100 Persons: p1, p2, p3, ... p99, p100
90 x 100x100 meter of farmland.
90 x 100x100 square meter of nature, some of which viable for a variety of economic activities, such as logging.
30 x 100x100 meter of land is occupied by roads and other public areas, such as squares, parking lots, a waste dumping area, a Government building.
30 x 100x100 meter of land is occupied by private homes.
One river producing fish roughly equal in economic value to the average produce of 10 x 100x100 meter of farmland.
The National Government comprises a single meeting of 100 persons, where decisions are made by majority vote. A meeting is called when a serious problem comes up, or otherwise once a month.
- The Government has set aside the above mentioned areas for either nature, of which some parts for limited economic use such as non destructive logging and hunting, it set aside the land used for roads as public area, it declared the lands already build as meant for buildings, it has found 90 x 100x100 meter of farmland which was decided could not be used for anything but farming and light farming oriented buildings, such as barns. If a person would want to build something on designated farm land, he/she would file a request to the Government, then the farm-land usage issue would be looked at again in light of the request. Each person gets a resource right equal to 100x100 farmland and 30x30 meter of private home space.
- Each person goes to the resource bank of the Government, and comes away with a description of either "100x100 farmland place yet to be determined," or "100x100 exact location: ......". Each person also comes away with the area of their private home. 10 people live very small, they transfer 20x20 of their living right into an additional 10x10 farmland, which has been confirmed to exist. 10 persons live very large and have big gardens also suitable for farming, they have taken a farming right the size of their private gardens, leaving 5 of them with only 20x20 meter of farm land right in reserve, and 5 of them came 20x20 meter of land right short of having the right to have their garden under their control. 2 of them decide to give up part of their garden, 3 of them decide they will put up a bid to hire someone its farm land right. They offer a nominal amount of money to the total value of 1 days of average work income per month. Some people see the offer and take it up, these people now retain 80x80 meter of farm-land in reserve.
- 25 persons, p1-p25 are farmers. They quickly put up bids in order to hire the land they want to farm. To prevent one farmer to get control of all the land, a Government meeting is convened. It is decided that the maximum rent price for 100x100 meter of farm land will be 3 days of average work per month. It is decided that any one farmers can't control more then 10% of all available farm land, and that if imbalance proves to be a problem additional taxes will be levied on farmers per their amount of farm land under control. 80 persons make a contract with one of the farmers to hire their land, the left over people seem to want to leave the land barren for now. The division of farm-land between the farmers goes in an acceptable way. The Government convenes and appoints a small 5 man commission that would see to it that the land is divided fairly, serious problems would be reported back to the main meeting for resolution.
- 3 persons decide they want to exploit the river, they have taken out a fishing right on the river expected to be roughly equal in economic value to the farm-land. They put out an offer for more fishing rights, 5 persons convert their unused farm-land right into a fishing right, and hire it to the would be fishing industry.
- 2 persons decide they want to log in the forest and put up the occasional trap for wild meat to sell. They switch their farming right into a logging right. The Government meeting is unable to decide yet what the value of the timber is going to be, therefore is unable to decide on a logging concession, allowing the loggers to go at it as if their own right to log is up to the limit nature can sustain, half for each. When it proves more valuable, the right will be shrunk, so that the loggers will have to hire more logging rights from others. When it proves less valuable, the right will be expanded, and the loggers will get additional farming land rights, which is also convertible into fishing rights.
- The Government keeps an eye on the average profitability of the various resource using activities, making sure that the size of the rights of use remains more or less equal. It is decided to review these problems, and to levy a tax on everyone to a value of 2 days of work a month, so that that money can later be used to straighten out apparent differences over the past year in the profitability of various resources.
- The remaining 72 persons start working in a variety of needed trades, such as home building, schooling children, a hospital, a mill to produce flour from grain, a cloth making company to produce clothing from wool from sheep and cotton, a printing company for paper and ink.
- The Government decides on a fiat money system, the printing company will produce hard to forge bills. It is decided to coin some coins because they wear down less quickly. The metal for the coins will be bought for an amount of wool from a nearby country, because there is no metal mine in the Country. The Government decides to start the money system by giving everyone 1.000 money units. The Government decides it will levy a taxation on everyone, needed to pay for the road maintenance, the policeman, the judge, and the doctor who is also payed for as a public convenience from taxation, since the sick are unable to work [note that this is not necessary, but it is one possible option]. The policeman is charged with tax collection, the Judge will rule in disputes on all kinds of issues. The Government decided who will be the police and who will be the Judge. Both end up doing the job part time. The policeman therefore also doubles as a fire-brigade and is a part time farmer [Well, it is a tiny group, isn't it. Full scale this would not be part time.]
- The Government decides that it will be useful to have a non-profit lending system, so that persons can purchase goods asynchronous to making expected earnings. It is decided a small part time committee of 5 will manage it. The paper and ink and other expenses will be payed for by taxation. Some people complain that taxes get too high, but they quickly realize that they may on occasion need credit. The majority decides it will be done.
Now how does this run for for instance p1.
P1 is a farmer. He makes his crops, paying an amount of soil rent to those he has contracts with every month. He pays for that rent by selling his crops. In a bad year he will take a loan, and pay that back later. If someone wants to increase the soil rent, he has the option to either find another willing person within one month to own that land, if that is successful he will rent the land from that new person, pushing the previous contract holder out. If that is not successful, he will have to accept the new rate, or stop renting it. In practice this will not get out of hand, because of the Government enforced rent maximum. This means the farmer is quite secure in its farm. If for some reason soil rent prices are quite high, he will (have to) compute that through into crop prices. The costumers will be able to pay easier for the high crop prices, having gotten more money from the higher soil prices. The two effects of high rent and high crop prices cancel each other out naturally. In practice this effect will be mixed with other economic factors like who owns what and who buys what, it is not exactly one to one exactly, but it is a stabilizing factor in principle. The money just goes round and round through the system, as it is supposed to.
- The Government (that is the meeting of everyone) decides that it will be unacceptable if one person comes to own more then 5 times the average of everyone. The policeman will see to it that nobody becomes too rich, because that is not good for everyone. The decision is that a rich person should simply take a rest or a vacation, instead of always trying to better everyone else all the time. That would just cause anger to build up. "Enough is enough," and "we don't need that!" were heard that day in city hall ;-) ...
Another person is p30, p30 is making thread from wool. She gets some minimum income to the value of 2.5 days work per month from renting out a fishing right. Since she doesn't need a lot of soil for her clothing company, she had a natural resource right to spare. She buys wool from the sheep farms, turns it into thread and then into various clothing. She also buys other types of fibers suitable for making clothing. For this she needed to buy a couple of machines, which she could not afford at first. She applied for a business credit, and got the money from the Government. She didn't need to promise to give any new employees in her business a fair wage that deviated not too much from her own income, and neither that she would give her company to her employees if any if she retired, because that was already the law and therefore inescapable for all businesses. She used the money to buy the machines she needed. The credit she would pay back over 10 years, using the machines as collateral. This inflated the money supply somewhat, therefore the Government did not fund any other new businesses that year, and raised taxation a little. That way the value of money was retained as it had been. When the money would be re-payed, that would leave more spending room for the Government, and that way the value would come back for everyone. At the end of the 10 years there would be a little less money then usual, allowing the Government to print some additional money, and issue a tax cut because the budged would already be in, for instance.
Now to follow a single coin. The coin is struck, and lands in the Government's secret vault (a sock under the policeman's bed.) From there the Government switches a badly used coin that it got as yearly taxes from the printing company out, and puts the good coin back in, as if nothing had happened. Only the old coin was switched for the new. The Government decided the long road needed some repairs, therefore it bought 2 days work to repair holes from 3 persons (p89, p90, p91 for instance). P90 gets the coin as payment, and uses it to buy a cup of coffee and sandwich in the village bakery. The village bakery puts the coin in a savings account with the local money protection bank, because a thief has been going around and nobody knew yet who it was. The savings account service is a part time business run by the judge. After 6 month, the bakery owner (a working owner), takes all the cash out of the savings account, and pays the judge for the service, but not with our coin. The bakery owner then goes to the clothing shop, and buys a new coat for which he had been saving up. The coin then lands in the clothing shop, and she uses it to pay back part of her loan on the machines she bought on credit. The Government marks down her outstanding loan on receiving the money among which our coin. The Government accountant is suddenly out of ink, and uses our coin to buy ink from the printing company, and the coin is going again.
And they lived long and became happy people; and so did their animals.
How does this scale up to 30.000.000 persons ? It would likely work better, because with more persons there is more room for specialized and professional/dedicated businesses in all possible areas of endeavor. The Government would not need to worry about a single credit to a single company, but loans out and in would balance themselves. It will also be easier to conduct trade with foreign Nations, for instance for raw materials, the Government itself will be run more professionally by specialized full time people.
How does this scale to 9.000.000.000 persons ? Since persons would be grouped (grouping) in sovereign countries of roughly 30.000.000 persons, a group of 9.000.000.000 would consist of a large number of individual and separately organized economic D.A.V.I.D. systems, roughly 300 such groups. Each group will experience the rewards and punishments of how well they keep their own DAVID economy up and functioning. Some groups may experience hardship because corruption occurred, but other groups will be totally unaffected by that, as they are separate and independent. If some groups suffer from corruption, others may even do better because of certain trade repercussions: if an iron producing Nation is doing badly for itself because of high crime, then other iron producing Nations might fetch a somewhat higher price internationally, for lessening competition on the international iron market. The great multitude of independent DAVID economic systems (aka sovereign Countries), provides for a tremendous potential to review the policies and experiences of other Nations, and take full advantage of each others successes and failures. With 300 Nations running side by side there is unlikely to be a shortage of such information, but the world would be running over with the abundance of different experiences with different policy decisions. With 300 fully sovereign Nations, this will also intrinsically make the world a more interesting and varied place. With so many Nations, not one Nation, not one single policy decision can destroy the entire world. Damage would always be local to the Nation itself, whereas policy successes can be quickly spread throughout the world through popularity resulting from actual verifiable results. Each Nation will then decide for itself what it is going to do with the historical information, if anything. The system scales even better to a group of 9.000.000.000, then it does for just a single 30.000.000 group.