Published on March 31, 2025 1:30 PM GMT
When I read about how dath ilani use unskilled labor hours as currency, it shattered my suspension of disbelief and I noticed confusion. It's hard to imagine that a coordinated utopia would consciously choose this as the best option.
Every part of dath ilan reads like it was built by some person of strictly average intelligence who'd read about education in a book but never actually gone to school, who spent ten minutes designing all our civilizational systems via a series of fifteen-second casual decisions about how things intuitively ‘ought to work’ that they made without ever seeing the consequences in action (C) Chief of Exception Handling
I’m not as smart as the average dath ilan person, but I spent a little more than 15 seconds to make up the difference.
Conclusions of my reflections:
There’s no reason why money should be measured «from 0 to infinity» instead of «from 0 to 1». If global market capitalization is 100 trillion dollars, and you have 1 dollar, you could instead have one one-hundred-trillionth of the world’s capital. You could use it exactly like regular money.
It may seem like a zero-sum game, but in a growing market, sustained deflation actually increases the purchasing power of your money, even with the same amount. Why would people in a utopia choose this option over any other?
Everyone would just agree that they aren’t smarter than the market.
If your money is tied to gold, you might think of yourself as an investor in gold while using that currency. If your money is backed by the reputation of your state, you’re a "shareholder of the state". You have fewer rights as a shareholder, because the "corporation" can print new shares at will and compels you by law to use this shares while you live in this country, but nevertheless you speculate in these shares on similar principles. And if you think you have a particularly clever reason to believe that gold, the reputation of a state, or stocks or anything else are undervalued, you're most likely wrong. Without unique knowledge, you can’t be smarter than the market.
However, there is a humble form of investment that the Sane Investor Law could use to be as smart as the market. He could invest in the entire market by capitalization. He could see what fraction of the global market is held by company A and invest the same fraction of his money into company A, and do this with companies B, C, D, and so on. Leave this system as it is, without making “smart” exceptions like “company H definitely sucks” or “I’m sure company Q has the future”, and you will be just as smart as the market.
In our world, this doesn’t work because no one knows exactly how large our economy is, and there are different not-perfectly-coordinated exchanges with different rules, political barriers, commissions, and not all companies or sectors of investment are represented in stocks, etc. There are approximately similar financial instruments like index funds, but there is no single red button for “investing in the market by capitalization”. And even if such a button existed, many would consider it beneath their dignity to use such a boring instrument, which gives growth proportional to global market growth, when “you can get more!” (It works until it suddenly doesn’t).
Nevertheless, in an ideal world, many would agree that they are not smarter than the market, and the barriers to investing by capitalization would be eliminated. These people would have one big red button for “investing in the market by capitalization”, or something very similar, covering as many sectors of the market as possible, serving as a universal and the most stable investment benchmark. This would be the best option for the vast majority of people, better than any state currency, resource, cryptocurrency, or stock in a specific company. And people would press this button and be happy.
"Exchanging Money for Money"
Dath ilani do not use fiat money, which is merely dead weight. If the market believes that the price of a company's stock is what it is, it’s likely correct, and thus you can use stocks as a currency equivalent. It would be foolish to have a system where you sell one form of money to buy another form, only to later exchange that for a third form of money, because all sellers distrust each other’s money, right?
However, if from all the stocks in your portfolio you specifically choose some to pay for goods, then for some reason, those stocks are perceived as having the lowest priority in your mind. You’d rather get rid of them, expecting their price to be somewhat lower than the others, which creates mistrust. The seller won’t bother figuring out what stocks you’re handing over, just as they wouldn’t accept a torn banknote as payment.
(I admit, a randomized sample of stocks from your portfolio of the value needed, or proportional shares of your portfolio, might sound like reasonable options, but this violates anonymity and still maintains the distrust and confusion in a system where you don’t even know which stocks you own because you’re accepting random stocks as payment. People typically prefer more control, and this forces them to exchange money for money.)
However, in a world where everyone modestly agrees that, as a rule, they are not smarter than the market and thus invest in it as a whole, "a fraction of the global market" becomes a convenient focal point that everyone can trust. So people begin to pay each other with "shares of the most popular index fund covering the largest portion of the market", which gradually becomes simply "market shares", and this becomes the primary currency. They stop thinking of it as stocks and just use it as money, assuming it is.
This is sane. You’re not trying to outsmart the market by buying specific stocks unless you’ve researched them thoroughly. You’re not using currency as "government stock" simply because you were born in a particular country and the law obliges you to be a shareholder. But if you truly believe that you can contribute your unique knowledge to the market and gain from it — for example, you exchange your money for education, and as a result, you create goods for which people are willing to give you their market share — you’re improving the collective intelligence of humanity with every transaction, bringing your unique capabilities to the table. In this way, you really do become smarter than the market.
Goodhart's Law for Currencies and the Production of Money
Money is both a measure and a target. Why can’t you just point to any random object and call it money if, as a result, people begin to exchange it, and through the magic of wisdom fo the crowd, an adequate economy is generated? In principle, you could make shells your currency, but then the person collecting useless shells would become wealthy, and the economy would undergo absurd inflation.
Perhaps, in that case, you would want the currency to be tied to a resource of significance for the economy — so that the "printing press that produces money" could fall into someone’s hands, but only if it benefits civilization. This works somewhat better, but it still inherently creates a dysfunctional incentive to maximize whatever the money is tied to. If you're using energy credits, but energy isn't really needed on such a scale, your demand for energy becomes irrational. If you have cryptocurrency tied to computing power and you burn it on solving pointless tasks just to demonstrate that you have computing power, you're doing something stupid from the perspective of a healthy economy.
If your money is a fraction of the global market, then… in order to maximize your market share, you must convince others to give you their share in exchange for goods or services. There's no clever way to print money — money is limited, and it can be divided into any reasonable number of parts that you need. This system doesn’t need updating after its initial introduction. There's no government that can print as much money as it wants for short-term gains, and everyone simply trusts that it won’t do so — instead, the government is forced to participate in the economy and provide public goods in exchange for taxpayers' money. Poor government, happy everyone else.
I would also like to point out that in this system, you have a minor incentive to increase public welfare, even without the possibility of receiving anything in return, because it increases the purchasing power of your money, acting as a form of deflation. Sacrificing the common good for personal gain, on the other hand, lowers the value of your money, becoming a form of inflation. Of course, on the scale of personal interactions, this effect may not mean much, and to an Earthling, it might seem similar to "burning your money to fight inflation".
However, the effect becomes more significant when dealing with larger agents or groups of agents, such as states or corporations (or simply well-coordinated individuals). If you're a corporation owning 2% of the global market and you have a Supercriminal Mastermind Conspiracy Plan to sacrifice public welfare for personal gain, a ratio of public good destroyed to private good gained greater than 50 to 1 makes the strategy ineffective, and even less harmful strategies "create inflation equal to 2% per good destroyed" on your money.
(You can keep your money in assets other than world market shares, which you expect to appreciate in value and survive the public good share destruction that you are planning. But you still have a significant amount of purely financial assets that you cannot invest better than in world market shares, equivalent to holding fiat money, so the minor incentive remains)
Money is both a measure and a target, and if your money is "global capitalization share", then your drive will be to increase global capitalization, not reduce it.
Objection! It's weird. Clarification — it's hard to say out loud.
It’s hard to imagine exchanging “one-hundred-trillionth fractions of the global economy” instead of dollars. It’s just such a long phrase! ...In a utopia, if you refused to use an efficient currency because you couldn’t say something like X*12^-12 in a short phrase, people would look at you very awkwardly. Orders of magnitude, like numbers, are just common enough that we can assign them monosyllabic words, throw your language where you found it and create a new one.
If you’re uncomfortable with infinite divisibility implying purely digital money, you could make it fully or partially paper-based. For example, banknotes could function as standardized ‘checks’ or ‘promissory notes’ linked to accounts in a central system, automatically redeeming or renewing every X years to prevent lost bills from turning into Dead Money. Or just use digital money — you’re in a utopia, free from tax evasion worries or hacker threats.
This currency is stable and universal. It guarantees a huge influx of liquidity and investment during the implementation phase, when people start pressing the "invest in the market by capitalization" button instead of holding fiat "dead money". It creates a minor altruistic initiative for coordinated agents to improve public welfare. It doesn’t require careful regulation or maintenance once it has been implemented. It even works well for relative value assessment.
I can't imagine a better currency. I would be surprised to hear an explanation of why, in a coordinated utopia, people would use anything BUT this as currency, why "energy credits" or "unskilled labor hours" or just "dollars" would remain the equivalent of value. So I would welcome your criticism and further discussion of this concept.
Discuss
