As Libertarians in our current political system, many of us dream and talk about one day having a stateless society. The idea of no government and letting the free market flourish is certainly tantalizing. There’s a huge problem with this unless we want to go back to a bartering system which isn’t very conducive for a modern society. We would have to go back in time quite a bit if we adopted that as our means of exchange, “How many chickens can I get for one car tire”? The impracticality is apparent but what other options are there? In order to have one currency there needs to be a set value and a way to enforce it. Without a state this seems rather difficult, near impossible. There was some hope recently around cryptocurrency being a new mode for trade however these currencies are dependent on the value of currencies managed by countries such as the U.S. dollar. If other currencies did not have value, neither would our cryptocurrencies the way they are currently designed. Perhaps this will change in the future, although having our society rely on internet connection and the upkeep of cryptocurrency as a system such as verifying transactions etc. may give those positions such importance that they resemble a state in function. So I propose an alternative solution, one which will allow us to retain our modern society while simultaneously being independent of a state.
Currently we have tokens which have value according to our government. We trade them between us for our goods and services. The state decides how many dollars should be in circulation and how much buying power they should have. It also protects transactions and eliminates counterfeits. That’s why we can use the dollar anywhere within the country or anyplace that relies on our country economically such as China or India. If we did not have a state, where would our currency come from and how would we determine its value? Well we know that the basis of money is the exchange of goods and services. So it would make sense that the money we use be defined by those providing the goods and services in place of a government. Imagine some of the most basic representations of goods and services traded within the market, IOU’s and borrowing. Which is essentially what the dollar is for the Federal Reserve, a green IOU from the Reserve to us, the citizens. So it would make sense that in a free market the companies provide their own forms of currency. They would produce the money for their consumers and determine what the value of the currency is based on how much of their goods it represents.
For instance, one company gives another company some furniture and that company trades with tokens worth a certain amount of their goods that can be exchanged at any time. You buy 5 tokens from a company or trade for them that represent 5 of their goods, perhaps you stock up for the following years such as when buying drapes. People can then trade these tokens between each other so anybody can bring it back to that company and get drapes in return. The supply and demand of the market would determine how much of one currency another one is worth. How many tokens of Burger King can I exchange for Walmart tokens? The market will answer that for itself. This ensures all currency is backed up by goods and services while the relative value is dependent on supply and demand. Think of the stock market but for currency in a way. There are already currency markets that serve as a good example how this would work. Now, as companies have high rates of exchange between their currencies they may decide to use the same tokens. The production of which would then be cheaper for both companies. In this way, these tokens would start out being relatively volatile and only when the business becomes stable and is verified by consumers would they be able to enter into the social contract of the more widely used currencies. These currencies would probably be tied to that area as that is where companies, people who live there, do the most trade. So you may end up with centralized currency per community. At the same time, counterfeits would be regulated through inspection during exchange within the market as well as by the companies. This would scale into our modern day very nicely.
Looking at this application in modern times, those who run real life and online currency markets may set transaction fees or membership fees which would be set by the competition of others who also seek to manage exchange markets, the competition lowering the price as dictated by supply and demand. This way currencies from anywhere could be exchanged real time with more security. It would be very similar to the bank accounts and stocks we have now. Imagine setting some currency you own from your region to your default mode of payment and when you go to pay anywhere with your card, the cash register automatically uses the exchange rate of the market to deduct the appropriate amount of the currency you used from your account in terms of how much the goods you bought were worth in that region or companies tokens. The possibilities here are many and convenient. It is easy to imagine as this proposed system is very similar to the way our financial systems are run currently. Except every company is responsible for their own monetary responsibilities that would normally be delegated to the Federal Reserve. I cannot say for certain this is the exact form it would or should take if this system were to be adopted however it is along this vein that it would express itself or in an even more efficient manner. This would allow us to maintain our modern society while at the same time foregoing a centralized currency. Perhaps the social contracts between companies could grow large and stable enough to have a common currency for regions as large as the nations we see today. Alternatively, it’s possible cryptocurrencies could be reworked to include these fundamentals of the market making this unnecessary. It may be a more immediate transition to a possible culmination of this idea. It’s important to remember that it certainly isn’t a requirement to have a common currency and either way this would be a great start to giving power to the market while ensuring we do not devolve into hunter gatherer societies. I am hopeful this will incite an ongoing conversation between us Libertarians and all those who seek a stateless society so we can be one step closer to our favorite dream.