I would like to propose that the first function of central governments around the world should be to print or otherwise issue and distribute enough money, new or de novo money (usually called “base” money), to all of their legal residents to a) assure that their basic needs for income security, health and education are satisfied, and thus b) position them to work in the productive economy and civil society to advance their own private needs/wants and those of others. This base money would be issued in the form of entitlement grants distributed to the bank accounts of individual recipients themselves or those of institutions (e.g., schools or public health insurance programs) operating on their behalf. These grants would be guaranteed to all human beings by their sovereign central governments “by right” or, over time, by a world-wide governmental body like the United Nations, empowered to issue and distribute such money in either a) the relevant sovereign currencies of its member nations or b) an international currency.
Stepping back for perspective, over the long course of history, but especially in modern times, human beings have collectively achieved great increases in economic productivity: the ability to produce and distribute more and more goods and services with less and less human labor, materials and/or energy. These increases in productivity have come through discoveries in science and technology and their application, through automation, in businesses and other organizations. With the advent of artificial intelligence, automation has begun to increase at a still faster pace.
Given these facts, it can be argued that the increases in productivity should be viewed as “accumulated knowledge-based benefits,” and be distributed to all human beings. This could be done, in my view, by having central governments use their power to create money—de novo base money—to finance new rights or entitlements for their legal residents which better equip them to achieve basic economic security, good health and education. In doing so, they would lay the foundation required for recipients to participate actively in their productive economies and civil societies. Viewed in this manner, base money might also be called “opportunity money.”
To address concerns that may be raised by critics who fear that the use of base money to pay for entitlement programs might cause runaway inflation, let me argue that new base money injected into an economy from entitlement grants would simply increase demand for goods and services that are so essential to individual and social well-being (basic material needs, healthcare and education), so that they would be consumed as soon as it were made available to or applied for by eligible recipients. This means that there would be little, if any, inflation. The demand-production-consumption loop would be closed quickly.
With tax burdens relieved by using base money to pay for entitlement expenses, employed persons would retain more of their earned income and new markets would be created for more luxury consumer goods and services and for investment in enterprises to produce, distribute and sell them. Money spent in these areas should stimulate increased economic activity and produce more jobs, income/profits, and ultimately tax revenues for non-entitlement-related public expenditures (e.g., better infrastructure, cyber and other security systems, environmental protection, etc.). Whether inflation in prices of these luxury goods and services occurred would depend, as always, on the efficiency with which the demand-production-consumption loop was closed.
Even if inflation did occur in the prices of luxury goods and services, however, it would be of much less consequence to the public welfare than inflation in the prices of essential goods and services. The public benefit of assuring all legal residents’ access to basic income security, healthcare and education—and the additional opportunities these would open up to them—far outweigh the harm of possible increases in the price of luxury goods and services.
If these entitlement programs were implemented successfully, for the first time in history all human beings would be able to start life from a position of relative security and strength, and devote themselves to embellishing their lives rather than struggling with issues of scarcity and survival. Work would often be selected for the intrinsic rewards associated with it rather than for the money it pays. In short, human beings would have at last found a way to channel the benefits of increased productivity and automation to serve the public at large, rather than merely a selective few. Machines (used as a metaphor for “capital”) would work for the benefit of all, not just for a privileged minority of persons who have acquired them largely by luck—that is, because of unique circumstances such as inheritance or chance placement in the social order, over which they had minimal if any ultimate control.
With these general observations made, let me close by emphasizing that the base money issued to guarantee new universal rights or entitlements would provide the “monetary foundation” upon which a larger free and fair market-based global economy would operate. Nations—or regional groups of nations—which share distinct language and/or other cultural characteristics would be encouraged to maintain and innovate upon them to offer a rich array of experiences for the world’s population, made available either directly or vicariously through new media. Whereas those portions of national economies tied to entitlement expenditures would be limited by the public money invested in them, no such limits would apply to economic activities in the broader productive economies around them. In these broader economies, humans would be free to expand their productive activities as far as their knowledge, skills, initiative and ability to convince employers, banks or other organizations to loan or invest money in them allowed. They would, however, need to monitor the effects of these open-ended economic activities on ecological processes in the natural world, so that conditions essential to long-term survival on the planet are not destroyed or placed in serious jeopardy.