I
am happy to report that I have completed four chapters for my next
sci-fi story called, “The Makers’ Stone.” It takes place on a Terran
colony not too far from Earth and is aptly named, “Terran Secundus.”
Part of my process in writing sci-fi stories is to devise interesting
social paradigms made possible with technology. I wondered…could
technology make it easier to implement the minimalist, limited, and
voluntary type of governance that some Austrian and Mises economists
espouse? In the process of answering this question, I wrestled with the
mechanics of money and how a voluntary government could collect
revenue…voluntarily. This is what I came up with and some of the
rationale behind it. It actually surprised me and I realized, “Hey, we
have the technology to do this today.”
A
cornerstone of a prospering society is the ability to securely and
efficiently exchange money for goods and services, so I decided that
would be the key service for this “futuristic” and voluntary government.
In the case of Terran Secundus, electronic currency is backed 100% by
precious commodities that can be exchanged at the government’s Treasury.
But is that the only service a minimalistic, voluntary government
should provide? I considered adding other services, such as a military
to protect the vaults of precious commodities, provide secure electronic
monetary transactions, and defend its members from external aggression.
How about arbitration services to resolve claims of civil aggression,
property damage, or contractual issues? Do we need prisons in the
future? I could go on, but I had to remind myself of the goal—a
minimalist government, with the expectation that advanced technologies
and services developed by free market competition would provide all
other services. So I devised a “bare-bones” list of services for the
voluntary government of Terran Secundus:
- General Government (Treasury, Courts, Legislative, and Executive)
- Defense
- Prisons for sociopathic criminals
The next issue I decided to tackle—how to voluntarily pay for these services? I personally dislike the word TAX.
So I thought, how about a fee for electronic monetary transactions? How
much needs to be charged to fund the “bare-bones” services? So I used
data from the Federal Reserve (www.frbatlanta.com), the US government
(usgovernmentspending.com), and the US Census (census.gov) to explore
further. This is what I found.
In 2015, US federal, state, and local governments spent over 1 Trillion USD to provide the services identified above.
- Defense: 798.7 Billion USD
- General Government (Executive, Legislative & Courts): 168.4 Billion USD
- Prisons: 85.4 Billion USD
- Public Order (no police or fire): 11.5 Billion USD
- Total: 1.064 Trillion USD
Considering
the huge amount of domestic and worldwide policing by the federal
government, the high number of people incarcerated for victimless crimes
(about 86% of the federal prison population), and the bloated nature of
the executive and legislative branches—I figured an annual budget of at
least 25% less than the above total should be ample. Let’s say 750
Billion USD.
Next
step. What level of an electronic monetary transaction fee is needed to
fund this type of government? According to the latest Federal Reserve
Payments Study done in 2012, the total number of non-cash payments was
$79 Trillion USD. It’s probably higher for 2013-2015, but the Federal
Reserve hasn’t released an updated study, which they do every three
years.
Let’s
try 1%? That would provide 790 Billion USD in revenue. That works and
provides a 40 Billion USD budget surplus (good to have in case of
defense emergencies like alien invasions…this is a sci-fi story
after-all) and no tax forms to fill out ever! And while we are at it,
let’s lower that even more. Let’s say that the sender and receiver (or
buyer and seller) split the fee. Now we are down to 0.5% per person for
each transaction.
Another
benefit of a transaction fee is that it’s completely voluntary. If you
don’t want to pay this “convenience” fee, use another form of money:
coins/cash, bartering, or other free market currencies like bit coin.
What a great incentive for this type of government to provide the most
safe, effective, and convenient form of money.
Last
step. Let’s compare the Terran Secundus system to what the US has
today. Well…actually I have to use 2014 numbers as that is the latest
dataset the US census has published for average income per person.
According
to the US government web site, the average revenue collected by all
levels of governments in 2014, per person was $19,073. Now here comes
the crazy part. According to the US census, in 2014 the average income
per person was $28,555. That’s a difference of $9,482 (that’s what you
have left to live on) and an average tax rate of 66.79%. How is that
possible? The magic of deficit spending and progressive income tax.
If
you have been following so far, I think you have guessed that the
average member of the minimal, voluntary government is paying
considerably less than the average US citizen, provided they have the
same average income. How much? If they never saved, spent all their
income electronically (worst case scenario), the average payment a
member of the Terran Secundus minimalist government would be $142.76 per year ($28,555 x 0.5%).
Sure,
they will be getting less services from their government. For example
there is no government welfare, regulation, social security, police, or
fire. But maybe you could afford to buy that from private companies
(especially if there is competition to keep prices low). I plan on
exploring that in the background of The Makers’ Stone, while in the
foreground present the exciting adventures of the Neman family
introduced in my short story, Escape from the Emerald A.I., available in
most stores as an e-book.
What do you think? Feel free to like, share, and comment.
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