Superphysics
The Balance Sheet of a Points-Based Economic System
August 1, 2022 8 minutes • 1630 words
Table of contents
In 2017, we predicted that Masayoshi Son would be the last capitalist . This was because our model predicted a global economic crisis sparking in 2018, which would then create a global stagflation by 2019 .
The crisis turned out to be Covid and the Russia-Ukraine war which caused the current global stagflation in 2022.
Though the stagflation is a few years late, it nevertheless gives us a chance to deploy our solution step by step, starting in 2022. The solution manifests as a Points-based system that is specifically built for severe inflation and stagnation.
Money is the Root of All Evil
Moral philosophies from all countries unanimously agree that money is the root of all evil. However, none of them are able to explain why.
We explain that this is because money is a finite, exact, number or quantity. Value, however, is naturally infinite, non-exact, and is more of a quality.
- Money is close-ended
- Life itself is open-ended
A system that focuses on money will close out the infinite, subjective nature of life. This leads to a system that goes against nature, manifesting as suffering via crashes, poverty, inequality, recessions, stagflation, etc.
Imagine a mother charging a money-price to her children for every dinner that she cooks for them, putting them under a precise money-debt which gathers interest the longer they do not repay her. Such a mother would be regarded as cruel.
In reality, her cooking was sourced from her love for them, just as they are expected to love her back in non-exact or non-quantifiable ways. The imposition of an objective money-payment naturally kills that subjective feeling of love.
More commonly, this is similar to attending a live concert and watching it through your smartphone that you use to record the concert. The smartphone objectifies the event into a video file that you can watch later. Yet it also limits you from experiencing the concert in full.
The natural way is to either watch the concert:
- at the venue without the smartphone, or
- outside of the venue via a smartphone or video streaming.
Likewise, a family can eat dinner:
- without using any money by cooking it themselves and serving it to each other, using family-relatonship bound by family morals, or
- by using money by going to a restaurant, using customer-seller-relationship bound by commercial morals*
Superphysics Note
The current economic system only uses money, and commercial morals, and fails without it. Our points-based system frees up an economy by allowing a second, lower-cost mode, using more of the family-friends-morals instead of buyer-seller-morals.
Points Quantify Effort
Unlike money which quantifies utility, our points system quantifies the effort put by the producer, according to the viewpoint of both the producer and the buyer.
- Utility is the effect
- Effort is the cause
Our science, called Supereconomics, thus focuses on the cause. This is different from Modern Economics which focuses on the effect.
In our family-dinner example, the points can be assigned by the children as follows:
| Meal | Points |
|---|---|
| Dinner July-31-2022 | 9/10 |
| Breakfast August-1-2022 | 6/10 |
| Lunch August-1-2022 | 8/10 |
| Dinner August-1-2022 | 7/10 |
| Average | 7.5 |
The changing points then plot the changing quality or quantity of the meals and serve as a record of actual meal-events. The mother can then fairly demand from her children to excel in their own tasks, such as in their chores or in grades in school, in exchange for the benefits that they get from her.
Since the points are quantification of past events, their values do not inflate over time. The system also requires its members to be tightly-knit, having common interest.
An economic system based on points is therefore inflation-resistant and far less volatile than a money-based system. It also creates a tighter, more integrated, and responsive local economy that is organized into hubs and spokes.
- In our dinner example, the mother is the hub and the children are her spokes.
The money system, on the contrary, is arbitrary, disorganized, and fragmented since it relies on selfish-interest instead of the common-interest. These qualities cause prices to rise and fall wildly, with economic damage spreading uncontrollably. This is beneficial for speculators who buy and sell things to take advantage of price movements, following the maxim of ‘buy low, sell high’.
The Balance Sheet in a Capitalist System
Captialists use this maxim on equity by buying or investing in cheap stocks or startups, and then selling them when they become expensive.
This equity is recorded as part of liabilities:
| Assets | Liabilities |
|---|---|
| Cash | Loans Payable |
| Receivables | Long-term Debt |
| Property, Plant, Equipment | Stockholder’s Equity |
The Balance Sheet in a Points-based System
Under a points-based system, equity and long-term debt are converted into points.
Money is retained only as petty cash for facilitating immediate payments. Adam Smith calls this as ‘ready money’.
This leads to a new kind of balance sheet:
| Assets | Liabilities |
|---|---|
| Cash | Money Loans Payable |
| Points-Receivables | Short-term Points Payable |
| Property, Plant, Equipment | Long-term Points Payable |
In the beginning, a company will have very few points-receivables and points-payables. But as the new system catches on, and the cost savings* become evident, a balance sheet will have more points values until money becomes a smaller part of company and every local economy.
Why is a Points-system so much cheaper?
Points are bilateral whereas money is universal or multilateral.
This means that a promise by Joe to John is only applicable to Joe and John. No would bother “stealing” that promise.
For example, Joe (a mechanic) fixes John’s car (a doctor) in exchange for a promise of a future checkup or treatment from John of the same value.
No one can steal that promise and get that treatment from John without Joe’s consent.
But if John paid Joe money to fix his car, then someone could just steal that money. Moreover, the transaction would not push through if no money was available. So there should be:
- a system for money creation (e.g. paper bills)
- a system for money safekeeping (e.g. wallets or banks and bank accounts)
- a system for money transactions via the telecoms system (e.g. electronic cash)
In contrast, a points-system only needs:
- a system for money transactions either offline (points-cards) or online via the telecoms system (e.g. points app)
At its cheapest and most natural form, a points-system only needs a verbal agreement between John and Joe, with the objective points being subjectified into satisfaction as good or bad service. Such a system is really broken down into its components:
- a common language to make a verbal agreement
- a common moral system to make promises binding
If a moneyless system is so cheap, then why did the money system replace it?
A moneyless system is cheap. But it requires a certain level of morality. If that morality fluctuates, then the whole system becomes less reliable.
If John became selfish and forgets about what he owes to Joe, then it would be an injustice to Joe, and Joe would simply stop using the system.
This is why the precolonial governments that used this system imposed morals such as:
- ‘ayni’ in the Inca
- ‘bayanihan’ in the Philippines
The Europeans did not have a solid moral system and so they used money and treasure instead. They then imposed their system onto the world through the colonial system.
This is why morals naturally decline with the spread and adoption of the money-system. This is most obvious in cryptocurrencies which are full of scams and are even synonymous with scams.
The use of debt and elimination of equity is evident in:
- The Wealth of Nations where Adam Smith bashes the equity system and advocates the use of loans to serve as capital to build a factory
- Socrates being in debt even up to his last breath
A bank could still less afford to lend the fixed capital needed by an iron forge owner for his smelting-house, workhouses, warehouses, etc..
Such entrepreneurs may properly do most of their projects with money borrowed upon bond of private people who can live on the interest of their money without taking the trouble to employ the capital themselves.
The borrowed money, which would not be repaid for several years, should not be borrowed from a bank. The Wealth of Nations Simplified, Book 2, Chapter 2
[The man who gave him the poison looked at his feet and legs now and then. Socrates showed us that he was cold and stiff and said:]
When the poison reaches the heart, that will be the end. Crito, I owe a cock to Asclepius. Will you remember to pay the debt?
What Will Investors Put their Money In?
If equity will no longer be a thing, then what will rich people do with their money?
For example, an Arab sheik has 100 million dollars and personally knows very few worthy entrepreneurs. How can he use his money so that it preserves their value, at least?
The cash saved by the points-system will be used to grow the global economy.
This is explained here .
