CROWDSOURCING the COLLECTIVE “WE”

By J.D. ALT

Let’s jump ahead to the day (surely it will come, right?) when we realize a general consensus has actually been established that, yes, it IS possible to sustainably pay for collective goods and services by the direct issuing of sovereign fiat dollars―that our federal government doesn’t have to collect taxes in order to have dollars to spend, that it doesn’t have to issue Treasury bonds to get the dollars it needs but imagines it doesn’t have.

Now that we’re here in this future moment, it’s clear we have an even BIGGER problem than we had before!

Back then the problem was we couldn’t collect enough tax dollars to even begin to pay for all the things we really needed to do for ourselves as a collective society. Nor would we allow ourselves (being “fiscally sound” Americans) to borrow the dollars to make up the difference because we couldn’t mathematically figure out how we’d ever pay the dollars back. And we needed a LOT of dollars. We needed $3.6 trillion IMMEDIATELY, just to keep our public infrastructure―roads, bridges, transit systems, electric grids, etc.―repaired and functioning. We needed $1.9 billion AS QUICKLY AS POSSIBLE to develop a Zika vaccine. We needed $10 billion ANNUALLY to build, staff, and operate pre-school learning and day-care centers in every American neighborhood. We had everything we needed to actually accomplish each of those things―the tools, materials, labor, technology and know-how―but we couldn’t allow ourselves to do them because we couldn’t tax ourselves enough dollars to be able to then pay ourselves to undertake the work.

This was a serious problem we had back then. We had highway overpasses collapsing, we had babies being born with heart-breaking birth-defects, we had children entering grade school without ever having been read to. We also had millions of young adults who wanted to do something useful to earn their living, but instead were camped out in their parents’ basements with nothing to do―except play video games and wonder about how they could pay off their college loans. It was a difficult and frustrating time, and a lot of American citizens were seriously suffering, and angry, and cantankerous―and worried.

But now in this future moment, as I said, we have this even bigger problem. Now that we realize there exists this general consensus about how our modern money system actually works, we have to DECIDE―and agree, as an entire sovereign nation, that we have decided―what our “direct sovereign spending” should be targeted to achieve.

This is a really big mess and horribly difficult. In retrospect, it was so easy NOT to spend sovereign-issued dollars because it meant we never had to agree with anyone. All we had to do was disagree with each other (which, of course, comes naturally to us) because there was no point in agreeing what to spend dollars on if there weren’t any dollars to spend. But now we have to AGREE with everybody, because if we don’t or can’t, the sovereign dollars we now understand we have an infinite supply of will not get spent― nothing will be undertaken or  accomplished, and our millennials will continue to camp uselessly in their parents’ basements.

But how can we possibly hope to actually decide and agree? First of all, it will take forever. There will be endless arguments and claims and counterclaims and lawsuits. There will be accusations of “give aways” and cronyism and waste. It’s almost ludicrous to imagine our political system being able to manage this opportunity, to turn it into the ongoing series of positive outcomes which are certainly possible.

Fortunately, however, I just realized there IS a proven, fail-safe, and politically painless way to actually accomplish this otherwise impossible kind of agreeing. It’s called “crowdsourcing,” a term coined by the editors of Wired magazine in 2005. It actually was the process whereby the Wikipedia article that taught me that piece of factual information was produced. It obviously works—in the case of Wikipedia, it works really well. But how might it work in the particular case of the “direct sovereign spending” dilemma we now confront?  Here’s a brief outline of ideas:

First, we have to create the list of the possibilities for direct sovereign investments. I would suggest doing this in categories―in the manner of a crowd-funding website, like Kickstarter. The categories might be, for example, Public Infrastructure, Medical Research, Early Childhood Care & Education, Affordable Housing, National Retirement Infrastructures, Art Therapy, Climate Change Mitigation, Addiction Therapies, etc. Those kinds of things. The kinds of things, in other words, that the profit-oriented private sector economy (which we still want to keep going strong!) isn’t interested in undertaking or even thinking about.

Once the categories are established, any “qualified” person or organization can post a “Direct Sovereign Investment Project” (DSIP) proposal in one of the categories. For the moment, we’ll avoid going into details about how a person or organization is “qualified,” or what a DSIP proposal would entail, what questions it would have to answer, etc. To keep things simple, we’ll just say, at this point, that the posted proposals would be explanatory, descriptive, and illustrated in a manner that allows them to be evaluated fairly quickly by lay-people―i.e. by the American citizens who are now going to judge them by a process of crowdsourcing.

To make the crowdsourcing process itself transparently fair, it would be accomplished as follows: Every U.S. social security number is assigned, every month, a certain number of points, to be used during that month. Every social security number gets the same number of points. If they are not used during the month assigned, they disappear―and are replaced by the new points for the following month. The owner of each U.S. social security number, on a completely voluntary basis, can go to the crowdsourcing website and use their points to “vote” for the DSIP proposal, or proposals, they choose. After they’ve cast all their points, they’re done until the following month.

At the end of each month, the top five (or ten or twenty?) point-getting DSIP proposals in each category become qualified for the Direct Sovereign Investment Program. That is to say, they can now requisition payments from the U.S. Treasury for the work described in their DSIP. The dollars to make the payments would be created by the U.S. Federal Reserve in exactly the same way it creates, every day, the dollars to cover the profits in the private sector economy (which it would also, of course, continue to do as well). In other words, the dollars would simply be electronically “issued”—not debited from some tax account, not offset by some borrowing in the bond market.

It’s important to consider that this process is completely apolitical and outside of the federal “budget.” Congress is not involved. Congress would continue to establish tax policy, and approve and appropriate dollars for federal budgets, just like always. Congress would continue to pass the laws of the land, just like always. The Treasury would continue to auction Treasury bonds for people to hold as safe, interest-paying savings accounts. Presidents would continue to give state-of-the-union addresses and propose directions the country should go in, things it should strive to achieve. Politicians and the courts would still debate about whether the federal government can or should regulate this thing or that thing. American politics doesn’t change at all. Let the Hatfield and McCoys do what they will and fight it out.

In the meantime, what’s important is that now there’s this other thing going on as well—this other process whereby American citizens, on a continuing basis, are agreeing to pay themselves dollars to accomplish specific tasks which, in crowdsourcing aggregate, they have decided are important and worthwhile things to accomplish. No one can argue with or complain about the crowdsourcing decisions. No one can claim that the American citizens, in their crowdsourcing wisdom, decided to accomplish the wrong thing. The collective “We”—which, in point of fact, is the entity with the unlimited supply of dollars—begins to achieve a kind of “consciousness” that everyone can, to a certain degree, perceive and participate in. Great and important things could be accomplished. But first we have to actually get to that future moment.

13 Responses to CROWDSOURCING the COLLECTIVE “WE”

  1. Derryl Hermanutz

    Great idea!

  2. Hilary vs. Trump and you want to talk about reaching tht future monment. LOL! Talkabout job security. 🙂

  3. I though this was a really interesting article, and thanks a lot for coming up with this idea (reminds me a bit of “participatory budgeting” exercises that were trialed in some Brazilian cities by the Worker’s party before it shifted to the right) but I have one question: if the total amount of spending resulting from proposals supported via the DSIP process would (in the absence of other changes) push the aggregate (public and non-govt) spending in the economy higher than the full employment level of spending (with inflationary potential), what’s the mechanism for addressing that? Would Congress take into account the spending incurred via the DSIP process (as well as it’s own spending) in setting the Federal budget, and raise taxes if there was some concern that aggregate spending would otherwise be higher than that needed to purchase the full employment level of output? Is that why you emphasized that Congress retains it’s usual tax powers?

    Thank you

    • A.J. Your question, of course, is a good one. There are two major concerns (that I can think of) with regard to the idea of “direct sovereign spending.” The first is would the spending increase our consumption of scarce or threatened resources? The second is hyper-inflation. I think it is clear that any DSIP proposal would have to convincingly address the first concern. (In fact, it is my fantasy that many DSIP projects would be specifically directed toward projects that REDUCE our consumption of scarce resources, or otherwise support their sustainability.) With regard to hyper-inflation, if there were emerging signals of that, the sovereign investment program could be suspended until prices were stabilized.

  4. John Zelnicker

    Great idea, J. D. One of the criticisms of MMT that has some validity, in my view, is that it doesn’t address the problem of how we use our sovereign fiat to promote the general welfare, beyond the Job Guarantee. This is a potential solution that has the advantage of avoiding the political gridlock that has hog-tied our government as our legislators play schoolyard “King on the Hill”.

  5. Michael Kramer

    I do not understand this argument.
    Right now, under conditions of scarcity, choosing one good requires the rejection of a competing good.
    If, as the article states, there is an “infinite supply” of “sovereign dollars,” the problem of scarcity disappears. We don’t have a “BIGGER problem,” in the sense stated in this article in figuring out how to adjudicate among competing goods.
    The only way I can make sense of this is to assume that the word “infinite” should actually be interpreted to mean “a lot bigger than is currently the case.”
    Please explain to me what I am missing.

    • Michael, you are clearly correct in noting that we live in a world of scarcity. I would add that much of the task ahead of us is to manage our consumption of that scarcity. What’s scarce, however, is not sovereign fiat dollars but real resources–water, fertile soil, carbon-trapping forests, fisheries, etc. An infinite supply of fiat dollars (which exist in the same way there are an infinite number of inches or centimeters) does not make the problem of scarcity disappear at all. But if we genuinely understand how modern fiat money works, we can, as a collective society, pay ourselves to do the things necessary to overcome, or mitigate, the scarcity problem. We could, for example, pay ourselves to plant a whole LOT of trees in the next ten years.

  6. OFF TOPIC: RE: PROSECUTORIAL DISCRETION

    I am a Canadian citizen who has followed the saga of the 2008 financial crisis both in the US and Canada (as well as the whole area of corporate fraud in general). I have lately been catching up on the literature about “Too big to Jail” ( I have read many books and blogs on the subject ). I came across, for instance, an article about this report by the Committee on Financial Services of the House of Representatives over the summer, going into this critical matter of downplaying prosecutions because of apparent threaths to the US and world economy if , say, a bank, like HSBC crashed as a result of vigorous prosecutions. You know, I am sure many concerned and interested persons are wondering about the critical matter of prosecutorial discretion in these major corporate fraud cases, and perhaps in general .I mean there are legitimate factors that can go into decisions to prosecute, and we know conversely that there are instances of malicious prosecution and non-prosecution. But should matters of economic consequences to an economy be considered as legitimate factors to be weighed in these instances? If not, then if it is established that these factors were indeed weighed, and furthermore that they are illegitimate, then should the prosecutors themselves be prosecuted civilly or criminally for having being derelict in their duty to prosecute these banks?

    Marco E.

    • John Zelnicker

      An important detail that is intentionally ignored by those claiming to worry about threats to the economy from prosecutions is the distinction between prosecuting the bank executives as opposed to the bank as an institution. While it may be true that prosecuting a bank could create broader economic issues, a bank as an institution has no agency. It is the bank executives who are responsible as individuals for the frauds that are perpetrated, and prosecuting them would not cause any kind of issues with the broader economy. Recently the British financial regulator required a couple of the top executives of BNP Paribas (I think) to resign and, I believe they were prosecuted for fraud. There are more than enough bank executives around that prosecuting a few, or even many, would have no effect on the ability of the institution to continue operating. It’s even possible that seeing a few of their contemporaries in orange jumpsuits might persuade some executives to be more honest.

  7. Two problems: 1. Congress is supposed to be in charge of spending (says the Constitution), and 2. Actual experience doing something like you suggest at the local level indicates requests for funding need to post much more about the costs and consequences of proposed projects than a simple request.

    Here are the “principles of governance” derived from a public meeting with (stickers) votes for publicly proclaimed proposals:

    1. Keep our town rural
    2. Bring in better shopping
    3. Keep our taxes local

    JFYI, 1 & 2 are like “have our cake” and “eat it too,” while in California, little bedroom communities like ours don’t pay in taxes what they demand in services. So #3 is “keep the Pope Catholic.”

    Costs and consequences *must* be part of what’s requested in any democratization of spending. Otherwise it’s vulnerable to such silliness.

  8. Love it. Socialism for the 21st Century.

  9. Brilliant!