16.5 Evolution of monetary systems

After understanding of benefits of direct capital taxation ( excess capital ) it is possible to view the historical evolution of monetary systems based on their ability to maintain sustainable economical relations and truly reflect value of goods and services.

Indeed, this is the first time in history when we can introduce  really effective and fair financial system which provides both incentives for economical entrepreneurship and is fully sustainable, without any threat of crash.

People of the past could not do otherwise, than to fight bloody wars for limited supply of gold, as they could not possibly make any more of it even they were able to actually produce more goods and services than their limited “golden cow” god commanded them.

With onset of paper money, becoming rich is possible even without arms. But the wealth created that way is rather unstable, because of unlimited source of its substance: paper or digital money, created as offset of ever rising debt, capable of collapsing under its own weight. This unlimited, ever rising and inevitable expansion is also its biggest weakness. We all know that there are limits there ( mostly in our psyche, but hey, they are and were always  the most serious of them all !) and we cannot run the expansion forever. But if we were to stop it, system would collapse. People would not stop saving and hoarding money. So we need to recycle somehow.   

But this recycling requires direct taxation of deposits, as described in chapter 16. And this is impossible without full digital currency, without any paper money. If people of the old did not want to pay taxes, they hid their coins and emperors and kings had to use swords  and violence to extract them. But despite their immense powers, their empires and kingdoms collapsed as they failed to achieve their monetary goals. 

If we today tried to tax deposits directly, while still having paper money, people would defy such efforts by trying to withdraw their money, resulting in bank runs and collapse of all financial system.

Only now, with massively spread digital payments and virtually total availability of digital grid we are really able to move to this next age, where taxation cannot be avoided. To ordinary people it may sound as total heresy, crazy idea but waterproof financial system is a key to sustainable prosperity. We all need to pay taxes. We all want to save, which is fair and good. But there must be limits, otherwise out savings will not reflect their true buying power and our systems will collapse, as all the empires did before. Such a crash is always terrible and brings suffering and destruction totally unnecessary. After all, what collapses is not the fertility of the earth or production capacity of our works: what collapses is just our mental projection of our wealth and with it our pride and reasonability. It is the math, which we are doing wrong, based on imperfect economical system. 

Now, for the first time in history we indeed have the technological means at hand to build a sustainable financial system, which will never crash. Roman emperors never imagined possibility to extract needed taxes just by pure wish of the mind, executed by digital systems ( without any need for bloodshed !!!), fairly and efficiently, in time. We can. If we truly move to the 21st century and fully digitalize.