The Sea Dollar
October 5, 2009 at 8:24 pm #1075
I’ve been thinking about this lately, “How do you create a stable currency?”
As a sovereign nation, how do you ensure your currency is valued and won’t fluctuate wildly? I’m familiar with the whole “Demand = Value” idea, but how does that translate into a relatively tiny economy like a Seastead of 10,000 people?
My initial thoughts are create a strong export and tourism market… create demand for our/your currency. But is that all there is to it? Thoughts? Ideas?
I’m a financial consultant by profession, It’d be nice if one of the economists out there could educate me further :pOctober 5, 2009 at 8:50 pm #7964
I don’t know much/anything about economics, but I’ve been thinking about this a bit recently and I feel that to begin with, we should work with an existing currency. The US dollar is, of course, most widely used, but it’s getting very unstable. So I’d go for the Euro.
– NickOctober 5, 2009 at 9:03 pm #7965
Gold standard. Nuff said.
Okay, my genetic makeup won’t allow me to be that brief. 😉 Pegging the currency to something like gold is the way to go. A gold standard is an excellent way to keep the economy stable and the government honest. For practical purposes you don’t actually want to use gold…I think platinum is better. But any commodity that is non-perishable and valuable the across the planet would do.October 5, 2009 at 9:10 pm #7968
Not as precious as gold, but just as good and more plentiful besides! The Euro like the US dollar and all the rest are Fiat currencies: worthless paper who’s value fluctuates against other worthless paper. The fluctuations of the worthless paper are controlled by the same people who benefit most from the fluctuations: the national and multi-national banking industry(s) at the expense of, well, everyone… If your currency was based on silver, say, .999 fine Silver coins, 480 grains in weight and represented by Silver Dollar Certificates and copper tokens in 1/10,1/2,1,5,10 and 50 cent denominations redeemable in Silver Dollar coins a 1/10 cent coin would still be worth over 1 cent US. THAT is a ‘stable currency’!October 5, 2009 at 10:13 pm #7972
I like the silver and/or gold standard from a traditionalist point of view. Not an economist either. We do keep a few actual such coins onboard.
Like the Sea Dollar, too. Would a hundred still be a Sea Note?
*************************************************October 5, 2009 at 10:31 pm #7973
As previously mentioned is the $tead!
1 $tead = 1 pint of home brew. Now THAT is a “stable currency”!October 5, 2009 at 11:16 pm #7975
Hah, nice Ocean.
And nice pun Michael.
I dont like the idea of valuing something against any single commodity, however valuable. It’s too easy to horde. And I don’t like the idea that someone can accidentally find themselves a huge stockpile of the stuff. Be it via inheritence, or by literally finding it in the ground.
Here’s a novel idea: Why not deal in “man-hours”. 1mh = the value of one hour of work from an unskilled labourer. Depending on your skills, and what they’re worth to your employer, you could be paid anything from 1 to 20 (as a rough estimate) mh/hour. I like the idea that anyone, in any situation can be paid a flat rate for even the most menial of work. Almost like minimum wage, only… better.
– NickOctober 5, 2009 at 11:33 pm #7977
Ocean, I like it. Measured in Proofs, Shots, or Ounces? The Beer (B) is a standard of trade here at the marina. I helped my neighbor Professor Bob troubleshoot his radar in exchange for a cold rum drink (approximate value, 2B).
Nick, From my limited experience living on a boat and dealing with other liveaboards, the ManHour is a good measure. Barter works and it’s off the books. Money is scarce, but time is always a good trade item, as are actual barter items. I’d suggest going with either the ManHour (MH) or the Favor (Fave).
But bear in mind, a lot of folks are going to be moving onto seasteads with all sorts of, well…extra crap. Stuff they think they’re going to need but end up not. And they’re going to end up needing stuff they didn’t think of. Trade and barter will be the standard for a while, once people work out what’s worth what and to whom. We recently traded a window air conditioner and a pair of dive booties for two excellent bicycles, even up. The system works.
*************************************************October 6, 2009 at 12:04 am #7980
The internal exchange can be whatever the seastead decides. The external exchange will have to be equivalent to a foreign currency. I like the Euro idea.
A tourist visiting will not want to exchange manhours for food. They will want to buy their meals, drinks, or whatever is available.
That said, when we start ferry things on our boat from one group to another, we will definitely be interested in trade, manhours, and brewskis.
When we design colonial games, we always start out with the most precious and necessary item as a base. Then it usually goes to metals.
What is a usable metal?
Aluminum (lightweight and useful)
Copper (wiring, pipes)
Zinc (definitely necessary when on the ocean)
Gold (important resource for multiple reasons)
Titanium (hard to manufacture properly and doesn’t rust)
The question is what can be manufactured on the seastead, harvested from the ocean, and what will have to be imported?
Information is also a good currency. Setting up weather, radar, WiFi hotspots, and ocean salinity and current monitoring systems may be a source of outside funds to the seastead. Charge them Euros for manhours and buy the metals needed.
Just a suggestion.October 6, 2009 at 12:09 am #7981
Barter is good, but it has the same issue as currency. A man with nothing to give has nothing. That’s why I like the man-hour. Everyone can give a man hour.
Although the downside of man-hours and the upside of everything else is when you’re not able to work. Man hours aren’t likely to be accepted on land, so if, for whatever reason, you’re unable to work for any amount of time, you have nothing to trade.
– NickOctober 6, 2009 at 12:26 am #7983
A MH can be mental as well as physical. I can spend an hour mucking out a bilge or standing a watch, or I can spend an hour talking someone through programming their GPS…even if I was cripped up in bed with the Creeping Morning After Flu. In trade terms, not all labor involves sweat.
Taking our cue from the Eskimos, we boat people have over 30 words for “leak.”October 6, 2009 at 3:57 am #7986
The only problem with using a low-value commodity like silver as the basis for a seastead economy is that you would need to store TONS of it to back your entire economy.
Silver trades at about $17USD per ounce. Even if your entire seastead economy was only a million US dollars, you would need more than 1.6 metric tons of silver. That is a LOT of weight to have on a floating colony. Gold trades at about $1000USD per ounce, so you would only need 28.4kg of gold to back the same one million USD economy.
Platinum trades at about $1300USD per ounce, so it doesn’t give as much of an advantage over gold…you would need 21.8kg of platinum to back that one million USD economy. In this case gold would probably be better…since you could probably find more people willing to accept a chip of gold over one of platinum.October 6, 2009 at 4:00 am #7987
The whole idea of using your time as a form of currency was already done by Danny Wallace in the lovely country of….Lovely:
Man I loved that show.October 6, 2009 at 7:57 am #7991
Was an interesting show. I felt fairly betrayed after watching it though.
I watched it on a rerun about a year after first show, then signed myself up but the place was already a ghost town. Actually, less lively even than that.
If he’d been serious about it, the revolution could be much further ahead by now than it is.
– NickOctober 6, 2009 at 1:44 pm #7994
If he’d been serious about it,
I really don’t think he was ever serious about it…he’s a comedian after all. It was a tongue-in-cheek piece but it did tackle some serious issues like crime and gun control. I enjoyed it a lot…when they tried to take over that small island I was cracking up!
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