How To Solve Research Funding Problems, Using A Parallel Currency System

Posted: November 12, 2012 in Crazy ideas, Humour
Tags: , , , , ,

Post a flurry of exuberant outpouring on Radical Proposals (links at the end of the post) aimed at tackling some of society’s most pressing problems, HaLin hit the pause button. Few seemed excited (HaLin actually pitched more palatable versions of the ideas to powers-that-be, who quickly reminded the fable of the goose that lay the golden egg), and less pressing issues took precedence. On careful search for thorny problems demanding somewhat crazy solutions, HaLin hit upon a problem worthy of addition to his expanding list of Radical Proposals.

Anyone who has been around academics/scientists/researchers, real or otherwise, for any length of time would notice a common grouse. Lack of funding. HaLin has long been an admirer of the Sciences – Natural, Social and Pseudo – and has strongly believed that the inability of the Illuminati to communicate with lesser mortals should not detract from their grand mission; of ridding the world’s problems. This community, generally also believed to exhibit scant understanding of the real world, are most comprehensible when complaining about the utter lack of funding and understanding on society’s part, of their many vital contributions. Rejected research proposals are attributed to recalcitrant attitudes or ignorance or both. Moreover, despite much progress, humankind is besotted with more problems than it would like to have on its menu. Solutions are nowhere in sight.

Given this, humankind faces a serious problem. A proposal to solve this pressing issue of lack of funding, whilst maintaining economic sanity, is duly recommended; for dissection, digestion, suggestion, redaction and comment. Though, criticisms are expected to feature most prominently.

——–

Put simply, every single research proposal across the globe vying for funding, would receive full funding support. To ensure impartiality, a pan-global entity – Mission for Advanced Research Solutions (MARS)  – could be constituted to administer duties. MARS could be empowered legally to print money in unlimited amounts, with the sole constraint of doing so to fund research projects. MARS grants would not be entirely contingent on viability to humankind and probability of success. The currency used by this entity would be a special unit, perhaps referred to as RGU (Research Grant Unit).

Every earthling alive would hold an equal share in MARS, so benefits would flow directly and equally to all earthlings. No corporation, or a small set of privileged individuals would be shareholders; as in the present-day arrangements in key economic entities around the world. To ensure market stability, trading in these RGUs would be prohibited.

Earthlings in dire need for more RGUs could enter into a barter exchange agreement with fellow earthlings, with MARS standing in as the global Custodian and watchdog. For instance, University X that badly needs extra RGUs might enter into a barter exchange with University Y, on mutually acceptable, bilateral arrangements. The Over The Counter (OTC) barter system might also insure against black market or surreptitious trading, a common outcome when public trading is banned in a commodity of some value. This would also ensure reasonable matching of excess and deficits, whilst maintaining broad market stability.

It is likely that this broad brush, open-for-all approach would encourage many to seek a career in academia/science instead of heading to finance and assuming a bad name, by default. The attractive pay-off could potentially dwarf the pay-off provided by finance. As an unintended consequence, this would solve one major problem confronting the world today; vilification of finance. However, the open door would likely encourage rampant misuse, which remains a risk.

With time, there would be a proliferation of RGUs in the hands of the Illuminati, which would, essentially, be extra currency in their wallets. At some point in time, a seamless medium of exchange between RGUs and existing paper currency would be introduced (at a 1:1 exchange rate) to ensure smooth functioning (many services that the Illuminati would use for their research would have to be paid for, using actual currency).

This would lead to a new problem. Excess paper currency on Earth. The MARS Project, with its printing of RGUs, would be akin to the present system of Quantitative Easing, being employed to combat the world’s economic woes. The creation of a parallel currency system – the RGU – is recommended keeping in mind the ill-effects of excess currency floating in the world. As excess money would lead to a surge in inflation at some point, the creation of RGUs would be a first step at ensuring that continued (new) currency creation would not awaken the ogre of inflation.

In the moratorium period that would ensure post creation of MARS, RGUs would assume the character of future money, exchangeable for existing currency at central banks around the world. Till such time, RGUs would not enter the world financial system, and inflation would be kept at bay. When the exchange takes effect, a surge to swap RGUs for existing currency might be reasonably expected.

To smooth the effect, the Illuminati (who would hold much of the world’s RGU) would be suitable encouraged to deposit their RGUs at a warehouse specially created for this purpose; in planet Mars. Much of Mars’ atmosphere is carbon dioxide, which would serve as a reasonable deterrent to a daring heist (the thieves would have to be alive, which isn’t possible presently). The warehouses in Mars might be within the realm of possibility, thanks to the outcome of the many research projects that would bear fruition due to creation of the MARS Project. Machines administered by MARS would preside over the to-and-fro transactions. Withdrawals from the warehouses could be restricted to a semi-annual cycle, and to within, say, 25% of the RGU balance held by the individual. To further encouragement, an annual rate of interest – payable in RGU – would be on offer.

This proposal, if implemented, would let the Illuminati enjoy the fruits of their labour, even if part of the enjoyment would be deferred, their grumbling would cease. The world would get solutions to many thorny problems, old and newly created ones. While net currency in circulation on Earth would increase, the above laddered proposal pertaining to savings and withdrawals, would smooth the effects of inflation.

To be sure, this scheme is not infallible. Like any system, it is open to gaming and has chinks which need ironing out. Just the basic construct has been presented here. Specifics have been deliberately left out, for want of space and to let you, dear Reader, contribute in shaping this proposal.

For comment.

——

Radical Proposals, selected archives:

Tequila Shot Solution, To The World’s Prison Problem

Tax The Fat

On The Futility of Eating & Marriages. How To Reduce Food Wastage…

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Comments
  1. Sharmishtha says:

    we really need an alternate economy!

  2. Ankur Mithal says:

    Since I do not know enough I desist from opining, but I often wonder what the objectives of the economists are; is it more money for everyone? is it a better life (defined by whom?) for everyone? is it something else?
    Is it even possible that everyone becomes richer? I don’t think so. Rich exists only because there are poor, and vice versa. If everyone is rich then no-one is rich.
    One experiment worth doing, whether by the Illuminati or otherwise, is to create a microcosm of the world, like a monopoly game, but one that can hurt, and have a select set of humans to play it out, under rules made by economists for the “perfect world”. Will it stay perfect or degenerate into the normal world, with rich and poor, with boom and bust, and everything else we seem to be trying to manage all the time? What do you think?
    Currently everything seems to be based on a theory.

    Also, am attaching a link to a recent article on Cuba in NatGeo magazine which talks about a dual-currency system they introduced ten years back to complicate life for everyone and create work for the government (it seems one can only work for the govt in Cuba) which might give you ideas:
    http://ngm.nationalgeographic.com/2012/11/new-cuba/gorney-text

    • HaLin says:

      John Kenneth Galbraith is one of the few economists whose thoughts and methods I admire.

      Galbraith believed that Social Sciences ought to be measured by their usefulness. He liked to cite the difference between exoteric knowledge (aka knoweldge related to practical application) and esoteric knowledge (the theoretical world). The former ought to have more weight but it so turned out (back then, and more so now) that the latter gained in precedence. Galbarith focused on the exoteric. Most economists, though, prefer residing within the strong walls of theory.

      My grouse with the study of social sciences remains the same. Most branches of social ‘sciences’ do not resemble science at all; economics being one such activity. One principal difference between the Natural Sciences and Social Sciences is easily forgotten. The former lends itself to established arrows of causation, whereas the latter is frequently riddled with circular relationships. This however doesn’t prevent economists from building mathematical models of reality that are premised on strong arrows of causation. Circular relationships are wished away. The real world, sadly for the economists, isn’t aware of this grand swiping.

      The fallouts of this is best viewed through the example that you cite, which is a very useful thought experiment.

      We could set off the Monopoly World with ‘ideal’ conditions (everyone equal in moentary endowment, equal distribution of natural resources etc). However, I suspect strongly, the ideal world would slip away quickly from a state of orderliness to one more chaotic. The process of interaction between human beings would exacerbate this. Hoarding by a few, wielding of power, the will to exercise this power to command the many is a rather strong force. Introducing more complexity to this Monopoly World (in the form of paper currency), will further abet this process of emergence of inequality.

      Every action, though, has positive effects too. The introduction of paper currency provided a much-needed anchor for our expectations. When you and I trust money, we are incentivised to finding solutions to problems such as AIDS, small pox, cancer etc. This same incentive system gives rise to motivations such as building a nuclear arsenal, bombing your neighbour etc. The good comes with the bad.

      Finance is like a gun in your pocket. It can be used to safeguard, or to kill. Unfortunately, much activity is focused with the latter in mind. An alternate currency system, when used appropriately, would prevent black marketeering (Cuba example, where it is frequently instituted as an instrument of ‘appeasement’).

      One system that has been in existence since 1934 is the WIR Bank in Switzerland. The WIR Franc was invented thanks to the Great Depression. It exists alongside the Swiss Franc but kicks into business during recessionary times, or when mainstream credit dries up. Manufacturers/traders transact using the WIR Franc; which has a negative correlation with economic cycles. In times of expansion, people use the Swiss Franc. However, in recessionary times and/or high unemployment, people prefer transacting in WIR Franc, which leaves Swiss Franc in the pockets of people (much needed cash is conserved).

      Confidence is the glue that keeps any medium of exchange together. The WIR Franc isn’t the cure all but it works better than alternatives, which is its USP.

      The MARS idea is centered on building confidence in an alternate form of currency. True transparency would go a long way in creating this environment, and would give us expedited solutions to many real problems confronting us, but it might also encourage anti-social/power-hungry interest groups to use the window to further hegemonical ambitions. Plus, it would lead to higher inflation everywhere; which may not be a bad thing. As you refer in your rich-poor paradigm, when everyone is at the same level nomenclature becomes meaningless. When the world moves from a state of low to high inflation, little would change materially.

      One cannot have everything. There will be sections which will be on the receiving end of any system. I suppose the question then boils down to a majority-minority view.

      Despite my natural skeptical attitude, I wonder if we can work towards this ‘better’ system. What do you think?

      • Ankur Mithal says:

        Had not heard about WIR Bank, despite occasional dalliances with Economics. Thanks for introducing me to it.

        In my view there are a few givens in the nature of humans which need to be taken into account for any system to have some impact, rather than assume “perfection” as the disposition of humans. Some of these are:
        – relativity; i.e. seeing themselves in relation to others
        – constant striving for more; more money, more power, more leisure, etc.
        – looking for promoting self-interest at all times; even promoting a group’s interest may be for the purpose of furtherance of self-interest
        – not really knowing what is desirable; in the absence of this knowledge, money is used as a surrogate

        As such, in my view, humans are condemned to living in a state of permanent flux.

        I think our main objective, which in any case is coded into our DNA as instinct for self-preservation, should be to ensure that the foolish actions of a few do not bring the whole mankind to the point of extinction.

        You are right. One cannot have everything.

      • HaLin says:

        Interestingly, three out of the four criteria that you cite are what economists use as building blocks!

        I think our main objective….should be to ensure that the foolish actions of a few do not bring the whole mankind to the point of extinction.

        Disorder seems the only constant. I often think much of our thoughts and actions (politicians, market participants, consumers) are directed at finding the path that leads the slowest to orderly obliteration. Though of course, we do not think of it as such.

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