Explaining RTM with Universal Dividend from the relative point of view

I found it much easier to grasp the theory of relative money, if explained the other way around, taking the uCoin parameters as example but going against 1 instead of ∞

There are basically three characteristics a relative currency with implemented Universal Dividend has:

a) The growing or distribution factor
Each verified member of the TrustNetwork will generate every year into their account 0.1 Coins. This is your universal Dividend.
b) The shrinking or destroying factor
Each account in the network will destroy every year 10% of their own Coins, thus the maximum total amount of coins per person will stagnate after 10 years at 1 Coin.
(For Example: If for 10 years, no member would be added or removed from the trust network, the total monetary mass would be 1000 Coin s)
c) Choosing your UD unit
Anyone can put their own relative Unit on top of those Coins.
(For Example: You can set your daily UD to 24, for each hour 1UD. The maximum total amount of UD’s in your calculation world, would be then 24 * 365 * 10 = 87600 UD’s = 1 Coin)

Please let me know, if I am making any mistakes here and please help improve this explanation

Hello Samuel,

This is actually really good, but you are still calling the Relative Money a “Relational Money” haha :wink:

Else I think that you really got it. It’s a nice way to see the relative point of view, with the growing and shrinking factors, Also, do not forgot that the number of 10% is not chosen arbitrarly, but based on the individual. It’s life expectancy is the direct cause of the 10% number, so that no individual is privileged from money issuance, whatever the time he is born.

For the relative reference, I’m not sure to understand. We can, for sure, define units on top of the Universal Dividend (@kimamila is developing a referential which represents dividends as “Time”), but your example is not really clear to me.

Hoppala. Thank you, seems to be wired into my brain. I changed it :blush:

I could never get hold it this reasoning. Maybe someone can explain this to me properly.
What I am understanding so far is, that the higher you choose the parameter, the higher the velocity of money exchange will be, since your coins are losing their value at a faster rate.

Jes, this was inspired by @kimamila. I can not put it in better words than him at the moment:

That’s wrong, according to what we observe in MetaBrouzouf where growth is 10% per day: in this currency, we have almost no exchanges at all.

The reason is extremely simple: if money is not able to store value in some proportions, it cannot serve as a medium of exchange.

This is wrong, because M/N = 1/c UD, there is always 1/c UD within the money, so money is stable, and cannot “lose value” due to “velocity of money”.

You can study “The RTM in color” to understand that :smile: when you don’t spend your money you’ll have more money in you account, when you own less than 1/c UD.

Much more : the values(t) in the economy are not the values(t+dt), so compared to which value will you estimate the “value” of your money ?

Do you know any “absolute value” all men past, present and future, recognise really as “a value” and “the same value” refuting the relativity principle ?

You are right. I have chosen wrong words. What I wanted to express is, that once you own more than 1/c UD you are more likely to spend that money, since otherwise you’ll loose them anyhow. Thus my conclusion, if you look at a larger scale economy, a possible behavior to be expected would be a slightly higher velocity of exchanges, if chosen for example 20% over 10% yearly distribution.

You are right, there is of course an upper limited to that parameter.

[quote=“Galuel, post:5, topic:529”]
Much more : the values(t) in the economy are not the values(t+dt), so compared to which value will you estimate the “value” of your money ?
[/quote] Always against the average amount of money per person of the total money supply in time.

Because individuals receive money all along their life. It’s basically down to this :

Each (t+1), the UD is 1000.
At t(0), individual A owns 0.
At t(30), individual A owns 30 000. Monetary mass is 30 000, so he owns 30 000.

Another individual joins the community at t(30)
At t(80), individual A owns 80 000, individual B owns 50 000.
So A received 80/130=61% of the monetary issuance at his death.
At t(150), individual B owns 80 000 of 160 000.So at his death, he received 50% of the monetary issuance at his death.

Thus, the monetary issuance was not neutral in this community. The first individuals were privileged in money issuance. The money issuance parameter cannot be chose arbitrarily.

That’s why the demonstration of Stephane Laborde is using the life expectancy : so that at half life of any individual, everyone issued a relatively equivalent part of the monetary mass.

Thank you that explanation has done the click!

But wait, I think I am figuring out another parameter, which has not been considered in your example, the element of exchange.
If t is put at a 1 sec interval and an individual is always spending its generated money immediately, he will after 80 years have generated much more than, other individuals that are not spending their money. Or Not?

For example, with my explanation of RTM, going against 1 instead of ∞
T+1, UD is 10
Shrinking factor per t 10%

t(0), A own 0, total mass 0
t(1), A owns 9 (10 - 10%), total mass 9
---- B joins ----
t(2), A owns 17,1 (19 -10%), B owns 9 (10 - 10%), total mass 26,1
— A gives B all money (A = 0, B = 26,1) —
t(3), A owns 9, B owns 32,49 ( 36,1 - 10%), total mass 41,49

In t(3) A got +9, B just got + 6,39
So, if A continues to give over the course of 80 years B all its money, they will not generate the same amount of money, but B is even starting to loose once B has passed 1/c UD

But M/N has value compared to what ?

Do you pretend B has always obligation to sell something to A and accept a certain amount of money for that, and do that all his life, producing and selling for money to A, never spending the money, like would do a slave, working without any counterpart ?

Is that the idea you develop here, B being slave of A and having no freedom ?

This was just an example, with 2 people, for an easy demonstration. But it is indeed possible, that someone will just live from its UD and always give away everything to other people. In my point of view this is totally a valid scenario, that is going to happen and shall be considered in RTM, and has nothing to do with slavery or not having freedom.

It has no value at all, every person is evaluating this for themselves at every point in time differently.
To be able to evaluate better, M/N is for me a good point of reference, but everyone can do as the think of course, it doesn’t matter.

It’s a relative point of view, and is included in RTM as a relative point of view with no incidence at all.

To loose compared to what ?

M/N has value compared to what ? values(t) or values(t+dt) ?

Let’s imagine he “loses” 10% of his amount (t+dt), and then price of bread(t+dt) decreases of 15% so :

  • He will earn 15% - 10% = 5% more breads(t+dt), and so he owns much more breads not less.
  • But because you say he nerver spend his money, perhaps this amount of money will earn much more breads after his death, when bread prices will have decreased of 99%

So compared to bread, his stock will increase more and more in value, and so what ? Is this a bad thing or a good thing ?

I would like to exclude the element of “external” goods, because if you only look at the money accounts of people, it doesn’t matter how much extra value in form of breads or other goods you have generated and or accumulated.
What I am trying to express: The only difference between using 5%, 10%, or 20% (not that I am trying to fight the choice of 10%!!) is the time it will take until the maximum monetary mass is reached and the gap between the UD’s and M/N, if no new members are entering.
5% = 20 years
10% = 10 years
20% = 5 years

For Example:
Adapted to the current economy, where M/N is ~35000€, this means a monthly UD of:
a) 5%, UD = 175€
b) 10%, UD = 350€
c) 20%, UD = 700€
And therefore if choosing 20%, you are more likely to spend your money, once you passed M/N, since your account will not grow anymore, but decrease at a faster rate, if you choose 5%.
Thus my expectation, if chosen a higher rate, the velocity of exchange could be slightly higher, than with a lower rate. I can be wrong, but nobody will know at this point, unless there have been larger scale experiments.

This is a correct scientific assertion.

And even with experiments, we will probably never know. Consider Euler’s sum of powers conjecture:

x^4 + y^4 + z^4 = w^4

Give it some tries, with brute force. Make 1 thousand tries, on paper. You will probably end considering there’s no solution to this equation, like Euler did.

But this is wrong: it exists at least this solution:

2682440^4 + 15365639^4 + 18796760^4 = 20615673^4

So what’s the point of my comment? To say that after each try, the next one might be the one saying “false” to our test. Until we reached this, we just believe.

That’s true*, in experimental science, you can never say “this is true”, and if so it is not science. Because always experience is first, and you cannot make all experiences and infinite ones to demonstrate : “this is true” and will always be in the future.

Example : Newton was ok, until the measures of Mercury perihelion precession, and Einstein work better. But then, who will say, “this is the end, Einstein is true, and all fulfill and will fullfil for ever” ? No scientist will do that.

NB * : that “this is true” in that case is not an experimental law, it’s logical axiom about science = science is what fullfil this assertion.

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I am neither a scientist nor any specialist on economics. Just an ordinary guy expressing and sharing his thoughts on this topic.
What is the point of this comment. Well, since my feedback is not professional enough and this discussion is getting of topic, I would like to point back to the start of this conversation and ask one last question:

Does this make sense for you in general to explain RTM with going against 1 instead of ∞ or should I stop wasting the time of all of us?

I personally think that explaining the RTM in the relative referential (your 1) is about why there is no inflation, while explaining the RTM in the quantitative referential (your infinite) is about the money issuance equality mechanism.
In general, it’s always good to try to explain the RTM because it helps a lot to understand all the points made my the RTM :slight_smile:

Talking about the 5, 10, 20 %, the problem is not about the gap between M/N and the UD, it’s also about symmetry in time between individuals, with a life expectanxy of 80 years, 5% privileges the olds, while 20% privileges the young.

I understood, thanks to your example! :slight_smile: But I am not sure, if this holds true, since I believe the element of exchange is not considered. If you take the scenario that some people will only live from their UD’s, they in general will destroy less money than those who keep more of their money. Thus, as fas as I can judge, the amount which is going to be added or taken to or from you account, depends one your exchanges and not on when you enter.
Or am I completely wrong on this? If yes, maybe you have another example for me?