Emotional economics - again

Colin Beckingham | Sep 09, 2020

In a world where beans might be the principal sustenance for all, before anyone can tuck into their plate of nourishment someone has to grow or at least collect the beans from storage. Production has to precede consumption. The addition of money to the economy, tokens for exchange and paying taxes, implies that the more tokens you have the greater your claim on the store of beans since more money outbids less money.

When the Prime Minister naively doles out more tokens with no regard for production this can only lead to a dilution of claims on the store. If token holders received more tokens in proportion to tokens already held the effect is neutral. But when extra tokens go to certain privileged people the result is clearly indirect taxation through an underhanded redistribution of token savings. Taxation is important, but it should be conducted through the usual transparent channels.

Tokens as reward for production encourage the maintenance of useful stores. When there are plenty of beans in the barn everyone continues to eat and the effect is not obvious. But as time goes by when production stutters through misdirected incentive will the barn attendant be the only person to notice as the hill of beans slowly evaporates and the scoop contains the somewhat less nourishing chaff, wrinkles, splits and dust?

Colin Beckingham