Money Redefined, Part IV

THE SPHERE OF GOVERNMENT

 Redefinition Three: Money can be manipulated to make basic needs more affordable to the underprivileged.

In the belief that everyone is entitled to at least minimal levels of nutrition, shelter, education, and medical care, the Postcap government acts affirmatively.

FOOD VOUCHERS:

Each month, the National Bank deposits in every citizen’s food subaccount an allowance of vouchers designed to help meet his nutritional needs.  The number of vouchers is adjusted for the age and sex of the recipient but is otherwise universally allocated-i.e., no qualifiers such as means testing are applied.  The vouchers are, of course, always in the form of electronic entries and remain valid for the current month only, expiring at its end.

The vouchers cannot, by themselves, be exchanged for food but are a necessary component in all retail purchases of food items.  Specifically, all food purchases require, in addition to their normal dollar payment, an equal number of food vouchers.  This requirement applies to all grocery and market shopping, specialty food purchases, package deliveries, and restaurant meals.  Even “free” food, such as that offered at banquets, promotional events, and charitable handouts, must similarly be paid for in vouchers and dollars by the sponsor of the event.

The number of vouchers distributed to each person is calculated by the authorities so that, on the average, middle class families break even every month, based on their consumption of a standardized basket of wholesome foodstuffs.  In short, the voucher system has little or no impact on their standard of living.

Wealthy families, on the other hand, starting with the same number of vouchers per person, are likely to deplete their allowance well before the end of the month by virtue of their more frequent restaurant dining, their more expensive taste in foodstuffs, and their fondness for drink.  To meet their voucher shortfall, they are obliged to purchase them on the National Bank’s open market in which dollars and vouchers are freely exchanged.  It is not be unusual for the accumulated demand for vouchers by the well-to-do to at least double their food costs.

The market’s source of vouchers is predominately poor families.  By adopting such tactics as conservative menu planning, home gardening, raising chickens, canning, and careful buying, the underprivileged households normally manage a surplus of vouchers that can, of course, be converted into cash.  Whereas they might not eat as sumptuously as the rich, they can, with industry and good judgment maintain a healthy diet very economically

The first week of every month occasions relatively little trading volume on the exchange because everyone has on hand all the food vouchers he needs.  Trading activity picks up during the second and third weeks of the month and trails down again the last few days of the month as the current vouchers approach their expiration.

Every month the government employs feedback formulas to recalculate the number of vouchers it requires the National Bank to distribute.  Roughly speaking, had the previous month’s vouchers been exchanged on the open market for less than “par,” (one voucher worth one dollar) then the purchasing power of the poor for their surplus vouchers would be deemed too little and the formula would reduce the number of vouchers to be distributed the following month.  On the other hand, were the previous month’s vouchers priced, let’s say, in the realm of two dollars, the corrected formula would avoid repeating a situation in which the poor enjoyed a free lunch-their surplus vouchers having paid for their entire food budget.

One might think that the imposition of vouchers would create a good deal of inconvenience on the part of food buyer and seller alike, but this is not the case.  When a shopper brings his cart to the register, bar codes on his purchases enable foodstuffs to be tallied separately.  Say they total $30.00.  That sum, along with its identification as a food purchase, is sent to the bank that then debits both the shopper’s cash account and his voucher account for the $30.00 amount.  If the shopper has already exhausted his monthly allowance of food vouchers, the bank automatically buys, in its customer’s name and at his expense, thirty vouchers in the open market.  This transaction, like the original one, is instantaneous and invisible to both the shopper and the checkout clerk.  Only the buyer’s receipt betrays the complete details of the transaction.

SHELTER VOUCHERS:

The Postcapians can no more countenance homelessness than they can widespread hunger.  And for many of the same “selfish” reasons. They are convinced they have more to gain than to lose by reducing the societal ills associated with slums, vagrancies, tent cities, barrios, skid rows, run-down trailer parks, and the like.  For these reasons they have introduced a shelter voucher system that works very much like food vouchers.

Postcapia’s steady erosion of all asset classes made mortgage lending, for all practical purposes, prohibitive.  The overwhelming majority of citizens, therefore, satisfied their housing needs by renting and it is these renters to whom the government’s shelter assistance is targeted.  Every month the National Bank deposits an allowance of shelter vouchers in every citizen’s account and requires all residential rental payments to be made in both dollars and an equal number of vouchers.  The allowance is calculated to roughly equal the rentals paid by middle-income people who consequently neither gain nor lose by the system.  And again, as in the case of food vouchers, the wealthy, who choose expensive accommodations, have to buy vouchers in an open market to cover their higher rentals.  Meanwhile, the poor, by compromising their choice of living spaces, can use their surplus vouchers to substantially lower their rental payments.

There are, of course, a few, very wealthy people who accumulate enough money to pay for a home in full, and those who do are able to pocket the dollar equivalent of their entire shelter allowance.  The other side of the coin, however, is that, like the purchase of any other hard asset, buying a house automatically sets up a shadow asset that is then taxed at Postcapia’s formidable rate.  How these gains and losses net out for the owner depends on his length of tenure and his profit or loss on its sale.

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The Postcapians believe their voucher systems are not just a social good but a political necessity.  Specifically, they allude to the following benefits:

1) From a humanitarian standpoint, food vouchers largely prevent widespread hunger and childhood malnutrition among the poor.

2) The food voucher system is virtually cost free to the government save for its minor administrative expenses.  It is, in reality, a form of income redistribution in which the rich, on a sliding scale, subsidize the poor.

3) In times of acute food shortages, the wealthy have, in times past, commandeered the available supplies of food by bidding up their price beyond the ability of others to pay.  Under the Postcapian’s system, however, the rising price of vouchers would act as a counterweight to rising food prices and thus reserve some portion of the available food supply for the poor.

4) At the very bottom of the scale, the shelter vouchers allow the abject poor, who might otherwise be homeless, to pool their allowances and jointly rent modest accommodations with the proceeds.

5) With the shelter system in place, there is never an excuse for slovenly practices either by renter or landlord.  Renting out substandard quarters and sleeping in cars, for example, are not allowed.

6) A more subtle advantage of the voucher system is its ability to carry more information than could a single currency.  Contained in the system’s statistics are important sociological data regarding the physical status of the underprivileged, the underserved niches that call for charitable efforts, and the general capacity of the food industry vis-à-vis the country’s demands.

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Postcapians not only tolerate a wide variation in living standards, they encourage it as an essential feature of their incentive-driven capitalistic system.  However, they recognize that the same steep gradient applied to the quality of education and health care would create unacceptable obstacles to underprivileged youth seeking to improve their station in life.  In effect, poor kids would start life’s race to the top in starting blocks set a hundred yards behind those of richer kids.  To avoid such egregiously unfair circumstances the Postcapians instituted two entitlements:

 THE EDUCATION ENTITLEMENT:

 Education on Postcapia is federally funded but locally administered.  Monies derived from the national tax are allocated to each school district in proportion to its enrollment.  Thanks to this governmental largesse, for meritorious students there is no cost for education from nursery school through graduate programs at university, if appropriate.

This is not to say that every youngster can pursue whatever course of study he chooses for as long as he chooses at government expense.  The budget set aside for education is predetermined each year and the number of students benefited by the program strictly rationed to fit within it.

Students are selected for the program on the strength of both their scholastic record and a numerical grade determined by their teachers’ appraisals.  Granted the latter qualification is subjective, its compilation from the opinion of many teachers is assumed to be impartial.  Attention is given as well to which course the student applicant wishes to pursue.  There is, after all, a finite limit to the number of artists, engineers, doctors, etc. that the economy can absorb at any given time.  And, needless to add, how far a student is allowed to advance in his chosen career depends on his academic performance.

As a practical matter, the lives of young people are not nearly as circumscribed as the above discussion might suggest.  A great many, having been unable to qualify for financial assistance, take advantage on the good education offered by the for-profit colleges.  Indeed, tales are legendary of unconventional kids who found their independent streak, coupled with hard work, gave them an edge in the adult world.

THE HEALTHCARE ENTITLEMENT:

Postcapians are convinced a healthy populace is happier, more easily governed, and more productive than one whose physical well being is neglected.  Furthermore, an argument can be made for health care just on the basis of raw economics.  The longer a productive life can be extended, the greater is the community’s gain.  Take two contemporaneous workers for whom the investment in their upbringing is roughly the same.  If one retires at age fifty-five for health reasons and the other, in robust health, retires at eighty, the productive years of the latter cost society only half as much as the former.

Having elected to institute universal healthcare, the Postcapians went about it in their customary efficient manner.  They set up a network of open-door hospitals and clinics throughout the land offering good basic medical services to every citizen free of charge.  Hospitals specialize in different medical areas to achieve more efficient utilization of equipment and expertise.  Services provided by the network include the treatment of chronic illnesses and injuries, routine medical exams, approved surgeries, joint replacement when practical, physical therapy, and medications.  Excluded are heroic end-of-life measures, exceptional neonatal intensive care, exotic procedures, cosmetic surgery, and unproven drugs.

One obvious advantage of the system is that its only nodes are the patient himself and his caretaker institution.  There is no intervening insurance company, supplemental insurance provider, government bureaucracy, nor employer facilitator.  Obviously, this translates into a fraction of the paperwork we non-Postcapians take for granted.  Another important saving comes about from their handling of malpractice issues.  These are settled by arbitration within set, realistic limits established by law.

Like universal education, universal healthcare depends for its funding on a dedicated portion of the general taxes collected from citizens’ asset accounts.  Rationing ensures that this portion stays within prescribed limits and, again like education, a grading system is the enforcement mechanism used.  Physicians are required to grade patients on their every office visit from “A” to “F” depending upon such factors as the legitimacy of the patient’s complaint, his compliance with previous medical advice, his attitude during the office visit, and his honesty.  A patient who stubbornly ignores his doctors’ advice to lose weight, for example, will find his defiance reflected in a lowered grade point average.  Since a patient seldom sees the same doctor twice, his running grade-point average turns out to be a generally accurate assessment of his efforts to cooperate in his own health care.

Whereas no one is totally denied medical attention, a patient’s grade has much to do with how well he is treated by the system.  An “A” patient, for example, is kept waiting less, is assigned a better ward, has a wider choice of caretakers, enjoys more appealing food trays, and so on.  “F” patients, on the other hand, experience poorer service and, in marginal situations, simply less of it.  Not surprisingly, then, the majority of patients are strongly motivated to follow their doctors’ advice.

And, since this is Postcapia, for those who can afford it, there are a wide variety of private healthcare facilities including many specialized in services unavailable in the public network.

CONCLUSION

Whereas the speculations discussed in this essay would entail a radical departure from today’s economic structure, they may nevertheless deserve further study if, for no other reason, than they do address problems that have hitherto proved intractable.

Were such study to reveal that the ideas contained some meritorious elements, their eventual application would be feasible, I believe, if introduced in an evolutionary manner.