Cross-posted from LessWrong

As an economics major, I have often heard it pronounced (largely correctly) that the great thing about money and the free market is that money is an extremely nimble decision-making process; money provides a way to measure how much value people can gain from something being created, or some service being done, and it also measures how much effort will be required to do so. This allows for things to be done when it creates more value for everybody than it destroys, and prevents things from destroying more value than they create. Money also allows for one person to be paid money for a large, complex service, and then for that same person to redirect parts of that money to induce other people to do smaller parts of the bigger task, allowing for coordination of large, complex tasks. This view is largely correct, and an important fact that among the general population is often missed.

But there is a slight magic trick going on here: When we say “valuable”, we haven’t defined valuable to who? As it happens, money does not measure value uniformly over all people; it measures what is valuable to those who already have a large supply of money. Now, in some sense, this is a feature, not a bug, since by rewarding primarily those who have earned money, we induce people to engage in complex chains of flow of value, as I have described above. However, currently, this is taken to an extreme: People who don’t have money can get “locked out” of the system, having their needs and desires not accommodated, even though they put in their best effort to contribute to the system, while the people who already have a large amount of money are best able to increase the proportion of value they command, in large part by investing in good projects that increase the capacity of what humanity can accomplish. It’s good that rich people can improve our abilities, the problem is that poor people are prevented from taking part in that dance to the fullest extent - I wonder how many brilliant minds are made unable to contribute their best contributions due to a lack of starting capital? How many Elon Musks, Bill Gates, or Warren Buffetts have been prevented from working their magic due to not having those first few dollars that they could eventually turned into many (helping humanity prosper along the way)?

The solution that seems obviously correct to me is have a currency (I imagine a digital currency) that has some amount of “source” in the people. In the case of USD, the source of the currency is the federal bank, which then gives the money to banks that loan money to the federal government; in the case of Bitcoin, the source of the currency is the miners who do the calculations required for the currency to function as it is designed to. In the case of a “democratic currency”, the major source of the currency will be in the people as a whole, with a certain fixed percentage of the value represented by the currency (that is, the market cap), being credited, on regular intervals (for example, every day), to every single person known to the currency. The currency could either have a fixed amount of the currency (as is the case of Bitcoin, where there will never exist more than a fixed amount of BTC), or the total supply of currency can constantly be increasing, as is the case with USD. Of course, to fix the total amount of currency at a constant cap, but have a constant source, that implies that the currency itself must constantly be “decaying”, that is, what is 1 unit of currency will only be 0.99 units of currency at a later date; In practice, this would not be practically different from the current situation of the American dollar, which is designed to inflate at a steady rate (based on the ideas of a man named Keynes), except instead of the value of what is called “one dollar” constantly decreasing, the value of a given nominal unit will be constant, with people’s accounts of the currency themselves being where the value disappears.

There is one important variable that can vary here, which is the percentage of the value represented by the currency per time which gets redistributed, which I will call alpha. Alpha could be 1 percent per day, or 1 percent per year, or 1 percent per millenium. In the extreme cases, if alpha is 0 percent per year, then we just have regular currency, and if alpha is infinity percent per day, then we get a weird degenerate thing that I think is impossible to use in any meaningful way. I expect that if alpha was 1 percent per day, that would be very high, and very few people will willingly engage in it, with a half-life of around a month or two. Unless there is some domain where fast circulation of value makes sense, I don’t expect such a high value to be useful. A more reasonable value perhaps would be around 1 percent per month, with a half-life on the order of four or five years. Such a currency one still wouldn’t want to use as a vehicle for long-term investment, but no “democratic currency” would ever be designed with long-term store of value in mind. But on such a time scale, people can easily conduct transactions and create value, while also ensuring a steady flow of measure coming from the people as a whole, not just those who already have the most value present in the system.

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There are two points. 

Firstly, the problem that people are locked out because they have no money. This can be solved with this idea. It's similar to Universal Basic Income.

The other problem is that the money should be capitalized. Here we are with the market economy, which is currently creating problems for the climate because there is the legal compulsion for infinite growth.
Universal basic income means that everyone in the world has access to everything they need. So there has to be enough and it is. But if there is enough, you don't need money, you just take it. 

And if there is no money, there is also no pursuit of profit. As a result, useless things are not produced, resources are conserved and less CO2 is produced. With it we can maybe stop the climate change.
 

Why not generally abolish the money worldwide?

UBI does not create value, it merely redistributes it. It does not guarantee that there is enough for everybody, it merely helps ensure that when there is already enough (thanks to the workings of the free market), everybody has access to some part of that value

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