The Real Bill Economy, part 1

The history of real bills offers a potential solution to the difficulties of non-dollar commerce. A real bill is essentially a direct IOU, guaranteed by your own ability to produce. It is essentially a store of value for whatever you offer. The advantage is that it can be transferred to multiple owners. Thus, in effect, your IOU, representing your service, becomes part of a market, and you would not control who cashed it in.

Here is a practical example. Say you are a laborer, and you want to buy some food. In a pure barter economy, you could offer to work for the farmer in exchange for food. But what if the farmer had no need of your labor? Instead of refusing the sale, the farmer could accept from you a real bill for 8 hours of your labor. He wouldn't even have to use redeem the bill himself. Say the farmer needed to visit the doctor. He could pay with your real bill, signing it over to the doctor, who would then own your 8 hours of labor.

The ownership trail of real signatures would be the main safeguard against counterfeiting of real bills. You would never redeem a real bill that you yourself had not written, and a valid ownership chain would be easy to verify, in a case of multiple real bills being fabricated. As you can see, theft of real bills would be senseless, since, unlike fiat money, they had to be redeemed by their legitimate owner. A stolen or lost real bill would be worthless, unless returned to its owner.

A real bill is also given an expiration date, which guarantees both its worth and its marketability. The market would determine the validity of various expiration dates, primarily based on risk assessment. For example, a physical labor bill might have a weekly or monthly expiration date, whereas a doctor's or teacher's service bill might have a year-long or even multi-year expiration date, since such a professional is much less likely to "go out of business".

Specific expiration dates and real bill values would also depend upon your own personal skill, ability, and work ethic. If someone knows you are a lazy laborer, they are not likely to give you much in return for your 8-hour labor bill. Someone who is a known hard worker will command much more for their labor bill.

Character assessment would also play a role in real bill value. Such as, most obviously, your consistency in redeeming your outstanding bills faithfully. Defaulting on your real bills would quickly mean no one would accept them, thus taking you out of the real bill economy.

Since stolen real bills are worthless, defaulting on your own real bills would have serious consequences. Essentially, everyone would have to work faithfully, or face starvation.

But how would you know if some random person's real bill was worth anything or not? This is the role of the real bill clearing house. The clearing house would provide the verification and market service for real bills. Verification means the clearing house would track the performance of your real bills and make that performance available to the public, acting as a rating agency. Anyone desiring to do business with you could simply check your real bill rating. If your real bills have a certified 100% performance, they would be rock solid in trade or transaction, and your services would be in high demand. If you were lazy or unfaithful in writing or redeeming your real bills, no one would accept your bills and no one would want your services. Violating the terms of your own real bills could also be against the law, resulting in criminal penalties.

The clearing house would also provide a market for real bills, greatly facilitating general commerce. Upon receipt of a real bill, you wouldn't personally have to use that service or personally find a matching buyer. Rather, you would only have to give it to the clearing house. The clearing house would then match people who have the need for that real bill. With today's economy, it could all be done electronically.