Non-POM: Even Better than Universal Basic Income?

Free Necessities, No Taxes, and It Reinvents Money to Reward the Right Things

A well-implemented, inflation-adjusted Universal Basic Income would lift everyone above the poverty line. Unfortunately, it wouldn’t do anything about disproportionate rent increases, predatory lending, scammers, addiction, advertiser-induced cravings, or getting mugged at the ATM. It could leave such a minefield of “gotchas” that many at the bottom would still find themselves broke and desperate halfway through the month even though technically they’re not poor.

One alternative to UBI solves these problems by changing the way money works. It’s called Non-POM, which stands for Non-Physical-Object Money, and it’s depicted in Larry Mason’s novel Invisible Hand.

In the book’s Non-POM America, necessities are all free. The free necessities include health care, education, nutritious food, modest shelter… everything a person needs to live a simple, non-materialistic life. The government collects no taxes; the free necessities are paid for by a mark-up on luxury goods.

The money in this system is non-transferable, meaning it doesn’t move from person to person like a physical coin (thus the name Non-Physical-Object Money). No mechanism exists to move money between accounts; it simply can’t be done. Your money can only ever belong to you. Your balance still goes up when you get paid and down when you make a purchase, but that money is created within your personal account by a system with a benevolent agenda.

Traditional money is morally neutral at best, which in practice means that people are constantly tempted to do reprehensible things for personal gain. With Non-POM, people are paid based on one criterion: the creation of net benefit for others. The more you improve the world for other people, the more money you earn for yourself.

Finally the incentives run the right way! Crime doesn’t pay, but helping people does. In fact, many kinds of crime are made impossible because money cannot be transferred from one account to another. There are no crimes of economic desperation because everything a person needs to survive is already free.

Since money was first developed, its very nature has been encouraging people to enrich themselves at the expense of others. For thousands of years, we have been inadvertently paying people to cut corners, rip each other off, and just generally act like selfish jerks. It’s not all grim, of course. Traditional money has paid for a lot of good things too. But switching to a system that no longer offers cash rewards for sociopathic behavior could help us achieve positive goals more efficiently. It would also make us better human beings, because self-interest would tug us in the right direction.

Don’t believe traditional money is so bad? Look at the tobacco industry. It earns billions selling an addictive drug that gives people cancer. What kind of sick society would actually reward that? All of them, unfortunately. It’s a booming business in capitalist, socialist, and communist economies. The common thread is traditional money, which treats a customer’s cancer as an externality, meaning it’s a negative side effect that doesn’t affect the company’s profits because someone else pays the price.

Today’s money demands no accountability, so we try to reduce externalities like cancer and pollution using the legal system. Sometimes fines are levied. Other times lawyers and lobbyists earn huge salaries circumventing those legal efforts so corporations can continue profitably destroying people’s health and the environment. With Non-POM, the “net” in net benefit means that negative secondary outcomes will always reduce your pay, so you have a built-in incentive to minimize or eliminate them.

Trying to ensure that money functions exclusively as a force for good involves a series of value judgements. Who gets to decide how much you deserve to be paid for your particular creation of net benefit? Who decides what’s a luxury, what’s a necessity, even what’s considered beneficial?

Non-POM relies on a group called the payers to make those decisions. These are the ones who add money to your account based on how much net benefit you create for others. Payers comprise three to five percent of the population, and are not part of the government. Anyone is free to become a payer, though it’s a commitment that means giving up money and luxuries for the rest of your life.

The no-luxuries rule puts power in the hands of those willing to transcend material self-interest for the greater good. It also makes the payers as close to incorruptible as possible, since it’s hard to bribe someone who can’t possess money or luxuries. Note that even the evolved individuals who volunteer to join the payers generally wait until their retirement years.

Limiting payers to consuming only necessities also keeps the system honest about what’s a necessity. The payers aren’t going to deny themselves food or medical care, or anything else people truly need to live, so those things are all necessities and therefore free for everyone. On the other hand, every indulgence the payers allow themselves by declaring it a necessity reduces their power and influence, because that’s one less item people need to buy using money, and rewarding actions with money is how the payers exert their influence. But they can’t make the necessities-only life too spartan, or it becomes difficult to attract new payers. In the book, I noticed that coffee and ice cream were both considered necessities, though upscale versions were also available for a price.

A transition to Non-POM would affect people differently depending on their inclinations and income level. The benefit to the poor is obvious: they wouldn’t be particularly poor anymore. Even those who don’t work can count on basic necessities no worse than what the payers get. Also, Non-POM pays for work that current systems don’t acknowledge, like childcare and household chores where the others who benefit are your own family.

For the middle class who enjoy what they do for a living, most would carry on as before, though the workplace would be less hierarchical because they’d be paid by payers for creating net benefit, not paid by the boss for their time and obedience. Jobs that don’t really add anything positive will no longer pay, but new opportunities will take their place. Connecting people to suitable work would be one way to earn money during and after the transition, so everyone could get help finding something productive to do that’s a good fit.

The wealthy benefit because this is a small-government system that operates without taxes. Government workers are paid as individuals for the creation of net benefit, just like everyone else. Sure there’s a mark-up on luxury goods, but it isn’t imposed by the government so you can’t really call it a tax. It’s more akin to profit, an invisible component of price that shoppers are accustomed to paying without complaint. Since every consumer good that isn’t a necessity is considered a luxury, the mark-up is paid by practically everyone, not just the wealthy.

Most high-functioning business people would quickly adapt to the new system. They would adjust their enterprises to maximize net benefit for others, and thereby maximize their own earnings. Some businesses inherently do more harm than good, and will fail when tested against the yardstick of net benefit. To these we say good-bye and good riddance! Letting destructive operations die is progress. Our tobacco executives and their ilk will either start over in new fields or retire in luxury on their ill-gotten gains.

The children of privilege would still benefit from family wealth and connections, but they would not have inherited money to look forward to because the new money can’t be transferred from one person to another, even after death. Possessions can still be inherited, just not money. When someone dies, the value of their account goes back into the system and everyone who created some net benefit that month gets a tiny bit more pay.

The reason for this is that Non-POM uses money as a component of reputation. A large balance shows that you’ve created a lot of net benefit for others in the past, which would tend to open doors for you in the future. Inherited money, or money received as a gift, would falsely inflate the recipient’s perceived merit.

After reading Invisible Hand, I kept noticing news stories where people had done some terrible thing for money. I’d ask myself if it would have happened in Non-POM, and the answer was always no. A system like traditional money that routinely pays people for making things worse has a serious design flaw. UBI eases the symptoms, but Non-POM fixes the underlying problem.

Does Non-POM have a chance, compared to Universal Basic Income? It’s hindered by being virtually unknown, and it’s so different from what we’re familiar with that it’s hard to even wrap your head around. On the other hand, where UBI would almost certainly raise taxes on the wealthy, Non-POM would mean no federal, state, or local taxes for the wealthy or anyone else. That part is a right-wing rich guy’s dream come true. It’s hardly the best thing about Non-POM, but it might make it an easier sell politically.