Economic system PANC (PNNC)
— Hypothetical essays on the moneyless economy of Ybymarã —
1 – Need for paradigm shift
All known economies work with money or some form of direct correspondence between the products and services that circulate in the system. The advent of money was revolutionary, allowing much greater agility in commerce. However, the level of complexity in managing cash-based economies has increased exponentially, generating several problems.
1.1 – Problems generated by the use of money
The first problem arises from the administration and control of the amount of money in circulation, where excessive system resources are spent that could be directed to productive areas.
Another problem has to do with the values attributed to each item, be it a product, service, or others. Many essential items are undervalued, and other futile or superfluous items are overvalued.
The third problem is excessive inequality. Assigning an exact value to each thing is simply impossible. Sometimes we try to get around this by making values more flexible, but this violates people’s equal rights to items, since they do not correspond to each person’s effort and production.
The fourth problem is psychological: the feeling of loss when purchasing something for a value considered high or getting rid of an item for a value considered low. There are also distortions of values where a banknote with a value “x” produces the sensation of being worth more than an item to which the same value “x” is attributed.
The fifth problem is a priority distortion, where monetary values acquire more importance than the products and services they represent. In this context, the provision of services and the production of goods are secondary effects of financial transactions, which have an unrealistic importance and are disconnected from reality.
1.2 – Capitalism and socialism
Firstly, it is necessary to consider that capitalism and socialism are economic systems, and, as systems, they are neutral; they are neither good nor bad. Therefore, each one adapts better in different contexts. Capitalism adapts best in a self-centered culture, where each individual defends their rights. In a more altruistic culture, socialism might be more appropriate.
It is worth mentioning that, in practice, the situation is much more complex. In capitalist systems there is also a socialist bias, as governments provide minimum guarantees for each citizen. In socialism, individual needs and guarantees are exclusive to the dominant minority, who end up having the advantages of capitalism without its risks.
Egocentrism in economic models is so deeply rooted in our culture that we don’t even realize it. The feeling of ownership—the ‘it’s mine’—has become law, which stimulates conflicts and results in inequalities, both in capitalism and socialism.
Based on the above, it becomes desirable to idealize some economic system that gives more importance to goods and services than to whatever is used to represent them. The system should also embed basic survival guarantees and allow for a fairer distribution of returns, so those who contribute most to production can get more. Furthermore, it should encourage the manufacture of more durable goods, minimizing the production of waste and the problems arising from it.
Considering that people’s right to enjoy goods and rights must be equitable and that exact correspondence between the representation model and what is represented is impossible in practice (it would probably require more resources than those available in the system), a more flexible model can generate better results. Then we have the “Point-Evaluation-Level-Quota” system, or PANC (from the Portuguese Ponto-Avaliação-Nível-Cota), whose basic ideas are described below.
Points: represent the quantity of goods and services available. It is equivalent to GDP in monetarist systems, having a more direct relationship with money (each point can be expressed as a monetary unit). Each point has an expiration date. It is suggested that the standard point corresponds to 1 hour of work valid for one year.
Levels: right that people have to “buy” products and services. Upon reaching a certain number of points, the person moves up a level. She can only drop a level if the points expire. The levels are divided into sublevels whose entitlement may vary according to market fluctuations. Thus, a person at level 4 can fluctuate between 4.0 and 4.9, depending on the market, but can only fall to 3 or rise to 5 through their own effort and merit (or lack thereof). The sublevels function as a kind of bonus.
Quotas: limiters of consumption per product or service. It is fixed based on availability and demand, in accordance with market rules. Thus, the consumption limitation is not given by the points (money) that the individual has, but by the effective availability of the product or service.
2.1 – Points
Points are awarded individually to each person, are non-transferable, and have a limited validity. There are several ways to earn points, the most basic being standard work, where you earn one standard point per hour worked that will be valid for one year. The standard work must have the following characteristics:
1 – Requires little effort;
2 – It is not dangerous, tiring, or unhealthy;
3 – No specialization or experience is necessary;
In addition to the standard points, you can earn extra points:
1 – Extra points for specialization study/work;
2 – Extra points for requiring physical or mental effort;
3 – Extra points for proven socioeconomic need;
4 – Extra points for hardship, dangerousness, or unhealthy conditions;
5 – Extra points for work rejected by other people;
6 – Extra points for inventions and intellectual works;
7 – Extra points for anything that pleases people and generates a “like” (each “like” does not necessarily generate a point, and several “likes” may be needed for each point);
8 – Extra points for proven need for the work performed.
2.2 – Levels
The levels determine the accessibility of goods and services for individuals and businesses. Normally lower levels only grant access to more basic rights of less productive complexity (essential rights and guarantees are accessible to any citizen regardless of level and score).
A suggestion is to number the levels from 1 to 10, as described below.
Level 0 – only babies and people unable to care for themselves.
Level 1 – lowest level that a capable person (in possession of their mental faculties) can reach. Just food, basic clothes, and a room with a bathroom in a shelter.
Level 2 – borderline level. The person is prevented from having some rights. You may lose the right of usufruct of a house. Children under 12 have the right to sweets and toys.
Level 3 – lowest socially acceptable level for any capable individual over 12 years of age. The entitlement extends to nearly all types of food and clothing. Grants the right to the use of a house and certain electronics.
Level 4 – in addition to N3, the right to electronics, except those of high complexity, and the use of motorized passenger vehicles.
Level 5 – in addition to N4, the right to an auxiliary android and ownership of a house and a motor vehicle.
Level 6 – right to everything that is allowed to an ordinary civil citizen.
Level 7 – in collaboration with other N7 individuals, you can establish companies, promote scientific research, construct buildings, and undertake non-residential projects, among other activities. You can also partner with people at a lower level (from N3 upwards) to give them the right to undertake work. You can only reach N7 upon registration with a competent agency.
Level 8 – exclusive to legal entities. They can contract machinery, production inputs, civil construction, and works of all types. At least one level 7 citizen is required in a business society.
Level 9 – government and legal entities working in critical systems, duly registered with a competent agency. They can undertake construction and civil, governmental, and military works and manage energy and water distribution, among others.
Level 10 – only the government in situations of apocalyptic calamity, where the entire country is ruined. It can do anything. For isolated disasters, where the country’s economy is still functioning, Level 9 is sufficient to send all necessary aid.
Levels 1 to 7 are subdivided into ten parts each, constituting successive bonus rights for each tenth. The tenths (sublevels) are achieved through scoring, but they also fluctuate according to variations in the availability of the goods and services covered. Levels, however, are much more stable than sublevels. Once a level is reached, its holder will only lose it when the points expire. Thus, a person with level 4 can fluctuate between 4.0 and 4.9 depending on market variations but will only drop to level 3 if they lose points or rise to level 5 if they gain more points.
For level 8 (business), there can be one hundred subdivisions (8.00 to 8.99), not gradual as in levels 1 to 7, but rather targeted. Thus, level 8.30 does not mean that you are entitled to more than level 8.20, but to different things. A possible attribution of competencies could be as follows:
8.00 – Agriculture
8.10 – Mining and metallurgy
8.20 – Food and medicine processing
8.30 – Manufacturing in general (machines, clothing, furniture, etc.)
8.40 – Civil, business, and government construction
8.50 – Transport and commerce (logistics)
8.60 – Health
8.70 – Education and scientific research
8.80 – Arts
8.90 – Administration and management
For level 9 (governmental), rights and limitations are established by laws and not by the market.
Level 10 can only be instituted in cases of public calamity (natural disasters, wars, etc.) and upon approval by the Supreme Council (made up of the leaders of the seven powers).
2.3 – Quotas
Each natural person will be entitled to a certain share of each product, commodity, or service. As an example, let’s say that each person is entitled to one kilo of rice per week. This right is personal and non-transferable. The idea is that the quotas are very generous since each person has a different consumption profile. As for basic products, they must be produced in sufficient quantity, stimulated by higher scores, if necessary.
2.4 – Scoring examples – human beings
Below is a sketch that provides an idea of how the relationship between points and levels would work.
N0 and N1 – do not require punctuation. They consist of basic fundamental rights for any citizen: housing, food, clothing, public transport, security, health, and education.
N2 – 10,000 points (+/– 4 years of work with standard points)
(220 hours/month)
N3 – 30,000 points (+/– 11 years of work with standard points)
(220 hours/month)
N4 – 50,000 points (+/– 18 years of work with standard points)
(220 hours/month)
N5 – 100,000 points
N6 – 200,000 points
N7 – 500,000 points
N8 – The sublevel is determined by the area of activity.
N9 – Specific legislation
Levels above N4 are impossible to obtain just by working for standard points. Then points must be obtained by other means, such as specialization, physical or mental effort, etc.
2.4 – Scoring examples – legal entities
Company points are also non-transferable. It is important that only individuals have the right to score subjectively (giving grades) to both companies and other individuals. Companies can only subjectively score other companies and must register their employees’ points according to each person’s work and specialization. Thus, when purchasing a product, the person must assign a rating, say from 1 to 5, which will be converted into points depending on the product.
The conversion of grades into points must follow the ease or difficulty of obtaining the evaluated product. Thus, the grade given for a kilo of salt will be converted into fewer points than the same grade given for a car. One suggestion is that the company carry out “accounting” to determine how many points were needed to manufacture the product. Suppose the company gave 200 points to workers and needed 150 points for input “A”, 250 points for input “B”, 50 points for transport, and 50 points for logistics, for a total of 500 points. The intermediate grade “3” will be worth 500 points, grade 4 could be worth 1000 points, and grade 5 could be worth 2000. Grade 2 would be worth 250 points, and grade 1 would be worth 125. This is just an example of how it would work. The only important thing is that the central note balances the points.
For a company, we can set the standard point to one kilo of salt, valid for one year. This point will correspond to all the work involved in the process of extracting, packaging, and transporting a kilo of salt to the individual who will use it.
Companies can also earn points depending on the volume of demand for their products. For products of very low value (such as candy, chewing gum, screws, etc.), companies may receive scores based on the volume of demand, which are then recorded in the scorers. This type of score can also function as a kind of bonus for all products and services.
Companies score other companies through grades. So, the transport company scores the salt packer, who scores the salt extractor and packer, etc. In this case, the score will be by grade (can range from 1 to 5), which will be converted into points.
Both companies and individuals have the right to a single change in the scored value within a pre-established period. For foodstuffs it could be 24 hours, for example. For technology products (vehicles, for example), it may be 1 year.
As there must be a maximum number of points in the system, the points assigned to a grade must be floating.
Companies score their workers a little more rigidly. Thus, a simple job that does not require effort or specialization will receive the standard point per hour worked, with extra points for effort, dangerousness, specialization, etc.
Companies can only score people who work directly for them (their employees) and other supplier companies.
2.5 – Scoring examples – government
Governments should only score their employees and suppliers in the same way as companies. However, it is empowered to set the maximum number of business and personal points available in the system and to interfere, within narrow limits and exclusively with the aim of maintaining the stability of the system, in the relationships between points and levels, as well as quotas. However, it can only do so through a law or decree in which the majority of powers agree.
(A) – The non-transferability of points is crucial, as it prevents potential corruption and system instability. Furthermore, transferring points goes against the basic ideas of the PANC system, as points can be traded just like money. Points are awarded to people on their own merit or through the provision of work and constitute an inalienable right of each person, and can only be withdrawn in the case of illicit acquisition and through full defense. All assets belong to the Community (including real estate) and must be distributed to each person by mutual agreement, through grades and scores. It is important to set the minimum validity of each point, which can be one year.
(B) – When a person wishes to give a gift to another person at a lower level, they may do so using their own quotas while adhering to the registry of items that require it.
(C) – A used item that someone discards may be made available for a level below. Let’s say someone has a device that can only be obtained at level 4 and gets rid of it to get another one. This used item may be accessible to those at level 3. But the quota must be respected; let’s say that the person at level 4 is entitled to one item “X” per year; if he gets rid of item “X” before that, he will have to wait for the deadline to get another one. Used items must also be scored or given a grade, generating points not only for the intermediary but also for those who manufactured them.
(D) – To allow citizens to enter civil life, points will be awarded as bonuses to each person. The expiry of points should be gradual at the beginning of working life. So, for example, at age 12, enough points may be awarded for level 3, with, say, half of them due at age 18 and half at age 20. This will allow for a smoother transition into working age. Students should also have their points deadlines extended.
(E) – Companies are also scored by users of their services through grades. A company achieving a higher score will secure a larger share of consumption and foster growth. Company shares should be distributed according to availability in the same way as for individuals. The volume of demand for a company’s products will increase its score.
(F) – The work score will be cumulative and will always be added to the individual score. The score assigned for each grade, which acknowledges the individual’s performance, will proportionally affect the average points. So, for example, one person scoring will generate “x” points, ten people scoring will generate “2x” points, 100 people scoring will generate “3x” points, and so on.
The advantages of the PANC system are associated with its simplicity of management. Below are listed some.
1 – There is no need for government collection.
2 – Simplification of commercial operations, since products and services do not have an exact value associated with them.
3 – Eliminates the need for social actions regarding minimum income and essential guarantees, such as food, clothing, and housing.
4 – Simplifies the guarantee of access to goods and services for people who are temporarily or permanently disabled (accidents, illnesses, etc.) and for retirement, as it is enough to “freeze” the validity of the points.
5 – Eliminates the “feeling of loss” when someone is scored, because whoever is scoring does not hand over anything belonging to themselves.
6 – Prevents waste and rework, as it directs goods and services provided to increase quality, as these are “paid for” with users’ notes.
7 – Simplifies business management and accounting, as they only have to award points to employees according to the time worked, type of work, and specialization.
The relationships between the production and distribution of goods and rights are extremely complex and cannot be described in just a few pages. The system proposed here only serves as a proof of concept for the possibility of having an economic system that does not use money.
