An African Example
Here follows a rough example of how the Fundament can be practically implemented in a country like South Africa - a nation full of hope for the future, but a nation with high unemployment and thus a large untapped labour force.
To start, there is only one piece of legislation that has to change: Permission must be granted to pay people with a currency other than the Rand. Once this happens, the South African Fundament can be built.
The Fundament declares that in 20 years it hopes to give exhange 1 Banana-Buck for 1 banana, 100g Maize, 1 hours education, 1 hours medical care, 1 KWh of electricity and 1 Litre of water. It says it can't provide this initialy, but one day eveybody will be able to buy these goods at these prices from the Fundament.
The Fundament is a non-profit co-operative which, every year, floats shares on the stock markets. It is designed to invest resources in order to build infrastructure to fulfil basic needs. The shares issued by the Fundament are essentially currency and so, in this example, we can call these shares Banana-Bucks.
The Fundament uses the capital it acquires by selling Banana-Bucks to build renewable power stations, schools, universities, hospitals, clinics, farms, dams, and water purification plants. In addition, the Fundament pays its employees in Banana-Bucks.
In the early days of the Fundament, not enough infrastructure exists for employees to spend their Banana-Bucks. Thus, employees might sell some of their shares on the stock market to pay for their everyday expenses. Eventually, however, those employees will buy their electricity, food, electricity, education and medical care using only Banana-Bucks – an energy-backed currency that never inflates.
Initially, Banana-Bucks are worthless. But as the Fundament begins to deliver energy into the economy the value of Banana-Buck increases relative to the FIAT currency. Eventually, Banana-Bucks are worth more than their FIAT currency equivalent and begin to replace that currency.
In ten years, the Fundament will be able to employ anyone who wishes to work there. In twenty years the Fundament will provide for all basic energy requirements. In addition, enough currency will be in circulation for people to use Banana-Bucks to purchase that energy. The growth model for the Fundament can be described over four periods:
During this period the Fundament targets areas of low income, taking advantage of spare labour capacity and retraining that labour to fulfil the needs of future construction projects. Investments are made in schools, clinics and adult training facilities. A work-force is trained, evaluated and distributed in order to begin construction.
Land is purchased and farming begins on both a subsistence and intensive level. Agricultural production is geared towards meeting the subsistence needs of local populations.
Larger infrastructure projects, like dams and nuclear power plants, enter the planning phase.
At this stage the Fundament is providing approximately ten percent of the energy it will ultimately provide. Several major infrastructure projects are completed and – in localized areas - the Fundament can provide food, water, electricity, health care and education. Although the production capacity of the Fundament must be rationed, all these forms of energy are now purchasable in Banana-Bucks. This proof-of-concept is now formalized and expanded – national infrastructure construction can begin.
The Fundament now employs all excess labour available in the market. It plans and implements all the large-scale infrastructure projects required for it to deliver all the energy needs of the population.
After proof-of-concept is demonstrated, the share value of Banana-Bucks increase dramatically in value. Investors realize that - as the Fundament begins to deliver more and more energy - the Banana-Buck will increase more and more in value. Long-term investors begin to store wealth in Banana-Bucks, increasing share value.
Benefits of early investments in health and education begin to show. Near full employment and constant retraining lead to collateral social benefits such as lowered crime, increased free market participation and higher educational attainment. Former employees of the Fundament now purchase all their basic energy requirements in Banana-Bucks.
Private individuals begin to store their personal wealth in Banana-Bucks to avoid the constantly devaluing FIAT currency.
Major national construction projects are completed. All basic energy is purchasable in Banana-Bucks. Moreover, the cost of this energy is guaranteed not to inflate in price. The average Fundament salary is enough to provide for a lifetime of basic energy.
The FIAT currency is dropped in favour of conducting all transactions in energy-backed Banana-Bucks. The free market – now radically larger, more efficient and more competitive - floats on top of the Fundament.