Sunday, August 9, 2015

The Digital Dollar

This is a ‘behind the story’ supplemental article describing in more detail some of the background of the Slowpocalypse books that isn’t directly addressed within the narrative, part of the iceberg that’s underneath the surface of the water, or dealt with in the posts about how I wrote the individual stories.  As such, it may contain spoilers.

In the hypothetical near future of the Slowpocalypse series, society had moved even further away from hard currency to electronic transfers, and the FURC was operating almost completely along those lines.  There was a physical bank inside the compound where people could withdraw cash for spending on the outside, but within the FURC all transactions were computerized and run through the FURCSnet.  The federal government made regular deposits into the FURC general operating fund, and the administration electronically transferred salary payments and other disbursements automatically into residents’ accounts.  And inside the community, the costs of goods and services people purchased were directly debited using their FURCS pads.

After the initial events of Certain Hypothetical, the FURC would continue to receive digital dumps of ‘currency’ from Washington, at least for a little while, but soon their monetary system would become closed and entirely electronic, with the value of their digital dollar disconnected from the outside world.  And that could work because their community is isolated and residents can trust that the ‘money’ they have in their accounts has value.

The administration continues to pay people, who can then spend within the FURC just the same as they always had, and most of that money ends up coming back to the administration one way or another.  So they ‘print’ very little in the way of new digital currency to keep the same amount in general circulation.

In the rest of the country, however, with the breakdown in communications and the old institutions, hard currency would become the only money worth anything.  But the real value in the collapsing civilization outside the FURC would be in goods – whether perishable products like food and clean water, necessities like clothes, or durable goods such as cars and weapons.  And so the old paper dollar continues to lose its value as the world descends into a barter economy.  And though the efficiency varies from place to place, in general that barter system doesn’t function very well.

And the FURC can’t remain a closed system forever.  So what will happen to their economy once it has to operate beyond the confines of their community, when they have to deal with a world that has been functioning according to very different principles?

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