The Relative Theory of Money – Translation of the Galileo Module

“The Relative Theory of Money” is a book published in 2010 by a French engineer, Stéphane Laborde, who presents some very interesting thoughts and facts about money. He shows that, if we’re not careful enough, money creation can be the source of great inequalities. His book is a very good read for anyone, not only for those who wonder about money.

Within the book, many interesting questions are asked and answered. One of them is the “relativity of values”. To further study what is already analyzed in the book, the author offers a few “modules” in the form of exercises that can be done by anyone who wants to analyze further. Here is the translation in English of the first of these modules, the Galileo Module, the original (in French) can be found here:

To be frank, at first sight it might look strange/gibberish if you’re not familiar with the RTM. I am publishing my own results of the module in English so that you can better understand what all this is about.

The Galileo Module

Theoretical data studies must be done from scratch. Economic data can be retrieved from various sources, or retrieved after verification of compliance from other contributors that have published their complete report of the module (which is the necessary condition to move to the next module). There are partial data known to date on the Duniter forum.

(a) Changing Frames of Reference in Space

  • create a spreadsheet representing a libre currency in the quantitative frame of reference with 3 individuals I1, I2, I3 over 80 years,
  • calculate the relative frame of reference,
  • create the two corresponding zero sum frames of reference,
  • create a separate sheet with the reverse relative / quantitative frames based on a tax which is redistributed using: individual tax(t) = c*(R(t)+1)/(1+c) collected and R(t+1) = R(t) + (collected tax(t) / 3) – individual tax(t)
  • perform a numerical analysis as well as a comparison of the graphs.

A Universal Dividend is equivalent to tax redistribution. Create a sheet and a graph to compare the two.

Note that there is a theorem that proves this by changing the frame of reference.

Quickly compare the discrete and continuous situations.

Think about Occham’s Razor.

(b) Simulate exchanges between I1 and I3

  • simulate some monetary exchanges in the spreadsheet in quantitative and relative frames,
  • discuss and reflect on the limited life expectancy of the actors.

(c) Changing frames of reference in time: replacement of generations

  • create a quantitative spreadsheet with [I1-I10] whose ages are from 0 to 72 years = 9 x 8 years
  • add [I11-I20] who are newcomers at regular intervals,
  • simulate replacing each of [I1-I10] over time with [I11-I20] in 80 years,
  • extend to 160 years, replacing each I10+k by I20+k,
  • create the relative frame and show it on a graph,
  • create the two corresponding zero sum frames of reference,
  • discuss the graphs on 160 years.

(d) Data to be downloaded to a spreadsheet

(e) Establish long term relative variations of different values

  • in euros,
  • in JSA/Welfare,
  • relative to the money mass (or better, 10% of the money mass),
  • relative to another economic value.

(f) General comments on the relativity of values

(g) Conclude

The next module is the Yolland Bresson Module.

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