Philip Rosedale Supports Andrew Yang for President, Suggests Ways to Implement Yang's Freedom Dividend

Second Life/High Fidelity founder Philip Rosedale just published a really interesting blog post that brings his long experience with virtual economies and virtual currencies to the very real idea of a Universal Basic Income -- or what Presidential candidate Andrew Yang calls the Freedom Dividend.

"I think Yang is great and I'd love to see him get elected," Philip tells me. So his post delves into the challenges of putting Yang's plan to give $1000 to every American adult per month into practice. Rosedale's key idea -- eliminate the fiscal middle man of banks: 

Most people (who aren’t economists) naturally assume that [the Freedom Dividend] would be very hard because… who would cover the bill to give away all this money? It has to come from somewhere, right? The actual answer is more complicated: when an economy is growing (meaning people are making and selling more and more valuable goods and services over time), the government actually needs to print more money, so that the value of the dollar remains stable.

But where does this newly printed money go? Mostly in the USA it gets loaned to Big Banks, and is more generally a tool that governments can use to to their own advantage. But a more direct (and democratic) approach would be to simply give newly printed money out equally to all citizens, which can very substantially offset the cost of basic income.

"As US President," Philip expands to me in e-mail, "I'd work with the Federal Reserve to change monetary policy to redirect funds to citizens that were originally going to be loaned to banks... That alone is something like $1 trillion per year. Plus, any gains in real GDP can also go back directly to everyone in the same way. "

Philip's latest virtual world, High Fidelity, uses its own cryptocurrency, and Second Life with its Linden Dollars (exchangeable for real dollars) continues to maintain a thriving virtual economy -- so thriving, the grassroots content creators on the platform make as much money as the actual company. So as you'd expect, Philip's blog post has suggestions for implementing cryptocurrency to manage the Freedom Divided -- and points to Second Life's own use of a Universal Basic Income (so to speak) as a potential proof point:

A democurrency could be a cryptocurrency with a fixed tax on all transactions which funds a dividend to all citizens, with periodic voting to determine both the tax and dividend rate. So, as people use the currency, the tax automatically makes the money supply decrease. And every day, everyone also gets the same amount of new currency — the basic income...

My own inspiration and perspective here is driven by the similar success that I saw with basic income ‘stipends’ combined with fixed taxes, open exchanges, and transparent reporting of money supply changes used to manage the Linden Dollar economy in the virtual world of Second Life, which has been operating very successfully since 2003. I’d really like to see something like this happen, and would be happy to work with anyone going in this direction, if I can be of any assistance. 

If Andrew Yang's people are curious, here's where to go.

Comments

[Ross]

This is absolutely fascinating. I’ve often thought that economies in MMOs were an interesting representation of different ways that economics can work. This is a fantastic endorsement for Yang and a really unique and valuable perspective. I hope Yang gets with Phillip to brainstorm.

[Rin]

I always suggest to look up and read the book Utopia for Realists by Rutger Bregman. Especially when it comes to ideas as described in the article above.

[Clara Seller]

Good for Phillip. I find him a very frustrating character sometimes, but this is a good place for his visionary spirit. I'd love to see Philip and Yang in a discussion.

[uh-oh]

Not sure I'd take any recommendation from Phil considering how blindly he appeared to ignore the HF communities needs for almost a half decade.

[sirhc desantis]

Interesting read (after firing up the 'sod cookie' browser to read Medium - wot Phil can't afford a real blog?) and to be honest the UBI thing is fun. Long string to .gov allowed retail shops (hello GUM!) to annoy as well.

But - 'transparent reporting of money supply changes used to manage the Linden Dollar economy' do me a lemon matey. Total Hotspur that is. (hey even your own link goes back 2 years on the money side).

Still have a problem with Saint Phil and its focus on wanting to know all about everyone ('people have to be identity-verified'). Sod that.

But in the US favour - between Yang and the woowoo crystal person and yer combat Tulsi - def value for money on the loon front. Hell, you all (hmm might have that wrong) will probably elect one. Again.

[Blaise Glendevon]

@sirhc desantis - Was this supposed to be English?

[Simple Lemon]

Two hundred billion a month based upon current adult USA population paid from tax money, not freshly minted dollars. People become dependent upon this monthly money, its imbedded into their life and monthly expenses. Then the economy has a considerable downturn, and tax revenue goes way down because the top taxpayers are in an economic depression, and now the free money program is in the red. And on top of a nearly 30 trillion dollar debt the USA is now paying 200 billion inflationary dollars each month for yet another program that cannot be funded. We sell more government bonds that are continually diminishing in value to help pay the government expenses, but programs have to be cut, so against public outcry the free money does not get cut, they cut infrastructure like roads, bridges, electrical grids, gas lines, public services, and America continues on its path of decay. Great idea, free money. Wow.

[irihapeti]

the Second Life 300L weekly stipend is not free. It is paid for in USD by the account holder

some of the early adopters do get a 50L weekly stipend for free. If this was sustainable then every new account since would be getting it

UBI is a new label put on what is known as a negative tax system and is nothing special or ground-breaking really. Example first $12,000pa is tax-free. Every person who earns less than $12,000, including zero, gets topped up to $12,000pa

most western countries practice this in one form or another already: Tax deductibles + welfare payments to low income people

UBI is basically icing

[irihapeti]

ps

UBI results in a quite regressive tax system. More regressive than the current tax systems