Re: [Taler] Money with capabilities

[Jacob Bachmeyer]

Sebastian Javier Marchano wrote:
>     The problem with "just-for-food money" notionally denominated in the
>     same currency as "general" money is that it will exacerbate food price
>     inflation for everyone:  money that can only be spent on food has no
>     other value, therefore rational (and probably most irrational) actors
>     will be less reluctant to spend it on food, including paying higher
>     prices for the same food, squeezing people who do not have
>     "just-for-food money" and who must make trade-offs to balance
>     their own
>     budgets.
>     I believe that this is the fundamental issue behind the "steak on food
>     stamps" problem.
>
>
> Thanks Jacob, I think that the problem you describe is for a situation 
> where there is a just-for-food currency. Having 1 currency and a 
> payment system that allows you to configure restrictions is different. 
> In some sense, it will be like buying stuff like 18+ where you need 
> your id:
>  * merchants gets the normal currency, no food currency that needs to 
> exchange
>  * money supply is different, since there are only 2 currencies
> Although I share with you the concern about what it would mean to add 
> this kind of configurable restrictions.

There is a difference between subaccounts in a wallet app that provide 
softly enforced budgeting (the user can decide to transfer money from 
one subaccount to another, but the wallet refuses to spend tokens in 
excess of the allotment for that purpose; this adds merely an extra step 
if the user reconsiders the budget) and hard restrictions bound to the 
user's tokens.

We see the "steak on food stamps" problem with just-for-food currency 
because that is the only such "special-purpose money" that has been 
seriously used.  Any kind of restriction on purchasing power has this 
effect of making restricted currency less valuable to its holder and 
therefore increasing the holder's price tolerance for the items they 
*can* spend it on.  This is basic microeconomics:  supply (of money in 
your wallet) and demand (for money to make your desired purchases) 
govern your perceived value of the money.  Money with limited demand 
(because it can only be spent on some items) is less valuable to its 
holder and therefore *more* likely to be spent frivolously.

Yes, even age restrictions:  minors (who already have less understanding 
of the value of money, which is one of the reasons we put limits on them 
in the first place) will be more likely to spend larger amounts more 
readily, thus driving inflation in items purchasable by minors.  There 
Is No Free Lunch Here.

Lastly, there is a "thin end of the wedge" here.  Today it is minors, 
tomorrow it is people with addictions, somewhere down the line it is 
disfavored ethnic groups.  There are some things that should *not* be 
made easy.  This ethical principle used to be well-understood.


-- Jacob