Most of the problems encountered in modern society can be attributed in some way to money. Poverty is a result of having too little or no money and the dangerous balance of power that leads to oppression is a result of too much money at the disposal of too few people. Money can be manipulated in ways which accumulate debts and its distribution is grossly uneven.

This is because money is a fictional token of value. The value is assigned to the token so that even the value is fictional because the tokens have no intrinsic value. But we have become so addicted to this concept that, even when we are looking for alternatives that will take the dangerous levels of power away from the banks, we look to alternative versions of exactly the same thing: local currencies. The heart of this idea is in the right place but the level of innovation does not go nearly far enough.

We must ask: what do we want our economic model to do for us? Forget, for the moment, the idea of a unit of exchange and look at the essential role of economic models. We want to ensure that every member of society is individually rewarded for their contribution to society. That's it. We want to ensure that the members of society have access to the benefits of society and that each individual earns the right to those benefits.

The unit of exchange was a good idea when it was introduced around 700BC... but surely we have moved on somewhat since then! Basically, money is simply an abstract version of the barter system. It is a very simple concept despite the complexities that now apply to economics that manipulate the ways in which transactions can be undertaken to such a degree that even the fictional face value of money is volatile.

The mistake, of course, is in assigning a fictional 'token' value to something that (a) has no intrinsic value and (b) can be freely exchanged. This applies equally to local currencies.

In 2009, Gordon Brown made a speech about what he referred to as a "value-based economy".  The speech itself was little more than hot air flatulating in spin and soundbites from a dying dinosaur. Nothing new was on offer. But the term "Value-Based Economy" struck a chord with me. What entities have true, intrinsic value? People, products and services. What I am proposing here is a complete departure from the idea of a unit of exchange. Instead, I propose fixed units of value linked directly to the services and products that society needs and the people who provide them. The main difference between this concept and the unit of exchange concept is that money is essentially a very simple (and primitive) concept that has become extremely complex in application. What I propose is complex (and more sophisticated) in essence and extremely simple in application.

All businesses must have a "bottom-line", which is the point at which the business breaks even with no losses or gains. Society, too, must establish a "bottom-line" but with a slightly different angle. Society's bottom line must be assured survival for everyone within the community. If we fall below that level (and we are currently WAY below that level), society is on a downward path to extinction. Above that level, society is in a state of growth. That bottom line is where society ticks over with neither loss nor gain and, as with any business, this level is not indefinitely sustainable but it must be our starting point.

So the bottom line is that the community provides adequate housing, adequate nutritious food, serviceable clothing, clean water, energy for heating, cooking and lighting and access to public transport, education and public health care for every family or single member of the community by default. No one has to earn this. This, of course, will require considerable manpower and resources and this must be assigned a value. Value is based on need, time and take up.

Because the 'need' element is assessed as essential, this is assigned the highest level of value. Because the take-up will be 100% of the community, this is also afforded the highest level of value. Each of the resources is also linked to a fixed value rated as essential. This calculates as a given figure. Every individual employed in the provision of these essential services will have a base value linked to their identity according to the level of skill required to perform their roles. This Base Value figure is then used to calculate the value of one hour of working in the provision of the service. Each hour worked earns a given number of Redeemable Value Points (RVPs) established by the base value of the individual.

RVPs can be 'spent' in return for other, non-essential services such as more exotic foods, more stylish clothing, nicer homes, entertainment and so on. However, for these to be of any value, these non-essential products and services must be available and this is where  entrepreneurial skills and innovation come into force. A good business idea is set out with an estimated percentage of the community likely to use the products or services. The value to the community is assessed and the idea is awarded a provisional base value. This figure identifies how many RVPs can be generated in order to procure the resources necessary to establish the business. A provisional base value is then assigned to each of the personnel according to the level of skill. After a year, the business is reviewed and given a fixed base value according to performance and this is reflected in the fixed base value of each of the personnel.

Businesses can grow and individuals are rewarded for their input. RVPs can be redeemed by 'purchasing' services or products and this is how it would work:

(A) wants to buy a computer from (B)'s computer store. The computers are supplied by (C) computer manufacturers. (A) chooses a computer priced at (X) TVPs. The price is the base value of the product and will always remain a fixed price. The store deducts (X) RVPs from (A)'s base value account. This does not affect the base value of (A) but simply reduces the number of available RVPs. The base value account is not a 'bank account' because there are no banks as such. (A) is his or her own bank in this respect. The appropriate number of RVPs is then added to the base value account of the store. When the store has its annual review, the number and value of transactions are calculated to provide a new base value for the business, which is then fixed for another year. The base value of each individual working in the store is then adjusted accordingly. When (B)'s computer store restocks from (C) computer suppliers, the value of the transactions are transferred to the supplier.

In this way, businesses grow according to their value to the community and personal wealth grows according to value to the community. This provides an incentive to every business and individual to provide as much value to the community as possible. However, the base value can never be transferred. RVPs are simply records linked directly to the businesses or individuals to which they apply. They cannot be loaned or borrowed (or stolen). One cannot gamble with them or trade with them as is done with international currencies. They have no intrinsic value and exist only as a record of earned entitlement to products and services.

This takes banks out of the equation. This takes taxation out of the equation. Value cannot be manipulated in the way that money is and value is not volatile but fixed.

With our current system, the price of a loaf of bread can vary from one day to the next according "market forces" but its value always remains constant. The value of a loaf of bread is the same now as it was in Biblical times. Value is reality whereas "price" is a fluctuating fiction. We cannot continue to be at the mercy of an economy based on a fluctuating fiction. it is unsustainable, to which the current economic crisis testifies.

It takes imagination to look at a heap of stones and see them as loaves of bread. It takes insanity to starve because we don't have enough stones!

This idea is just a basic possible alternative to illustrate that we can live in a moneyless society and still enjoy the prospect of reasonable wealth but without the fear of crushing poverty. Businesses can still enjoy growth but without the dangerous levels of corporate power currently exercised by companies that pollute and exploit with only the interests of their shareholders to consider. There may be many other workable alternatives and I don't doubt that others will have other ideas and better ideas. The only rule is that economies must be based on true value.

Why is gold valuable? Because it is scarce.
Does it matter that it is scarce? No
Why does it not matter that it is scarce? Because gold is too soft for most applications of metal and it is too heavy for practical use. Its use is limited to jewellery and, in small quantities, to technology.
So what is the value of gold to society? Minimal
So why is gold valuable?

In real terms, iron has far more value to society than gold because it has more essential uses. Glass is far more valuable to society than diamond because it has more essential uses and on it goes. The market value of minerals such as diamonds and gold are volatile because their value is fictional. Their real intrinsic value is minimal. So a currency based on something like the Gold Standard is also a fiction. We must base our economy on stable values that do not fluctuate with market forces