Currency began as a way for an individual to express their perception of value without carrying the commodities they gave value to. However, over time, the perception of currency has evolved to make it a commodity.
A commodity can be used as it is to help a person survive and reproduce. A currency can not be used by itself to help a person survive and reproduce. A currency can only be used to buy commodities that can help a person survive and reproduce.
For a society to be healthy and sustainable, the perception of currency must never be allowed to change it into a commodity – it must always be perceived as nothing more than a tool for expression, and a variable in the formula of a functioning community.
The perceived value of a currency should not be based on a commodity. The perceived value of a currency should be based on a formula and the administration of that formula.
The formula should be designed to tell administrators how much currency should be in circulation; how much to print and distribute, or how much to collect and destroy.
Any currency formula must include the society’s tax policy as a variable. That is, the cost of administration of the currency, and society it supports, cannot be separate from the decision of how much currency should be in circulation.
The formula and the processes of administering the formula must be public knowledge, for the value of the currency is based on people’s confidence in the formula and the administration of that formula.
A properly constructed formula would be effective at modelling the cyclical flow of currency through an economy as a form of energy – like the water cycle or calorie cycle.
The formula, and the administration of the formula, is the seed – the cornerstone – of a society’s institutional governance.