Money in a closed ecosystem

[Dave Howe]

On 20/10/2010 04:36, Morlock Elloi wrote:
> Antartica can function without external cash flow only if it's
> zero-sum inside, ie. no value created, which is true for any
> collection of, ehm, scientists.
> 
> Growing, however, creates real value that would need to be balanced
> with external cash inflow (a very useful indicator of how much is
> being grown, BTW.)

I disagree. While the total value of the system compared to the external
world can indeed grow (and be balanced by an outflow of some saleable
resource, either physical or not) the amount of needed in-circulation
cash is going to be pretty close to constant, if you can disregard
inflation.

you still need a bank - people will need to exchange the non-physical
value of their wages for physical tokens (cash) and will spend those at
retail for food, clothing etc. a certain amount will remain in the bank
(as savings) or be transferred electronically for mail order goods)

however, all money spent at retail will be in the cash registers of the
retailers who will invariably then take at least some of it to the bank,
to be credited to their account. This account will then be used to pay
wages (for their own workers) and buy in fresh supplies of resources
(electronically). Some will no doubt skip this step, and issue wages
from receipts and buy some materiel in cash (so freshly caught raw meat,
etc) but that doesn't cause the cash to leave the system - its new
owners will either spend it at retail or bank it, thus recycling the
tokens they have.

no matter how you look at it, the amount in people's wallets won't vary
that much, and once spent, will either be placed in other people's
wallets, or in the bank (where it can be re-issued to the people who
spent it in the first place). The only reasons you can need new physical
tokens in the system are inflation (items are costing more, so the
amount of in-wallet cash you need to carry is larger), physical tokens
are leaving the system - so, raw materiel bought in cash from outside
the system, people leaving Antarctica and taking cash with them - or if
the number of people in the system is increasing, which of course is
possible.