Bitcoin Could Be the Saviour of 'Meritocracy'

11/02/2016 10:34 | Updated 11 February 2016

Meritocracy is, according to The Oxford Dictionary, 'a society governed by people selected according to merit', and 'a ruling or influential class of educated or able people'.

It is a simple and wonderful idea really, that all one needs to do to achieve greatness in life, is to work hard, do well in school and be recognised and rewarded by one's own 'merit'.

As the moot idea for the eighties goes; "there is no such thing as society", stated by Margaret Thatcher in 1987, instead, she said, 'there are individual men and women', as she attempted to position herself as the chief apostle of 'meritocracy'.

Of course, whilst it is a nice idea, and those who have done well in life love to believe it is because of their own individual merit, it is hard to claim that there really is a level playing field for every citizen born. It is difficult to argue that someone who came from an abusive, unstable home, perhaps with alcoholic parents and an education that was barely supported or encouraged, would do as well in life as someone who went to an elite school and had an emotionally stable upbringing with well-off parents and extracurricular activities.

There is no denying that where you were born, the parents you have, the peers you are surrounded with and the teachers and resources you have access to, play a monumental role in your ability to do well in life. There is even a major disparity between education in the North and South of England according to a recent study, which correlates strongly with family income as a major indicator of how well pupils perform. Whilst of course there can be other factors involved such as mental health and emotional stability, the overriding reason for such a disparity boils down to one thing -- money.

Our current economic system faces many problems. In 2007 we went through a major crash, for reasons way beyond most people's understanding. Interest rate setting, the Libor scandal, the subprime mortgage scandal and many other such activities, demonstrated a calamitous manipulation of the economy in their own interests by a bunch of 'financial experts' in suits.

Politicians can revalue an entire country's currency against others, can print unimaginable amounts of cash in the name of 'quantitative easing', and banks can lend money which doesn't actually exist. This effectively just creates money out of thin air, and it's becoming clearer and clearer that most people do not, and, largely cannot, understand how the economy works.

Whilst some argue the problem with this over-complicated, and seemingly unfair system could be rectifiable with the re-introduction of the gold standard, where the value of a currency was defined in relation to gold, such a system would still be subject to manipulation and revaluation, as all the gold in the world cannot be measured and divided easily, and can be mined, hidden etc.

Bitcoin, however, is finite in its amount, and this may be exactly what is needed. Could a global currency which cannot be hidden, revalued or increased simplify all this? Bitcoin has nearly all been 'mined' now, and it should be asked whether a single, finite currency which could not be revalued, nor lent by institutions which do not own it already, could perhaps allow the whole world economy to 'reset'. Of course, many will claim that even this would still be subject to manipulation, and still enable meritocracy's arch-enemy, inequality, to thrive.

However, if everyone gave up their money when they died, it would go back into the pot. No-one would care about saving, and actually it would be in their interest to spend. This may sound radical but it is not too far from Japan's foray into negative interest rates last month.

Proposals for a 'Universal Citizen's Income', or 'Basic Income' are gaining in popularity, and are designed to reduce inequality by ensuring a more 'level' playing field -- the idea that if people have all their basic needs met automatically, then they would be free to work, educate themselves and engage in leisure when and how they chose to do so. Amidst widespread support for this idea, many models of how to implement it are being discussed.

Should everyone in the world receive an equal amount of Bitcoin, which s/he could then spend and earn throughout their lives, then Bitcoin's value would need to be constantly revalued as the amount each person receives would be equal to total bitcoin value divided by total number of humans in the world. Every time a birth or death occurred, a reissue of Bitcoins would have to happen. Whilst birth rates are unlikely to suddenly fluctuate hugely, if there was a massive disaster and sudden increase in death rates, there would be a large amount of bitcoins put back into the global pot, which would need reallocating equally to every human. Whilst this sounds incredibly complicated, this is not to say a computer algorithm would not be able to work this out, and whilst there would be a change in the value of Bitcoin, this would likely be so small that it would not affect things like how much the price of milk is.

Of course the whole issue of not being able to leave anything for your children, may encourage families to horde assets such as antiques so they can pass them on to their children who could sell these on after their parents' death, but the fact that parents can die knowing their children will have all their basic needs met may in fact discourage this from happening.

Whilst there are still many different models being proposed and analysed, perhaps a single, finite, global currency, which would allow for a much more transparent, and difficult to manipulate, system, may lay the foundations for achieving a true 'meritocracy'.