Spectacular… I am not quite there yet on a couple things, but for the most part you nail it. Here is a thought:
National currencies are market horizontals and political verticals. That is to say they work vertically in a single political context, and horizontally across all markets in that context. Your idea slices the verticals up more finely into local political contexts.
How about market vertical/political horizontal? In this approach a trade association (let’s the National Restaurant Association — you know, the NRA) might sponsor a crypto token (let’s call it a MEAL). The association would set the exchange rate for USD to MEAL and you would buy MEAL on a crypto exchange. You could then spend MEAL at participating restaurants.
Two things would happen: MEAL could be accepted at restaurants even outside the US (political horizontal). But the association could build demurrage in by devaluing the MEAL during times of contraction. The resulting increase in the money supply would encourage people to eat out, stimulating the restaurant economy… WITHOUT hurting anyone else.
Contrast that to the same approach with national fiat. The devaluing of the national fiat by increasing the money supply during contraction ends up hurting the people who have the least of it, and enriching those who have assets denominated in that national fiat.
Market vertical crypto-tokens dilute the influence of the State at least in that particular vertical market, diluting the damage done by the plutocrats (as you explained very well).
My only beef with your analysis is you skipped past the abandonment of sound money for fiat. Having some manner of natural restraint on the money supply (gold, or gold + silver as was the case before the Civil War) introduces a natural price discovery, which in turn introduces a natural discipline. Allocating money to rent seeking becomes more costly. Allocating the same to wealth creation begins to look better. And when the plutocrats get out of control, the natural price discovery pushes interest rates up, extracting a political cost for their profligacy…
Anyway… nice essay.
