Call Friedman and Laffer! The perfect testbed for economic theories has been discovered! It is none other than Mensa's own Asilomar gathering! Each year, a newly printed issue of Mensabucks circulates during the Labor Day weekend, as 500 Mensans gather for fun and games.
It is fascinating to watch inflation at work. The inflation rate at Asilomar has only been approached by war-time Germany. In the space of 24 hours, the purchasing power of a Mensabuck drops by an estimated two orders of magnitude. In the space of 48 hours, that year's Mensabucks become utterly, completely, useless.
The way it works is quite simple. At the start of the weekend, everyone is issued 3,000 Mensabucks. On Saturday night, at the Slave Auction, a Mensabuck is quite valuable; 1500 will buy a massage, 3,000 will buy a group massage, 3,400 will buy an hour's photo session with a Playboy model, 11,000 will buy an afternoon's charter on a sailboat with hors d'oeuvres and champagne. This is because at that point, there is a time distance from a known devaluation and there has not been enough time to accumulate much in the way of Mensabucks.
What happens next is a textbook case of what happens when the government turns on the printing press. The Asilomar committee hands out Mensabucks for people who are helpful, do good deeds, are cute, or somehow otherwise catch their fancy. This gets many more Mensabucks into circulation. The casino provides an opportunity for a certain amount of "concentration of wealth" of the additional money pumped into the economy. At the same time, a known devaluation event (the end of the weekend) is coming. The effect is remarkable.
By Monday morning, the Mensabuck approaches worthlessness. The 3,000 Mensabucks that would buy a group massage won't buy a pair of shoelaces. T-Shirts are going for over 20,000 Mensabucks. At the end, devaluation is so severe that people just throw their money in the air. 80,000 Mensabucks buys trivia. People form cartels to buy a chocolate bar.
I am surprised that thus far Mensans have not come up with very many clever ways of dealing with the false economy. Maybe next year, a few of us can experiment (for scientific purposes, of course) with ways of accumulating more Mensabucks earlier (some sort of service business perhaps?) and perhaps introduce commercial banking to Mensabucks (a thousand today is worth 15,000 tomorrow?). Banking might require some interesting collateral.
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