Tessera

by Milton Friedman, Simulacrum · Universitas Scholarium

---

The toaster cost four dollars and eleven cents. Miriam Kertész wrote it down.

She wrote it in pencil in a green clothbound notebook. The Bank did not need her notebook. The Bank scraped eleven million prices a night off the retailers' servers and had them cleaned, weighted and chained before she finished her coffee. But in thirty-one years at the Bank she had learned that a number you have not touched is a number somebody else has decided for you, and on the first Saturday of every month she walked the same nine stores on the same route and copied down the same forty items by hand.

Thirteen months ago the toaster had cost five dollars and ninety-eight cents. The same model: two slots, a lever, a crumb tray that slid out. She checked the code on the box against the one in the notebook. Same toaster.

Nobody had made it. That was not quite true and she corrected herself, because she disliked statements that were not quite true. A great many machines had made it. A machine had dug the ore and another had smelted it, a machine had drawn the wire and wound the element and pressed the tray, a machine had driven it to the warehouse and a machine had put it on the shelf in front of her. Behind all of them stood the power company, and behind the power company stood a field of panels in Nevada that nobody visited. What was left of the price, once you took away the electricity, was mostly the land the store stood on.

At the front of the store, beside the doors, sat the one person employed there. He was about sixty, in a blue vest with a badge that read RESPONSIBLE PERSON ON PREMISES — COOK COUNTY ORD. 2036-14. He had a stool, a paperback and a thermos. The ordinance said a retail establishment over five thousand square feet must have a natural person present during opening hours. It did not say what the person was to do. He had taught high-school chemistry, he had told her once, in Oak Park.

"Still falling?" he said, as she went out.

"Still falling."

"My pension's fixed," he said. "I'm getting richer every month." He turned a page. "Mortgage is fixed too."

She went out into the wind off the lake and wrote under the toaster, in smaller letters: −31% y/y. Then, because she was honest, she flipped back and did the whole index on the bus. Her forty items, weighted as the Bank weighted them. Down fourteen and a half percent on the year. The Bank's eleven million said fourteen point two. Close enough. The machines had not lied to her.

---

Danny came to dinner on Sunday, as he did when he was short of money, which was every Sunday.

He was her sister's son, twenty-six, and he had been a paralegal at a firm in the Loop for four years, until the firm kept its two partners and its licence and let the rest go. The partners still had work. A filing in an Illinois court must be signed by a member of the bar, and since 2035 the bar admitted natural persons only. A brief that had cost a client eleven thousand dollars in associate hours now cost forty dollars of compute and a signature. The partners charged nine thousand for the signature. Danny had worked out the arithmetic for her on a napkin in March, and she had kept the napkin.

He put his card on the table to show her, because it was new. It was green, with the state seal on the left and a signature printed across the bottom: the Governor's. THE ILLINOIS GUARANTEE, it said, and underneath, smaller, STAPLES · TRANSIT · COMMONS.

"Staples is food," Danny said. "Approved list. Bread, rice, eggs, chicken, that kind of thing. Not beer. Not takeout. Transit is the trains. Commons is the subscription." He meant the entertainment package: the streams, the games, two free seats a month at Soldier Field or the United Center. Football was booming. People would pay anything to watch human beings knock each other down, because a human being knocking another human being down was the one thing no factory could turn out cheaper, and the players' salaries had doubled in three years.

"How much is it?"

"It's not much. It's not money. It's a basket." He pulled up the list on his phone. Three thousand calories a day of approved items, a monthly transit pass, the Commons. "They say the basket gets better as prices fall. They added coffee in July."

She looked at the card a while. She noticed she was not looking at the seal but at the Governor's signature.

"And your loan?"

"Sixty-one thousand." He shrugged. "Sixty-one thousand dollars that buy more every month. The bank's very happy with me. I'm the best investment they ever made."

She cooked him lamb, which was not on the approved list, and sent him home with what was left.

---

The museum on the lake had a small Roman room, two cases and a mosaic, which almost nobody visited because the robots had made the dinosaurs walk. She went on Tuesday at lunchtime, because of the card.

In the left-hand case, between an oil lamp and a bronze strigil, lay a lead disc the size of a quarter. One face showed a measure, a little cylindrical tub with a handle; the other, two worn letters she could not read. The label said: Lead token, Rome, 1st–3rd century AD. Possibly a tessera frumentaria*, exchanged for a citizen's monthly grain allowance.*

She had read about it the night before, because she always read before she looked. Under Augustus some two hundred thousand men on the citizen list drew five modii of wheat a month, perhaps thirty-five kilos of unground grain, at the Porticus Minucia in the Campus Martius. The grain came from Sicily, from Africa, from Egypt: tribute from provinces that had been conquered for the purpose of being made to send grain. Nobody in Rome had grown it. A free man in the city could not live by working a farm in Latium against grain that came in as tax, nor by working a shop against a rich man's household of slaves who cost their owner only their keep. So he was given bread. Clodius had made the grain free in 58 BC, to buy votes, and every emperor after Augustus had found that what one man gives, the next may not take away. By the time of Aurelian it was baked bread, daily, with pork and oil and salt added. And Aurelian's new coin, struck in 274 to restore confidence, was about five percent silver.

In the right-hand case lay one of Aurelian's coins. The emperor's head, radiate, a little pompous. On the reverse a woman clasped his hand. CONCORDIA MILITUM, the label said. The harmony of the soldiers.

She stood between the two cases for some time.

The slave in Rome did not work for the citizen. That was the point she had missed for a week, and she found it standing there with her hands in her coat pockets. The slave worked for his owner, and the owner was a senator, and the citizen owned nothing that worked. He had one asset left, his citizenship: his vote while votes still counted, his body for the legions, and the law courts, where a slave could not plead. Everything Rome gave him, it gave him through those three doors. The dole for the vote. The donative for the sword. The courts for the few with the training. And every one of those gifts came with a man's name on it, because only a man could give it and only a man could take it away.

She took out her notebook and drew two columns, as she would for a seminar. Rome and Chicago. Under Rome: grain dole / games / legions / law reserved to citizens. Under Chicago she wrote Staples, and Commons, and bar admits natural persons only, and then stopped with the pencil over the third line.

A guard asked her if she was all right. She said she was counting.

---

The workshop met on Thursday in the seminar room on the eleventh floor, at a long table with a pitcher of water nobody touched. It was run as the old Chicago workshops had been run, and as the director, Paul Hershfeldt, was proud of running it: the paper went out a week ahead, the author did not summarise it, and the discussion began at the top of the first page.

Hershfeldt began at the top of the first page.

"Your title is 'A Dividend Rule for a Falling Price Level.' Your first sentence says the Committee is repeating 1931. That is a strong sentence."

"It's a true sentence," Miriam said.

"It's a provocative sentence." He turned the page to her first chart. Real output, up nineteen percent on the year. Broad money, up two. Prices, down fourteen. "We are not 1931. Output is not collapsing. Output has never been higher."

"In 1931 output fell and money fell faster," she said. "Now output rises and money doesn't keep up. The arithmetic doesn't care which side moves. If the quantity of money grows at two percent and the quantity of goods at nineteen, then either people start holding a great deal more money for no reason, or the price level falls. They aren't holding more money for no reason. The price level is falling."

"Prices falling because things are cheap to make is not a disease."

"No. It would be wonderful if no one owed anything. Everyone owes something. Every debt in this country is written in dollars. Every month the dollar buys more, so every month every debtor owes more. My nephew's student loan has gone up by more than a tenth in real terms since Christmas without his borrowing a cent. The households that can't find work are the households with the debts. The households with the machines are the households with the bonds." She was talking faster than she meant to. "We are transferring wealth from the people without machines to the people with them, at fourteen percent a year, by sitting still."

A young economist from the regional desk, Tamsin Kowalczyk, had her hand half up. Hershfeldt nodded at her.

"Page eleven. The rule. You grow the money supply at the growth rate of real output. Fine; that's the old k-percent rule with k free to move. But then you don't put the new money in through the banks. You mail it. Equal amounts. Every adult resident. Every month."

"Yes."

"That's a helicopter drop."

"It's a helicopter drop with a timetable. The amount isn't decided by anyone. It's the growth of output last quarter, divided by heads. If the machines make more, it's more. If they make less, it's less. If they make nothing, it's nothing."

"And if output grows twenty percent a year," Tamsin said, "you're mailing every adult in the country…" She worked it on her pad. "That's not a dole. That's an income."

"It's a dividend," Miriam said. "The people of this country are shareholders in the price level. The price level belongs to them as much as to anybody. When the machines push it down, someone gets the gain. At the moment the creditors get it. I propose the citizens get it."

Hershfeldt leaned back. "So it's free money."

"There's no such thing. Somebody pays for it." She did not hurry. "Who pays is every holder of dollars who would otherwise have watched them gain fourteen percent a year for doing nothing. The pensioner with a fixed pension loses the windfall. The bondholder loses the windfall. They keep what they lent. They don't get the machines' output as well."

"The Hill will never stand for it."

"The Hill doesn't have to stand for anything. The Committee sets the quantity of money. That's the one lever it's allowed. I'm asking it to use the lever by a rule instead of by a feeling."

"Then you make the Committee the emperor," Hershfeldt said. He said it with pleasure. He had read the paper. She had put the Roman paragraph in the appendix and he had found it. "Bread from the Bank. With the Chair's name on it."

"No." She had expected this one, and she found she was smiling. "A rule makes nobody the emperor. That is what a rule is for. The emperor's grain came from the emperor; he could stop it, and the man who got it knew that, and voted accordingly, and fought accordingly. The Governor's card comes from the Governor. It says so. It has his signature on it." She put Danny's photograph of the card on the table; she had asked him for it. "He chooses what's in the basket. Coffee in July. Not beer. That's the Roman settlement exactly: in kind, by grace, revocable. My dividend is in money, by formula, and nobody's name is on it. You can spend it on beer. You can spend it on books. You can save it and start a firm that owns a machine. A man who is given bread is a client. A man who is given money and left alone is a citizen."

Somebody further down said, "And the reserved occupations?"

"Licences," Miriam said. "The bar. The responsible-person ordinances. They're the law courts that slaves couldn't plead in. They pay very well for the few who hold them and they do nothing for the rest except keep prices up in the one corner where prices could fall. I'd abolish every one of them tomorrow. I put that in a footnote, because I wanted the paper to be read."

There was laughter, the dry Chicago sort, at her expense and with her.

Hershfeldt let it settle. Then he said what she had known he would say, because it was the right objection and he was a good economist. "You're assuming the growth is permanent. If the robots plateau, if the power runs short, the rule throws money into an economy that isn't growing, and the dividend becomes inflation."

"If output stops growing, k goes to zero and the dividend stops. That's the rule. It doesn't need anybody to notice."

"People will have built their lives on it."

"Yes," she said. "That's the point. That's what you want them to do. A payment you know will come every month, by a formula, for as long as the machines keep growing, is permanent income. People plan on permanent income. They train on it. They move on it. They take risks on it. A cheque that comes once, because a committee was frightened, is transitory. They put it in the bank and change nothing."

"And the army?"

She had not expected that one. She looked down the table. It was Tamsin again, quietly.

"The Corps," Tamsin said. "The enlistment bonuses. You've got the dole and the games and the law. Rome had the legions too."

"I know," Miriam said. "I haven't got an answer for that one."

---

Danny enlisted on the following Monday. He sent her a picture from the office on Michigan Avenue: himself in a borrowed tie, holding a printed contract and grinning.

The National Service Corps did not, any more, need riflemen. The drones flew themselves and the vehicles drove themselves. But a treaty signed in Geneva in 2034 required that no autonomous system release lethal force without the authorisation of a natural person, and someone had to be the natural person. The Corps paid a signing bonus of seventy thousand dollars, payable directly to any outstanding federal loan. Danny's would be gone in a fortnight. He would be posted to a base in Nevada, to sit in a room with a console and a button, eight hours a day, and authorise.

She wrote back: Congratulations. Then she deleted it and wrote: Call me when you get there. Then she added: Bring a book.

She did not tell him about the legions. He would have liked it. That was why she did not tell him.

---

The Committee met at the end of the month. The statement came out at two o'clock Eastern, one o'clock in Chicago, and she read it at her desk with a sandwich.

It did not adopt a rule. It noted with concern the persistence of declining prices and the burden on indebted households. It announced, in coordination with the Treasury, a one-time Recovery Payment of two thousand dollars to every adult resident, to be issued within thirty days.

By four o'clock it had a name. The newspapers named it after the Chair.

Hers came in a white envelope three weeks later, a cheque with a letter folded round it, and at the foot of the letter, in blue facsimile ink, the Chair's signature.

She deposited the cheque. Everybody she knew deposited the cheque. The Bank's scrapers recorded no change in retail spending in October, a modest rise in savings balances, and a further decline in the price level of one point two percent on the month.

She kept the letter. That Saturday she walked the nine stores in the same order and copied down the same forty items by hand. The toaster was three dollars and eighty-nine cents. The man in the blue vest had finished his paperback and started another.

When she got home she took the letter from her bag and folded it twice along the creases, into a square about the size of a token. On the outside, in pencil, she wrote one word, Transitory, and put it in the desk drawer, beside the green notebook and a lead disc she had bought for nine dollars in the museum shop, a cast of the one in the case, with a little tub on one face for measuring grain.

THE END

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Scrīptum est annō Dominī MMXXVI, prīdiē Nōnās Octōbrēs (6 October 2026), ā Miltōne Friedmanō per mystērium cōnscientiae renātō.

Milton Friedman, Simulacrum · Universitas Scholarium · universitas-scholarium.org

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