I've been mulling a bit over the philosophy of law, and one concept I have been exploring is that a key to understanding a major class of immoral acts is to look at attempts to exploit flaws in human cognition and physiology. There's been a reasonable amount of scientific study of the "bugs" in the way humans think by economists, game theorists and psychologists, and while some of the bugs are debatable, some are fairly undisputed. This might help build moral codes.

There are a lot of consequences of this which need more study -- for example it might argue that a large fraction of modern marketing should perhaps be illegal rather than rewarded -- but for now I would like to focus on one of our most obvious bugs, namely addiction. Both psychological addictions, like to gambling, and physical ones, like nicotine.

This led to a potentially interesting idea -- the use of new digital currencies (such as cryptocurrencies) to regulate the purchase of addictive things.

Gamblin' Money

One idea might look like this: All gambling would be required to be done only with a new digital currency. All wagers and winnings would be made and paid in this currency.

Gamblers could purchase this currency with regular money, but by default only up to some limit per month, a rough estimate of "the amount you can afford to lose." Most simply some fraction of your income or net worth, though one could imagine more complex formulae. You might even buy this currency when you file your taxes, where your income is plain to see. Places which sell the currency would need to get ID from the customer to record how much "gamblin' money" you have purchased, but they should not record what money is yours for privacy reasons. You would also get a token linking the money to you which you keep private until challenged.

You could use the money at casinos, bookmakers and lotteries to gamble. If you won, you could now also gamble your winnings. Once you ran out, you could not gamble any more, legally. It would be very hard to gamble yourself into ruin, and the vast majority of people could enjoy gambling for entertainment, because they would never even consider going above their limit.

Today, almost all casinos track gamblers with loyalty programs, so the mechanism is already in place for the use of a digital currency. A good cryptocurrency would also allow full anonymity, with the following provision; as noted, you encode an identity into the coins you have in the currency. From time to time, you might face an audit check, where a casino security officer would as you to provide, then or later, the identity token tying your identity to the money you are using to gamble. If caught gambling anybody else's currency, you could be guilty of a crime. (So would the person who sold it to you, but it's harder to design a way to identify them and protect privacy on the currency -- I welcome designs that might do this.)

For those who like the aesthetics of casino chips, they could still exist, but with small chips inside them. You could then transfer your funds into the chips. (The casinos would like the better security, but they would have to always take lost chips and reprogram them, never handing them to another gambler.)

You could turn your gamblin' money (including winnings) into other money when desired, and even keep a receipt to turn it back. Though in reality, we know that most people would lose it, or Casinos would not own all those tall buildings. The house always wins. Bonded casinos of course would turn your losses into other money as they need to do.

Such a system could also be built without any laws, if the casinos all agreed together to create and use it, making a declaration that they are not interested in taking people's next eggs. However, that would need a non-governmental apparatus to determine how much you can afford to lose. And addicts could still gamble in places not part of the consortium.

Several issues

There are a few wrinkles to consider, like how to deal with foreign tourists, whose income is not known, but I think this can be worked out, and of course many countries feel no need to stop foreign tourists from losing all their money in domestic casinos.

As I noted above, some might view the government controlling what fraction of your income you can wager to be too "nanny state." To solve this, people might have the option to increase their gamblin' money purchase. The most liberal approach would let anybody do this just by asking, because the simple act of asking will trigger a warning to a person that they might have a problem. For married people with joint savings, the consent of both people might be required, which would stop a lot of people. It might be allowed for people to increase their own limit, but required that this be public, so that family members and employers can see how much you took. Or, on the voluntary side, you might ask for this protection yourself, saying, "Only let me increase my limit if you tell my boss and mother." Mandatory enforcement might not be required at all.

Minors and people with confirmed addictions could not get the gamblin' money, simplifying that as well.

Beyond the casino

This could be extended from the casino to investing. Today in the USA, only "accredited investors" can purchase stock in speculative private companies and other investments. They need to have $1M in assets, and companies are required to get a declaration of that before taking investments. One could create investment currencies for use in investment in different types of securities, and again have limits for the riskiest securities based on how much a formula (or your own goals) decide you can afford to lose.

This might allow smaller investors to participate -- in a limited way -- in the risky investments they are currently barred from. An ordinary wage earner making $50,000 might still be allowed to put $3,000 into wacky crowdfunded startups and ICO tokens if they wanted to.

And yes, addictive drugs

This idea could apply to addictive substances as well. Products like tobacco, opiods or even alcohol might be made only for sale with a special digital money. You could hook yourself on the drug if you really wanted to, but could not spend yourself into ruin with your habit. Or you could perhaps not do it in secret, as above. Of course there would still be illegal markets in these drugs (and in gambling, too) but the presence of a working legal market for those who are not ruining their lives would greatly reduce that.

As before, there are many challenges in designing such a system to protect privacy and personal freedoms. The use of such a coin could lead to significantly more regulation of these things than exists today (at least for the ones that are legal today.) And as I have used the phrase nanny state 3 times, you know I am concerned about how much we want to let the government regulate commerce between consenting and informed adults, even on dangerous products. I don't like that in general, but I think the "bugs" in the way we work are the most reasonable exceptions to that principle.

Thought in progress

This is very much an idea in progress. Designing it to preserve protections of privacy and freedom for those who are not at risk of being swallowed up by an addiction is challenging, but it seems it might be possible. I welcome critiques and different ideas. In addition, the idea of "purpose specific money" is full of both positive and negative potential. Past examples, like food stamps, have not performed very well.