i should start this post with a disclosure that i have studied minimal economics at college level, and even when i did, i thought it was such garbage that i didn't attend lectures and barely passed (micro-economics: you can graph the hypothetical variables that can never be observed in the real world, that is logical and even beneficial to see the hypothetical effect of the change in one variable on another. but calculating the exact change in an un-observable, hypothetical variable, is intellectual w@nkery at its finest. just because you can, doesn't mean you should).
by the above disclosure, i am giving fair warning that i have little or no understanding of the subject i will be talking about, and am therefore almost begging to be corrected by someone who actually attended lectures / did more than 2 econ units.
when i originally envisaged the ample system, i thought there would be no money, no currency at all, as it is a tool currently used to further entrench the economic power of the elite. i say this as it isn't real, there is no difference in having a wad of money in your pocket to having a deck of cards - it is just pulped wood and ink. the difference is the belief that it is different, and the trust that it can be used in the future to purchase economic resources (ie a medium of exchange and a store of value). an implication of this is it stores the accumulated power of the economic elite to wield over the disenfranchised majority. the accumulated green pulped wood (or accumulated zeroes as it is now) only has this power because we the disenfranchised majority allow it to.
however i came to the conclusion that the benefits of open markets outweighed the risk of a currency, so long as the currency cannot be manipulated by a banking system. currently you have banks creating money through the fractional reserve system, you have a central bank protecting the interests of these banks to ensure 'financial stability' (translate: preserve the current financial and economic power structure), issuing debt as they feel is required to fix the price of money where they think it should be. they then cover-up poor business decisions by banks by purchasing toxic assets at inflated prices while the banks allow the real businesses and employers to die due to lack of funding.
but in an ample system - there is no debt, there are no banks, nobody is actively printing money or performing quantitative easing, individuals can't take out loans, businesses don't need funding and don't need to pay interest, or dividends, or provide capital gains on shares that no longer exist. there is no federal reserve rate to falsely manage business levels in an economy. the boom-bust cycle that has been observed for centuries in market economies is entirely a money and debt phenomena. a bust is where people can't pay their creditors, but in an ample system, there is no debt, liabilities are immediately settled, companies can go negative in their currency reserves as currency isn't real anyway. but those businesses that are least efficient are culled, to be absorbed by efficient businesses or to start new businesses based on new ideas, new products, new practices.
the defacto currency of 'hours', as mentioned before, is effectively printed when citizens work. assuming a random minimum quota of 30 hours that citizens have to work every week to have their basic needs covered plus a minimum level of luxuries, their 'bank account' goes up 30 hours at the end of the week. the qualifying business' bank account goes down a corresponding amount, and this feeds in to the efficiency measure of the business. the citizens then spend their hours on whatever they want (goods, services, infrastructure, research, gift it directly to others, total economic freedom). various businesses receive these hours as income, also contributing to their efficiency rating.
so at a basic level (ie, my level), as citizens work, they produce goods and services. except for a small timing difference (hours expire like reward points on a credit card, to ensure they can't be hoarded to obtain unfair economic power), total money produced in a period is equal to total consumption of goods and services at the consumer level. the higher the population, the more hours worked, the higher the money produced, and the more goods and services that are produced to be purchased. it would make sense to me, given corresponding amounts of both money and goods and services to be purchased, there would be a downward bias in prices due to progressive improvements in efficiency as the less efficient businesses are culled, and as innovative new technologies come to the market drawing demand away from outdated goods and services.
for businesses, they would purchase inputs from other businesses (or pay to extract it from the ground etc). if it has a positive balance of hours, it would show a surplus of income over expenses, approximately the same as profitability in a capitalist system. payment for these inputs / labour costs is therefore existing money circulating through the system. if there is a negative balance (only businesses are allowed to go negative, not citizens), effectively they are printing money, but still creating goods and services for purchases. as any new money is offset by a corresponding increase in production, it seems logical to me that there wouldn't be a sudden increase in money floating around the system, chasing the same number of goods, and pushing up prices.
government, by my thinking, should have no income at all. if they have an income it suggests to me they are providing a good or service, and in an economic system where it is so easy to start a business as long as there is demonstrable demand, this product or service would be provided by a (more efficient) private sector business. i see government agencies therefore being restricted to pure policy and regulation, plus services that should not be charged for (fire services, police, prisons, armed forces). the exception i can see being fines and penalties. government agencies would therefore be permanently with a negative balance of hours, any purchase from them increasing this negative would therefore be printing money with no offsetting increase in production. this would therefore have an inflationary impact, which isn't good.
in the capitalist system, this is coerced away via compulsory taxation, and any remaining deficit is covered by incurring debt (which is working real well for greece and other parts of europe at the moment, with other countries probably to follow shortly). the temptation for all government departments and politicians is to spend up from this bottomless well, which necessitates rigorous systems to limit this urge.
in the ample system, i would suggest no tax. by taxing, you create a self-justifying system for government expenditure. the default position is any tax income is to be spent, with any reduction in taxes a cynical ploy to pretend tax-payers are receiving largesse, rather than getting their own money back. and by default, the country pays for the government it has, whether or not there is explicit taxation. i think it is a valuable psychological tool to see government as a large expense, so that we can all readily see they are a burden on society and should be minimised.
the cumulative negative position would show how much of a burden they are, and i would suggest there needs to be a specified limit on government as a % of private. the auditors also need to be very active in ensuring maximum efficiency in government, with full disclosure of all expenses, and penalties in place to ensure no politician or government employee is receiving benefits not received by all citizens.
the inflationary impact from government would i think be more than offset by the deflationary impact of efficiency and no new money without offsetting goods and services in the private sector.
Tuesday, 4 December 2012
Monday, 3 December 2012
bankruptcy vs efficiency
in a capitalist society, bankruptcy is dreaded, an outcome to be avoided any way possible. what is bankruptcy, and why is it so bad?
insolvency is the inability to meet your financial obligations as and when they fall due, with bankruptcy being when the courts recognise this inability to pay. at this point the company is either wound down, and sold off to pay creditors what it can, or provided with special freedoms / protections to allow it to trade out of bankruptcy (depending on what country you are looking at).
the inability to meet obligations would normally result from not making a profit for a period long enough to exhaust the working capital. it could also result from tying up capital in assets that cannot be converted to cash readily, but either way it means the entity cannot pay its liabilities, it cannot service its debts, and therefore under the rules of capitalism it should no longer retain stewardship of those assets.
bankruptcy is traumatic for all involved - creditors frequently get only a small amount back, shareholders even less, employees lose benefits, customers may not receive goods paid for, management become pariahs who failed the commerce game and will forever be stained by having guided a business into such dire straights.
but in reality - the assets still exist, and can still be used to produce goods or services as they have been. it is only in the human mind that the business, including the assets, has failed, and therefore must be disbanded. the human mind comes to this conclusion due to how the assets are funded. for example, if there was no liabilities, no debt, (ie 100% equity), the business can never go bankrupt, however the shareholders may choose to liquidate the assets if the feel their return on assets is inadequate. it is having debt, liabilities, that sets the conditions where bankruptcy may result.
so not being a natural law, merely being a concept in the human mind, there is no actual need for bankruptcy. just different rules for the game are required.
a bit of a tangent, but serfdom was a system prevalent in medieval europe where the lords retained ownership of the fields, but would allow the 'serfs' to grow crops on the fields in return for a substantial portion of the produce. the serfs in this system were trapped in subsistence and poverty, and the system is generally held to be grossly unfair.
in the modern capitalist system, businesses cannot be started without funding. this funding isn't real, there is no real asset that is provided to new businesses. it is the accumulated profits of prior economic activities representing power over future economic resources. this funding is largely wielded by an economic elite (frequently i read the ratio that 80% of the worlds wealth is held by 20% of the population, and am sure that the top 5-10% hold the vast majority of it). this funding is therefore equivalent to a field being tilled by a serf - you can use the funding, but only if you can pay your lord his required tithe, which will allow you to subsist a little longer. you may even be able to feed yourself in retirement.
effectively, bankruptcy is not having the capacity to pay a tithe to your master, in recognition of their previously accumulated power and resources which they want to continue building. this tithe (in the form of interest, dividends, taxes or capital gains) makes it more difficult to achieve a profit, but not impossible. the significance of profit is that, based on the market price of inputs and outputs, the business is adding value. while the money it is measured in isn't real, i think the underlying message of adding value to society is useful.
in the ample system, i have suggested that, rather than being required to make a profit as in capitalism, businesses be required to satisfy demand (a pre-requisite for profit, you could say) and maximise efficiency. i consider maximising efficiency a better measure because profit isn't necessarily meaningful, whether a company is making or losing something that isn't real in the first place (money). whether they are building up more of this fake resource on their balance sheet is actually irrelevant, but for the signal it gives on adding value based on market prices.
what if, rather than companies going bankrupt when they can't make a profit and can't service their liabilities, they are allowed to continue to operate due to the fact they are satisfying demand, their customers find their product or service of use and attach value in continuing to receive it. but, in recognition that society needs to make the best use of its resources, the least efficient companies in each sector are liquidated, effectively allowing the remaining more efficient businesses to purchase the assets and use them in their more efficient operations.
effectively, i envisage this efficiency measure to operate similar to profitability, probably be measured based on the ratio of the income measured in the defacto currency 'hours' to the costs. however, instead of a fake threshold (the business is not profitable, cannot meet it's obligations, and will be forced into bankruptcy), companies can go negative in 'hours' and continue to service their customers assuming there is still demand. the least efficient 10% (or other %) on an annual basis lose their business certification, with the auditors selling the assets on the open market to remaining businesses. in an ample system, there is no debt, there are no shareholders, liabilities are always settled as there is no impediment to going negative in the defacto currency 'hours' (just for business, private individuals cannot go negative).
employees are the most adversely affected by this loss of certification, but as they are guaranteed their minimum needs, and as there abundant jobs due to the ease of starting a business (no funding required, just demand for the product and a business plan), i foresee it being less stressful than bankruptcy in capitalism and much easier to find alternate employment.
a major benefit i see in replacing profitability with efficiency is that it facilitates 'creative destruction'. it 'destroys' those businesses least able to add value to society, offering up their assets and labour to businesses able to extract a larger societal dividend from them. and then does it again the next year, and the next, in a never-ending cycle toward a perfection that can never be achieved. also, there is no stigma attached to it, there is no impediment to starting a new business, people can still contribute to society to the limit of their ability, simultaneously having their needs met and achieving as affluent a lifestyle as they want based on how much they want to work.
insolvency is the inability to meet your financial obligations as and when they fall due, with bankruptcy being when the courts recognise this inability to pay. at this point the company is either wound down, and sold off to pay creditors what it can, or provided with special freedoms / protections to allow it to trade out of bankruptcy (depending on what country you are looking at).
the inability to meet obligations would normally result from not making a profit for a period long enough to exhaust the working capital. it could also result from tying up capital in assets that cannot be converted to cash readily, but either way it means the entity cannot pay its liabilities, it cannot service its debts, and therefore under the rules of capitalism it should no longer retain stewardship of those assets.
bankruptcy is traumatic for all involved - creditors frequently get only a small amount back, shareholders even less, employees lose benefits, customers may not receive goods paid for, management become pariahs who failed the commerce game and will forever be stained by having guided a business into such dire straights.
but in reality - the assets still exist, and can still be used to produce goods or services as they have been. it is only in the human mind that the business, including the assets, has failed, and therefore must be disbanded. the human mind comes to this conclusion due to how the assets are funded. for example, if there was no liabilities, no debt, (ie 100% equity), the business can never go bankrupt, however the shareholders may choose to liquidate the assets if the feel their return on assets is inadequate. it is having debt, liabilities, that sets the conditions where bankruptcy may result.
so not being a natural law, merely being a concept in the human mind, there is no actual need for bankruptcy. just different rules for the game are required.
a bit of a tangent, but serfdom was a system prevalent in medieval europe where the lords retained ownership of the fields, but would allow the 'serfs' to grow crops on the fields in return for a substantial portion of the produce. the serfs in this system were trapped in subsistence and poverty, and the system is generally held to be grossly unfair.
in the modern capitalist system, businesses cannot be started without funding. this funding isn't real, there is no real asset that is provided to new businesses. it is the accumulated profits of prior economic activities representing power over future economic resources. this funding is largely wielded by an economic elite (frequently i read the ratio that 80% of the worlds wealth is held by 20% of the population, and am sure that the top 5-10% hold the vast majority of it). this funding is therefore equivalent to a field being tilled by a serf - you can use the funding, but only if you can pay your lord his required tithe, which will allow you to subsist a little longer. you may even be able to feed yourself in retirement.
effectively, bankruptcy is not having the capacity to pay a tithe to your master, in recognition of their previously accumulated power and resources which they want to continue building. this tithe (in the form of interest, dividends, taxes or capital gains) makes it more difficult to achieve a profit, but not impossible. the significance of profit is that, based on the market price of inputs and outputs, the business is adding value. while the money it is measured in isn't real, i think the underlying message of adding value to society is useful.
in the ample system, i have suggested that, rather than being required to make a profit as in capitalism, businesses be required to satisfy demand (a pre-requisite for profit, you could say) and maximise efficiency. i consider maximising efficiency a better measure because profit isn't necessarily meaningful, whether a company is making or losing something that isn't real in the first place (money). whether they are building up more of this fake resource on their balance sheet is actually irrelevant, but for the signal it gives on adding value based on market prices.
what if, rather than companies going bankrupt when they can't make a profit and can't service their liabilities, they are allowed to continue to operate due to the fact they are satisfying demand, their customers find their product or service of use and attach value in continuing to receive it. but, in recognition that society needs to make the best use of its resources, the least efficient companies in each sector are liquidated, effectively allowing the remaining more efficient businesses to purchase the assets and use them in their more efficient operations.
effectively, i envisage this efficiency measure to operate similar to profitability, probably be measured based on the ratio of the income measured in the defacto currency 'hours' to the costs. however, instead of a fake threshold (the business is not profitable, cannot meet it's obligations, and will be forced into bankruptcy), companies can go negative in 'hours' and continue to service their customers assuming there is still demand. the least efficient 10% (or other %) on an annual basis lose their business certification, with the auditors selling the assets on the open market to remaining businesses. in an ample system, there is no debt, there are no shareholders, liabilities are always settled as there is no impediment to going negative in the defacto currency 'hours' (just for business, private individuals cannot go negative).
employees are the most adversely affected by this loss of certification, but as they are guaranteed their minimum needs, and as there abundant jobs due to the ease of starting a business (no funding required, just demand for the product and a business plan), i foresee it being less stressful than bankruptcy in capitalism and much easier to find alternate employment.
a major benefit i see in replacing profitability with efficiency is that it facilitates 'creative destruction'. it 'destroys' those businesses least able to add value to society, offering up their assets and labour to businesses able to extract a larger societal dividend from them. and then does it again the next year, and the next, in a never-ending cycle toward a perfection that can never be achieved. also, there is no stigma attached to it, there is no impediment to starting a new business, people can still contribute to society to the limit of their ability, simultaneously having their needs met and achieving as affluent a lifestyle as they want based on how much they want to work.
Sunday, 2 December 2012
land
in a system with no savings, no investments, and no debt, how do you allocate land? who decides? clearly lots of potential for corruption, people with power inevitably feel they are entitled to the best in life, which usually involves real estate with harbour views.
the basis of real estate in the ample system is that no one owns it, therefore everyone rents. without trying to get all spiritual, even in capitalism, nobody really owns real estate. we at best temporarily occupy it. this contractual occupation may last a while, but eventually, systems collapse, revolutions occur, empires crumble, and species a little too intelligent for their own good self-destruct. but the land will almost certainly remain, unaffected by the upheavals in the human domain.
renting in the ample system is all quite straight forward. everyone is entitled to a minimum area in "good" habitable condition. they can rent anywhere they want, any size they want, any quality and facility they want, but they have to pay the going market rate in the defacto currency 'hours'. they then get reimbursed the cost of the minimum area in the worst suburb in close proximity. the system would apply to everyone including politicians, auditors, secret police.
i expect that without investments, where everyone is restricted to just their salary, and due to full employment and useless jobs no longer being performed (finance industry, sales and marketing, the majority of the government, for example), there would be much less disparity in disposable income, and therefore much less disparity between 'ghettos' and affluent suburbs. and it would be impossible to afford a huge mansion with these restrictions.
that is all fine for residential accommodation, how about commercial sector? obviously still renting, still based on market rates, the business able to select the best location / facilities that match their needs. in an ample system, a business doesn't necessarily need to make a profit, so you could argue that commercial rents would just skyrocket as businesses kept bidding up the prices in preferable locations. but it would be constrained by the need to maximise efficiency, with the least efficient businesses being culled / losing their certification by the auditors. i still need to properly define efficiency, but it could just be the ratio of costs to income as measured in the defacto currency of hours, and therefore paying high rent will reduce efficiency and make it relatively more difficult to avoid the cull.
the actual building of structures (and logically, the allocation of land prior to the start of building) would be similar to the building of infrastructure. effectively first in first served, once the business has secured the resources to develop the land and has the necessary approvals. i don't see any way around having a government agency involved in planning land and issuing approvals, however definitely their power needs to be curtailed when compared to the current system. if demand is there to develop land, while it shouldn't be a rubber stamp, a government department shouldn't be holding up development. if they are, they need more resources / to make more efficient use of their existing resources, with the auditors providing the enforcement power to dump the management. on consideration, it could be out-sourced - any job done by government has a private sector counter-part. i guess it would just be the standards (what h&s standard is required etc) that would need to be driven by politicians / government, but even then it should be judged against other departments / other regions, and if it is slow or wasteful - the auditors step in.
these approvals would be in the nature of health & safety, environmental, not the desirability of the development. that is no business of a government employee to dictate to the market. keep in mind, businesses are very easy to start in an ample system - just demonstrated demand, and a business plan approved by an auditor.
so for example, if businesses keep having shortages of a key component needed to manufacture cars, the increased price would send the message that it would be easy to start an efficient business manufacturing these widgets, and this increased interest in widget making would send the message via increased rent that another widget factory would be good. a builder (existing or a start-up, doesn't matter), observing the increasing rent, would decide developing another widget factory would be an efficient use of resources, and would put in an application for allocation of land. the government department, as the plan shows adequate health & safety provisions and has environmental protection standards in line with other factories, approves it. if there are competing applications for the same land, first in first served, so it would be incumbent upon government to expedite all applications, and incumbent on applicants to make sure the application is complete and comprehensive.
another important point - no one is making a profit as such, everyone is just working to attain their preferred level of affluence by working minimum hours plus extra if they want a better lifestyle. the current system has so much legal angst because everyone is bitterly trying to capture profit for themselves. if profit is no longer the goal, if the goal is now to satisfy demand / provide a service / improve society, there would be less legal battles, and less lawyers, both of which would be better for society.
the basis of real estate in the ample system is that no one owns it, therefore everyone rents. without trying to get all spiritual, even in capitalism, nobody really owns real estate. we at best temporarily occupy it. this contractual occupation may last a while, but eventually, systems collapse, revolutions occur, empires crumble, and species a little too intelligent for their own good self-destruct. but the land will almost certainly remain, unaffected by the upheavals in the human domain.
renting in the ample system is all quite straight forward. everyone is entitled to a minimum area in "good" habitable condition. they can rent anywhere they want, any size they want, any quality and facility they want, but they have to pay the going market rate in the defacto currency 'hours'. they then get reimbursed the cost of the minimum area in the worst suburb in close proximity. the system would apply to everyone including politicians, auditors, secret police.
i expect that without investments, where everyone is restricted to just their salary, and due to full employment and useless jobs no longer being performed (finance industry, sales and marketing, the majority of the government, for example), there would be much less disparity in disposable income, and therefore much less disparity between 'ghettos' and affluent suburbs. and it would be impossible to afford a huge mansion with these restrictions.
that is all fine for residential accommodation, how about commercial sector? obviously still renting, still based on market rates, the business able to select the best location / facilities that match their needs. in an ample system, a business doesn't necessarily need to make a profit, so you could argue that commercial rents would just skyrocket as businesses kept bidding up the prices in preferable locations. but it would be constrained by the need to maximise efficiency, with the least efficient businesses being culled / losing their certification by the auditors. i still need to properly define efficiency, but it could just be the ratio of costs to income as measured in the defacto currency of hours, and therefore paying high rent will reduce efficiency and make it relatively more difficult to avoid the cull.
the actual building of structures (and logically, the allocation of land prior to the start of building) would be similar to the building of infrastructure. effectively first in first served, once the business has secured the resources to develop the land and has the necessary approvals. i don't see any way around having a government agency involved in planning land and issuing approvals, however definitely their power needs to be curtailed when compared to the current system. if demand is there to develop land, while it shouldn't be a rubber stamp, a government department shouldn't be holding up development. if they are, they need more resources / to make more efficient use of their existing resources, with the auditors providing the enforcement power to dump the management. on consideration, it could be out-sourced - any job done by government has a private sector counter-part. i guess it would just be the standards (what h&s standard is required etc) that would need to be driven by politicians / government, but even then it should be judged against other departments / other regions, and if it is slow or wasteful - the auditors step in.
these approvals would be in the nature of health & safety, environmental, not the desirability of the development. that is no business of a government employee to dictate to the market. keep in mind, businesses are very easy to start in an ample system - just demonstrated demand, and a business plan approved by an auditor.
so for example, if businesses keep having shortages of a key component needed to manufacture cars, the increased price would send the message that it would be easy to start an efficient business manufacturing these widgets, and this increased interest in widget making would send the message via increased rent that another widget factory would be good. a builder (existing or a start-up, doesn't matter), observing the increasing rent, would decide developing another widget factory would be an efficient use of resources, and would put in an application for allocation of land. the government department, as the plan shows adequate health & safety provisions and has environmental protection standards in line with other factories, approves it. if there are competing applications for the same land, first in first served, so it would be incumbent upon government to expedite all applications, and incumbent on applicants to make sure the application is complete and comprehensive.
another important point - no one is making a profit as such, everyone is just working to attain their preferred level of affluence by working minimum hours plus extra if they want a better lifestyle. the current system has so much legal angst because everyone is bitterly trying to capture profit for themselves. if profit is no longer the goal, if the goal is now to satisfy demand / provide a service / improve society, there would be less legal battles, and less lawyers, both of which would be better for society.
Thursday, 29 November 2012
research
research is an area where, unless there is a pressing reason to do it, research becomes a low priority. governments always have a vast array of things to spend money on, and there is never enough tax income that has been successfully extorted from the populace. if government isn't stumping up the funds, the only options remaining are venture capital (restricted to research where there is a reasonable prospect of profit), or failing that, charity.
to my mind, research is the greatest hope of humanity. the technological breakthroughs in the past have so immeasurably improved the quality of life for so many people, it seems to me one of the highest priorities in human society should be continued research, specifically in the desired outcomes of society (as per the measuring success post, i suggest the following as societal goals: longer lifespan; healthier; safer; happier; more productive; better educated).
it is a shame that, unless the economic elite that control the funding think there is a reasonable chance of profit that will therefore improve their economic power, the only time research is prioritised is at times of crisis. like a virulent new disease sweeping the world, or a world war.
so i think a shift to an 'ample' economic paradigm (ample-nomics?) where profit is no longer worshipped and no longer dictates the economic decision making would prove beneficial to research. specifics of how i think research would occur:
1) businesses are very easy to start in an ample system, effectively just needing to demonstrate demand for the product, and have the administrative skills to write up a coherent business plan and maintain adequate records to satisfy the auditors. so conceptually, research on new products no longer need to attract funding, no longer need to pass the profitability test, so long as there is demand for the product and they maintain adequate efficiency to escape being culled by the auditors (note - i really should define efficiency as it would be measured by the auditors).
2) this demand can be from citizens or from existing businesses, and in an ample system, anything that can be pushed out of a 'government organisation', would be. so hospitals, schools, transport, transport systems, anything where a product or service is being provided, i envisage being operated as a private business with the same dual goals of satisfying demand and maximising efficiency. therefore all these private businesses can undertake more research themselves, as they are no longer constrained by the profit / breakeven paradigm, but also provide demand for other research businesses (ie businesses whose product / service is pure research). there would still be government in an ample system, effectively setup by politicians where they think private / business demand is not providing a product or service that society needs (police, jails, national defence). these organisations would still be subject to efficiency requirements, would be required to accountable and transparent with audits being published on government organisations, and ultimately the politicians would be answerable to the citizens come election times.
3) anything not achieved via the above 2 concepts, same as large infrastructure, could put up a prospectus on the online marketplace, which citizens or businesses could allocate hours to. so for example, space technology and exploration. this is basically the same as charity in the current system, and would therefore probably only work for 'cool' research. any research that isn't cool, or isn't in demand, probably unlikely to get much traction. but that is the same as capitalism anyway.
i envisage people having more time in an ample system. profits aren't quarantined to an elite few but shared by everyone. people currently classified as unemployed would be contributing at least minimum hours to qualify for their basic needs (which means the labour pool would increase by 5%-15% based on official stats, plus all those who are missed in the stats as they are not looking for work, have given up, are not fully employed etc). businesses would be so easy to start, and there would be such an abundant workforce, that i envisage higher production, in that there would be the same physical assets, but increased workforce to extract goods and services. and many, maybe most, would work more than the minimum hours to enable a higher quality of life / level of luxuries.
obviously some of the population would spend spare time and resources on just R&R, that is their choice. but i think a fair portion of the populace would use the increased freedom to get education, training, take classes on hobbies, and assisting research and inventing things.
to my mind, research is the greatest hope of humanity. the technological breakthroughs in the past have so immeasurably improved the quality of life for so many people, it seems to me one of the highest priorities in human society should be continued research, specifically in the desired outcomes of society (as per the measuring success post, i suggest the following as societal goals: longer lifespan; healthier; safer; happier; more productive; better educated).
it is a shame that, unless the economic elite that control the funding think there is a reasonable chance of profit that will therefore improve their economic power, the only time research is prioritised is at times of crisis. like a virulent new disease sweeping the world, or a world war.
so i think a shift to an 'ample' economic paradigm (ample-nomics?) where profit is no longer worshipped and no longer dictates the economic decision making would prove beneficial to research. specifics of how i think research would occur:
1) businesses are very easy to start in an ample system, effectively just needing to demonstrate demand for the product, and have the administrative skills to write up a coherent business plan and maintain adequate records to satisfy the auditors. so conceptually, research on new products no longer need to attract funding, no longer need to pass the profitability test, so long as there is demand for the product and they maintain adequate efficiency to escape being culled by the auditors (note - i really should define efficiency as it would be measured by the auditors).
2) this demand can be from citizens or from existing businesses, and in an ample system, anything that can be pushed out of a 'government organisation', would be. so hospitals, schools, transport, transport systems, anything where a product or service is being provided, i envisage being operated as a private business with the same dual goals of satisfying demand and maximising efficiency. therefore all these private businesses can undertake more research themselves, as they are no longer constrained by the profit / breakeven paradigm, but also provide demand for other research businesses (ie businesses whose product / service is pure research). there would still be government in an ample system, effectively setup by politicians where they think private / business demand is not providing a product or service that society needs (police, jails, national defence). these organisations would still be subject to efficiency requirements, would be required to accountable and transparent with audits being published on government organisations, and ultimately the politicians would be answerable to the citizens come election times.
3) anything not achieved via the above 2 concepts, same as large infrastructure, could put up a prospectus on the online marketplace, which citizens or businesses could allocate hours to. so for example, space technology and exploration. this is basically the same as charity in the current system, and would therefore probably only work for 'cool' research. any research that isn't cool, or isn't in demand, probably unlikely to get much traction. but that is the same as capitalism anyway.
i envisage people having more time in an ample system. profits aren't quarantined to an elite few but shared by everyone. people currently classified as unemployed would be contributing at least minimum hours to qualify for their basic needs (which means the labour pool would increase by 5%-15% based on official stats, plus all those who are missed in the stats as they are not looking for work, have given up, are not fully employed etc). businesses would be so easy to start, and there would be such an abundant workforce, that i envisage higher production, in that there would be the same physical assets, but increased workforce to extract goods and services. and many, maybe most, would work more than the minimum hours to enable a higher quality of life / level of luxuries.
obviously some of the population would spend spare time and resources on just R&R, that is their choice. but i think a fair portion of the populace would use the increased freedom to get education, training, take classes on hobbies, and assisting research and inventing things.
Wednesday, 28 November 2012
infrastructure (with rant on the evils of government)
infrastructure in a capitalist system is usually provided by quite a circuitous process. people and companies are taxed to pay for inefficient, bloated government services. a government babu / elected politician decides a piece of infrastructure is a good idea. the government plods its way through the planning stages usually via the use of expensive consultants who, after decades of working in the government, come to the conclusion that doing the same job as an external consultant is far more lucrative for them. after many revisions, they come to an acceptable plan, and lurch into the tendering process.
tendering is just as ridiculous as the planning stage, with revisions, scope changes, political interference, all wasting more and more tax payer money on the bureaucratic nightmare that is modern day government. eventually, the process is finally completed, private companies submit their tenders, and a committee of government babus decree that company x provides the best value for money (hopefully company x is politically acceptable to the politicians, otherwise a sh!tfight starts about now). the honourable politician announces the decision with extensive press coverage and abundant fake smiles.
company x and government then begin their intricate dance of pretending to follow the tender / contract to the letter, while trying to maximise their profitability (for company x) and maximise value for money / government prestige (with different departments and different politicians often working at cross-purposes for internal reasons, making it all the more laughable). there are frequent revisions to the tender / contract at this stage. finally, infrastructure is produced, frequently late, over budget, and with contractual disputes about quality. the infrastructure may be owned by the government, in which case the tax payer pays, or it may be privately owned, in which case the tax payer pays (only when using it, this time). government is a beautiful thing.
just in case i have accidentally portrayed government workers as competent in the above, all work they do (in any department, at every level) is invariably less efficient than a private counterpart. government workers see no need to work overtime, find ways to have extensive coffee breaks, lots of staff meetings, lots of union meetings, work is stopped to watch sporting events, not only do they have no need to minimise costs to make a profit, they frequently maximise spending to ensure their budgetary allocation isn't taken away, their work is frequently interrupted by random ministerial queries and ministerial directives that reverse the directive from the week before, and work often gets shuffled around and re-done to accommodate the high levels of government workers that inexplicably take fully paid stress leave. all of this is topped off by an air of superiority because government workers think they keep the country running (clearly my opinion here has departed from objective analysis, and i have assumed that my limited experience in government is reflective of government workers everywhere).
slight diversion there as i waxed lyrical on the joys of government workers and bureaucracy, but it is relevant into how infrastructure is provided in the capitalist system (and also demonstrates why communism will never work, there being no private sector this level of dysfunction would be present in all economic activity throughout the country). i don't think anyone pretends that the current system is efficient or even good, but how can you improve it? how do i envisage it happening under an 'ample' economic system?
going back to the key events that have to happen - there is a need or want, there are adequate resources to provide this need or want, and it is then built. everything else is just the currently accepted mythology in how we get things done, and same as we used to sacrifice virgins and worship zeus, it is largely unnecessary.
in the ample system, all needs and wants can be found in a centralised website / online market-place, something similar to ebay. new products and services can be added to gauge consumer interest, consumers can purchase existing products and services by spending their 'hours' earnt. given there is no tax, no hoarded savings, and no debt in this system i am imagining, how can large scale projects and infrastructure occur?
anyone can add a new product or service to the market-place website, whether it is a haircut, an electronic widget, or a housing development (housing would be rented, not owned as per the previous post, nobody / nothing would own any land, it could just be temporarily used). people and businesses are then free to 'bid' on it as either a buyer or a seller in the defacto currency of hours. a seller would put together a business plan for the provision of the product or service demonstrating how they could provide it, what inputs would be needed, whether those inputs are available and at what cost in 'hours', what employees would be required, whether they are available and at what cost in 'hours'. small scale products or services can start running their business prior to receiving certification from an auditor, effectively as a sole trader in the current capitalist system (ie personally spending their 'hours' to buy materials, receiving 'hours' in payment for the product or service). as they can't go into negative 'hours' personally, they effectively would need to make a profit in 'hours' to continue, and to provide any incentive to continue (if it is profitable enough, they may not need to work their quota of hours as they get more than enough from their mini-business. this would of course attract other people to provide the good / service, bringing the price down to equitable levels).
once an auditor has certified the business, i consider this as equivalent to incorporation in the capitalist system. the business is effectively a separate legal entity, purchases materials in its own right, has employees that can work their minimum quota of hours at the business, has income from customers spending their 'hours' to purchase the good or service. importantly, and different to capitalism, the business does not need to make a profit, it can spend more 'hours' than it receives. the key criteria for the continuation of the business is firstly demonstrated continuing demand for the product or service (as evidenced by the online market-place showing a pipeline of customers wanting the product or service, note that this is a free market where customers can bid whatever hours they want to purchase the good/service), and secondly, by maximising efficiency. auditors would need to regularly review all businesses and cull the bottom 5%-10%-30%. there is therefore incentive to maximise efficiency (to avoid the cull), while also providing products or services that are in demand.
for larger scale projects (road, bridge, harbour), i envisage a supplier would write up a proposal / prospectus that would need to be certified by an auditor as being realistic and possible, but would leave it up to the citizens in the market to determine whether it was desirable. the project would then be placed in the online marketplace in a special category, where there can be only one supplier (other suppliers can have simultaneous mutually exclusive projects competing in the market place, probably with a special link between the pages to notify citizens they are mutually exclusive), and citizens can allocate 'hours' to any project that they want. citizens can allocate as many hours as they want, bearing in mind that they then can't spend these hours on luxuries or other projects etc. The project would need to reach the threshold hours required as per the audited business plan for the project to be built, and would need to reach the threshold first in a situation where there are competing mutually exclusive plans. hours allocated by citizens would be 'refunded' in a situation where the project doesn't meet the threshold by a key date specified in the business plan.
why would citizens allocate their hours to projects? bear in mind, in capitalism we are compelled to allocate circa 30% of our hours (depending on country and income level) to government in the form of taxation, which as i have never signed a contract saying i wish to do so, and have little to no say on how those taxes are spent, i consider theft. so it would be nice to actually have some control over infrastructure expenditure in my local area. secondly, if there is an infrastructure need (eg roads are really congested, wish we had a new freeway here; the closest airport is 3 hours away; i have to wait 5 hours to see a doctor), the citizens can directly influence the priorities of infrastructure expenditure as it affects their life. this is much more closely aligned to democratic ideals in that only projects that can attract adequate public support will get done, whereas bridges to nowhere are less likely to occur as citizens are less likely to allocate their hours to projects that they don't think will improve their life, they will allocate their hours to further their own goals, whether that be luxury food, booze, education, art for the wall, a new car, or a new hospital or airport.
obviously, there is still the potential for corruption, for example a politician publicly endorsing his brother's project x, and sheep from his party toeing the party line and allocating hours as instructed. but no more than with capitalism and if people choose to allocate hours as per political party instructions or as per any influential member of society, that is their choice. you can't stop stupid from being stupid, and at least it is democratically stupid and they could choose an alternative if they so wished. however there are no companies making massive profits on infrastructure, it is more difficult to get projects going unless citizens put value in it and allocate hours accordingly.
its an interesting idea, as to whether it would work as i envisage - no idea, but nothing ever goes to plan. i need to go further into detail on land usage and how it would be determined (eg project x involves building a highway through the house you currently live in, or project y involves locating hazardous materials next to a kindergarten, or just more housing is being demanded in desirable suburb z, where does it get built). but next i want to go into research and innovation, as i think this is an area where capitalism puts unnecessary artificial constraints on human aspiration.
tendering is just as ridiculous as the planning stage, with revisions, scope changes, political interference, all wasting more and more tax payer money on the bureaucratic nightmare that is modern day government. eventually, the process is finally completed, private companies submit their tenders, and a committee of government babus decree that company x provides the best value for money (hopefully company x is politically acceptable to the politicians, otherwise a sh!tfight starts about now). the honourable politician announces the decision with extensive press coverage and abundant fake smiles.
company x and government then begin their intricate dance of pretending to follow the tender / contract to the letter, while trying to maximise their profitability (for company x) and maximise value for money / government prestige (with different departments and different politicians often working at cross-purposes for internal reasons, making it all the more laughable). there are frequent revisions to the tender / contract at this stage. finally, infrastructure is produced, frequently late, over budget, and with contractual disputes about quality. the infrastructure may be owned by the government, in which case the tax payer pays, or it may be privately owned, in which case the tax payer pays (only when using it, this time). government is a beautiful thing.
just in case i have accidentally portrayed government workers as competent in the above, all work they do (in any department, at every level) is invariably less efficient than a private counterpart. government workers see no need to work overtime, find ways to have extensive coffee breaks, lots of staff meetings, lots of union meetings, work is stopped to watch sporting events, not only do they have no need to minimise costs to make a profit, they frequently maximise spending to ensure their budgetary allocation isn't taken away, their work is frequently interrupted by random ministerial queries and ministerial directives that reverse the directive from the week before, and work often gets shuffled around and re-done to accommodate the high levels of government workers that inexplicably take fully paid stress leave. all of this is topped off by an air of superiority because government workers think they keep the country running (clearly my opinion here has departed from objective analysis, and i have assumed that my limited experience in government is reflective of government workers everywhere).
slight diversion there as i waxed lyrical on the joys of government workers and bureaucracy, but it is relevant into how infrastructure is provided in the capitalist system (and also demonstrates why communism will never work, there being no private sector this level of dysfunction would be present in all economic activity throughout the country). i don't think anyone pretends that the current system is efficient or even good, but how can you improve it? how do i envisage it happening under an 'ample' economic system?
going back to the key events that have to happen - there is a need or want, there are adequate resources to provide this need or want, and it is then built. everything else is just the currently accepted mythology in how we get things done, and same as we used to sacrifice virgins and worship zeus, it is largely unnecessary.
in the ample system, all needs and wants can be found in a centralised website / online market-place, something similar to ebay. new products and services can be added to gauge consumer interest, consumers can purchase existing products and services by spending their 'hours' earnt. given there is no tax, no hoarded savings, and no debt in this system i am imagining, how can large scale projects and infrastructure occur?
anyone can add a new product or service to the market-place website, whether it is a haircut, an electronic widget, or a housing development (housing would be rented, not owned as per the previous post, nobody / nothing would own any land, it could just be temporarily used). people and businesses are then free to 'bid' on it as either a buyer or a seller in the defacto currency of hours. a seller would put together a business plan for the provision of the product or service demonstrating how they could provide it, what inputs would be needed, whether those inputs are available and at what cost in 'hours', what employees would be required, whether they are available and at what cost in 'hours'. small scale products or services can start running their business prior to receiving certification from an auditor, effectively as a sole trader in the current capitalist system (ie personally spending their 'hours' to buy materials, receiving 'hours' in payment for the product or service). as they can't go into negative 'hours' personally, they effectively would need to make a profit in 'hours' to continue, and to provide any incentive to continue (if it is profitable enough, they may not need to work their quota of hours as they get more than enough from their mini-business. this would of course attract other people to provide the good / service, bringing the price down to equitable levels).
once an auditor has certified the business, i consider this as equivalent to incorporation in the capitalist system. the business is effectively a separate legal entity, purchases materials in its own right, has employees that can work their minimum quota of hours at the business, has income from customers spending their 'hours' to purchase the good or service. importantly, and different to capitalism, the business does not need to make a profit, it can spend more 'hours' than it receives. the key criteria for the continuation of the business is firstly demonstrated continuing demand for the product or service (as evidenced by the online market-place showing a pipeline of customers wanting the product or service, note that this is a free market where customers can bid whatever hours they want to purchase the good/service), and secondly, by maximising efficiency. auditors would need to regularly review all businesses and cull the bottom 5%-10%-30%. there is therefore incentive to maximise efficiency (to avoid the cull), while also providing products or services that are in demand.
for larger scale projects (road, bridge, harbour), i envisage a supplier would write up a proposal / prospectus that would need to be certified by an auditor as being realistic and possible, but would leave it up to the citizens in the market to determine whether it was desirable. the project would then be placed in the online marketplace in a special category, where there can be only one supplier (other suppliers can have simultaneous mutually exclusive projects competing in the market place, probably with a special link between the pages to notify citizens they are mutually exclusive), and citizens can allocate 'hours' to any project that they want. citizens can allocate as many hours as they want, bearing in mind that they then can't spend these hours on luxuries or other projects etc. The project would need to reach the threshold hours required as per the audited business plan for the project to be built, and would need to reach the threshold first in a situation where there are competing mutually exclusive plans. hours allocated by citizens would be 'refunded' in a situation where the project doesn't meet the threshold by a key date specified in the business plan.
why would citizens allocate their hours to projects? bear in mind, in capitalism we are compelled to allocate circa 30% of our hours (depending on country and income level) to government in the form of taxation, which as i have never signed a contract saying i wish to do so, and have little to no say on how those taxes are spent, i consider theft. so it would be nice to actually have some control over infrastructure expenditure in my local area. secondly, if there is an infrastructure need (eg roads are really congested, wish we had a new freeway here; the closest airport is 3 hours away; i have to wait 5 hours to see a doctor), the citizens can directly influence the priorities of infrastructure expenditure as it affects their life. this is much more closely aligned to democratic ideals in that only projects that can attract adequate public support will get done, whereas bridges to nowhere are less likely to occur as citizens are less likely to allocate their hours to projects that they don't think will improve their life, they will allocate their hours to further their own goals, whether that be luxury food, booze, education, art for the wall, a new car, or a new hospital or airport.
obviously, there is still the potential for corruption, for example a politician publicly endorsing his brother's project x, and sheep from his party toeing the party line and allocating hours as instructed. but no more than with capitalism and if people choose to allocate hours as per political party instructions or as per any influential member of society, that is their choice. you can't stop stupid from being stupid, and at least it is democratically stupid and they could choose an alternative if they so wished. however there are no companies making massive profits on infrastructure, it is more difficult to get projects going unless citizens put value in it and allocate hours accordingly.
its an interesting idea, as to whether it would work as i envisage - no idea, but nothing ever goes to plan. i need to go further into detail on land usage and how it would be determined (eg project x involves building a highway through the house you currently live in, or project y involves locating hazardous materials next to a kindergarten, or just more housing is being demanded in desirable suburb z, where does it get built). but next i want to go into research and innovation, as i think this is an area where capitalism puts unnecessary artificial constraints on human aspiration.
Tuesday, 27 November 2012
debt & equity
in the previous post, i made the logical extension that if hoarding of money inevitably leads to the unfair distribution of economic resources and power, then all investments including owning real estate cannot be allowed. as previously stated, hoarding is a logical consequence of capitalism, in that profit is the ultimate goal, those that are good at profit / are born into the right families / right countries continue to make profits, they then retain these profits to maximise their future economic power. over generations this results in an economic elite that hoard a large portion of the economic resources, to the detriment of the majority of humankind. and by detriment, i am referring to people dying in various parts of the world due to the inequitable distribution of resources.
with no hoarding and no debt, there would be large implications for the banking sector. if you go back to the traditional banking model, people keep their savings in the bank for security, and maybe a little interest. the bank then aggregates this pool of savings and finds a suitable customer to loan it to. back when banks were responsible and prudent, they would make a margin of profit but would very carefully assess who they lent money to as even a small bad debt would wipe out the profit on many other healthy loans. but the obsession for profit combined with the concept of selling those loans (or more importantly, selling the risk of non-payment) resulted in banks lowering these lending standards. i think we all recall the consequences.
debt, even when it is provided by a prudent banking sector, is a significant cost in a capitalist society. a healthy business could easily have interest making up 10% of their expenses, often more. in my country, young people first entering the housing market often spend 25%-33% of their income to cover the interest expense. even people that don't hold any debt directly, consider that all the prices they pay for goods and services has to cover the cumulative cost of the interest of the logistical chain from when the raw resource was first extracted to the final finished good that they are purchasing. this is a significant impost for all purchases, reducing all economic activity due to the requirement to pay the holders of the debt this 'rent' on their accumulated economic resources.
investments (equity) are said to have a higher required return on capital than debt, due to there being higher risk as the returns are not contractual obligations. so debt, or equity investments, are effectively a tax on all economic activity that is required to be paid to the economic elite rather than the government, stifling all activity, stifling growth, stifling innovation, all because these elite were privileged to be born in the right place, right family, or be skilled at making a profit.
and once again, money isn't real. it is a symbol of the underlying economic resources or power. debt and equity is therefore, in the current capitalist mythology that we accept without question, a symbolic representation that a significant portion of all economic activity is quarantined for the benefit of the economic elite. that all activity currently taking place is at their discretion as they can withhold all forms of funding, and every transaction serves to strengthen the power these elite hold as they extract their interest, dividends and capital gains.
a logical question is - if there is no debt funding, no investment funding, how can businesses start and continue to operate? my answer to this is, once again, money isn't real. you don't need money, the physical assets continue to exist in the absence of money. money is just how we justify they flow of economic activity from raw materials to finished goods and services.
in the current system, a company sees an opportunity. obtains funding, buys materials, converts it to a value-added good, sells it at a profit. it then uses this profit to pay other expenses including the cost to service the funding.
the key events that happen - there is a need or want, they receive materials, they convert the materials, the finished product is transferred to the customer. money is not required for these key steps, it is used just a part of the currently accepted mythology. same with profit - it isn't required, the underlying assets don't spontaneously combust if there is no profit.
society can choose an alternate system to convert raw materials into goods and services. money and profit aren't required, and they both result in the continued and ever increasing power of the economic elite. instead of benefiting those few elite, it should benefit all of human-kind. it therefore should be allocated according to need first, rather than callous profit. the challenge as i see it is any system needs to be efficient to maximise the benefit to human-kind.
with no hoarding and no debt, there would be large implications for the banking sector. if you go back to the traditional banking model, people keep their savings in the bank for security, and maybe a little interest. the bank then aggregates this pool of savings and finds a suitable customer to loan it to. back when banks were responsible and prudent, they would make a margin of profit but would very carefully assess who they lent money to as even a small bad debt would wipe out the profit on many other healthy loans. but the obsession for profit combined with the concept of selling those loans (or more importantly, selling the risk of non-payment) resulted in banks lowering these lending standards. i think we all recall the consequences.
debt, even when it is provided by a prudent banking sector, is a significant cost in a capitalist society. a healthy business could easily have interest making up 10% of their expenses, often more. in my country, young people first entering the housing market often spend 25%-33% of their income to cover the interest expense. even people that don't hold any debt directly, consider that all the prices they pay for goods and services has to cover the cumulative cost of the interest of the logistical chain from when the raw resource was first extracted to the final finished good that they are purchasing. this is a significant impost for all purchases, reducing all economic activity due to the requirement to pay the holders of the debt this 'rent' on their accumulated economic resources.
investments (equity) are said to have a higher required return on capital than debt, due to there being higher risk as the returns are not contractual obligations. so debt, or equity investments, are effectively a tax on all economic activity that is required to be paid to the economic elite rather than the government, stifling all activity, stifling growth, stifling innovation, all because these elite were privileged to be born in the right place, right family, or be skilled at making a profit.
and once again, money isn't real. it is a symbol of the underlying economic resources or power. debt and equity is therefore, in the current capitalist mythology that we accept without question, a symbolic representation that a significant portion of all economic activity is quarantined for the benefit of the economic elite. that all activity currently taking place is at their discretion as they can withhold all forms of funding, and every transaction serves to strengthen the power these elite hold as they extract their interest, dividends and capital gains.
a logical question is - if there is no debt funding, no investment funding, how can businesses start and continue to operate? my answer to this is, once again, money isn't real. you don't need money, the physical assets continue to exist in the absence of money. money is just how we justify they flow of economic activity from raw materials to finished goods and services.
in the current system, a company sees an opportunity. obtains funding, buys materials, converts it to a value-added good, sells it at a profit. it then uses this profit to pay other expenses including the cost to service the funding.
the key events that happen - there is a need or want, they receive materials, they convert the materials, the finished product is transferred to the customer. money is not required for these key steps, it is used just a part of the currently accepted mythology. same with profit - it isn't required, the underlying assets don't spontaneously combust if there is no profit.
society can choose an alternate system to convert raw materials into goods and services. money and profit aren't required, and they both result in the continued and ever increasing power of the economic elite. instead of benefiting those few elite, it should benefit all of human-kind. it therefore should be allocated according to need first, rather than callous profit. the challenge as i see it is any system needs to be efficient to maximise the benefit to human-kind.
Monday, 26 November 2012
shelter
to my mind, of the basic needs i listed as being guaranteed to all citizens, shelter poses the largest conceptual problem due to the variables implicit in the provision of the need. in a capitalist system, we have rentals, mortgaged, owned, big, small, apartments, big gardens, good suburbs, bad suburbs, quality of construction, and more. what standard, and how, would the government/system (or an agent of the government) provide this basic need to the citizen?
the logic i have used in the provision of food and other needs is the minimum amount required to maintain good health is provided for free. i would suggest this be based on the number of calories, and i would also restrict it to common foods (ie citizens couldn't use their minimum guaranteed calories to eat caviar, for example). anything above the minimum calories, and other luxuries like coffee, alcohol, caviar, cake, would be paid for by spending the hours they earn working at their qualifying job (they need to work minimum hours to qualify for basic needs covered).
consistent with the food, i am thinking a minimum area per person be included in the guaranteed minimum. any additional area needs to be paid for with hours. the quality would need to be fit for the purpose, adequate, but doesn't need to be top quality with all the mod cons. in addition, i would suggest that the minimum provided be based on the price of the worst suburb in the vicinity. therefore those that don't want to live in the worst suburb, want more area, want higher quality, want a garden etc, would be free to select shelter more in line with the preferences, price set by the free market forces. they would then be rebated back the cost of the minimum area in the worst suburb in close proximity.
this seems logically rigorous, in that the basic needs are covered, but the citizens have the freedom to choose in line with their preferences but must pay to do so. but who would own the property?
in previous posts, i have ranted about how hoarding money is effectively stealing food from the mouth of a starving baby (nb, i am currently stealing food from starving babies). the only moral justification available is that as currently our future needs are not guaranteed, we need to be able save (hoard) resources to provide for those future needs for ourselves and our family.
in many parts of the capitalist world, the family home is the biggest investment they have. but effectively, they have this investment due to a combination of being born in a capitalist affluent society, perhaps having affluent parents, perhaps working in a well-paid trade or job, maybe due to the skilful trading of resources / investments on the open market. often being prudent and responsible as well. however, to be logically consistent, hoarding is hoarding. the logical consequences of hoarding are that those that prove good at hoarding will obtain unfair control of economic resources, eventually culminating in the same inequity we currently see in capitalist society. so no private ownership of real estate.
using the terms currently in use, citizens would therefore rent property, on the free market, selecting the property from those available that best matches their preferences and how much of their 'hours' they wish to spend on shelter. no one actually gets 'paid' the rent, nobody is receiving rental income, in the same way nobody 'loses' hours when citizens are paid for working. the 'hours' are printed (in bernanke speak) when citizens work, and disappear when they are spent. same as money in the current system - hours are not real, they have no intrinsic value.
as with rented properties now, maintenance on the existing structure would be provided by the 'owner' ie the cost would be rebated back to the citizen. any modifications and subsequent maintenance would be the responsibility of the citizen, along with the responsibility to repair any damage they cause.
the next logical topic i need to explore - if housing can't be owned as it is hoarding, logically you can't have investments for the same reason. to extend this logic further, if there are no accumulated (hoarded) savings, there are no accumulated savings to be lent out, and that means no debt.
final point i want to make - no hoarding, no investments, no debt, doesn't actually change anything. the same physical assets would still exist in the world. investments and debt are just a part of the capitalist mythology that we all believe is a natural law, but it's not. we can change the mythology if we choose to do so. this mythology is just the system by which we currently allocate resources, and i think the system is inequitable and therefore should change.
so next posting - debt.
the logic i have used in the provision of food and other needs is the minimum amount required to maintain good health is provided for free. i would suggest this be based on the number of calories, and i would also restrict it to common foods (ie citizens couldn't use their minimum guaranteed calories to eat caviar, for example). anything above the minimum calories, and other luxuries like coffee, alcohol, caviar, cake, would be paid for by spending the hours they earn working at their qualifying job (they need to work minimum hours to qualify for basic needs covered).
consistent with the food, i am thinking a minimum area per person be included in the guaranteed minimum. any additional area needs to be paid for with hours. the quality would need to be fit for the purpose, adequate, but doesn't need to be top quality with all the mod cons. in addition, i would suggest that the minimum provided be based on the price of the worst suburb in the vicinity. therefore those that don't want to live in the worst suburb, want more area, want higher quality, want a garden etc, would be free to select shelter more in line with the preferences, price set by the free market forces. they would then be rebated back the cost of the minimum area in the worst suburb in close proximity.
this seems logically rigorous, in that the basic needs are covered, but the citizens have the freedom to choose in line with their preferences but must pay to do so. but who would own the property?
in previous posts, i have ranted about how hoarding money is effectively stealing food from the mouth of a starving baby (nb, i am currently stealing food from starving babies). the only moral justification available is that as currently our future needs are not guaranteed, we need to be able save (hoard) resources to provide for those future needs for ourselves and our family.
in many parts of the capitalist world, the family home is the biggest investment they have. but effectively, they have this investment due to a combination of being born in a capitalist affluent society, perhaps having affluent parents, perhaps working in a well-paid trade or job, maybe due to the skilful trading of resources / investments on the open market. often being prudent and responsible as well. however, to be logically consistent, hoarding is hoarding. the logical consequences of hoarding are that those that prove good at hoarding will obtain unfair control of economic resources, eventually culminating in the same inequity we currently see in capitalist society. so no private ownership of real estate.
using the terms currently in use, citizens would therefore rent property, on the free market, selecting the property from those available that best matches their preferences and how much of their 'hours' they wish to spend on shelter. no one actually gets 'paid' the rent, nobody is receiving rental income, in the same way nobody 'loses' hours when citizens are paid for working. the 'hours' are printed (in bernanke speak) when citizens work, and disappear when they are spent. same as money in the current system - hours are not real, they have no intrinsic value.
as with rented properties now, maintenance on the existing structure would be provided by the 'owner' ie the cost would be rebated back to the citizen. any modifications and subsequent maintenance would be the responsibility of the citizen, along with the responsibility to repair any damage they cause.
the next logical topic i need to explore - if housing can't be owned as it is hoarding, logically you can't have investments for the same reason. to extend this logic further, if there are no accumulated (hoarded) savings, there are no accumulated savings to be lent out, and that means no debt.
final point i want to make - no hoarding, no investments, no debt, doesn't actually change anything. the same physical assets would still exist in the world. investments and debt are just a part of the capitalist mythology that we all believe is a natural law, but it's not. we can change the mythology if we choose to do so. this mythology is just the system by which we currently allocate resources, and i think the system is inequitable and therefore should change.
so next posting - debt.
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