[p2p-research] Capital Club

[Patrick Anderson]

>  IMO profit doesn't result automatically from ownership.  Profit only
>  results from capital ownership, vis a vis the consumer, when the state
>  creates artificial scarcity.

So if we could somehow "start over" - say if a group of people landed
on a deserted island or began trying to populate a planet without
connection to the previous society - would you say that would be
enough to fix it?

If you answer yes, then I wonder how we arrived where we are today.  I
mean, how did the [e]state gain so much power over us to begin with?

>  In a competitive market without
>  privilege, artificial property rights or artificial scarcity, I would
>  expect the price of a carpet service to be just enough to amortize all
>  costs and pay for the labor of those running it.

Well, if workers are the only owners, then Wages and Profit won't be
cleanly separated, so there probably IS a good chance that profit
could reach zero since anything that might have been labled profit
will simply be labled Wages by those Worker/Owners who would want to
keep their own income as high as possible.

But when ownership is determined by those who consume the outputs of
that production, and who pay for the purchase or construction of the
Sources of that production, then Wages are a cost to be minimized, and
Profit becomes a measure of the need for ownership.  Any consumer pays
profit when they do not yet have sufficient ownership in the Sources
needed for that production.  This can be balanced by treating that
payment as an investment from the consumer who paid it - to eventually
vest to him as his real property so that he will eventually (when he
finally has enough ownership of physical Sources) own all the outputs
of production he needs even before they are produced.

To explain that last sentence, just imagine the owner of an apple
tree.  He owns the apples even before they are produced, and can only
pay pure costs, since it would be impossible to pay profit unless he
were to pay it to himself.  To scale this all the way down, we can see
that an individual actually might choose to pay "price above cost" to
himself in a manner - in that he might be investing in future
production by buying more trees or better tools or more land etc.
This seems to prove that profit should be understood as a consumer's
investment.

>  >  How can a consumer increase utilization to the point of making
>  >  ownership "worth it"?  One way is to buy the machine with a group of
>  >  other consumers.  Organizing with your neighbors to buy a rug-doctor
>  >  is cheaper if there are enough of you to keep that equipment busy, so
>  >  why don't we (consumers) do this more often?  Why do we leave that
>  >  work of organizing up to a business that intends to charge us price
>  >  above cost?
>
>  The intention to charge a price above cost does not automatically
>  translate into the ability.  If market entry is free, competition will
>  lower the price to cost.  The only way the equilibrium price can
>  remain above cost is if some entry barrier prevents competition from
>  lowering it.

But market entry is not free, even on a deserted island because of
costs such as the difficulty in "ramping up" and the time needed for
those investment to begin producing.

For instance, let's say I am in a large cruise ship that crashes,
killing all but 7 people - including me - shipwrecked on an uncharted
island.  As I look around I notice the plants and animals seem oddly
familiar.  It suddenly dawns on me these are the same ornamental
organisms that the people of 1st world countries have chosen to have
running on the soil around their homes and througout all of their
cities.  There is green and flowering everywhere, but it is all a
wasteland of worthless, and in some cases even poisonous fabricators.
None of the mushrooms are useful for medicine or food.  No chicken,
cattle, turkey or geese - only dogs, cats and songbirds.  No nut
trees.  No grape vines.  No bees.

Luckily some sealed rations wash ashore, including some steel cans of
wheat and few whole spices that we are able to sprout and begin
growing.

We build simple bellows and construct a crude forge to melt the steel
and aluminum scraps that also wash ashore.  We also use the forge to
make glass from some of the more pure beach sand.

After a couple years, you crash-land onto the same island in a much
smaller boat.  You have no food, no tools, no seed, and not even any
land to stand on.

Let's say the 7 original islanders are not happy about your arrival,
and treat you similarly to how "M. Fioretti" mentioned in his response
to this thread:

> (semi-serious) we, that is any generic group of neighbors in a
>  generic city, all hate each other and the least interact the better
>  we feel:-)''

Even if we 'let' you work for us, we could price the food we sell to
you so high, and the land and tools so high that it may take you years
to be able afford some land and fully own a house, in fact we could
delay it forever - just as almost nobody in the US actually owns their
house, they all OWE their house.  You'd "owe your soul to the company
store".

Wouldn't you agree there are barriers to entry even without a large
state?  I would say it is because the estate IS the state.  When you
pay a price higher than the cost (including wages) that it really took
to grow the wheat and bake the slice of bread you ate, wouldn't it be
nice if that 'extra' you paid (profit) became your investment in more
fields, ovens, etc. even if  you don't have any of those exact skills
- so that you slowly become "set up" as you pay "price above cost"?

>
>  >  I think another part of the problem is in figuring out how those
>  >  resources should be shared among the owners.  It is a difficult,
>  >  sticky situation that most people would rather just avoid altogether
>  >  because of the in-fighting they perceive would occur.  It seems such a
>  >  group could write some 'rules' about how to schedule access and how
>  >  much each individual must compensate the others for any extra wear or
>  >  exclusion they cause.  I see such a contract, if 'properly' written,
>  >  would be the only thing our society needs to begin down the road of
>  >  peace and abundance, but will delay that discussion for now.
>
>  This general principle of cooperative consumer ownership of cars,
>  appliances, etc., is a good one IMO.  Another example would be the
>  pooling of resources by a village to share tractors and other
>  mechanical equipment and use them in common, rather than hiring a
>  capitalist firm.
>
>  But I think the reason for taking the own rather than hire approach
>  whenever possible is really to increase one's economic independence:
>  specifically, to reduce future needs for outside income, to reduce
>  dependence on future wage labor to meet one's basic consumption needs,
>  and to reduce vulnerability to the business cycle and the threat of
>  unemployment.

Those are good reasons too.  But are you also claiming it is possible
for the owner of an apple tree to pay profit for the procurement of
those apples?  In other words, is consumer ownership is more
operationally efficient than having the trees owned only by those that
happen to possess the skills needed to plant, tend, harvest, etc.?
Won't the workers overpay themselves if they are the owners?

If it is most efficient for the workers to own, and many small
businesses are worker-owned, and if the concepts of efficiency in
scale are overrated, then why is there a problem?  Oh yes, you will
say it is the privilege handed out by the state.  I wholeheartedly
agree that almost every government on earth is directly puppeteered by
corporations that sometimes even write the very legislation that gives
them even more privilege.  Much of this is fully above-board
(technically legal), again because the rules of interaction were and
are written by those very same corporations.  So enormously important
policy decisions - such as whether or not to invade the nearly
defenseless countries of Afghanistan and Iraq are influenced by the
profits those policy makers receive because of their investments in
offense contractors.

Sorry for that sidetrack.  I am going to have to work on how to
separate these issues before I can give a better analysis.

>  This principle works well so long as the tools and appliances can be
>  owned in common and used by the co-owners themselves.  The problem
>  arises when they have to hire the wage labor to operate them.  At that
>  point the principle has reached the point of diminishing returns, and
>  is no longer creating a net reduction in dependence on outside wage
>  employment.

That may be a good point.  It is hard to envision how things will be
when all industry is owned by the consumers that need that product,
and have paid for that ownership when they paid "price above cost".

Patrick