[p2p-research] Paying Investors With Product Solves the Paradox of Profit in Perfect Competition

[Samuel Rose]

Patrick,

As you already know, I don't argue with your basic logic.

I personally am only saying that I think the motivation, the "filter"
through which people are processing reality, is **THE** reason why everyone
in the world has not already adopted the most efficient, and logically best
economic models and systems.

What you propose is really a "commons", and Robert Axelrod (
http://www-personal.umich.edu/~axe/) already figured out several decades ago
with his agent based modeling experiments that the only way that autonomous
agents will "win" the game of the "tragedy of the commons" is if they
"understand" or know the rules of the "game" they are playing (understand
that they are using a depletable commons, and autonomously work towards not
depleting it)

So, we live in a world where some people cannot understand the "game" they
are "playing". They thing they are "playing" a different "game" than
"tragedy of the commons". And, we won't be able to get them to see reality
any time in our lifetime.

So, how do we create something that resonates with their ways of solving
problems, and still tips the balance towards maintaining the commons of
planet earth?

In the case of User owner, I think it will resonate with some people as it
is. But, for those who it does not resonate with, "commons" must be reframed
into motives that will resonate with them enough to get them to participate,
but not enough to allow those motives to overtake and deplete. If we work
within existing systems, it will become more apparentas to how this is
possible. If we create a real world pilot project, that is. If we *try* the
idea.

So, I will commit to figuring out a way to *try* your idea. Will anyone else
reading this also commit? If not, not a problem, we can still try it. We
only need at minimum 2 people, and I assume that you would be one of those
people, Patrick.



On Fri, Mar 14, 2008 at 1:07 PM, Patrick Anderson <agnucius at gmail.com>
wrote:

> This begins part two in our study of elementary economics.  I hope
> this will be a step toward resolving some of the still pending issues
> in the "Capital Club" thread.  If that doesn't happen, I will go back
> and address them directly.
>
> Part of the Wikipedia entry reads:
> "According to the standard economical definition of efficiency (Pareto
> efficiency), perfect competition would lead to a completely efficient
> outcome. The analysis of perfectly competitive markets provides the
> foundation of the theory of supply and demand. Perfect competition is
> a market equilibrium in which all resources are allocated and used
> efficiently, and collective social welfare is maximized." --
> http://en.wikipedia.org/wiki/Perfect_competition
>
> Since perfecting competition would cause price to approach cost, a
> strange situation occurs where normal "For Profit" businesses - who
> measure their success by the amount they can keep price above cost -
> would all close their doors proclaiming failure.
>
> A business must pay it's investors SOMETHING, otherwise, why would
> they invest?  So, if the investors are expecting profit, then they
> require the business they invested in to be able to operate in an
> imperfect market.  Profit is a measure of this imperfection.
>
> But there is another thing that we could pay investors if those
> investors are in a certain set.  If the investors are also CONSUMERS
> (some could incidentally be workers too) of the product being
> produced, then they would be satisfied with receiving product alone,
> and would never need the business to keep price above cost.
>
> When the investors of production are the consumers of the output, the
> organization can withstand perfect competition because those that
> pre-paid will expect PRODUCT instead of profit.
>
>
> In contrast, if the all investors are all WORKERS (some could
> incidentally be consumers too), and the market has perfect
> competition, then the workers would be paid the same wages as any
> worker that was not an owner, yet would have the risk of holding the
> debt of that incorporation.
>
> If you say "Well, they would be consumers too, so would also be paid
> in product" then you are describing why consumers should be the owners
> of the Means Of Production and avoiding the issue of whether ownership
> should be limited to those that happen to have the skills to operate
> it.
>
> If you say "Well, the workers could pay themselves a higher wage than
> non-owning workers" then you are talking about how profit would be
> 'hidden' in those wages since owners can arbitrarily make that
> division.  But in that case, the organization would be less efficient
> than "consumer owned" - since, when many of the owners are not
> neccessarily workers, then wages and profit are cleanly and clearly
> separated.  If a worker tried to collect too high of a wage for the
> quality of work he was supplying, then the collective owners would put
> that job up for reverse-bid (just as employers do today) until a
> worker with a better quality-to-wage ratio was found.
>



-- 
Sam Rose
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