[p2p-research] Abundance Destroys Profit [was: Tick, tock, tick, tock… BING]

[Ryan Lanham]

On Sat, Dec 12, 2009 at 12:46 PM, Patrick Anderson <agnucius at gmail.com>wrote:

> >
> > State your estimate of the probability that capitalism ends as now for
> every
> > 5 year period going forward.  Combine that with the probability that this
> > end will be peaceful and easy.  That is the likelihood, in a given
> period,
> > you think your outcome will occur.
>
> Capitalism doesn't need to *end* for us to begin organizing in new ways.
>
>
Agreed.



> The change I propose can be implemented as a corporation with a
> special Terms of Operation to enforce the one constraint [profit is
> payer investment].
>
>
It is a reasonable model.  It does freeze and immobilize capital.   That
would be the stock complaint you'd hear.



> >>
> >> When you say 'capital' I assume you mean Capitalism.
> >>
> >
> > Capital is mostly money now.  If by capitalism, you mean a credit driven
> > economy of markets, then, yes, I mean capitalism.  If you mean it as Marx
> > did, then no, I don't mean capitalism.
>
> We will always need markets because we will always want to trade skills.
>

Well, this is where I am confused.  I would normally agree.  But imagine a
robot in one generation being more capable than any human at virtually
anything.  What's there to then trade?  Right now, my own probability
assessments set this event at about 0.7 probability prior to 2050.  Fairly
likely.  I'd put it at 0.9 by 2075...just 65 years from now.  People reading
this list will maybe see that. As you move toward that sort of AGI robotic
capability, skill means little.  AGI will hit first in things like
programming...which is a relatively simple process intellectually compared
to, say, dynamically managing an organization.  We'll find out very quickly
what intelligence is because those things a robot cannot do easily will be,
by definition, more intelligent processes.


>
> Trading goods will be minimized within "User Owned" corporations
> because when you co-own part of a dairy cow, you own the milk as a
> 'side-effect'.  Owning consumers do not need to buy the goods when
> they own the sources - they must only pay for the costs of that
> production and then they own the goods by virtue of their owning the
> sources.  They will then occasionally come to 'claim' (picking up
> their portion of raw milk according to the % of their ownership in the
> diary) their property.
>

Iceland and a few Nordic countries are starting to use this model
now...owned cows again on shared commons.  Shares of beef supplied in
co-ops, etc.  Really it is capitalism writ small.  Same models of
micro-ownership envisioned by market theorists when they opened up the stock
exchanges to individual trades that had low transaction costs.



> Marx was very wrong about at least one thing: the terrible error that
> leads us to cling to the short-sighted notion that ownership in the
> Means of Production should be in the hands of those who happen to
> possess the skills needed to 'operate' those sources.
>

I was reading Das Kapital the other day online and was stunned at how
ridiculous it is.  That people defend it now and claim to be "Marxists"
boggles me.  Of course I am equally boggled by people who find Ayn Rand or
Ludwig von Mises definitive.  I suppose I am always disappointed in people's
willingness to accept rather old and lame social philosophy...even that of
the US founders, which I see as reasoned, but ridiculous in modern terms (I
believe they would have agreed).

I think the power of Marxian ideas was in its revolutionary force.  That is
what attracts people to it.  As an intellectual work, it is primitive.  The
guy was very smart, but next to Jesus, this is the biggest deal made over a
weird foray into the obscure that has ever occurred.  I've given up ever
arguing about it again.  If someone finds it useful, I personally wish them
well.  They're on a very different path of reality and understanding than
me.




>
> The consumers must learn to co-own the Physical Sources of Production
> before User Freedom can enter the physical realm.
>
> >>
> >> Capitalism requires scarcity because profit is being misunderstood and
> >> causes us to not realize the fatal requirements of traditional
> >> investors who demand price never reach cost.
> >>
> >
> > Capitalism doesn't require scarcity.
>
> What is the paper
> http://P2PFoundation.net/Crisis_of_Value_and_the_Ethical_Economy
> about?
>
> If profit doesn't require scarcity, then why do governments -
> including the US - pay farmers to *NOT* grow food on land that must be
> proved to be arable?
>
>
I think the main purpose of these policies (and they were ill-thought) was
to preserve non-existent markets for social purposes--literally to protect
the way of life of farmers.  We wanted to not destroy farms based on low
prices, so we subsidized them as social policy.  Those days are over or
ending.  There is no money with which to do it...even though Europe, the US
and Canada all continually engage in this.  It had nothing to do with
"profit." It has everything to do with politics of land (19th and 18th
century stuff).  Same reason the US has two Senators from S. Dakota and 2
from California but calls itself a democracy.

In fact very few business ideas now point to large profits.  It is hard to
make a profit.  Those enamored of a profitless world are rapidly getting
their wish.  Even those organizations that can and do profit (e.g. large
banks) are widely recognized as adding little to no economic value even by
people within the system.  Volcker recently stated that banks are not useful
in economic terms.  I think he meant it.  In short, they are a transaction
cost.  The Internet could do what they do relatively efficiently.



> Why were dairy owners pouring milk on the road during the Great Depression?
>
>
See above.  Same answer.


>
> >> Treating profit as a reward for current owner incents scarcity and
> >> destruction.
> >
> > Profit is a form of reward for risk.  Risk is taken because someone has
> > superior information, abilities to plan, or out of sheer gambling.  Want
> it
> > incents is greater risk-taking so long as it doesn't fail.
>
> Yes, that is how most all corporations treat it now.
>
> But we are not *required* to do so.
>
>
Agreed.  And we are stopping doing so because credit is failing.  Labor is
tied to credit. People have no idea how profound the surplus labor problem
is...it is vast.  We simply have too many people.  So it will change...and
fairly soon...whether one wants it to or not.


> When we finally understand where profit comes from, and when we can
> design a funding model that includes some % of investors who are
> potential consumers that will accept "at cost" product as their
> return, then we can begin to handle that "price above cost" as a
> solution to that payer's dependence upon the current owners.
>
> Until then we will continue to be confused about why abundance destroys
> profit.
>
>
I still don't see a linkage.  We produce largely what we want to produce.
Investment banking is hugely profitable...isn't that hard, and yet it
employs 1 in ever 300 to 500 people in the US, Japan or Europe.  In human
terms, it is meaningless.  In profit terms...it is the great vast majority
of current profits.  Oil is similar...a low employment high profit
industry.  Take those and healthcare away in the US, and you've probably
eaten up 60% of all profits.

...Interesting discussion to me...thanks for helping me flesh out some of my
own ideas.

Ryan
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