[p2p-research] Equal Pay for Equal Work Energy // was Hierarchies and Abundance // was All Work Is Created Equal

[marc fawzi]

Here's the final cut, in case anyone is interested in further discussion.

Introduction

The P2P Energy Economy fuses the latest advances in SmartGrid technology,
P2P trading and lending, and P2P energy production (from renewables) into a
unique economic model, including a new kind of currency, designed to work
with the growing category of goods and services that can be produced on
sustainable, abundant basis.

The benefits of the P2P Energy Economy are summarized below:
1. Provide an energy based currency that has a fixed work value and a use
value that only increases over time (due to increased production
efficiencies for energy, goods and services.) 2. Enable trading in goods and
services, including work itself as a service, at the cost in work energy it
takes to produce and deliver them, such that anyone who wishes to get a
given good or service can get it at the cost in work energy it takes to
deliver that good or service. 3. Enable access to money based on the total
work energy the producer puts in and their creativity, not based on their
place in the hierarchy or their exclusive access to better education. 4.
Direct the flow of money into higher production efficiencies for energy,
goods and services. 5. Direct the flow of money towards socially,
ecologically and environmentally intelligent producers of goods and
services. 6. Enable a model of the economy where in order for peers to grow
their revenue they have to share it with others, i.e., "the more you share,
the more you have." 7. Enable increased autonomy through increased
inter-dependence between equally empowered peers as opposed to decreased
autonomy through increased dependence on few major players.

The following sections of the User Manual describe the above benefits in a
broader context.
[edit<http://p2pfoundation.net/P2P_Energy_Economy?title=P2P_Energy_Economy&action=edit&section=7>
]
Equal Pay for Equal Work Energy

The idea is to enable access to money based on the total work energy the
producer puts in and their creativity, not based on their place in the
hierarchy or their exclusive access to better education.

Technically speaking, in the P2P Energy Economy, tokens of the currency
(i.e. money) are created in proportion to the increase in the amount of
electric energy flow from nodes with energy surplus to nodes with energy
deficit, including households, charging stations, electric vehicle grid, and
neighboring communities, which is then converted by those nodes into new
work energy, which gives the tokens a real and absolute work value (in
joules) in spent energy, which enables its use in trading the goods and
services defined under this economy, at the cost of energy it takes to
produce and deliver them.

To restate this in plain English, it suffice it to say that in the P2P
Energy Economy all work energy is equal because all work energy is measured
using the same absolute-value unit, i.e. the Joule, so a dentist's work
energy is not any more valuable than a teacher's work energy, while still
allowing those who work harder (produce more work energy) to get more back.
In other words, it values all work energy equally while allowing people to
work as hard and smart as they are capable of and get compensated
proportionately, with increased sales and/or increased profit through higher
production efficiencies.

In other words, in the P2P Energy Economy, work-as-a-service is priced at
the [median] cost in work energy it takes to produce and deliver it,
counting all inputs, e.g. education, experience, R&D, equipment, etc in the
cost-of-work-energy calculation.

In order to trade at cost of work energy in goods and services, including
work-as-a-service, the conditions of sustainable abundance, given below,
must be satisfied. These conditions, when combined with the currency defined
under this model (see: Joule Tokens,) enable a radical departure from
today's scarcity enforcing economic model by allowing everyone who wishes to
get a given good or service to do so at the absolute work value of the
energy it takes to produce and deliver that good or service (see: Trading at
Cost with Joule Tokens.)
1. Non-Wasteful, On-demand Production (which permits predictive inventory
management so producers don't have to over produce, which causes waste and
inefficiency and is therefore unsustainable, or under produce which causes
shortages and high prices, which is also unsustainable) 2. Decentralized
Production (which assures there's no dependence on a few suppliers) 3.
Renewable Production (which assures there's no dependence on scarce
resources) 4. Scalable Production (which assures that volume is not limited
by the production process) 5. Open Source Production (which assures that the
good or service can be produced by anyone, while enforcing social and moral
rights of the originator, not their right to a monopoly.) 6. Non-Scarce
Qualities (which assures the absence of any scarce qualities that would
justify paying more than the cost of work energy it takes to produce and
deliver the given good or service) 7. Non-Scarce Dependencies (which assures
that there are no dependencies in the cost-of-work-energy calculation on any
goods or services that do not meet the above conditions.) 8. Equal Pay for
Equal Work Energy (which assures that all peers have access to money based
on the work energy they put in not based on their place in the hierarchy or
their access to education or the lack of it.) 9. Open Education (which
assures that all peers have access to education at the cost in work energy
it takes to produce and deliver that education.)

When the above conditions are met for a given industry the good or services
in that industry should be available to everyone who wishes to have them at
the cost of energy it takes to produce and deliver them.

So if health care (as an industry) was to meet the above conditions then a
visit to the dentist should not cost more than what it takes in total work
energy to produce and deliver it. But in order for health care to meet the
sustainable abundance conditions one of the first things that has to happen
is automation, not just of IT but of medical procedures. For examples,
today, robots are used by surgeons to perform sensitive surgeries to remove
tumors with a much greater degree of accuracy than procedures performed by
hand. It is very possible to replace the surgeon altogether with robotic
surgeon technology that can visualize the tumor in 3D to the finest detail
and use a combination of focused radiation beam (or gamma ray laser) to
annihilate the tumor in place. It would take a few minutes and a relatively
small amount of electricity. The second step in the process of making this
type of surgery (as a service) sustainably abundant, the robot technology
has to be open sourced and copied at no charge by anyone wishing to
manufacture the robot, under a license where the originator only gets to
enforce social and moral rights, e.g. attribution, share-alike, etc.

So if everyone who wish to get a given good or service can do so at the cost
in work energy it takes to deliver that good or service then why not just
give everything and get everything for free? Why do we need a currency? The
answer is that a gift economy is less efficient than a barter economy which
is less efficient than a currency based economy.

The hard problem here is figuring out the energy costing models for the
types of goods and services that fulfill the sustainable abundance criteria
given above.

We can know how much it takes in energy (calories) per day to keep a 25 year
old human being functioning, and we can estimate the other costs of living
in terms of the work energy required to maintain living conditions. We can
also know the energy use of various processes used in producing and
delivering a given good or service. Assuming the given good or service meets
the above-mentioned criteria for sustainable abundance, i.e. no dependence
on scarcity economics, we can measure the energy it takes to produce and
deliver that good or service, and, using historical sales data, we can
adjust that eventually to be based on an average volume of production for
that good or service (instead of raw estimate) and then calculate the price
as the median cost in energy it takes to produce and deliver that good or
service, per each instance of that good or service.

Such calculation involves building realistic energy costing models (for the
various goods and services that meet the sustainable abundance criteria,)
and when it's automated it via cost estimation software (as part of the P2P
trading application) it offers us the opportunity to understand the real
cost of production to ourselves and the environment.

When it comes to rewarding those who work harder and smarter, the model
fully supports that through two different paths:
1) Those who invest work energy in increasing the efficiency of their
production processes get to have a profit margin (because their good or
service costs less than the median cost in work energy to produce and make,
so they get to keep the difference.) 2) Those who invest work energy in
improving an existing good or service get to sell more of that good or
service if they select the right improvements (but also get to lose if they
select the wrong improvements, so this second path involves educated risk
taking.)

The logic behind 'All Work Is Created Equal' is based on the fact that all
goods and services covered by the model, i.e. those that meet the
aforementioned conditions of sustainable abundance, do not have any scarce
dependencies, such as an expensive (scarce) engineering degree.

With schools like MIT and Stanford supporting the sustainable abundance of
education by open sourcing their course materials educating an engineer
becomes attainable at the cost in work energy it takes to produce and
deliver the course materials and virtual lab tools etc. That cost is the
only cost the engineer being educated has to pay for (in joule tokens) as
far as education (knowledge) itself. The cost in work energy it takes to
keep the engineer functioning and maintain living conditions, during the
time he or she is learning a given subject/trade/skill, is an investment
being made by them in their future, which the person has to recoup from all
goods and services they produce in the future.

There is also the cost in work energy it takes to keep the person
functioning and maintain living conditions, during the time the person is
producing and delivering a given good or service, and this cost in work
energy, as well as all other costs in work energy involved, would be based
on a relatively simple 'work energy' costing model that provides an average
or baseline cost.

And, finally, there is the cost in work energy it takes to produce a good or
service (ones that meet the aforementioned sustainable abundance conditions)
which can have many other dependencies (that must also meet the
aforementioned sustainable abundance conditions.)

So we have four (4) main inputs so far to the cost of work energy it takes
the engineer to produce a given good or service, e.g. a chip design, which
is carried forward as an input into the cost of energy it takes to produce
and deliver the good or service.

What we're looking at is a tree of costs (in work energy) for each given
good or service (for goods and services that meet aforementioned sustainable
abundance conditions,) where all dependencies (for a given good or service)
and the good or service itself must meet the aforementioned sustainable
abundance conditions. The dependencies have to fit the dependency template
for the given good or service, such that all the main inputs are identified
and the 'work energy' costing models for all those inputs are used, in the
cost estimation software (that's part of the P2P trading application,)
together with user-set parameters for the given production and delivery
processes (which are part of the overall 'work energy' costing model for the
given good or service,) to come up with the total cost in work energy for a
given good or service, which is then fed by each producer of the given good
or service into the Energy Cost Registry (and becomes valuable data for
improving production and delivery processes) and used to calculate the
median cost in work energy for producing and delivering that good or
service, which becomes the price for that good or service, update-able every
10 years or so as production efficiencies increase.

Since the volume of production affects the cost of energy for producing and
delivering a given good or service, the energy costing models used by the
estimation software (that is part of the P2P trading application) should
assume an average volume of production based on historical sales data from
all the producers of the given good or service, as reported by their
inventory management system. In other words, pricing (or costing) is based
on the median cost of energy for producing and delivering a given good or
service at the average volume of production for that good or service.

It's an important consideration for producers to make sure that the total
cost in work energy for producing and delivering a given good or service is
recoup-able in full based on the historical sales data the producer has for
the given good or service, as provided by their inventory system, so that
they don't suffer losses due to over production, especially since losses,
under this model, cannot be recouped from the market(e.g. by dumping excess
at lower-than-cost and killing off competition then raising prices to recoup
the loss.)

Producing a volume (of the given good or service) above predicted short-term
demand, as given by the producer's predictive inventory system, is a risk
the producer must take alone without punishing the consumer or other
producers, and they must do so by making sure that their total cost in work
energy for producing and delivering a given good or service is recoup-able
based on the historical sales data for the given product or service, as
reported by their personal inventory management system, which is built into
the P2P trading application used for trading.)
[edit<http://p2pfoundation.net/P2P_Energy_Economy?title=P2P_Energy_Economy&action=edit&section=8>
]
Work Only If You Love Your Work

The result of trading in goods and services at the cost of work energy it
takes to produce and deliver them is that, unless one manages to produce and
deliver the good and service with less work energy than other producers of
the same good or service, producers will get back the same amount of work
energy in joule tokens as they put in. And since people can sell their own
produced energy, goods or services for joule tokens at the work value of
energy and at cost in work energy it takes to produce and deliver those
goods and services, respectively, and use those joule tokens to get the
goods and services they need at the cost in work energy it takes to produce
and deliver those goods and services, they can go on living indefinitely
without the need to generate 'profits.'

Therefore, the thirst for artificial motivation in the form of profits (i.e.
greed) is out of the picture, which means that people will only do the work
(to produce and deliver a good or service) if and only if they love the
work.

It also means that, since no one has to work unless they love their work, no
one will need -or have any incentive- to work for another person, which
means that most people will be both consumers as well as producers of goods
and services, or "prosumers.
[edit<http://p2pfoundation.net/P2P_Energy_Economy?title=P2P_Energy_Economy&action=edit&section=9>
]
Things Cost Less Over Time

Given continuous technological progress, work done today should take less
energy to do in the future.

While that's true for the current economy, the P2P Energy Economy channels
the profit motive (or greed) into achieving higher and higher efficiencies
in the use of energy (in producing and delivering products and services,)
since that is the only way profit can be achieved in the P2P Energy Economy,
so given the currency does not lose its work value in energy more and more
can be purchased with less and less currency.
[edit<http://p2pfoundation.net/P2P_Energy_Economy?title=P2P_Energy_Economy&action=edit&section=10>
]
Good Things Come to Those Who Care

In today's economy socially, environmentally and ecologically conscious
producers of goods and services are beginning to see increased sales, but
only in very limited niches and local markets.

In the P2P Energy Economy consumers identify, as part of each purchase of
goods or services, the required attributes (for the given good or service)
as well as their social, environmental and ecological values, which allows
them to find producers (of the given good or service) who support their
values. This means that money flows more in sync with society's values.
[edit<http://p2pfoundation.net/P2P_Energy_Economy?title=P2P_Energy_Economy&action=edit&section=11>
]
The More You Share, The More You Have

In the P2P Energy Economy, in order for producers to grow their revenue they
have to share it with others.

The way it works is by rewarding producers who lend money to others (with no
interest) with bigger access to the market, such that the more they lend the
bigger their to the market.
[edit<http://p2pfoundation.net/P2P_Energy_Economy?title=P2P_Energy_Economy&action=edit&section=12>
]
Increased Autonomy Through Increased Inter-Dependence

In the current economy, reliance on one or few major players in each given
market has created an unsustainable system. When the top 2 or 3 investment
banks in each country failed the entire global financial industry collapsed,
which has caused the global economy to falter (search: global economic
meltdown 2008.)

In the P2P Energy Economy, increased autonomy is achieved by putting power
with the whole rather than with one or few major players.

The current economic meltdown (search: global economic meltdown 2008) is a
proof that we have reached or are reaching the limits of sustainability for
the current economic paradigm, and that 'peer production' (the production of
energy, goods and services by individuals as opposed to utilities and
factories,) will make the system dependent on the people as a whole, instead
of on one or few major players, which, as we can see, based on the current
paradigm, makes the people dependent on the system and renders them helpless
in times of instability, thus perpetuating and even deepening their
dependence on the system.

The key concept behind the P2P Energy Economy is that it replaces increased
dependence by the people on the system (i.e. on the major players) with
increased inter-dependence between equally empowered peers, which puts the
power with the whole and allows both the individual and the system to enjoy
true autonomy.

Monopolies are eliminated in the P2P Energy Economy due to the following
conditions:
1. All industries must meet the following criteria for sustainable
abundance: a. Non-Wasteful, On-demand Production (which permits predictive
inventory management so producers don't have to over produce, which causes
waste and inefficiency and is therefore unsustainable, or under produce
which causes shortages and high prices, which is also unsustainable)  b.
Decentralized Production (which assures there's no dependence on a few
suppliers)  c. Renewable Production (which assures there's no dependence on
scarce resources)  d. Scalable Production (which assures that volume is not
limited by the production process)  e. Open Source Production (which assures
that the good or service can be produced by anyone, while enforcing social
and moral rights of the originator, not their right to a monopoly.)  f.
Non-Scarce Qualities (which assures the absence of any scarce qualities that
would justify paying more than the cost of work energy it takes to produce
and deliver the given good or service)  g. Non-Scarce Dependencies (which
assures that there are no dependencies in the cost-of-work-energy
calculation on any goods or services that do not meet the above conditions.)
 h. Equal Pay for Equal Work Energy (which assures that all peers have
access to money based on the work energy they put in not based on their
place in the hierarchy or their access to education or the lack of it.)  i.
Open Education (which assures that all peers have access to education at the
cost in work energy it takes to produce and deliver that education.)  2.
Consumers are automatically and anonymously matched to producers based on
the required attributes for the given good or service and the affinity
between the consumer's and the producer's social, ecological and
environmental values. ~~

Model description: http://p2pfoundation.net/P2P_Energy_Economy

Thanks again for helping shape these ideas through debate.

Marc
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