[p2p-research] Sustainable Abundance: Take 2

[marc fawzi]

Context:

Sustainable Abundance: debating the ideas from P2P Energy
Economy<http://p2pfoundation.net/P2P_Energy_Economy>on how to get
there ...

Updated ideas:

After a great deal of debate, especially with respect to 'measuring the
value of work,' I have much more clarity now regarding the following ideas
that are related to the goal of achieving sustainable abundance:

1.  Fair Compensation (or the idea of valuing work at the median cost in
work energy it takes to produce and deliver it and how efficiency and
creativity can still be rewarded)

2. Why free is not sustainable (and why gift and barter economies are not as
efficient as currency based ones)

3. Why self sufficiency does not equal true autonomy

4. Why we need to investigate new economics

The updated sections below have benefited and will continue to benefit from
your critical feedback, with the goal of arriving at a fully workable model
for sustainable abundance (in energy, goods, and services,) which may be an
ambitious goal but one that is achievable for at least a certain growing
category of energy, goods and services.

Here is the updated set of arguments toward sustainable abundance:

Introduction

The P2P Energy Economy fuses the latest advances in SmartGrid technology,
P2P trading and lending, and P2P energy production (from renewables) into an
abundance-sustaining economy, including a new kind of currency, designed to
work with the growing category of things that can be produced on 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. 2. Enable trading in goods and
services, including work itself, at the median cost in work energy it takes
to produce and deliver them. 3. Enable fair compensation for producers at
the median cost in work energy that goes into making and delivering their
good or service and based on their efficiency and creativity, not based on
their place in the hierarchy or their access to a scarce resource. 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. 8. Enable sustainable abundance in energy,
goods and services.

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>
]
Fair Compensation

In the P2P Energy Economy, producers are compensated at the median cost in
work energy that goes into making a given good or service, while enabling
producers who work more efficiently and producers who work more creatively
to get higher compensation.

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.

In order to trade in goods and services, including work-as-a-service, at the
median cost in work energy it takes to produce and deliver the given good or
service, tthe conditions for sustainable abundance, given below, must be
satisfied.
1. Efficient, 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. Fair
Compensation (which assures that all producers are paid at the median cost
in work energy that goes into making and delivering their good or service
and based on their efficiency and creativity, not based on their place in
the hierarchy or their access to a scarce resource.) 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 in a world where everyone who wishes to get a given good or service can
do so at the cost in work energy it takes to deliver that good or service,
which is very low for most goods and services compared to today's prices,
then why not just give everything and get everything for free? Why do we
need a currency?

Getting and giving things for free (as in a gift economy) is unsustainable
because if a given good or service costs nothing then some people can demand
an infinite supply of it. For example, if gold was abundant and someone had
an insatiable appetite for gold then they may want to have an infinite
amount of it. There is no way "free" can lead to 'sustainable abundance.'

For example, when it comes to digital content, if too many people hog the
bandwidth, downloading terabytes of mp3s and software etc at a fixed $40 a
month cost (the ISP monthly fee) then the network will meltdown, and it
doesn't matter if it's a wireless mesh or the current internet.

In order to perpetuate the production of a given resource the energy that
goes into producing and delivering that resource should be recouped from
somewhere.

While we can have a fusion reactor powering our production we still need to
eat and we can't eat electricity so we need to be compensated for what we
produce either with other things, e.g. food, clothes, entertainment,
equipment, etc, or with currency, which is a more efficient exchange since
it's exchangeable for anything else.

The challenge when it comes to trading in goods and services at the cost in
work energy it takes to produce and deliver them is figuring out the energy
costing models for the types of goods and services that satisfy the
sustainable abundance conditions 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 conditions 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 generated by industries that meet the sustainable
abundance conditions,) 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 more efficiently and/or more
creatively, 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 'Fair Access to Resources' 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 enabling the 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 conditions for sustainable
abundance) which can have many other dependencies (that must also meet the
aforementioned conditions for sustainable abundance.)

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 conditions
for sustainable abundance,) where all dependencies (for a given good or
service) and the good or service itself must meet the aforementioned
conditions for sustainable abundance. 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

When trading in goods and services at the cost of work energy it takes to
produce and deliver them, using joule tokens, unless the producer manages to
produce and deliver the given good and service with less work energy than
other producers, they will get back the same amount of work energy in joule
tokens as they put in.

Since everyone in the P2P Energy Economy can sell their surplus electric
energy for joule tokens at the work value of energy and since everyone can
sell their goods and services at the median cost in work energy it takes to
produce and deliver those goods and services, and use the joule tokens they
get from the sale to buy the goods and services they need at the cost in
work energy (in joules) it takes to produce and deliver them, 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.

One of the key concepts behind the P2P Energy Economy is that it replaces
increased dependence by the users 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 users and the system to enjoy
true autonomy. A great example of increased autonomy through increased
inter-dependence is the Internet, where increased inter-dependence between
content producers, which manifests in the continuous production,
re-distribution and remixing of shared content by equally empowered
producers (e.g. bloggers, youtubers) has led to increased autonomy for the
medium as well as for the producers.

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

A great example of increased autonomy through increased inter-dependence is
the Internet, where increased inter-dependence between content producers,
which manifests in the continuous production, re-distribution and remixing
of shared content by equally empowered producers (e.g. bloggers, youtubers)
has led to increased autonomy for the medium as well as for the producers.

So if bloggers (in the above example) produced original copyrighted content
all the time and no one re-distributed or remixed anyone else' content, the
Internet (or Web) as a medium would not have had the autonomy that it has
today and the same goes for the bloggers, as they would be dependent on
major news outlets for their content instead of other bloggers.

When it comes to the misconceived notion that self-sufficiency leads to
autonomy, we can point to the fact that no amount of self-sufficiency can
compete with the autonomy achieved through increased inter-dependence.

For instance, in the case of North Korea, a fully self-sufficient country
that can make nukes from scratch, the fact is that despite having many
educated and capable scientists and engineers, a hard working population,
and many natural resources (including agricultural resources) they don't
have the autonomy (or power) to achieve the standards of living (including
nutrition) that would be theirs if they were engaged in the global economy.

Having said that, inter-dependence can easily turn into dependence when most
producers become redistributors and remixers and thus dependent on a few
original content producers. In order to assure that everyone is dependent on
everyone else, i.e. maximum inter-dependence, access to resources by each
producer needs to be based on their own work energy and creativity, which
means that there needs to be a way to trade resources at the cost in work
energy it takes to produce and deliver that resource, so in order for
someone to redistribute or remix another producer's goods or services they
need to pay for those goods or services in joule tokens at the same amount
in work energy it took to produce and deliver those goods or services, which
means that they have to produce their own goods and services (or produce
surplus energy) that they can trade with other producers at the cost in work
energy it takes to produce and deliver the given good or service, e.g. by
using joule tokens.

When it comes to monopolies, they are eliminated in the P2P Energy Economy
by the following conditions:
1. All industries must meet the following conditions for sustainable
abundance: a. Efficient, 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. Fair Compensation (which assures that all producers are paid at the
median cost in work energy that goes into making and delivering their good
or service and based on their efficiency and creativity, not based on their
place in the hierarchy or their access to a scarce resource.)  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. ~~

Rest of the model: http://p2pfoundation.net/P2P_Energy_Economy

Marc
p.s. now really going to work on something else to let these ideas simmer
...
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