[p2p-research] "Trading at Cost" with joule tokens

[marc fawzi]

Here is one reason why it's practically impossible to trade at cost using
the existing money:

<<"In the existing system, it's practically impossible to calculate an
absolute cost because the existing currency (e.g. US dollar, euro, yen, etc)
itself is relatively valued and changes in value over time due to inflation,
amount of currency in circulation, international trade imbalances, borrowing
by governments, and many other reasons. ">>

It's basically taking Patrick push for trading at cost and give it a natural
context by reframing cost as 'average cost in energy' (an absolute value)
used for producing and delivering a product.

There is also some analysis of how the existing currency actually "enforces"
scarcity:

<<"The existing currency (e.g. US dollar, euro, yen, etc) is part of the
model that has let scarcity persist and grow. By directing more and more
money into scarce resources (due to ability for sellers to set arbitrarily
high prices in response to demand for such scarce resource) rather directing
more and more money into solving the circumstances that cause scarcity, and
by deriving its value from its scarcity rather than from its utility, the
existing currency is fully complicit in the enforcement of scarcity.">>

The following use case provides a real-life (or specific) example of what
trading at cost means:
<<"Use Case 1-01

A person (let's call him Tom) who puts 10M joules into producing some
product (let's call it XYZ) will get that energy back not from the person
who buys the product (let's call him John), who actually pays Tom 1,000
virtual joule tokens for the product (where each virtual joule token is
10,000 joules,) but from the person who makes the food that Tom consumes
and/or from the person who provides entertainment that makes life livable
for Tom and/or from whatever producer of goods and services that makes the
enables (or helps to enable) sustainable production of XYZ by Tom, and this
amounts to a generalized exchange of energy (or outflow/inflow loop) between
Tom and the entire community, not between Tom and John directly.

In other words, the tit for tat exchange between Tom and John is done in the
context of supporting a generalized exchange of energy (as tokens) between
each peer and the community as a whole.

You may then wonder what's the difference between this model and the
existing model, given the latter does the same?

In this case, John pays, in joule tokens, the average cost in energy it
takes to produce and deliver the product to John. Tom gets back, in joule
tokens, the average cost in energy it took him to produce and deliver the
product (including the actual work energy.) In other words, the price does
not depend on the features or benefits the product has. What matters is that
Tom made it and wants to give it to the world without starving himself.
That's why artists give away music, or why software developers make free and
open source software. It's the creative impulse that exists within all of
us. What this model allows that the current does not is for John to give
back Tom the average energy Tom put into producing and delivering the
product to John. This means that Tom does not make a profit, but he will not
starve due to giving things for free.

In the existing system, it's impossible to calculate an absolute cost
because the existing currency (e.g. US dollar, euro, yen, etc) itself is
relatively valued and changes in value over time due to inflation, amount of
currency in circulation, international trade imbalances, borrowing by
governments, and many other reasons.

Thus, this use case (or example) demonstrates the benefit of the first
proposition of this model (see: Model's Propositions, also stated in parent
section.)" >>


There has also been an important realization:

<<"It is expected that 'circumstantially scarce' goods (e.g. out of season
fruit) and services (e.g. vanity services, legal services, creative
services) and assets (e.g. land) will continue to be priced using the
existing scarcity-enforcing currency (e.g. US dollar, euro, yen, etc), which
causes the emergence of manipulative/controlling power (due to competition
for scarce resources) in those scarcity driven markets. However, this
problem is not fully resolvable by this model. It is hoped that the
circumstances that cause scarcity are eliminated, one by one, by
technological progress.

In this sense, the currency defined under this model, i.e. the programmable
virtual joule token, can be viewed as a complementary currency whose purpose
is to train society to move toward an abundance-based model of existence."

Overall, the model has seen dramatic changes in the positive direction of
sustainable abundance (beyond just for energy production) and away from
ingrained patterns of scarcity and the manipulative/controlling behavior
that comes with scarcity.

The latest revised/evolved model is at:
http://p2pfoundation.net/P2P_Energy_Economy


I know there will be some disagreement as to whether the "Price Registry"
model of collective price-setting-at-cost (cost of energy) is realistic or
not but that's what we will be experimenting with in our simulation of this
model.

For more on the simulation work, feel free to visit or signup to
http://groups.google.com/group/p2p-energy-economy


Thanks again for all the feedback and help.


Marc
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