[p2p-research] [Open Manufacturing] Re: [ox-en] "Trading at Cost" with joule tokens

[marc fawzi]

Updated and open to further arguments...
*
Price Registry*

The existing currency, e.g. US dollar, euro, yen, etc, is based on a model
that permits the emergence of manipulative/controlling power, which the
model defined here (as a whole) is designed to unravel. In other words, it
doesn't help (and it may hurt) to direct money to a socially, ecologically,
and environmentally intelligent producer of good and services who is also
maintaining manipulative/controlling power through the existing monetary
system, which permits such behavior.

For example, a product that is priced using the existing currency may cost
$1.00 (US Dollar) to produce but may be sold by its producer for $0.50 with
the purpose of killing off competition, i.e. dumping below cost. Once a
market player has the market to themselves (i.e. once they control the
market for a given product) they can increase prices significantly above
cost, thus creating artificial scarcity and gaining power over the consumer.
While there can be more than one player that can afford to play this game,
the very fact that they'd need an existing disposable revenue stream to
support such behavior tells us that this kind of dynamic is intended to
concentrate power in the hands of those who are willing and able to play the
game. In other words, the existing international currency (e.g. US dollar,
euro, yen, etc) is designed (based on an antiquated model) to allow
manipulative/controlling power to emerge.

In contrast, with the currency defined under this model, i.e. the virtual
joule tokens, there is no such thing as "setting a price." That is because
every good and service is priced based on the average energy it takes to
produce and deliver it to the consumer. This works by having each producer
submit the energy cost for their product/service to some Price Registry,
which are verifiable by all peers, and taking the average for, e.g., all
apples.) So an apple will cost 1/5 joule token (assuming joule token =
10,000 joules) if it takes 2,000 joules on average to produce and deliver an
apple to the consumer. If there is an ice storm that reduces an apple
producer's output the producer will sell less apples at the same price, not
a higher price, i.e. the producer absorbs all losses. This is possible
because all transactions for products priced in joule tokens are done via
the P2P browser (see: Model's Context) where the price of a good or service
is given by the Price Registry not the producer (with all producers feeding
prices into the registry, in an open and audit-able manner, based on the
cost in energy for producing the given good or service, where the average of
those prices is what the consumer sees.)

In order for producers to minimize their losses, they must adopt a model of
sustainable abundance in their production, which involves using renewable
energy and renewable resources as well as a predictive inventory to match
supply to demand to eliminate loss to themselves due to over-production.

To put things into context, using a specific example, let's assume there are
3,000 small-scale apple growers in a given community and they all use
demand-matched, predictive inventory, so they never produce more than is in
demand.

Those 3,000 apple growers submit their joule estimates for growing an apple
to Price Registry, using certain easy to understand (multiple choice)
settings (e.g. do they hand pick or machine pick the apples, do they carry
the apples to market on donkey or by truck, how costly is their irrigation
method, etc) built into the estimation software.

The average or median from all cost submissions (by those 3,000 growers)
becomes the "cost" in Price Registry for apples.

We can work out the detailed model for collective price setting that's
realistic as well as practical.

The key thing here is that the joule tokens have an absolute value in energy
(spent) whereas the existing currency does not. Therefore, we have something
different here and it's possible through the use of simple statistics to
figure out how collective price setting would work.

This is what we will test during the simulation.

If a given peer spends 500MJ making something that they would like to give
to the world then they better get that 500MJ back somehow or they will
eventually starve (and the most efficient way is through direct exchange.)
If they're paid back 600MJ or 350MJ then they will have an idea if they're
producing the thing efficiently or inefficiently.

In this way, the use of joule tokens promotes (or direct money into) more
and more efficiency, not more and more scarcity (as with the existing
currency.)

People are not animals to be fed to lay their eggs or produce milk. People
need a sense of fairness and appreciation for their work and individual
creativity.

If Jill (from the above-stated example) puts her energy into making her
production more efficient then that's creativity (or work) to be rewarded
with the margin in energy she saves that she gets back from the difference
in her cost and the collectively set price for apples.

Furthermore, if Jill puts her energy into growing the type of apples that is
most in demand (i.e. feature selection) then she's to be rewarded with
higher volume of sale (which also depends on her Lender Credits.)

So, as we can see, the use of joule tokens to exchange things without
starving and in an efficient way, i.e. Jill gives her apple to the consumers
and gets back in energy what she put in, while also being rewarded for her
work and creativity (or individual choices), makes a whole lot of sense
compared to using the existing scarcity-enforcing currency, where Jill would
have to price her product based on demand (thus raising prices for what's in
demand and creating relative artificial scarcity) and she can't recoup her
investment in more efficient production against other producers who produce
the same product less efficiently.

~~~

Please also see the full model description:
http://p2pfoundation.net/P2P_Energy_Economy


On Sat, Jan 17, 2009 at 9:36 AM, marc fawzi <marc.fawzi at gmail.com> wrote:

> Franz
>
> If it takes Jill 5MJ to grow the same quantity of apples that take Tom 10MJ
> then Jill is an outlier as far as energy conservation, which means that she
> had put energy/money into acquiring or building more efficient energy
> production, so what would seem like 5MJ in profit relative to Tom is in fact
> a recouping of her continuous investment in more efficient energy
> production.
>
> Let's say there are 3,000 small-scale apple growers in a given community.
>
> They all use demand-matched, predictive inventory, so they never produce
> more than is in demand. That's covered in the last paragraph of Price
> Registry in the model's description:
>
> "In order for producers to minimize their losses, they must adopt a model
> of sustainable abundance in their production, which involves using renewable
> energy and renewable resources as well as a predictive inventory to match
> supply to demand to eliminate loss to themselves due to over-production. "
>
> Those 3,000 apple growers submit their joule estimates for growing an
> apple, using certain easy to understand (multiple choice) settings (e.g. do
> they hand pick or machine pick the apples, do they carry the apples to
> market on donkey or by truck, how costly is their irrigation method, etc)
> built into the estimation software.
>
> The average or median from all cost submissions (by those 3,000 growers)
> becomes the "cost" in Price Registry for apples.
>
> I can work out the detailed model for collective price setting so that it's
> realistic as well as practical.
>
> The key thing here is that the joule tokens have an absolute value in
> energy (spent) whereas the existing currency does not. Therefore, we have
> something different here and it's possible thru the use of simple statistics
> to figure out how collective price setting would work.
>
> This is what we will test during the simulation...
>
> People are not animals to be fed to lay their eggs or produce milk. People
> need a sense of fairness and appreciation. If I spend 500MJ making something
> that I would like to give to the world then I better get that 500MJ back
> somehow (most efficient way is direct exchange) and if I'm paid back 600MJ
> or 350MJ then I will have an idea if I'm producing the thing efficiently or
> inefficiently, so this model promotes more and more efficiency, not more and
> more scarcity.
>
> I'll add these arguments to the Price Registry section later today.
>
> You can find the whole model description here:
>
> http://p2pfoundation.net/P2P_Energy_Economy
>
>
>
>
> On Sat, Jan 17, 2009 at 4:11 AM, Franz Nahrada <f.nahrada at reflex.at>wrote:
>
>>
>> Marc
>>
>> the argument against money refers to the joules alike.
>>
>> 1. It is never sure how many joules are really in a product. Tom can
>> produce with 10Mjoule while Jill can do the same thing with 5Mjoule.
>> 2. If too much of a product is produced, how to count the "lost joules" ?
>> 3. If productivity changes, the product not yet being sold: old Joules or
>> new Joules?
>>
>> and so on.
>>
>> Its a big sigh for me, there is no absolute measure for value and
>> distribution cannot be based on sure grounds unless the quantity and
>> quality is fixed before by agreements between the producers. Then the
>> whole measurement in one abstract quantity of labor is useless and
>> senseless.
>>
>> >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.
>>
>> So its much more important to keep people from starvation than to measure
>> their contribution.
>>
>> Its much more important than ever, because by the increasing intellectual
>> nature of labor and the reproduceability by digital means the idea of
>> measuring any contribution has grown absurd.
>>
>> Society cannot but refuge to a sort of need - production matrix, based on
>> basic needs and assurance of basic needs. Or keep the whole unsolveable
>> money problem and deal with it for the next thousand years.
>>
>> Franz
>>
>>
>>
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>
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