[p2p-research] excellent contribution on flow money by Martien van Steenbergen
Ryan Lanham
rlanham1963 at gmail.com
Thu May 21 19:51:42 CEST 2009
A couple of other points:
1. Consuming goods one produces for oneself is still economic production.
You are choosing to not sell the goods presumably to achieve some benefit or
efficiency. Thus, if I grow my own vegatables, the value is what the market
might have paid me for them at the point they were consumed.
2. Profit as a term is not very useful. It implies a one-off transaction.
Most producers continue to produce, so they invest in means of production.
The reason is that machines are efficient. Investing in more efficient
machines (and processes) allows one to drive costs lower in the
marketplace. Profits lead to lost investment in favor of consumption.
That's why real hard core capitalists like Sam Walton (Wal-Mart) drove an
old pick-up truck and Warren Buffett has old suits. It is a spirit of
continual investment by which they think they are the real great saviors of
humanity.
3. A real problem of capitalism (and the toughest critique people on the
left could ever make) is that it creates negative externalities (along with
monopolies). A negative externality is a sort of collateral damage caused
by an act. So I produce bottled water and the negative externality is that
people throw the bottles into the ocean and we get dirty oceans. If I sell
really cheap mortgages, perhaps people buy them without the ability to repay
the bank I represent. I win by getting my commission, but I create a social
externality for the bank (or, if bad enough) for the whole of society.
http://en.wikipedia.org/wiki/Externalities
There is great regulatory power in claiming the negative costs of
externalities (e.g. climate change based on burning carbons). In essence
the argument goes as follows: All of society is a consumer. If society
incurs greater costs from the negative externalities of transactions than
the productive gains of economic production, society becomes a bad form of
perpetual motion machine...sooner or later it will crash.
Over-consumption is a negative externality of capitalism. It is akin to
alcoholism...a little bit of a good thing is a good, too much is an
addictive and destructive evil--this follows lines somewhat similar to
Marx's commodity fetishism, as I understand it.
The hardest problem associated with negative (or for that matter..positive)
externalities, is that it requires a political decision to recognize it. If
political systems are "owned" by those who enjoy negative externality
profits, they are inclined to simply keep making those profits and to suffer
their own waste excess. In theory, government acts as a regulatory buffer
to such processes. In practice, corruption happens...and sometimes reforms
happen.
4. It is unlikely that a producer perfectly matches a plan for production
with the economic demands of the market--particularly over the long run
(however long you wish to make long...). Stores build inventories. Some
things sell with high profits; others don't sell at all, or get stolen,
etc. The balance of production with demand/profit goals is extremely
difficult. Few get it consistently right. One way to assure you have the
best chance is to "innovate" to invest in better or cheaper means of
production or better quality outputs. A great advantage of capitalism is
that producers manage their risk of getting their production decisions wrong
in part by innovating. Innovation gives the world more for less--quite
literally.
Ryan
Ryan Lanham
rlanham1963 at gmail.com
Facebook: Ryan_Lanham
On Thu, May 21, 2009 at 11:52 AM, Ryan Lanham <rlanham1963 at gmail.com> wrote:
> Marc,
>
> In theory, any good capitalist is against unfairness. That is not the
> reality we both know. The question is, how do you redress the reality? Do
> you throw away the system, or try to fix the ailments? Marx thought the
> ailments were inherently part of historically inevitable process. To my
> mind, you've got to take each one in turn and deal with them. Not nearly as
> satisfyng as throwing away the whole or seeing some inevitable historical
> path, but reality is messy. It's like trying to stay healthy. Stuff
> happens. Transhumanism is an interesting attempt to replace the corrupt
> body with a less corrupt machine/body. I am very interested in
> transeconomicism in the same way. P2P is transeconomicism
>
> Predictive inventory systems isn't a workaround for the Black Swan that is
> demand and innovation. Today everyone wants a red sweater...because it's
> the bomb. Tomorrow, red is the worst thing you can own. Today, everyone
> wants Coke. Tomorrow, everyone wants tea. It's impossible to predict. If
> someone in New York wants tea, that means someone in Sri Lanka needed to by
> a tractor. The reason markets work so well is that the best possible
> decision process happens closest to the stakes.
>
> I agree with you that profits are excessive in a number of markets and that
> monopolies and oligarchies (trusts) exist. We should break them up. I also
> agree with Kevin that the rules have been unfairly structured to help
> corporations...we should change them. But the answer is not in doing away
> with markets--which make people very happy by and large. Who doesn't like
> going into a well-stocked supermarket? Sure, I don't want a lot of the
> poisen that corporations sell, but that's a different problem. I love the
> fact that I can eat a strawberry in Michigan in November and get salmon in
> Cayman at a fresh fish counter. Efficient? Different problem. If you want
> to regulate, regulate. But that's a political problem...not a systematic
> problem with markets.
>
> If you do away with currency, how will you allocate goods? Who decides who
> gets what and when? How do you educate people to act selflessly and morally
> when there is no evidence that any large scale human settlement has done so
> for a sustained period in the face of plenty? Moreover, how do you get
> people to go to work? The only answer is and can be that you COMPEL them to
> these things. And when you compel, you will end up with corrupt
> politics--always and every time. People will cheat for their uncles or
> daughters or old school chums, etc. I notice that in Soviet-styled systems
> the big shots were never skinny.
>
> Ryan
>
>
> On Thu, May 21, 2009 at 10:35 AM, marc fawzi <marc.fawzi at gmail.com>wrote:
>
>> <<
>>
>>> Marc, your question is a direct answer to Michel's, since what
>>> you propose is effectively a perpetual motion machine.
>>>
>>>
>> >>
>>
>> On what basis do you assume that? That is totally a flawed assumption on
>> your part, as far as I can see. But let's delve into your reasoning.
>>
>> <<
>>
>>> "Game playing" is the process of making decisions. That is why game
>>> theory is fundamental to economics. People make decisions under the
>>> pressures of time. We all have limited time, and therefore must allocate
>>> resources as part of life. In short, we choose when and what to produce.
>>> >>
>>>
>>
>> There are fair games and unfair games. You can call everything a game in
>> the game theoretical sense but people say "stop playing games" when they are
>> experiencing unfairness not when fair decisions are being made. The context
>> is the connotation of people playing games with unfair manipulation. The
>> context (while it's very obvious from usage) is not the abstract game
>> theoretical framework for decision making be it any of the models out there
>> including the two I'm studying comparatively.
>>
>> <<
>>
>>
>>> Fixed input systems are inherently unworkable because no one can
>>> determine ahead demand.
>>>
>>
>> >>
>>
>> That is a very outdated opinion given predictive inventory control
>> systems, on which the P2P Energy Economy is predicated in part.
>>
>>
>> <<
>>
>>> Demand changes and preferences change. Marginal utility changes. People
>>> make decisions based on relative positions of their own situation and those
>>> of the marketplace. There can be no "fixing" these levels because then you
>>> doom yourself to sub-optimal levels of consumption. That is, people don't
>>> get what they most want. When that happens, people simply produce less.
>>>
>>>
>> >>
>>
>> What we have today is sub-optimal level of consumption. There is
>> artificial scarcity created through manipulation of supply or
>> under-investment in supply in favor of extracting more profit! Money goes
>> into higher prices when supply is manipulated not into higher production
>> capacity. You should really read the full model description in P2P Energy
>> Economy and argue against the logic used there, and if you do successfully
>> I'd be delighted to give it another update. It has not received much
>> feedback in the last couple of months and I can only take it to mean that A)
>> it has become to hard for people to digest in full and/or B) no one is able
>> to find critical flaws in the logic (and if they do that would be terrific,
>> so I urge you to read it and make your arguments there rather than
>> shooting-from-the-hip judgments that are founded in lack of understanding of
>> the 'fixed cost + fixed profit margin' model.
>>
>> As far as perpetual motion goes, I'm not sure how a thermoeconomic system
>> where the currency is basically an accounting energy flow growth can be
>> anything but a while(growth) loop. If you believe that all conditional loops
>> should be abolished then 100% of software out there would stop working. As
>> long as energy flow grows the currency in circulation grows and accumulates
>> and the key assumption there is that growth is continuous. If growth stops
>> for whatever external or uncalculated reason (and I'd be interested in
>> knowing how and why, if others can give examples in the context of the P2P
>> Energy Economy) then currency issuance stops but no currency needs to be
>> taken out of the system because the energy flow growth that the currency
>> represents had been put into higher productivity, i.e. already consumed and
>> already produced tangible output, so no need to reclaim the currency that
>> had been issued as it was converted into work (or higher productivity)
>> already before it was issued and all work done (in this model where there is
>> an opportunity cost for energy) sustains growth.
>>
>>
>> <<
>>
>>> Therefore, raw materials, labor and skill are in a constant price
>>> tension. One cannot "fix" them because to do so is to establish the price
>>> of bread without understanding the factors that change the price of bread
>>> which include not only supply (inputs) but also demand.
>>> >>
>>>
>>
>> Predictive inventory systems SOLVED the problem of predicting demand about
>> 40 years ago. It's time to get on the bandwagon.
>>
>>
>> So given your argument is out dated in this regard, I'll let you argue
>> against predictive inventory systems as the already working solution for
>> rational supply-demand management! before I delve into deeper discussion.
>>
>> Marc
>>
>> So far as the world has determined to date, or at least so far as I am
>>> aware, there are only two possible processes for determining how much of any
>>> good or service to produce: 1) One produces what can be sold profitably or,
>>> 2) One produces what one is commanded to produce from a central point.
>>>
>>> If one tries to produce a good without profit, then one is attempting to
>>> complete a perpetual motion machine...building something that runs with an
>>> inherent energy imbalance...where the output is continued even though the
>>> energy in is greater than the value/demand out. A perpetual motion machine
>>> violates conservation of energy much the same way running an unprofitable
>>> business does. Money is the energy of an economic function. If you cost
>>> more than the world values your good or service, you cannot run forever just
>>> because your inputs + a profit = some number.
>>>
>>> In a nutshell, you've described why labor theories of value are
>>> nonsense. They fix too many inputs and assume irrational assessments of
>>> price. Price isn't determined by the seller/maker of a good, but by the
>>> buyer and seller acting in agreement--by the way, that is a P2P agreement.
>>>
>>> Ryan
>>>
>>>
>>>
>>> On Thu, May 21, 2009 at 4:15 AM, marc fawzi <marc.fawzi at gmail.com>wrote:
>>>
>>>> Ryan
>>>>
>>>> It's all this game playing that needs to stop You're aware if it and
>>>> describe it well. Why perpetuate it? It's possible that a feast is worth
>>>> exactly the amount of total median energy it takes to produce it (based on
>>>> 'raw resources + labor + skills' costing model for prepared food) plus a
>>>> fixed profit margin (for reinvestment/growth)
>>>>
>>>> I do not find a single correct and complete argument that tells me why
>>>> it's impossible to price things for what they cost in raw resources + labor
>>>> + skills plus a fixed margin of profit.
>>>>
>>>> If you can present a coherent fully logical and logically provable
>>>> argument as to why such pricing model would be unfeasible then that would be
>>>> a surprise for me. I believe it is a lot of tedious accounting but not
>>>> fundamentally flawed to price things at median cost in energy plus some
>>>> margin.
>>>>
>>>> Marc
>>>>
>>>>
>>>> On Wed, May 20, 2009 at 7:24 PM, Ryan Lanham <rlanham1963 at gmail.com>wrote:
>>>>
>>>>> Martien,
>>>>>
>>>>> 1. Please let me know if you still have mail problems. I don't think I
>>>>> sorted them out.
>>>>>
>>>>> 2. I think your system involves a pricing fallacy. It is that prices
>>>>> of goods and services can be accurately valued. They cannot. We don't know
>>>>> what your blog is worth or what an hour's work building a wall is worth.
>>>>> That's because we don't know what demand is for those things. Much as I
>>>>> would love for something like this to work, it won't.
>>>>>
>>>>> Here is why:
>>>>>
>>>>> A. Money is a dynamic system. The reasons people "own" money is that
>>>>> we store consumption until when it is advantageous. If I offered you a
>>>>> feast immediately after you had a large meal, it is nearly worthless to
>>>>> you. But tomorrow, you may want that feast very much. The makers of feasts
>>>>> count on their own skill at calculated just how many feasts will be wanted
>>>>> today or tomorrow.
>>>>>
>>>>> B. A pure measurement system would always look at fairness from the
>>>>> point of view of a centralized plan. That cannot work because it will not
>>>>> satify point A above. That is, there can be no standard set of "scales" nor
>>>>> any standard "centimeters."
>>>>>
>>>>> C. Money is already a p2p system in the way in spends. It's just not a
>>>>> p2p system in the way money is created. My recommendation to the
>>>>> micro-currency crowd is to focus on money creation--how does money come into
>>>>> the system.
>>>>>
>>>>> Most of he research focus now on this list is on trying to create
>>>>> infinite consumption or infinite earning machines. These are like perpetual
>>>>> motion machines and will not work.
>>>>>
>>>>> The dynamics of supply and demand are very difficult to challenge
>>>>> without coercion. People simply want to make their own decisions when they
>>>>> wish to make them. If you allow those things, then the question becomes one
>>>>> of price.
>>>>>
>>>>> Price is inherently tied to the supply of money as well as demand. It
>>>>> isn't about measuring production where money is interesting, but in
>>>>> measuring the nature of where money comes from in the first place.
>>>>>
>>>>> Ryan Lanham
>>>>> rlanham1963 at gmail.com
>>>>> Facebook: Ryan_Lanham
>>>>>
>>>>>
>>>>>
>>>>>
>>>>> On Wed, May 20, 2009 at 2:32 AM, Michel Bauwens <
>>>>> michelsub2004 at gmail.com> wrote:
>>>>>
>>>>>> This contribution seems to have been rejected by the mailing list
>>>>>> software, so I'm forwarding, it's an excellent explanation of what is wrong
>>>>>> with a system based on compound interest.
>>>>>>
>>>>>> I'm really looking forward to seeing the other side of the story,
>>>>>> especially the results of Ryan's research on the topic,
>>>>>>
>>>>>> Michel
>>>>>>
>>>>>> ---------- Forwarded message ----------
>>>>>> From: Martien van Steenbergen <Martien at aardrock.com>
>>>>>> Date: Wed, May 20, 2009 at 1:50 AM
>>>>>> Subject: Re: [p2p-research] Fwd: [ox-en] No more money trickery
>>>>>> propaganda please
>>>>>> To: Michel Bauwens <michelsub2004 at gmail.com>
>>>>>> Cc: Stefan Merten <smerten at oekonux.de>, p2presearch at listcultures.org
>>>>>>
>>>>>>
>>>>>> To throw some more oil on the already bright fire...
>>>>>>
>>>>>> Compound positive interest is a system wide exponential pump that
>>>>>> increasingly flushes money from the poor to the rich. It compells us to grow
>>>>>> beyond sense. It results in Obsessive Compulsary Growth Disorder, if you
>>>>>> will.
>>>>>> This can be proven by mathematics, simulation and experience (as we
>>>>>> all feel right now).
>>>>>>
>>>>>> Don't get me wrong, growth, development, evolving is good. But only
>>>>>> asymptotinc s-curved growth, not only exponential unlimited growth.
>>>>>>
>>>>>> If you want to destroy a community, introduce a monetary system where
>>>>>> money can be owned (‘saved’) and with compound positive interest. Introduce
>>>>>> it in such a way, that people are willing and able, eager even, to play this
>>>>>> system. Mankind has succeeded in that.
>>>>>>
>>>>>> Our current monetary system is like a cancer with metastasis into the
>>>>>> smallest corners of our system. It cannot be treated. No irradiation, and no
>>>>>> cutting will help. In fact, it will only fuel its self-destruction. Future
>>>>>> monetary crises and crashes will happen more frequent, faster and will be
>>>>>> deeper. The worst has yet to come, Schopenhauer would say.
>>>>>>
>>>>>> Compound positive interest also makes each and everyone extremely
>>>>>> short-sighted. The economy at large warps itself into short-term profits and
>>>>>> utter efficiency. Exact the opposite of sustainability, durability and
>>>>>> long-term wealth (in the non-financial meaning).
>>>>>>
>>>>>> It's extreme focus on efficiency makes the system as a whole brittle
>>>>>> and oversensitive to small changes. Flourishing systems have their dynamic
>>>>>> balance somewhere in the middle between chaos and order—chaordic—with a
>>>>>> slight preference for the chaotic side. Chaos is creativity searching for
>>>>>> order. Likewise, order (efficiency) is destructivity searching for chaos.
>>>>>> The sweet spot is an area (not a point) in the middle.
>>>>>>
>>>>>> This short-sightedness is due to the economist's Net Present Value<http://en.wikipedia.org/wiki/Net_present_value> calculations.
>>>>>> Suppose you invest €1000 to obtain an annual revenue of €100 during a period
>>>>>> of 15 years, so €1,500 in total you might think.
>>>>>>
>>>>>> An economist however will tell you that €100 in a year will be worth
>>>>>> €91 now (with an interest rate of 10%). The €100 in year 2 will be worth €83
>>>>>> now and in year 3 €75, and so forth. The €100 in year 15 is worth a meager
>>>>>> €24 now. All in all, in 15 years, the total Net Present Value of the revenue
>>>>>> will be €761, resulting in a loss of €239. In other words, not a profitable
>>>>>> investment.
>>>>>>
>>>>>> This affects our behaviour to short-term financial gains. Combined
>>>>>> with the interest pump from poor to rich, this leads to an instable and
>>>>>> brittle system.
>>>>>>
>>>>>> Enter ‘flow money’ (a.k.a. demurrage of liquidity tax). Technically,
>>>>>> flow money is a negative compound interest. Using exactly the same
>>>>>> calculations and formulas as our economist did in the previous example and
>>>>>> an interest of –10%, the first €100 is worth €111 now, the 2nd €123 and the
>>>>>> 15th €486, adding up to a total of €3,857 and a profit of €2,857! Break even
>>>>>> is during year 7.
>>>>>>
>>>>>> Together with the effect that your balance trickles away (into a
>>>>>> larger commons fund), this affects our behaviour in such a way that we will:
>>>>>>
>>>>>> 1. tend to spend our money sooner rather than later (since our
>>>>>> buying power now is greater than tomorrow), resulting in a lot of employment
>>>>>> opportunities, no more unemployed; and we'll chop the forest later rather
>>>>>> than now, since we don't want the money now as it will seep away;
>>>>>> 2. prefer sustainable, durable, resilient an dlong-term projects
>>>>>> over short-term ones; it gives all of us vision; we can see clearly now;
>>>>>> 3. closing the gap between the rich and the poor; in fact there
>>>>>> are only wealth people and som very wealthy people; and our planet
>>>>>> replenishes itself too.
>>>>>>
>>>>>>
>>>>>> If we can also get rid of the capacity to ‘own’ money, and we only use
>>>>>> money for payment and measuring products and services, than no one is poor.
>>>>>> Use money just like we use centimeters. We're never short of centimers (or
>>>>>> inches or lightyears for that matter). Everyone is as wealthy as their
>>>>>> activity in the community, small and large.
>>>>>>
>>>>>> Your monetary balance does not matter anymore, since it is of no value
>>>>>> to own money; you can't even own it. What does matter is the number of times
>>>>>> you touched zero when trading (either or not changing sign), since at
>>>>>> precisely that moment you have contributed to the community the exact amount
>>>>>> as the community contributed to you. You are in balance with your
>>>>>> environment (that serves you so good and abundant).
>>>>>>
>>>>>> Every time you touch zero, your ‘trustwidth’ increases, since you just
>>>>>> proved to balance your consuption woth your contribution. The trustwidth is
>>>>>> parameterized by your turnover until now, a (damping) factor and a
>>>>>> connectivity index (derived from the relative number of others you traded
>>>>>> with; to avoid kartel and free riding). Just like with flow money, your
>>>>>> trustwidth diminishes, decays, over time. So you need to stay active and add
>>>>>> value to your environment to keep up your trustwidth.
>>>>>>
>>>>>> The trustwidth (like bandwidth) are the ‘credit’ and ‘debet’ limits
>>>>>> for safe trade. Of course, if you like risk, you can go beyond someone's
>>>>>> trustwidth, but you know that you risk losing your extra investment.
>>>>>>
>>>>>> It's just like scaling up micro credit to meso and macro credit. With
>>>>>> our current technology level, it is a relative pievce of cake to implement a
>>>>>> global digital chartal spreadsheet system (which is all we need;
>>>>>> mind-boggling cheaper than all these expensive banks and their emplyoees who
>>>>>> don't even understand their own products anymore).
>>>>>>
>>>>>> This (non-monetary) balance is essential on all scales as well. Just
>>>>>> as the individual needs to balance receiving and giving to the community,
>>>>>> the import and export of countries should enjoy a dynamic (chaordic)
>>>>>> balance. Overshooting in either direction destroys your credibility als a
>>>>>> good citizen or global player. Too much import increases your ‘debt’ to
>>>>>> other countries, your promise to do something back. Too much export hoards
>>>>>> employabilty, depriving other countries from adding value and wealth to the
>>>>>> world at large.
>>>>>>
>>>>>> The balance and trustwidth are similar to energy economics (a topic on
>>>>>> this list some time ago if I recall correctly).
>>>>>>
>>>>>> My quest is to find:
>>>>>>
>>>>>> - the extremely elegant formulas that take any financial
>>>>>> transaction log and calculate the trustwidth between which a player can
>>>>>> safely trade;
>>>>>> - how to connect two ecowebs that have so far been developing
>>>>>> independantly and suddenly touch;
>>>>>> - design an immune system that keeps the system as a whole
>>>>>> healthy, even when (severely) attacked;
>>>>>> - the distributed, decentralized, peer-to-peer layers of
>>>>>> infrastructure and humanstructure that make it feasable and completely
>>>>>> self-everything (organizing, healing, supporting, etc).
>>>>>> - the way to have a holarchy emerge that use a cascade of flow
>>>>>> money for ever larger commons activities, up to the global level, while
>>>>>> embellishing local wealth and unfolding.
>>>>>>
>>>>>>
>>>>>> Succes en plezier,
>>>>>>
>>>>>> Martien.
>>>>>>
>>>>>>
>>>>>> P.S. I've been plannig to write this up for a long time; I just now
>>>>>> took 30 minutes or so to flow it out of my head into typing; so it's still
>>>>>> quite rough.
>>>>>>
>>>>>> On 19 May 2009, at 09:22 , Michel Bauwens wrote:
>>>>>>
>>>>>> Stefan,
>>>>>>
>>>>>> you persist in wanting me to say that a cushion produces interest,
>>>>>> obvious nonsense
>>>>>>
>>>>>> again, I do not want to enter in that game,
>>>>>>
>>>>>> obviously, if you had read the sentence as it was intented, in context
>>>>>> and given the long previous arguments, you would have understood that
>>>>>> keeping meant, keeping in the bank, in order to get interest, in other words
>>>>>> the opposite of your nonsensical misinterpretation, which for some
>>>>>> mysterious reason, you want to hold on to, even after repeated denials and
>>>>>> explanations of my part. Assuming that you misread it once, what can be a
>>>>>> possible explanation for holding on to that misinterpration after so many
>>>>>> corrections????
>>>>>>
>>>>>> (the reaction of a normal person would have been: "sorry to have
>>>>>> misinterpreted your phrase and having gotten into a irrational fit, I
>>>>>> apologize, now let's move on and learn from each other's arguments")
>>>>>>
>>>>>> so let me repeat, perhaps this time in very simple terms, what the
>>>>>> essential argument is, about the role of interest
>>>>>>
>>>>>> So, let's assume we have a negative interest rate, as was the case for
>>>>>> the Worgl shilling, in the first renaissance of high middle ages, or in
>>>>>> ancient Egypt.
>>>>>>
>>>>>> What happens for example in egypt is that you bring your rice to a
>>>>>> depot, you get some 'vouchers' in return, but they loose some of their value
>>>>>> every year, because of the price of stockage, and also, a certain profit for
>>>>>> the mediator. In the middle ages, if I recall correctly, every four years,
>>>>>> you had to change five coins for four. Same principle.
>>>>>>
>>>>>> In this context, hoarding money makes no sense, because it loses value
>>>>>> over time, it 'rots', just like real commodities do. Historically what
>>>>>> people would do is to re-invest in the productive economy, and the high
>>>>>> middle ages are known for their high rate of technical innovation i.e.
>>>>>> sometimes called the 'first industrial revolution', relatively high living
>>>>>> standards such as a five day working week with extra 'blue monday' as day
>>>>>> off for the family, long skeletons in cemeteries indicating good heatlh,
>>>>>> etc.., a doubling of the population in 3 centuries, reclaiming and expansion
>>>>>> of large swaths of formerly unproductive land). This system puts a break in
>>>>>> the accumulation process, because accumulation loses value. The market is
>>>>>> kept in check and does not outgrow the rest of the economy. Since your money
>>>>>> is worth more today than say in ten years, you invest it, and this is in
>>>>>> part the explanation for the crowdfunding of the Gothic cathedrals. This is
>>>>>> actually what good money is intended to do, not to be used in speculative,
>>>>>> non-productive activities, but to be used in the process of production
>>>>>> itself, to enhance the living standards of all.
>>>>>>
>>>>>> Now say you replace this system with centralized royal money, with a
>>>>>> positive interest rate. It now becomes interesting to keep your money, to
>>>>>> hoard it, not in a cushion of course, don't be silly, but in the bank; or
>>>>>> better yet, to become a banker yourself and to lend the money out. This way,
>>>>>> without working yourself, you are getting rich while those that work have to
>>>>>> pay a rent to you. This system strenghtens the tendencies for accumulation,
>>>>>> created the conditions for increasingly centralized royal power, and created
>>>>>> the deteriorated social conditions that started in the 14th century.
>>>>>>
>>>>>> But the systemic effects of compound interest are wider than that. If
>>>>>> you lend out that money, and I have to pay your back approximately double in
>>>>>> twenty years, which is about the going rate for buying a house now (or at
>>>>>> least it was when I bought mine), even with inflation, you are going to need
>>>>>> substantially more money than you have now. The result is that it destroys
>>>>>> any possibility for a balanced growth economy, since that extra money has
>>>>>> only two possible sources:
>>>>>>
>>>>>> - either you get it from people who have it in a static economy, in
>>>>>> which case you create absolute poverty
>>>>>>
>>>>>> or:
>>>>>>
>>>>>> - you create a growth economy, i.e. capitalism, in which noboby can
>>>>>> stand still, and so, you get the extra money from the ever-growing pie.
>>>>>>
>>>>>> Please, PLEASE, do not start now talking again about your cushion, and
>>>>>> read again the section about keeping, without taking it out of context,
>>>>>>
>>>>>> Michel
>>>>>>
>>>>>> On Mon, May 18, 2009 at 5:19 PM, Stefan Merten <smerten at oekonux.de>wrote:
>>>>>>
>>>>>>> Hi Michel!
>>>>>>>
>>>>>>> Now I am really upset!
>>>>>>>
>>>>>>> 2 days ago Michel Bauwens wrote:
>>>>>>> > read the sentence again, use your brain,
>>>>>>>
>>>>>>> I find it ludicrous that *you* ask *me* to use my brain. Obviously
>>>>>>> you
>>>>>>> stated nonsense and now *I* shall use my brain? COME ON!!!
>>>>>>>
>>>>>>> > and use the full context of the
>>>>>>> > dialogue to understand that interests makes it indeed interesting
>>>>>>> to keep
>>>>>>> > your money in the bank.
>>>>>>>
>>>>>>> If you give money to the bank then you do **NOT** keep it. This very
>>>>>>> sentence you wrote just makes no sense. It's nonsense again. And it's
>>>>>>> propaganda again because it is only said this way to invoke a feeling
>>>>>>> of injustice in simple-minded people. It hides facts to make a
>>>>>>> certain
>>>>>>> ideology look more logical and "just". It may not be your intention -
>>>>>>> and frankly I hope it is not your intention. But it is the intention
>>>>>>> of those you have this propaganda from.
>>>>>>>
>>>>>>> If you give your money to the bank in fact you may get your money
>>>>>>> back
>>>>>>> *under certain conditions* being part of a contract. If you are in
>>>>>>> bad
>>>>>>> luck you may even not get it back at all, however - as people learned
>>>>>>> during the latest financial crisis once again.
>>>>>>>
>>>>>>> If I *keep* my money there is no such risk. I just keep it.
>>>>>>>
>>>>>>> It is very easy to see that there is a major difference here. In fact
>>>>>>> it is the difference between a pre-capitalist fortune keeper - who
>>>>>>> really keeps her fortune - and a capitalist - who applies her fortune
>>>>>>> by giving it to others to make profit.
>>>>>>>
>>>>>>> > Explain to me how you would get interest under your
>>>>>>> > cushion, I would be very very curious.
>>>>>>>
>>>>>>> Sorry, it was *your* claim that keeping money raises interest. If
>>>>>>> this
>>>>>>> would be true then I can keep it under my cushion with the same
>>>>>>> effect. I'm just taking your statements serious.
>>>>>>>
>>>>>>> Taking statements serious is a simple necessity in a scientific
>>>>>>> approach. To think about what a statement actually means is a very
>>>>>>> simple test of an assumption against reality. It is basic scientific
>>>>>>> work - by which you are obviously shocked.
>>>>>>>
>>>>>>> > I'm trying to put the conflict behind,
>>>>>>>
>>>>>>> I have no conflict with you. To me all this feels very much like
>>>>>>> shadow boxing on your side.
>>>>>>>
>>>>>>> > but if you descend to such levels of
>>>>>>> > ridiculousness, it makes it very difficult.
>>>>>>>
>>>>>>> I'm really sorry Michel, but that it all but ridiculous. The question
>>>>>>> whether you can keep your money or need to give it to someone else -
>>>>>>> usually mediated by a bank but also in the form of shares - to get
>>>>>>> interest is the all-or-nothing question here.
>>>>>>>
>>>>>>> > Please, let's put that behind
>>>>>>> > thus.
>>>>>>>
>>>>>>> You are free to correct your statements so they make sense and - at
>>>>>>> best - match the observable reality. It would be far better than to
>>>>>>> leave the community just because someone says you are preaching
>>>>>>> nonsense.
>>>>>>>
>>>>>>> Frankly I'm curious how long it will take that you at least agree
>>>>>>> that
>>>>>>> you can *not keep* your money and get interest for it. In science
>>>>>>> that
>>>>>>> would be simply to recognize the observable reality and modify your
>>>>>>> basic assumption according to it. As you wrote above you are still
>>>>>>> not
>>>>>>> ready to modify your basic assumption - though you are now replacing
>>>>>>> your basic assumption with sentences which are inherently
>>>>>>> contradictory.
>>>>>>>
>>>>>>> With a scientific approach the next step would be to question what
>>>>>>> happens with the money you just gave to others. That would be the
>>>>>>> research step. And it would be easy because it is well-known that
>>>>>>> banks give money to capitalists in the form of credit. In turn the
>>>>>>> capitalists then apply it to labor force and machinery to produce
>>>>>>> products they can sell for a higher price than they had themselves
>>>>>>> for
>>>>>>> the input. The logical conclusion is that interest is a share of the
>>>>>>> profit of a capitalist. The amount of interest is directly coupled to
>>>>>>> the amount of expected profit and the risk involved to actually make
>>>>>>> this profit [1]_. In other words: What you are trying to accomplish
>>>>>>> with your [named above] stuff is what actually happens in capitalism
>>>>>>> all the time. It's in fact the very core of capitalism.
>>>>>>>
>>>>>>> .. [1] Of course in a fully expanded exchange system at the end of
>>>>>>> its
>>>>>>> life cycle like contemporary capitalism it is a bit more
>>>>>>> difficult. It's a interesting task to research that. But the
>>>>>>> general principle stays.
>>>>>>>
>>>>>>> I, Christian and others explained all that over and over again and it
>>>>>>> is really not hard to understand. In fact it needs no theory at all.
>>>>>>> It's all observable reality. But you constantly ignore this. Feel
>>>>>>> free. But don't be shocked if others call this nonsense or - when
>>>>>>> combined with an attempt to evoke certain feelings in simple-minded
>>>>>>> persons - even propaganda.
>>>>>>>
>>>>>>>
>>>>>>> Grüße
>>>>>>>
>>>>>>> Stefan
>>>>>>>
>>>>>>
>>>>>>
>>>>>>
>>>>>> --
>>>>>> Working at http://en.wikipedia.org/wiki/Dhurakij_Pundit_University -
>>>>>> http://www.dpu.ac.th/dpuic/info/Research.html -
>>>>>> http://www.asianforesightinstitute.org/index.php/eng/The-AFI
>>>>>>
>>>>>> Volunteering at the P2P Foundation:
>>>>>> http://p2pfoundation.net - http://blog.p2pfoundation.net -
>>>>>> http://p2pfoundation.ning.com
>>>>>>
>>>>>> Monitor updates at http://del.icio.us/mbauwens
>>>>>>
>>>>>> The work of the P2P Foundation is supported by SHIFTN,
>>>>>> http://www.shiftn.com/
>>>>>> _______________________________________________
>>>>>> p2presearch mailing list
>>>>>> p2presearch at listcultures.org
>>>>>> http://listcultures.org/mailman/listinfo/p2presearch_listcultures.org
>>>>>>
>>>>>>
>>>>>>
>>>>>>
>>>>>>
>>>>>> --
>>>>>> Working at http://en.wikipedia.org/wiki/Dhurakij_Pundit_University -
>>>>>> http://www.dpu.ac.th/dpuic/info/Research.html -
>>>>>> http://www.asianforesightinstitute.org/index.php/eng/The-AFI
>>>>>>
>>>>>> Volunteering at the P2P Foundation:
>>>>>> http://p2pfoundation.net - http://blog.p2pfoundation.net -
>>>>>> http://p2pfoundation.ning.com
>>>>>>
>>>>>> Monitor updates at http://del.icio.us/mbauwens
>>>>>>
>>>>>> The work of the P2P Foundation is supported by SHIFTN,
>>>>>> http://www.shiftn.com/
>>>>>>
>>>>>> _______________________________________________
>>>>>> p2presearch mailing list
>>>>>> p2presearch at listcultures.org
>>>>>> http://listcultures.org/mailman/listinfo/p2presearch_listcultures.org
>>>>>>
>>>>>>
>>>>>
>>>>> _______________________________________________
>>>>> p2presearch mailing list
>>>>> p2presearch at listcultures.org
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>>>>>
>>>>>
>>>>
>>>>
>>>> --
>>>>
>>>> Marc Fawzi
>>>> Facebook: http://www.facebook.com/people/Marc-Fawzi/605919256
>>>> LinkedIn: http://www.linkedin.com/in/marcfawzi
>>>>
>>>
>>>
>>
>>
>> --
>>
>> Marc Fawzi
>> Facebook: http://www.facebook.com/people/Marc-Fawzi/605919256
>> LinkedIn: http://www.linkedin.com/in/marcfawzi
>>
>
>
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