[p2p-research] excellent contribution on flow money by Martien van Steenbergen
Michel Bauwens
michelsub2004 at gmail.com
Fri May 22 06:02:25 CEST 2009
So, I have a problem with the following:
- Ryan stresses the dichotomy planning/market, though he recognizes
transeconomism
- Marc and Patrick reply with ideal technical/social solutions which could
be implemented, but aren't
So the only solution is peaceful co-existence, i.e. let the markets exist
with good regulation to avoid the negative externalities, but let us
continue to experiment continuously with other modes, and have a society
which allows this process to happen. This is in fact what I mean with the
Partner State, which becomes an arbiter between the 3 modes, and not just
two.
Michel
On Fri, May 22, 2009 at 4:06 AM, marc fawzi <marc.fawzi at gmail.com> wrote:
> The argument I have is two fold and you seem to be dancing around it :)
>
> 1. Open Peer Production: who gives a damn if demand was mis-predicted.
> Short on some product? DIY it!!! open production allows that and Patrick's
> question re: peer producing for themselves is a very key question. After
> all, we're discussing peer production here, aren't we? If it's open,
> distributed and sustainable it can be replicated by networks of peers as
> demand erupts (your black swan)
>
> 2. If you leave it to predictive inventory systems and collective price
> setting based on standard costing models (regardless of how tedious it would
> be to build and maintain those models as everything starts out inefficient
> then gains in efficiency and so will the costing models) then that and open
> peer production will give us a workale model where price = median cost +
> fixed profit margin, and I don't see any perpetual motion here.
>
> It's obvious that without a profit margin it would not work for three
> reasons: lack of guaranteed incentive, inability to grow, and friction (or
> inherent efficiency or noise that cannot be eliminated from the production
> and delivery process)
>
> But with open peer production and predictive inventory management systems
> (as opposed to managers who can exercise a natural human greedy/manipulative
> side) give us a much more robust and fair system than what we have today.
>
>
>
>
> On Thu, May 21, 2009 at 1:39 PM, Ryan Lanham <rlanham1963 at gmail.com>wrote:
>
>> Marc:
>>
>> Yours is a sort of "visible hand" of technology driving management. It
>> may happen someday. For now, we need managers.
>>
>> Miscalculations occur continually and everywhere--too much shipping
>> capacity, not enough flu vaccine production technology, too many low-cost
>> mortgages, etc.
>>
>> Managers try desparately hard to be smart. Some of the brightest people I
>> have ever met are corporate managers. They screw up continually--it is
>> exceedingly hard to get production decisions right. Just take pricing of
>> securities when a company goes public--the price can move 20% up or down
>> (and regularly does) in a matter of days or even minutes. That is a case
>> where very well-compensated and very smart people are missing demand
>> forecasts hugely.
>>
>> Plus there can be long (very long) lead times involved in production
>> processes (as with a jet airplane or a ship). The designs for many products
>> take well over a year to go from concept to production. Demand can change
>> during that time as can literally thousands of other variables (e.g. input
>> commodity prices, competitor capabilities and pricing, etc).
>>
>> No computer program, no matter how smart and how linked is likely to
>> replace that vast array of human brain power involved--at least not in the
>> next few (10) years.
>>
>> The market economy is extremely complex--and yet people reengineer it
>> continually...day in and day out at every level from the macro (government
>> interest rates) to the extreme micro (Mom and Pop changing their store
>> display). Sometimes the system changes radically, but it is false or wrong
>> or errant. It is. It just is. What's more, it is extremely unlikely that
>> it goes away in any significant way in the next few decades. It may
>> stumble, break, get rebuilt, change a lot, etc., but markets are pretty
>> fundamental--they are arguably "natural."
>>
>> Finally, there is no "market price" of a good that has any staying power.
>> As we say in stock exchanges, there is a continual auction. The price is
>> set when buyers and sellers cross terms. What is the price of a share of GE
>> stock? Tell me the day and time and I can tell you--for a limited quanity.
>> So it is with all things ultimately. No program can anticipate that range
>> of demand shifts and complexities. It is hugely sophisticated with billions
>> of interconnections ranging from the weather to the health of individuals
>> involved to the availabilty of credit.
>>
>> Ryan
>>
>>
>> On Thu, May 21, 2009 at 3:14 PM, marc fawzi <marc.fawzi at gmail.com> wrote:
>>
>>> Here is an improved version of my last paragraph:
>>>
>>> But let's say that there was no way to set a price (as is the case in P2P
>>> Energy Economy where price is set collectively based on per-category costing
>>> models and demand prediction [for more accurate detail, see P2P Energy
>>> Economy]) then assume a black swan event occurs and the total supply of
>>> Tickle Me Elmos is exhausted. What happens? people won't over pay for one
>>> thing. And the next thing that will happen, based on the fact that all
>>> production in P2P Energy Economy is open peer production, people will
>>> download the schemes and make their own Tickle Me Elmos. In addition, an
>>> intelligent, predictive algorithm with tentacles throughout the economic
>>> network (for the given product) will learn the pattern leading to such a
>>> black swan in demand and become better at recognizing the corrolates for
>>> such eruption in demand, thus adding another layer of safety against supply
>>> exhaustion, but open peer production together with current predictive
>>> inventory systems (some of which are very intelligent, much more than my
>>> simple predictive algorithm [see P2P Energy Economy for detailed algorithm])
>>> give us a much more robust system and we don't need to resort to the
>>> mechanics of the falsely called 'market price'
>>>
>>> ~~
>>>
>>> I can defend the above assertion at the detail level so, for those
>>> interested in details, let's work through some examples.
>>>
>>> A simulation is long over due, but there are certain high level issues
>>> with the P2P Energy Economy that need to be resolved first, one of which is
>>> guaranteeing growth in energy flow, which requires some constraints that
>>> aren't present in the model at the moment.
>>>
>>>
>>>
>>> On Thu, May 21, 2009 at 12:59 PM, marc fawzi <marc.fawzi at gmail.com>wrote:
>>>
>>>>
>>>> Very quickly for now, but will get back with more:
>>>>
>>>> I reject the argument re: Black Swan and predictive inventory systems.
>>>>
>>>> The 'Tickle Me Elmo' demand explosion during one xmas shopping week many
>>>> years ago is a good example of a black swan in demand forecasting.
>>>>
>>>> So what happened when demand exploded all the sudden? Well, supply was
>>>> exhausted and people were left fighting each other for a toy and over paying
>>>> by as much as 100X over 'market price.'
>>>>
>>>> But let's say that there was no way to set a price (as is the case in
>>>> P2P Energy Economy where price is set collectively based on per-category
>>>> costing models and demand prediction [for more accurate detail, see P2P
>>>> Energy Economy]) then assume a black swan event occurs and the total supply
>>>> of Tickle Me Elmos is exhausted. What happens? people won't over pay for one
>>>> thing. And the next thing that will happen, based on the fact that all
>>>> production in P2P Energy Economy is open peer production, people will
>>>> download the schemes and make their own Tickle Me Elmos. In addition, an
>>>> intelligent, predictive algorithm with tentacles throughout the economic
>>>> network will learn the pattern leading to such a black swan in demand and
>>>> become better at recognizing the corrolates for such eruption in demand,
>>>> thus adding another layer of safety against supply exhaustion, but open peer
>>>> production together with current predictive inventory systems (some of which
>>>> are very intelligent, much more than my simple predictive algorithm [see P2P
>>>> Energy Economy for detailed algorithm]) gives us enough resilience against
>>>> so called black swans in demand.
>>>>
>>>> So Patrick's question is very important in this context: open peer
>>>> production and predictive gives us a much more robust system and we don't
>>>> need to resort to the mechanics of the falsely called 'market price'
>>>>
>>>> Marc
>>>>
>>>>
>>>> On Thu, May 21, 2009 at 9:52 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
>>>>>>>>>
>>>>>>>>> http://listcultures.org/mailman/listinfo/p2presearch_listcultures.org
>>>>>>>>>
>>>>>>>>>
>>>>>>>>
>>>>>>>>
>>>>>>>> --
>>>>>>>>
>>>>>>>> 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
>>>>>>
>>>>>
>>>>>
>>>>
>>>>
>>>> --
>>>>
>>>> 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
>>>
>>
>>
>
>
> --
>
> Marc Fawzi
> Facebook: http://www.facebook.com/people/Marc-Fawzi/605919256
> LinkedIn: http://www.linkedin.com/in/marcfawzi
>
> _______________________________________________
> 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/
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