[p2p-research] excellent contribution on flow money by Martienvan Steenbergen

[Martien van Steenbergen]

Hi Andreas,

On 28 May 2009, at 13:45 , Wittel, Andreas wrote:
>
> It is of course possible to see this not as interest but as rent.  
> But time plays an important role. In terms of practicality it seems  
> nearly impossible to make these arrangements for every single  
> transaction, every single item that is being borrowed.

You're right. How does happen in real life now than? I borrow you my  
book and I get it back some time. Or we agree verbally on a date.  
After the deadline I'll start nagging you, perhaps. Maybe later this  
utrns into stalking, until I get my book back. Or I'll charge for it.

I see not much difference with borrowing stuff. You always need to  
plan a little, especially when the thing is scarce and used by more  
people; i.e. demand > supply.

A good ‘money’ system helps self-organise this.

Making these transactions  for simple things like books is overkill  
indeed; unpractical.

> >  True. But everyone can simply pay for borrowing the goods, right?  
> And
> >  they can make formal agreements for returning the good. Pay  
> upfront,
> >  pay later, pay over time, malus, bonus, what have you. But no  
> compund
> >  positive interest, please!
>
> Again: it is not practical to make formal agreements for the  
> exchange of every single good.
> Apart from that, Gesell claims that this form of rent is unnecessary  
> if exchange is not based on money. You take something, return this  
> item later, not matter when. This is where the problem lies with  
> Gesell's claim. As soon as you include the idea of rent, you need to  
> measure the time and the value of this time between the transaction  
> and the return of the action.

True. There is some threshold where it becomes important to measure  
and pay for borrow time, depending on context.

> (So where is the difference to compound interest?

Rent (normally) is lineair with time; you just pay for use over time.

Compound positive interest is exponential with time. A slow start, but  
an ever steeper line after its tipping point. You pay rent over rent.  
This is what will eventually kill it, or make it less attractive.

> >  > Interest, I would argue, is not intrinsically linked to money  
> as such,
> >
> >  True. It is a characteristic of a money system. One of the dials  
> one
> >  can turn to influence the flow of money through the system.
> >
> >  > but to the idea of measurement. Any model of exchange that  
> operates on
> >  > the basis of measurement (of the commodities and of labour) is  
> bound
> >  > to
> >  > end up introducing interest.
> >
> >  I do not see this. Please elaborate. Or prove that a system without
> >  compound positive interest will fail.
>
>
> I am not saying that a system without compound interest will fail.  
> There is a long history of economic exchange before the invention of  
> capitalism, and they have worked. So clearly interest is not needed.
> I am merely questioning that interest is instrinsically linked to  
> money. But there is not much disagreement between our views. Yes, it  
> is linked to money systems. And what else are money systems than  
> systems of measurement, systems of quantification. As soon as  
> measurement becomes important in exchanges the idea of interest is  
> unavoidable.

I disagree. Why does interest become unavoidable? Or do you mean rent?

> You can develop alternative money systems, but they will all be  
> based on attempts to value labour and value goods, and this is the  
> core problem.

It is a challenge, yes. But one that can be solved. We've solved it  
already, didn't we? You know what you need to pay for a root canal  
treatment, don't you? You can even compare prices between dentists. So  
can dentists themselves, and adjust their prices so that everyone's  
happy from a business and price/value perspective.

Have you read my previous suggestion regarding the VAX 11/780 standard  
for MIPS? In that general direction.

> >
> >  > The problem is that there is no just way to
> >  > measure the value of individual labour.
> >
> >  It's about time we put some thought and work to that, then.
>
> Here we disagree: IMO you can think about this problem as much as  
> you want, the value of labour is beyond measure. Qualities cannot be  
> transferred in an objective way into quantities. Different people  
> value different perceptions. One football fanatic might argue that  
> football stars deserve to earn what they do. Another one might argue  
> they should earn significantly less, but still more than a bin man.  
> And someone with no interest in football might argue the labour of a  
> bin man has higher value (as it is socially relevant labour) than  
> the labour of a football star.

So it's whatever someone wants to pay for it, or can afford. I agree.  
If you can pay the price, than you are also able to deliver value to  
others (your employer?) to be able to afford it. There must be a  
dynamic balance between what you consume and produce. ‘You’ in this  
case scales from individual to large companies or even countries.

> But there are plenty more argument: Innovation, ideas, creativity  
> can't be measured in an accurate way. It is just impossible.

But you can value them relatively when having two choices. And you can  
check them for your affordability. Are you willing and able to pay the  
price for this innovation or idea.

> This is why many great artists died in poverty.

I seriously doubt this. Great artists just want to do what their  
talents educe them to do: perform great art. It's just that it doesn't  
get bought because money is artificially kept scarce. If there is  
always sufficient money (not too much, not too little) I'd have an  
artist create a painting for me and pay for it.

Quote from previous message on this channel:

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.

So true. A bottle of water at noon when you're all alone in the desert  
is probably much more valuable than the same bottle sitting on the  
shelf with 500 others in the supermarket around the corner.

So the value of something is (extremely) context dependent. Another  
example would be some ointment treatment, for pigs, say. You can buy  
it by the barrel, for just €10/kg. The identical ointment can be used  
to treat the rash on your baby's skin, yet a 50g tube sells for €10 at  
your local drugstore. A 20-fold increase in price (€200/kg) , but  
you're happy to buy it, since it's for your newborn child.

Every time you buy something you either implicitly or explicitly  
evaluate its price, checking if you are able and willing to pay the  
price for the value delivered.

You can always compare two similar, yet distinctive, offerings. You  
can always feel and rationalize which one is ‘closer to you’,  
resonates more with you. Even, or in particular, for very subjective  
thing like a painting or music this is true. You can always personally  
value these offerings: are you willing and able to pay the price to  
obtain this product or service. That is, are you willing and able to  
deliver a contribution to the community at large at some time in the  
future that matches (compensates) your receiving this product/value  
now. In other words, can you afford this? Can you repay this over time  
(or have you maybe already done so in the past)?

This begs the question of how much an hour of effort (energy) is worth  
and if a difference between one hour from the janitor or the  
orthodontist can be justified. If one hour from tha janitor is worth  
€10, say, then is €60 for the orthodontist justified? Is there a fair  
or human maximum to the ratio between two valuations? That is, while  
the janitor makes something between €15k and €20k annually, the CEO of  
the bank he works for makes €1M annually. Can this 50x be justified?

To my opinion, differences in hourly valuation can be justified and  
should be limited.

All this implies that marktplaces still will work. People will still  
compete to deliver an excellent price/value. They will strive to  
excell in what they do, honing their talents and living their  
passions. In our current monetary system, people have become slaves.  
Are you working for the money, or is the money working for you? Many  
are compelled to work and do things that do not match their talents  
and passions, just to pay the bill. A unprecedented form of global  
slavery. Yet, we all seem eager to keep playing this game, designed by  
a set of smart, yet unwise, economists.

> Or: Should we assume that the labour of someone like Britney Spears  
> is more valuable that that of all members of say, the London  
> Philharmonic orchestra just because she has a bigger audience?

TMO there's also a psychological effect that impacts perceived value;  
besides the context that is. Spears has a bigger audience because,  
according to many, she sang great songs. Pop songs. Pop, from Popular.  
London Philharmonic Orchestra appearantly speaks to a smaller audience  
than Spears (once did). Less popular. Less valued.

> If we cant measure the quality of labour, could we find a way out  
> measuring the quantity of labour, that is the hours and days we  
> spend working? Again this does not work. It is increasingly  
> impossible to separate work from leisure, not just for artist but  
> for most people.

Time that we meshed work and leisure together. That work is actually  
something that you do with pleasure because it matches your talents  
and passions, and that it helps your self-expression and authenticity.  
Our current monetary systems enslaves the majority of people because  
they have to bring up the ever growing interest and shortage of money.  
It's a trait of the system.

> >  > Only those economic models that are established on the idea that
> >  > everybody should contribute with as much labour as he or she  
> wishes to
> >  > donate to the commons could avoid operating on the basis of  
> interest.
> >
> >  Yes. Contribute what you want, when you want it. If it gives you a
> >  happy live, enjoy it.
>
> Agreed. However this still doesn't lead to a solution what people  
> should get paid...

We'll work it out. I'm open to suggestions.

Thanks for your constructive critique.

Succes en plezier,

Martien.

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