[p2p-research] The Production Bubble: Why Capitalism Withholds Solutions and Gets Away with It

[Ryan Lanham]

On Thu, Jul 22, 2010 at 3:05 PM, Patrick Anderson <agnucius at gmail.com>wrote:

> Ryan Lanham wrote:
> > Wheat is going to be under pressure because it is a
> > hot wet summer in the US...so volumes will again be high.
>
> Hey Ryan,
>
>

> Thanks for the response.
>
>
>
Hey Patrick...no problem.



> We need to question our long-standing assumption about how markets must
> work.
>
>
Always...question everything...so long as there is a rational for coming to
a resolution of what is best thought...that is based on some form of
evidence and fact rather than metaphysic.



> When you say wheat will be "under pressure" because of "high volumes"
> you are saying Prices go down as Supply goes up.
>
>
Not always, but that will be the pressure.  Markets are complex.  If it was
pure supply and demand all traders would be rich.  There are numerous
subtleties.


> This is the Econ 101 argument that Abundance is Bad and Scarcity is
> Good because of how Supply reduces Demand.
>
>
Everyone is for abundance.  But things must be bought.  People own
things...including the right to production.  Actually...prices under
capitalism have dropped hugely over the centuries for nearly everything.
Probably always will.  In the short run, prices tend to rise given currency
inflation.  An ounce of gold buys hugely more than it did 40 100 or 300
years ago.


> It is assumed that we must keep Prices above Cost because of our
> previous assumption that the Means of Production (the farms for
> example) are not owned by the Consumers who need that product.
>
>
Consumers choose what to do with their assets.  They can buy modes of
production or specialize and consume more.  Most wisely choose to buy apples
from an apple farm rather than purchasing apple tree stock or growing a
tree.  Specialists are vastly more productive and thus more people are
served by economic efficiency.


>
>
> But let's open our minds to allow a new way of thinking about this.
>
> Imagine 10,000 Consumers buy a large wheat farm from a farmer who is
> going bankrupt.  They re-hire that same farmer and his employees to
> continue working there.
>

Happens all the time.  We call those corporations.  No need to own the item.
Instead, merely invest in the optimal financial return because money is a
machine that makes other capital from wheat to submarines.


>
> At the end of the season the Owners/Consumers do not buy the wheat
> from themselves (this is different from a co-op), but instead
> *already* own the product as a side-effect of their ownership in the
> Land and Tools.
>
>
That is the basis of a barter economy because no one can own every mode of
production for their many demands.  It would lead to massive and
instantaneous poverty.


> Overproduction is not a problem in this model.  These Owners don't
> need to destroy the grain or worry about prices at all because they
> are not even 'playing' in that arena.
>
>
In fact, markets tend to rarely destroy production.  Governments sometimes
do.  Better to let the market work.


> They can dump the excess by selling it 'at-cost' or even by giving it
> away to the poor if they like, for it does them no harm.
>
>
Anyone can give anything away.  The reason people don't do so is the reason
your or I don't.  That's because value exists in our property.  We all have
property...even people in Cuba.  We can metaphysically deny it, or we
can construct systems that excel based on our property law (i.e. market
capitalism or market socialism).


> This Mode of Production does not promote Scarcity because the reward
> for investment is the Product itself instead of trying to keep Price
> and Cost during the usual post-facto exchange of the goods.
>
>
Scarcity is a function (always) of incentives.  What most people on this
list fail to try to understand is the psychology of incentives.  Incentives
are why utopian colonies always fail.


>
> This approach is the only form of organization I have found that does
> not otherwise *require* scarcity be perpetuated.
>
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-- 
Ryan Lanham
rlanham1963 at gmail.com
Facebook: Ryan_Lanham
P.O. Box 633
Grand Cayman, KY1-1303
Cayman Islands
(345) 916-1712
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