[split from the Tip of the Iceberg thread by MQ}
$this->bbcode_second_pass_quote('MonteQuest', '
')Peak oil is a consequence caused by what?
Answer: Expectations of infinfite growth in a finite world, and developing a lifestyle and monetary system to support and facilitate that false premise.
Can can you support a sound premise with a false support system?
Of course not.
So, our monetary system and our lifestyle must change to support that new sustainable paradigm, correct?
PeakOil is You
New money system
First unread post • 12 posts
• Page 1 of 1
New money system
by CARVER » Wed 23 Nov 2005, 21:16:51
I think so. (I think that should be the introduction)
About the monetary system, I like the following analogy:
"The image that comes to mind is that during the Industrial Age we have become accustomed to a monetary toolbox with only a single tool: a screwdriver. Now, screwdrivers are great, even the only way to go, if and only if you are dealing with screws. However, for those of us who want to paint, the screwdriver becomes a rather clumsy tool. It may be possible to paint with a screwdriver, but the results are not going to be too convincing. When we see, for example, non profit organizations - each trying to bring good things to society - tearing each other apart to get scarce competitive money, they are really trying to paint with a screwdriver." -- The Future of Money by Bernard Lietaer (p.297)
Our national currencies are scarce competitive money. Why do we use that for everything? Not everything is scarce. Take a book for example, the paper and ink may be scarce, but the information it contains is not scarce. If I buy that information from you, you do not lose that information. So why use scarce money for something that is not scarce? By doing that we make it appear scarce to us, and put a limit on something like information which is unlimited. Why not invent a brush for painting? Why don't we create sufficient cooperative money for those things?
Ever wondered how it's possible that so many people that want to work can't get a job, while there is so much work that can/needs to be done? Is it because we can't or do not want to pay them with our scarce competitive money? We want to use that scarce money for other things. When oil gets scarcer are we going to cut back on buying information? Would we spend the money we save on information on oil (buy more oil, or drive the price of oil up). Does that make sense? Why would we cut back on information? Information didn't get any scarcer, it will always be unlimited, so why would we ever have to cut back on information? And it doesn't make sense for an individual to buy more of the same information, because that does not add up. If you get told what you already knew, you don't know more afterwards, you still know the same. So if we cut back on information, that does not mean there will be more of that information for someone else, there always was and there will always be plenty of it for everyone. If you buy a gallon of oil, and then you buy another gallon of oil, then you have more, that does add up. It's our current scarce competitive money that we use for everything that stimulates us to act this way. Our current money is holding us back for no good reason at all! Just because a screwdriver works for screws, doesn't mean it will work properly for everything.
For a long time the only tool we used were handaxes. It took us a very long time before we started to create other tools, tools more specialized and better suited to perform a specific task. When we did that we really started to make some progress. We invented money as a tool. But why did we create just this one type of money? When will we create other types of money, money more specialized and better suited to perform a specific task? Let's hope it won't take us that long this time.
-
CARVER - Lignite
- Posts: 396
- Joined: Thu 19 May 2005, 03:00:00
- Location: Holland
Re: Peak Oil: The Tip of the Iceberg
by Ludi » Wed 23 Nov 2005, 21:37:45
I'm not sure why you think we need more kinds of money. Maybe I'm misunderstanding you and you're speaking metaphorically somehow.
- Ludi
Re: Peak Oil: The Tip of the Iceberg
by CARVER » Thu 24 Nov 2005, 16:51:44
$this->bbcode_second_pass_quote('Ludi', 'I')'m not sure why you think we need more kinds of money. Maybe I'm misunderstanding you and you're speaking metaphorically somehow.
The problem with extreme concentration of wealth (money), is that we need money as a medium of exchange (it makes it easier to make complex exhanges over time, involving a lot of people, that might not know one another and might be located in distant places from eachother). If money gets accumulated in a small group, it could happen that the people with the money only need a small group of people to supply them with the things they need and want. That group of people that gets paid for that work, might use/need all the money they make to buy things that are owned by the wealthy people. It might happen that a group of people gets excluded from the money circle. Say you have group A, B and C. A and B might trade with eachother, work for eachother. So money moves between (and within) A and B (A <=> B). C got excluded. How did this happen, because we got this: (arrows indicate the flow of money)
A <=> B <= C
Money flows out of C, but never back into it, so slowly all of it flows out. But C is a group consisting of c1, c2, c3, ... cn. If there is no more money in C it means that the individuals within C have no medium of exchange anymore to even set up a trade efficiently amongst one another, so that the following is not possible anymore:
c1 <=> c2 <=> c3 <=> ... <=> cn
So we end up with this:
$this->bbcode_second_pass_code('', 'A <=> B C and (c1 c2 c3 ... cn)')
This group C gets in trouble and now the government (G) has to step in to give them social welfare:
step 1: A => G <= B
step 2: G => C
step 3: A <=> B <= C
As you can see since step 3 didn't change, the money flows out of C again. So the government has to keep doing this over and over again. As wealth gets more concentrated, more people are moved from group A and B to group C. So less people are working (group C) and thus the government has to collect more tax from group A and B to pay for the social welfare of group C. So this is a growing problem.
This: A <=> B <= C will end in exclusion of C (hardly any available money within C). If we could go from:
$this->bbcode_second_pass_code('', 'A <=> B C and (c1 c2 c3 ... cn)
to:
A <=> B C and (c1 <=> c2 <=> c3 <=> ... <=> cn)')
That would be positive for all parties:
- C doesn't rely so much on social welfare anymore, because they can trade amongst eachother and help themsleves.
- G would not have to collect so much tax and redistribute it in a proper way.
- A and B would not be negatively affected by the trade amongts the people in group C, and A and B would not have to pay so much tax (for social welfare).
To do this C should be allowed to create their own currency (money) that will not be accepted by A and B, so it won't flow out of C. (If they do decide to accept it, its not a problem for C, because C can create the money themselves). A local currency for example.
When a couple of children are not allowed to join in on a game some other group of children is playing, are they going to do nothing and just be sad and angry? Or are they going to form a group of their own and start a game of their own?
Consider an exchange involving 26 individuals. A does something for B, B does something for C, ... , Z does something for A. That might be very difficult to arrange without a medium of exchange like money. So without money that exchange would probably not take place, which would lead to a lower standard of living for all of them. You would have 26 unemployed people, willing to work, but they can't find anyone that wants to pay and can pay them for it. They are all waiting for money. Why? Is it so hard to find? No, money could be just about anything, like bits on a computer, or a piece of paper. It is just a belief system, mutual agreements. The only thing they have to do is agree on something to be used as money, agree to accept it as payment, as medium of exchange. We can give it the appropriate characteristics that we think it should have to best suit its purpose of serving as a medium of exchange. Money should serve us. If it does not do that, then we can change it so that it does.
We need different types of money, money with different characteristics. Our current national currency has the characteristics of being scarce and stimulating competition. It is scarce and competitive because we cannot create it ourselves, (central) banks together with governments do this. And if you want to take a loan, you have to pay interest, while if you hoard money (a public service) you don't have to pay for it. While this type of money could work reasonably well for things that are scarce (like oil), it does not work well for things that are not scarce (like information). So what if for those things we invent a new currency, with the appropriate characteristics: sufficient and stimulating cooperation. For example mutual credit: we can issue it ourselves, so it is sufficient. If I buy something from you, your account gets credited, my account gets debited. (I will have a negative balance, you will have a positive balance. The total of all accounts is zero). We can charge interest on the 'deposits' (credits), so you have to pay for the time that you have a positive credit balance. To stimulate you to invest that money and don't hoard it. So that it stimulates cooperation.
Now we make an agreement that we only use the scarce competitive money for things that are scarce, let's call this type of money the Yang. And that we only use the sufficient cooperating money for things that are sufficient, let's call this type of money the Yin. (Some items or services consist of both so the price is partly in Yin and the other part is priced in Yang). This way we prevent that the sufficient money is going to inflate the prices of scarce goods, and we make sure that there is always sufficient money available for things that are not scarce, so that we always have a medium of exhange for this.
(If this does not make it clear, I could work out an example if you want?)
-
CARVER - Lignite
- Posts: 396
- Joined: Thu 19 May 2005, 03:00:00
- Location: Holland
Re: Peak Oil: The Tip of the Iceberg
by ohanian » Fri 25 Nov 2005, 01:21:38
$this->bbcode_second_pass_quote('CARVER', '
')Money flows out of C, but never back into it, so slowly all of it flows out. But C is a group consisting of c1, c2, c3, ... cn. If there is no more money in C it means that the individuals within C have no medium of exchange anymore to even set up a trade efficiently amongst one another, so that the following is not possible anymore:
c1 <=> c2 <=> c3 <=> ... <=> cn
So we end up with this:
$this->bbcode_second_pass_code('', 'A <=> B C and (c1 c2 c3 ... cn)')
This group C gets in trouble and now the government (G) has to step in to give them social welfare:
')Money flows out of C, but never back into it, so slowly all of it flows out. But C is a group consisting of c1, c2, c3, ... cn. If there is no more money in C it means that the individuals within C have no medium of exchange anymore to even set up a trade efficiently amongst one another, so that the following is not possible anymore:
c1 <=> c2 <=> c3 <=> ... <=> cn
So we end up with this:
$this->bbcode_second_pass_code('', 'A <=> B C and (c1 c2 c3 ... cn)')
This group C gets in trouble and now the government (G) has to step in to give them social welfare:
There is a flaw in your plan.
-
ohanian - Heavy Crude
- Posts: 1553
- Joined: Sun 17 Oct 2004, 03:00:00
Re: New money system
by gg3 » Fri 25 Nov 2005, 02:52:59
Carver, you're onto something really important here; and I've been thinking along similar lines for years. I get the impression we could collaborate on this and make some interesting progress.
(Ohanian, you said there's a flaw but you didn't specify it; say more.)
What you've been saying so far, I understand as follows; please correct me if this is in error:
The present monetary system is based on scarcity, and money itself is subject to arbitrary scarcity. This has two undesirable side effect: a) it creates scarcity, i.e. makes things scarce that are not actually scarce, for example information; and b) it creates competition even where competition is inappropriate. Therefore you propose creating a new form of money that would be used a) for goods/services that are not scarce, and b) for transactions that are cooperative rather than competitive.
This is a very interesting starting point, though I would critique it on two levels. One, scarcity is a subjective judgement; it can be described as the relationship between demand (desire) and supply (quantity), where demand is the subjective factor that can be increased or decreased by manipulating subjective variables. Two, competition is also largely subjective, i.e. a subjective response to perceived scarcity. That is, the variables "scarcity" and "competition" are both largely subjectively determined.
The way I've been looking at this, there are four basic elements needed to produce anything of value: natural resources, energy, labor, and capital; all of these as conventionally defined. The present monetary system attempts to reduce all of these to the common denominator of capital; money as we know it *is* capital. But, like painting with a screwdriver, doing so is highly inefficient, and produces an enormous amount of externalized cost (such as resource depletion, unemployment, etc.).
Therefore it makes sense to develop additional types of money that are based on natural resources, on energy, and on labor, respectively. These elements are objective: each can be quantified objectively, measured in a way that has nothing to do with subjective judgements. A gallon of oil, a kilowatt hour of electricity, a pound of iron or cement, an hour of labor, etc., in each case there is no room for interpretation.
The place where my system runs into a snag is that most goods and services embody all four elements: natural resources, energy, capital, and labor. So then I go to the store and buy a radio, and have to pay for it in a combination of currencies: so much and such of each. The store and the manufacturer each have to keep four sets of accounts.
But in fact any system of complementary currencies runs into the same problem. And yet that problem must be solved, otherwise there will be constant pressure to return to a single common denominator with all its shortcomings.
More to be said later; at this very moment I'm tired & heading for sleep.
(Ohanian, you said there's a flaw but you didn't specify it; say more.)
What you've been saying so far, I understand as follows; please correct me if this is in error:
The present monetary system is based on scarcity, and money itself is subject to arbitrary scarcity. This has two undesirable side effect: a) it creates scarcity, i.e. makes things scarce that are not actually scarce, for example information; and b) it creates competition even where competition is inappropriate. Therefore you propose creating a new form of money that would be used a) for goods/services that are not scarce, and b) for transactions that are cooperative rather than competitive.
This is a very interesting starting point, though I would critique it on two levels. One, scarcity is a subjective judgement; it can be described as the relationship between demand (desire) and supply (quantity), where demand is the subjective factor that can be increased or decreased by manipulating subjective variables. Two, competition is also largely subjective, i.e. a subjective response to perceived scarcity. That is, the variables "scarcity" and "competition" are both largely subjectively determined.
The way I've been looking at this, there are four basic elements needed to produce anything of value: natural resources, energy, labor, and capital; all of these as conventionally defined. The present monetary system attempts to reduce all of these to the common denominator of capital; money as we know it *is* capital. But, like painting with a screwdriver, doing so is highly inefficient, and produces an enormous amount of externalized cost (such as resource depletion, unemployment, etc.).
Therefore it makes sense to develop additional types of money that are based on natural resources, on energy, and on labor, respectively. These elements are objective: each can be quantified objectively, measured in a way that has nothing to do with subjective judgements. A gallon of oil, a kilowatt hour of electricity, a pound of iron or cement, an hour of labor, etc., in each case there is no room for interpretation.
The place where my system runs into a snag is that most goods and services embody all four elements: natural resources, energy, capital, and labor. So then I go to the store and buy a radio, and have to pay for it in a combination of currencies: so much and such of each. The store and the manufacturer each have to keep four sets of accounts.
But in fact any system of complementary currencies runs into the same problem. And yet that problem must be solved, otherwise there will be constant pressure to return to a single common denominator with all its shortcomings.
More to be said later; at this very moment I'm tired & heading for sleep.
-
gg3 - Expert
- Posts: 3271
- Joined: Mon 24 May 2004, 03:00:00
- Location: California, USA
Re: New money system
by Doly » Fri 25 Nov 2005, 05:15:11
$this->bbcode_second_pass_quote('gg3', '
')The present monetary system is based on scarcity, and money itself is subject to arbitrary scarcity.
')The present monetary system is based on scarcity, and money itself is subject to arbitrary scarcity.
If I remember right the beginning of textbooks on economy, they always say that goods that aren't scarce aren't part of the economy, because everybody gets them for free. What need is there to have a kind of money to get non-scarce goods, when you can just take them?
-
Doly - Expert
- Posts: 4370
- Joined: Fri 03 Dec 2004, 04:00:00
