Related: diary
Aug-11-2009: Unpublished draft for Groups.Google.com/group/openmanufacturing
Herbert Snorrason wrote:
> Patrick Anderson wrote:
>> If artificial scarcity is eliminated, and if only costs are being
>> collected, then won't profit be zero?
>
> Aren't zero profits the natural result of a free market with perfect
> competition and participant knowledge? From my reading of economics, it
> seems that zero profits represent efficiency --- if I'm wrong, do explain why...
Yes, that is correct. But confusingly, a perfect market would be *fatal* for Capitalists - for what other reason are they in business?
Part of http://Wikipedia.org/wiki/Perfect_competition reads:
"'According to the standard economical definition of efficiency (Pareto efficiency), perfect competition would lead to a completely efficient outcome. The analysis of perfectly competitive markets provides the foundation of the theory of supply and demand. Perfect competition is a market equilibrium in which all resources are allocated and used efficiently, and collective social welfare is maximized.'"
Since perfecting competition causes price to approach cost, a strange situation occurs where normal "For Profit" businesses - who measure their success by the amount they can keep price above cost - would close their doors proclaiming failure during perfect competition.
Now, a business must pay it's investors SOMETHING, otherwise, why would they invest? So, if the investors are expecting profit, then they require the business they invested in to be able to operate in an imperfect market. Profit is a measure of this imperfection.
But there is another thing that we could pay investors if we choose those investors from a very special set:
If the investors of a business are the very CONSUMERS of the intended ouputs of that production, then they would be satisfied with receiving "at cost" product alone, and would never need the business to keep price above cost.
A consuming-investor's return on investment would be receiving the product at a price that is exactly the same as cost.
When the investors of production are the very consumers of the output, the organization can withstand perfect competition because those that pre-paid will be expecting PRODUCT, not PROFIT.
>> Who will be willing to invest in production if profit is zero?
>>
>> Consumers would invest even when profit is zero because
>> their return on invest would be "at cost" product.
>>
>> But then consumers would be the owners of the
>> Means of Production which many consider taboo.
>
> You're forgetting another group. Producers would also invest, because
> their livelihood depends on it. So you'd have a mixed bag of consumer
> and producer owned businesses.
>
> Interestingly, businesses owned and operated by consumers have been a
> long-standing feature of the cooperative movement.
The traditional definition of a "Consumers' Cooperative" shows the individual consumers are not in control, but have instead forfeited their rights to a representative committee that causes the organization to be run largely the same as a for-profit corporation.
http://Wikipedia.org/wiki/Consumers%27_cooperative tells us: "'Every year members receive a share of the profits that they helped to create, based on the amount made in profits that year and the how much they had spent with any of its businesses.'"
And http://Wikipedia.org/wiki/The_Co-operative_Group tells us there was "'Revenue over 13 billion'" in 2009.
But profit only occurs when a consumer must buy the good from an owner at a price above cost.
Trading goods only occurs when the consumer has insufficient ownership in the Physical Sources of that production - for when his ownership is sufficient, he does not 'buy' apples, but instead owns them already as a result of his owning the Physical Sources and pre-paying the costs of production (with wages being one of those costs).
Aug-11-2009: Posted to Groups.Google.com/group/openmanufacturing
Kevin Carson wrote:
> The important thing is to eliminate
> artificial scarcity, not to try to simulate abundance where it does
> not exist. Where things are naturally scarce--i.e., take effort and
> disutility to produce--then payment is entirely appropriate. I just
> want the portion of price that reflects artificial scarcity to
> collapse, leaving only the actual cost of effort and materilas,
> meanwhile continuing to look for ways to reduce the effort and
> materials required for production.
If artificial scarcity is eliminated, and if only costs are being
collected, then won't profit be zero?
Who will be willing to invest in production if profit is zero?
Consumers would invest even when profit is zero because
their return on invest would be "at cost" product.
But then consumers would be the owners of the
Means of Production which many consider taboo.
Patrick
Aug-10-2009: Posted to Discuss@Lists.Autonomo.us
On Mon, Aug 10, 2009 at 11:10 AM, Luis Villa wrote:
> Just to make sure that we're all staying grounded in reality, it seems
> important to note that there is no significant 'backlash against
> social networking' out here in the real world.
"Backlash" is our impotent and immature reaction to our lack of preparedness.
For how long will the 'We' wait for someone else to organize for us in the 'correct' way?
The 'We' must stop thinking that it can "lash back" at Capitalists that have the forethought and tenacity to organize for us.
The 'We' must start thinking about how to "get together" and organize for our own collective and inclusive (all users must have freedom) benefit instead of just complaining that somebody else is doing it wrong - especially when those that the We feel are do it wrong had the intention of taking advantage of Us from the very beginning!
The 'We' is paralyzed because of the fear of property ownership.
The 'We' believes physical Sources can never be held for the sole purpose of "Use Value".
The 'We' has been hypnotized into the false dichotomy between "Capitalism" and "Communism" as though there weren't infinite other ways to organize.
The 'We' will never move forward until we face the combination of power and freedom that is "property ownership" to discover exactly what is wrong and then begin to buy and co-own those Physical Sources in a 'righteous' manner for the material sphere similar to how the GNU GPL uses Copyright against proprietary holdings in the realm of 'design'.
The 'We' does not understand the meaning and purpose of profit (price above cost), and so fear it also.
When the 'We' can finally see profit is a measure of user dependence upon the current owners, then the 'We' can begin using it to balance growth and autodistribute control to all those willing to pay.
Treating Profit as an investment from the user who paid it will cause the Capitalist to become unimportant as competition (in ownership of the Material Means of Production) will approach perfection - thus causing any profit collected against each of those users to approach zero and therefore 'destroying' the market since price will safely meet cost.
Aug-10-2009: Wikipedia.org/wiki/Co-operative_economics splits Cooperatives into "Co-operative Federalism", "Co-operative Individualism" and "Retailers' cooperatives".
"Co-operative Federalism" is supposedly consumer-owned, but this is clearly is not perpetually true since profits would need to be treated as consumer investment yet: "'profits (or surpluses) from these co-operative wholesale societies should be paid as dividends to the member co-operators, rather than to their workers'".
"Co-operative Individualism" is worker-owned, and so is of little interest to us here.
"Retailers' cooperatives" are owned by groups of capitalist corporations. BORING!
Aug-10-2009: FAX.Libs.UGA.edu/hd2951xc776/1f scans of CO-OP magazine from 1921-1947. Use WinDjView.sf.net to read the excellent djvu versions.
Aug-07-2009: Beginning to use "Payer Owned" as a new codename for the CCC to disassociate it from the traditional definition of a "Consumers' Cooperative".
Aug-07-2009: The structure and goals of a "Consumers' Cooperative" (CC) as defined at Wikipedia.org/wiki/Consumers%27_cooperative are massively different from those of a Consumer Capital Cooperative (CCC). The internal workings and final outcome barely resemble each other.
==Structural differences
* A CC is a committee-administered entity which inflicts "Tyranny of the Majority" dragnet compliance through slush-fund fees.
* A CCC is not an administrative entity and has no defined committee, but is merely an observation that many independent co-owners using the CCCC may choose to work together for the benefits it brings. We define a CCC only for the purpose of easily talking about such groups of co-owners, but that cooperation is neither mandatory nor centrally managed. The CCCC may even need a clause to help keep otherwise independent groups from being coerced into participating in governance or being drawn into clustering policies which some personalities will likely want to inflict during later stages of development.
It is now clear to me how misleading it is to utilize the term 'cooperative' since that word is traditionally envisioned as an overarching entity of control instead of the loosely connected independent groups of co-owners which the CCCC would foster.
==Ownership of the outputs
* A CC entity owns the outputs of production and sells those goods back to each individual consumer/owner - causing price above cost even if consumer/owner had sufficient ownership to have been the owner of those goods already.
* When using the CCCC, the individual owners of each individual Physical Source is the owner of the ouputs of that production, so goods are not sold unless the owner decides he has an 'excess' and chooses to do so - but in that case profit must be treated as an investment from the payer.
* A CC may have arbitrary conditions of ownership applied homogenously to all Physical Sources across the entire cooperative such as "'Membership is open to everyone as long as they share the Group's values and principles.'" [ Wikipedia.org/wiki/The_Co-operative_Group ]
* The CCCC has only one condition of ownership: If the owners of an object under the CCCC choose to sell, give, rent, trade, share, propagate or convey that object - any price above cost must be retained by the payer as a receipt of investment in more productive sources. This investment is currently known as a Product Future.
== Treatment of profit
* A CC treats profit as a reward for the current owners: "'Every year members receive a share of the profits that they helped to create, based on the amount made in profits that year and the how much they had spent with any of its businesses.'" But profit only occurs when a consumer must buy the good, and that only occurs when he has insufficient ownership in the Physical Sources - for when his ownership is sufficient, he should not need to 'buy' apples, but would instead own them already as a result of his owning the Physical Sources and paying the costs of production.
* The CCCC is a Trade Agreement that requires price above cost be treated as an investment from the payer so that latecomers gain property in new Physical Sources at the rate they are willing and able to pay.
* A CC is supposedly 'democratic' in that each member has one vote over the operation of the *entire* cooperative no matter the amount they have invested. This has Tyranny of the Majority problems, gives newcomers too much weight compared to more established members and will probably lead to 'representative' governance.
* The CCCC creates extremely localized governance because it is applied solely by the co-owners of each indivisible Physical Source. The only mandatory laws are embodied within the CCCC and enforced by the private-property laws of the 'containing' city, state and nation. Owners using the CCCC might enforce extra restrictions upon the use, modification, copying and sharing of their physical property instances as long as those restrictions do not violate the CCCC.
Aug-06-2009: Thinking again about the 'CoBuy' idea and how it relates to co-ownership, the GNUrho and Product Futures.
Aug-03-2009: FlameDesktop.com >>