Related: diary
Feb-22-2010: Posted to P2PResearch@ListCultures.org
Eugen Leitl wrote:
> Patrick Anderson wrote:
>> Must the Material Means of Production required for P2P be necessarily
>> limited to *individual* ownership
>
> I would strongly suggest so.
Hmm... Maybe I should rephrase. What I really meant to ask is:
Must the Material Means of Production required for a more 'fair' economy be necessarily limited to *individual* ownership?
>> devise a way to hold physical resources together, but in a 'fair'
>> manner?
>
> Of course, it's a design problem. Difficult, but doable in principle.
Aside from any technical issues, what do you see as being wrong with how things are done now?
In other words, assuming centralization has *some* benefits, why does it not serve us in the way we expect?
As an example: What is wrong with Gmail? I understand they snoop on you, limit you, report you to 'authorities', etc., but why do *they* do those things to *us*, and why can *we* not get-together to co-own those datacenters for our collective 'self' so that we (as a group) finally have control?
It appears to me the problem is that even when attempting to make production so-called "community owned", we do not understand how to handle growth caused by Profit, and so ignorantly accumulate the control of those investments into the hands of the few that began the venture while leaving those who paid for the growth without any real control of their own.
Feb-22-2010: Posted to P2PResearch@ListCultures.org
Eugen Leitl wrote:
>
> I'm aware of nonprofit-deployed ISPs, which includes the last mile.
Unfortunately, so-called "nonprofit" corporations still charge Price above Cost, but then 'hide' that revenue in various ways, including padded wages or bonuses.
They also grow the organization, but retain all the ownership of that growth for themselves, leaving the users who paid without any property whatsoever.
> If you deploy
> GBit Ethernet mesh which is municipally owned and connect this by
> intercity fiber there's no centralized backbone. It's a bit like a
> federal railway only much less expensive.
I agree it *should* be less expensive, since the municipality will not be paying Profit to external owners, but on the other hand, local governments suffer from other problems (especially associated with how funding is collected through mandatory taxation) that make them unable to allow full user freedom, nor truly at-cost services.
>> Patrick Anderson wrote:
>> > What should a Community do with Profit?
>
> Why, invest it into infrastructure operation, maintenance and upgrade.
> Earthworks for one are remarkably expensive, especially a lot of them in
> cluttered environment.
Yes, but who should be the *owner* of that growth?
Most assume it should be the current owners or original organizers - as that is how Capitalism and even non-profits work - but what would happen if that growth (those investments) were instead the property of the people who actually *paid* for them?
That would create a very different dynamic where control was continuously 'distributed' and automatically balanced since the profit a user must pay decreases naturally as that user gains property in the "Physical Sources" of that good or service.
Feb-19-2010: Watching Vimeo.com/5699670 >>James Pike - Equity Partnership; exploring non debt-based financing for building development in the downturn.
He mentions Chris Cook's OpenCapital.net ideas and begins talking about Community Land Partnerships (CLP).
A CLP has four key members:
CUSTODIAN: Has Freehold ownership in perpetuity on behalf of the community.
MANAGER: Hired by the CUSTODIAN.
OCCUPIERS: Those using the outputs of that community.
Pays "at-cost" rental. Receives equity if paying more than cost.
INVESTORS: Expect return for risk
DEVELOPER/OPERATOR:
LOCAL AUTHORITY: Enforces restrictions and taxes.
Feb-16-2010: Posted to P2PResearch@ListCultures.org
Subject: Stabilizing Growth through Negative Feedback (was: User Freedom and the Purpose of Profit)
Richard Stallman wrote:
> I don't see what happens in this system when there is no
> reason for growth. Suppose there are 5 of these collectives which own
> all the means of production in a certain area, and people keep buying
> from them, and they keep taking in money, but it makes no sense for
> them to invest in increased capacity because demand is stable.
These consumers are paying a Price above Cost, so we know the current owners are collecting Profit.
The current owners are using THE CONTRACT which requires a consumer's overpayment be treated as HIS investment in more Physical Sources.
There is sufficient production in the area for all those paying consumers, but the Physical Sources are not owned by those consumers.
The current owners of those Physical Sources obviously have more production than they can use directly, for that is why they are selling the products. During such conditions, the most ideal route (and I think will be the most common for 'overpropertied' owners) would be some of the current owners choosing to sell some of their extra Physical Sources to those underpropertied customers.
But, (in what I think will be a rare case), if none of the current owners are willing to sell any of their Physical Sources even though they clearly have more than they can use for themselves, there will be no recourse but to buy or build even *more* Physical Sources for the new users - paid for by the users - until every user has sufficient ownership.
For it is not just that we need sufficient production, but the ownership in that production must be distributed to those who are willing to pay for it, else freedom is not complete.
When a user finally has sufficient ownership toward some Objective, he no longer buys that type of Object from someone else because he already owns it as a side-effect of his property in it's Physical Sources.
An owner of Physical Sources is also the owner of all potential Objectives of those Sources.
For example, when you own a car, you don't buy the Objective "get across town" from somebody else, you own it as a side-effect of paying for all the costs of buying, maintaining, storing and operating that Physical Source.
When you own an apple tree, you don't buy the Objects called "apples" from somebody else, you own them even before the blossoms have formed - as a side-effect of paying for all the costs of that Physical Source.
> What do they do with the money?
> Are they required to reduce prices
> so that they do not have a surplus?
Prices are set "by the market" in this system, but as users gain ownership in Physical Sources, they no longer pay anything more than Cost because they no longer buy those Objectives directly, but instead receive them as a result of their ownership in the Physical Sources required for that production.
Feb-12-2010: Posted to P2PResearch@ListCultures.org
Subject: Profit Measures the Payer's lack of Physical Source Ownership
Ryan Lanham wrote:
> The Marxian stuff of owning means of production is meaningless.
Are you saying ownership makes no impact on the Price a consumer pays?
What is cheaper:
A bunch of friends buy a large van to ride to work together.
A bunch of friends rent a large van to ride to work together.
If there is no difference between the Costs of Owning and the Price of Renting, then all rental agencies would be reporting zero Profits, right? I'm sure that is untrue.
When you own an apple tree, you get apples at exactly the Cost of production.
When you don't own the tree but want the fruit, you can buy them from another owner, but he will likely charge you a Price that is more than it really Cost to produce. That difference is Profit.
> It is the capacity to generate profits that is all important.
No, the capacity to generate *products* is all that is important.
Profit does not occur when a consumer owns the Means (or Physical Sources) of that product.
> Prices are set by demand and supply...not by production costs.
Prices are affected by Costs because the Owners must recover at least what it Cost to produce, or they won't even "break even".
The difference between Consumer Prices and Owner Costs is Profit.
Profit increases as Consumer dependence increases, and decrease as that dependence decreases.
Feb-12-2010: Posted to P2PResearch@ListCultures.org
Subject: Funding an Ecosystem Prototype (was: User Freedom and the Purpose of Profit)
Kevin Carson wrote:
> To me the problem with this whole system is that the owner of
> resources seems to get very little out of agreeing to license his
> enterprise under such rules
This is similar to the one of the reasons a computer programmer would choose to license the results of his labor under the GNU GPL.
In both cases, there are benefits from the resulting ecosystem of payers who add their own specialized labor - causing the project to grow outside of your power, becoming a living entity independent of individual desires to stop it.
> aside from a lot of extra administrative
> hoops to jump through.
Yes, the way I describe it seems nit-picking. I was trying to be exact in my explanation, but we could lighten-up on the precision to begin such ecosystems in prototype.
We could loosen in our implementations by investing only a small % of the Profit for the Payer while paying-out the rest to various participants, including the traditional VC investors and of course the Workers.
This could allow us to begin as a hybrid corporation similar to what Suresh and others are working toward.
> The owner's prices would be driven down
> to production cost through the automatic function of the market,
> without a lot of paperwork and administrative complications.
One thing I've noticed about even pure* Capitalism is that it always requires more than one Physical Source to bring Profit down. And even then there is Profit hidden in high wages and other requirements.
But even if the Prices were identical in both systems, there would still be the problem that I, as end user, do not have dominion over those Physical Sources - and so cannot do the work myself and do not have much of a say over things except to beg those owners.
(*) Where governments provide none of the special favors they currently do.
Feb-12-2010: Posted to P2PResearch@ListCultures.org
Subject: Profit Measures the Payer's lack of Physical Source Ownership
A potential Consumer will pay a Price above Cost when he does not have sufficient ownership in the Means of Production because he is *dependent* upon those current owners.
This imbalance can be incrementally corrected by treating that overpayment as the payer's investment in the growth of that organization so that Capital is no longer 'accumulated' into the hands of the few, but is transparently 'distributed' back to the very person who paid it as a deed of property ownership in more Physical Sources needed for that type of product. It is a subtly 'forced' investment.
This causes profit to approach zero (as price approaches cost) and control to be move to the hands of those willing to work instead of being centralized into the hands the payees who treat profit as a reward for themselves.
Treating profit as a reward for the current owners is the physical basis of Usury.
Treating profit as an investment from the payer is a negative-feedback against primitive accumulation allowing growth that is both sufficient (according to the amount the consumer is willing to overpay) and autoleveling (because profit==0 when an Object consumer has sufficient Source ownership).
Feb-12-2010: Reading Wikipedia.org/wiki/Correlated_equilibrium: "'The idea is that each player chooses her action according to her observation of the value of the same public signal.'"
Feb-09-2010: Title idea: Life Ensurance
Feb-08-2010: Posted to P2PResearch@ListCultures.org
Subject: Stabilization Growth through Negative Feedback (was: User Freedom and the Purpose of Profit)
Richard Stallman wrote:
> Does your idea depend on unending economic growth?
No, treating profit as payer investment will redistribute ownership more than it will increase overall production.
Since ownership in Physical Sources is currently very far from being in the hands of the Object Users, property will need to change hands a great deal at first as farms and factories are slowly bought by groups using the contract.
....
As a collective whole, we have had for decades enough agricultural technology, if applied, could supply all humans many times over.
But those who currently own the sources of our food, medicine, soap, cloth, etc. cannot allow that those sources to be utilized to their full potential, for that would cause prices to drop.
And they can't let prices drop because their investors expect profit as their return.
These organizations grow so large they are able to purchase legislation such as the US Farm Bill that once again pays farmers to NOT grow in areas that must be provably arable.
This occurs because Capitalists treat Profit in such a way that it becomes a "positive feedback loop" - promoting actions that increase Profit even further, and subjugating the user to keep those measures in place.
Our species is trivially able to support itself if only we could organize in such a way as to allow Price to reach Cost in a 'safe' manner so we are not forever trying to 'protect' trade by propping up Prices and Wages through artificial scarcity enforced by tarrifs and Unions etc.
The usual opposite to that is to claim trade must be made 'free' using instruments such as NAFTA, CAFTA, etc.
But that doesn't work either, because the goal of those corporations is wrong from the beginning. They dont' care about product; they care only about profit.
....
Within Capitalism, the owners of Physical Sources are usually under obligation to investors who expect them to treat Profit as the return for taking risk.
But what about the Product itself? We can pay investors with Product of that production if those investors are also *users* that will be satisfied with "at cost" goods and services under their full control.
So how can we pay investors if we intend to use Profit for another purpose? One way is to attract Consumers to pre-pay for a return of *Product* instead.
Everyone will have "high-level" control of their milk, eggs, bread, medicine, networking, transportation, etc. We will have those things "at cost". How much does it *really* cost to send a photo from a cell-phone?
....
The payer of profit gains ownership the Physical Sources needed for the production of each type of object he consumes. And as his property ownership approaches 'sufficient', his need to purchase objects approaches zero.
For example: when the payer of profit has enough ownership in Peach trees needed to supply himself with all the peaches he will use during that season, then he no longer buys Peaches from someone else, but is instead already owner of his % of Peaches that fell from his tree. He must pre-pay for the costs of dealing with that fruit, but does not pay profit, for who would he pay it to?
And since he no longer pays profit for that specific objective, he will no longer be 'growing' in that regard.
His investments have fallen to zero because his payment of profit fell to zero; and his payment of profit fell to zero because he gained sufficient property in those Physical Sources.
The payer slowly gains property in Physical Sources as the profit he paid is invested for him.
While Profit is treated as Payer investment, Payers gain Property in Physical Sources until they have enough of that type that no longer need to grow in that regard.
Growth will approach zero as Profit approaches zero,
Profit will approach zero as Property approaches 'sufficient' for each type of objective.
Property will approach 'sufficient' if Profit is treated as a Payer's investment.
Growth will auto-level and stabilize in a natural manner when the goal is the outputs of production instead of the difference between Price and Cost.
This occurs because we will treat Profit in such a way that it becomes a "negative feedback loop" - promoting actions that decrease Profit toward and even reaching zero, freeing the users by giving they full and final control that Worker Owned organizations would never do.
Feb-07-2010: Posted to P2PResearch@ListCultures.org
Subject: User Freedom and the Purpose of Profit
Richard Stallman wrote:
> But what happens when you get profit but further expansion
> is not desirable?
Let's look at the most simple case where 1 person owns some Physical Source and applies THE CONTRACT* to that property.
Imagine I own a more expensive roto-tiller.
I choose to apply the contract to that Physical Source and begin renting it to others for a price that is higher that my real costs of: investment, maintenance (oil, fuel, wear parts), storage, wages to any workers I had to pay, wages to myself for managing it all, etc.
Since I am collecting profit**, and since I am choosing to apply the contract, I must save those overpayments until I have enough to invest for all the people that overpaid to rent the tiller during that round of growth.
In most cases, current owners will not be 'selling' any of their current holdings, and so the overpaying users will usually be paying toward the purchase of *more* Physical Sources.
Let's say, after a year or so there is finally enough money in the 'payer-fund' to buy another tiller.
It is a little unclear to me what we should do right here.
On the one hand it makes some sense to let the current owners invest the money and then release the fractional-titles to that Physical Source to the group of payers.
The current owners are generally more informed about what would be the best investment in that field, but it seems unfair and very wrong to not involve the end-user when it is his freedom we are trying to protect...
This needs to be outlined more clearly and may need to be part of the contract.
So, even though I think the current owners would probably be making the investments, the more important point is that those original payers of profit become the real property title holders of that new Physical Source.
To answer your question more directly: I would not be 'expanding' my own holdings, but would instead be acting a sort of "growth conduit" for those who do not yet have sufficient ownership.
> The question is, how does selling me a share affect the value
> of everyone else's share?
Where you say "selling me a share" I will rewrite "my paying of profit". So your question becomes:
> how does my paying of profit affect the value of everyone else's share?
When you pay a price above cost, that overpayment is held with the overpayments of many other users.
After there are sufficient funds to move forward, those profits become your real ownership in more Physical Sources such as a new farm or another factory.
You are not taking any value from anyone else, you are funding your own growth through the collective purchase of the material means of production needed to meet your objectives.
> Suppose there are a million shares
> owned by various people, and the farm sells me one share.
It is probably confusing to think of this in terms of traditional 'shares' because what I'm talking about it a % of real ownership shared among *only that group of payers*.
There are no committees or board-members or any such bureaucracy unless that individual group decides they want to subject themselves to such a system of rule. Very large groups may find some need for variations of such self-imposed structure.
Groups of owners using the contract are *fully independent* of each other. Some owners will decide they want the oil changed in their tiller every 200 hrs, while another group may decide they will do it every 300 hrs.
> Does that mean that there are now 1,000,0001 shares owned,
> and everyone else's share has gone down a little in value?
> Or do they get a dividend?
If by 'dividend' you mean "will the current owners receive some of the profit as a reward?" then the answer is 'no'.
Profit is treated as an investment from the user who paid it because profit measures a payer's lack of property.
----
(*) THE CONTRACT is the (as yet incomplete) legally-binding "Terms of Operation" that property owners can choose to apply to their own Physical Sources.
(**) When there is just 1 owner, profit is easily 'hidden' when the owner pays himself excessive wages which takes from the pool that would have otherwise been labeled profit. This ability diminishes as ownership is multiplexed, since the other owners will then demand such jobs be put 'on the market' to lower their costs.
Feb-07-2010: Posted to a private email list
Joel,
I agree that Land and Capital (property ownership) is the most
foundational problem. Own or be Owned.
But this does not conflict with my message.
I talk mostly about how Profit should be treated. But notice what I
say should be done with it: It must be invested in real property
ownership (Land and Capital) for the user who paid it.
The reason this is the 'solution' to our need for property ownership
is that Profit is measuring the payer's *lack* or *need for* Property.
So you might say: Profit = 1/Property
As user ownership in Land and Capital increases, the less Profit he
will pay - as he becomes his own supplier [[Without necessarily being
the worker that operates those Means of Production]].
Joel Pierre wrote:
>
> The Overriding law of all economics is:
> Land + Labor + Capital = Wealth - (rent + wage + interest)
This is what occurs during 'production'. But production is only one
phase of economics.
This equation does not mention 'Price' which occurs during the phase
called 'Trade'.
Profit is the difference between the Price an end-consumer pays and
the Costs an owner already paid. When the consumer and owner are the
same, then the price of the product is exactly the costs you paid to
get the produced.
It is when we workers, (as consumers) pay a price above cost that we
are losing our value.
We have been fooled into believing the workers must own the Means of
Production so we can guarantee high Wages.
But what we really need is to own the Land and Capital needed for the
things we Consume so we can guarantee low Prices.
> Is profit the wealth explained in above equation?
Wealth here appears to be representing 'product', not 'profit'.
Profit doesn't exist unless the Apples are sold. At the
point-of-sale, if the payer gives more than it really cost the owner
to produce that object, then profit has been paid.
For example, if you own a plot of ground (Land), and Apple tree and
tools (Capital) and are willing to work or to pay someone else
(Labor), then the Wealth received is the product == Apples.
> If so, who has a claim to what portion? If the problem is indeed profit, could it not be caused by an imbalance on the other side of the equation?
Yes, that is true. Profit can be thought of as the payer's lack of
ownership in the Means of Production.
Profit only occurs when the payer has insufficient ownership in the
Land and Capital needed to produce that thing. Otherwise he can hire
another to do the Labor (a cost) or even do that work himself. He
will have to pay all the other Costs of production, but will not pay
profit - for who would he pay it to?
> If you subscribe to the school of thought where life is about your individual experience, it follows that you were placed here by a higher power and that there is order in the universe. When this order is interrupted, the universe seeks to restore balance and the effects of this are felt by all involved parties.
> The fundamental law that Land + Labor = Wealth
Yes, but again, that is Product, not Profit.
> The symptoms, such as profit, will not disappear until we solve the problem being caused by breaking the laws of the universe.
I was hoping to use a better treatment of Profit to solve our lack of
Property by taking advantage of their inverse relationship to each
other.
Feb-02-2010: Posted to a private email list
Since corporations are the only ones getting anything done, (where does your cereal come from?), and since every corporation would go out of business unless profit were being collected, then what are we to do otherwise?
The corporations have so much power because WE paid them!
If we don't like the power they have, then shouldn't we stop paying?
But if we do that, then where will all the things we need come from?
It is tempting to pretend "God-dammit, I'll just pull up my britches and do it myself!". But that is only a dream when your britches are from China.
Most individuals can't produce all of even their basic needs in solitary confinement. We must learn how to organize in a corrected manner to allow specialized production while treating the value called 'profit' in a way that avoids handing control to those that currently organize.
Why are the Chinese so productive?
Why is the US no longer productive?
Many people will say "Well, it's just not profitable to pay workers so much in the US when the same labor is 1/10 the price in China/India."
These things must be said without much thought, since the same person is likely also an opponent of Corporate power which has been brought about by their collecting profit from us, the paying consumers.
So if profit is the problem, shouldn't we at least try to determine where, when and why we agree to pay that value?
And if we can determine the true origin of profit, then maybe we can decide how that value should be treated to avoid the overaccumulation that finally makes bullies out of those that were nice enough organize in the first place.