====THIS FILE IS ARCHIVAL. See 'Diary' for newest entries
Oct-31-2007: Subject: Charge full price, arrive "at cost" indirectly.
"N B" writes:
> Thanks for the response. It prompted more questions, but they're related
> to the other email, so I'll simply wait until you respond to that one.
> Maybe I'll figure some of this out from your next response.
Ownut writes:
Are you saying it didn't help even a little? Gah!
A summary of my response to your other mail is:
We (any business owner applying the trade agreement I so often allude to) don't want to hold Consumer_Price at Owner_Cost directly, as price above cost measures the amount the Consumer is willing to invest.
Instead of selling the apples "at cost", we will sell them at "whatever the market will bear" and use the amount usually designated as profit to invest for that consumer in sources to guarantee future production incrementally comes under his control through real ownership. There is also the matter of delayed 'handoff' that we might call 'vesting'.
Again, it is important that we charge as high a price as possible to essentially 'force' the citizen/consumer to invest for their own good.
Also, the current owners never lose ownership of anything they want to retain. If they don't want help paying off their current investments, the new consumer investments go toward purchasing more land, trees, water rights, etc., hopefully even nearer to the consumer that paid.
A consumer can receive "at cost" objects only *after* they are source owners in direct proportion to the amount they consume, and only then because profit becomes 'undefined' except as their own further investment.
Oct-29-2007: Listening to some Asylum Street Spankers:
YouTube.com/watch?v=KmsOIjzQ1V8 "Stick Magnetic Ribbons On Your SUV"
YouTube.com/watch?v=uhJx1gpl0kM "Hick Hop"
YouTube.com/watch?v=wVkk6fH2u0Y "Winning the War on Drugs" Reviewed as "'Arrogant foul-mouthed tattooed and body-pierced long-haired commie hippie pinko fag psychedelic left-wing, pot-smoking, God-hating, America-hating weirdo freaks.'"
Oct-27-2007: Subject: For-Product Business (was RE: Has everyone given up?)
Ownut writes:
>> Why does anyone ever pay more than cost? It is because that consumer is
>> not yet "set up" in regards to owning the Sources of the Object they
>> just purchased.
"N B" writes:
> Yeah, actually. If I had an aerator, I wouldn't need too rent one. If I
> had an apple tree that produced fruit I wouldn't have to buy apples during
> the season. It's just not really practical to own all of the resources
> necessary for a modern life, so we pay other owners to use (indirectly)
> their resources when we don't own those resources ourselves.
Maybe you meant to say "not really practical to INDIVIDUALLY own". Obviously it can be practical for SOMEONE to own (re)sources; you even reference them when you say "we pay other owners". I imagine you are referring to regular business owners in that case.
It is practical for a group of investors to COLLECTIVELY own expensive physical sources, and it can even be practical for a small business owner to INDIVIDUALLY own expensive physical sources as long as those (re)sources are kept 'busy' across many consumers so the continuous costs of ownership are 'shared' among those consumers.
This is a matter of utilization similar to the scheduling and allocation routines for an OS kernel.
The owner of a rental agency or an aerating service can INDIVIDUALLY purchase the expensive physical sources: not only the aerator, but also a building for storage and maintenance, the land for that building, a truck and trailer to transport the device, tools, fuel, repair parts, etc. as long as there are enough consumers to cover the initial and recurring costs of that ownership.
The sole owner of a very small business might be the only worker. He may be the operator, mechanic, cashier, advertiser, scheduler all at once. He will pay himself a wage arbitrarily separated from profit - probably according to how it effects his taxes.
But when the ownership is COLLECTIVE, the separation of wage from profit is not so arbitrary. If a part-owner tries to claim too high wage for some work he does, the other part-owners might vote to hire that position to someone who will do it for less.
As the business grows, the owners will hire other non-owning workers and pay them wages calculated as another cost.
What I have written so far applies to either a traditional "Capitalistic" for-profit corporation or to a "Source Freedom" for-product corporation. The difference comes in WHO comprises the set called 'owners'. The question is "What is the optimal composition of the source owners?", or maybe "WHAT ACTIONS should cause, or to WHOM should ownership 'flow'?".
Once we determine who *should* be the owners, we only need write a contract and apply it to some of our own physical sources to implement the theory on a small scale. If we are correct, then it will outperform and overgrow standard Capitalism because it will simply be more efficient. This is also how the GNU General Public License works: investors (programmers investing time and effort in the case of software) retain just enough ownership (copyright) to enforce the requirement that object consumers (object-code users) gain ownership of the sources (a copy of the source-code) whenever they receive an object - whether that object was a gift, or if they paid for it.
===There are at least 3 choices:
1. It DOESN'T MATTER who owns. This is how most modern corporations are constructed. Investors commonly have nothing to do this the product, and in many cases (such as with mutual funds), small-time investors may not even know the names of the corporations or what they produce.
2. The WORKERS own. This is common for very small businesses, and is also the solution Karl Marx and many others dream as being optimal to avoid "worker exploitation".
3. The CONSUMERS own. This is the pattern that Richard Stallman talks about with regard to virtual sources (non-rivalrous information such as source-code or genetics or mechanical design) and is held in place by the GNU General Public License. This is of course also the goal of the GNU General Public Law meant to be applied to physical sources that have or will have more than one owner.
===Consumer Ownership Example:
What if you could somehow organize with 100 or so neighbors to jointly purchase an aerator? Obviously you would each still need to pay your portion of the costs that a normal aerator business owner would pay (investment, fuel/oil, storage, upkeep, insurance, etc.) and would also pay wages (maybe even hiring one of the owners) for work such as maintenance, security guard, and also to an operator if you don't want to or can't run the machine yourself. A portion for some of those costs (such as some types of wear) will be paid as rent and will vary according to (be weighted against) the amount you use the machine, while others (such as storage) will be paid as a periodic tax and will vary according to your percentage of ownership.
Another type of cost we might call 'exclusion' is strangely similar to profit in that it is based on high simultaneous demand. This cost is special because it increases according to the apparent need to invest in more of that type of physical source. This occurs when new consumers overload the current availability or when too many consumers want to use the machine at one time instead of being satisfied to wait until a later time. Impatient consumers 'prove' they are willing to pay for another aerator instead of using what is already available at another time (earlier or later in the day or earlier or later in the year) when they drive up the price by 'bidding' against other potential consumers for a time slot. The winning consumer pays a price higher than the total of all other costs (very similar to what is usually called profit). That 'extra' payment will be that consumer's investment toward purchasing yet another aerator since it indicates a desire for growth because peak demand is not yet being fulfilled.
When the collective object(ive) consumers are also the physical source owners, paying price above cost (profit) becomes meaningless except as further investment.
I also posted about sharing aerators a couple months ago at Blog.P2PFoundation.net/the-call-for-open-social-networks-is-getting-louder-and-louder/2007/09/07
Here is a relevant excerpt:
When users (consumers) pay a PRICE for some good or service, they are paying for the COSTS of production that the capital Owners incurred for that round of production, and those users usually also pay an amount above COSTS which is (in a simplified manner) generally calculated as PROFIT.
PROFIT is therefore the difference between Consumer_Price and Owner_Costs, and is a rough measure of incomplete monopoly. In other words, profit is an inverse measure of competition, and is ‘balanced’ or even eliminated when it becomes an investment for the User that just paid it.
I will quote myself to fix a typo and to begin an example as Michel suggested to try to prove that it is the Consumers and NOT the Workers that must be the Owners of physical sources for us to approach a perfected economy:
"Owning expensive capital with a group of other users is valuable even when none of you can operate it because you can always hire that work done - and would treat those wages as a cost of operation, but could never pay profit unless you were to pay it to yourselves."
Let’s say a worker comes to your door asking to aerate your lawn. Aerators are generally too expensive to own for just one lawn, but you need the job done, so you agree to pay the PRICE of $30.
The PRICE includes the COSTS of:
Investment: If the Owner has not yet recovered the price he paid for the machine.
Maintenance: Wear, Oil, Fuel
Wages: Whatever the worker and owner negotiate.
The PRICE also includes PROFIT for the Owner that instantly increases the moment the capital has been “paid off”.
Now, if you and a bunch of your neighbors got together to buy your OWN aerator, you would still have all the same COSTS as mentioned above which could be covered by each of you renting the machine from the collective others, but PROFIT would have no meaning, as PRICE and COSTS would be identical. Furthermore, when the machine was finally “paid off”, the rental PRICE would fall even further, as that COST would be eliminated.
>> Will we always step on the undeveloped instead of heeding their cry for
>> growth? Can you not see that profit *REQUIRES* poverty, and the
>> mishandling of it (treating it as a prize for the owners) only
>> perpetuates that state?
>
> I can see that profit is a form of loss for the consumer, but I don't
> understand why you say this "requires" poverty. Can you explain this?
Poverty is a continum that most everyone participates in. Extreme poverty means you cannot meet even your most basic needs. While some humans are incapable of fending for themselves, or have given up because of past attempts and failures in a system designed to keep them oppressed, I am not addressing those case at this time. The poverty I am referring to is the low "standard of living" or poor "quality of life" had by so many of the very hardest workers.
Poverty is held in place 'naturally' when objects are truly scarce (there aren't enough coconuts to feed everyone on the island, even if we share nicely).
But for-profit owners also hold poverty in place 'artificially' in two ways: initially by keeping objects too expensive (owners hold price above cost without treating that profit as consumer investment in more sources) and finally by holding sources artificially scarce in that owners pay wages lower than what consumers would pay those same workers or the consumers would rather do the work themselves but are not allowed source access.
So profit requires poverty through high prices and low wages:
1. Profit depends upon keeping price above cost. As a consumer pays profit that is treated as physical source investment, he approaches "at cost" access to the output or objects of those sources: food/drugs, housing, cloth, soap, etc. The potential to profit against a consumer is lost as that consumer crawls out of poverty when gaining source ownership because an object consumer who owns the sources of those objects will only pay cost, and since profit is defined as "price above cost", profit relies upon poverty at the point-of-sale BY DEFINITION.
2. Profit also somewhat depends upon keeping wages lower than the worker deserves by making the separation from profit different from what the consumer would make (the consumer pays both profit and wage either way, the difference is in the separation). The more physical sources a consumer collectively owns, the less they need to worry about working for another because they can just work for themselves for product, and hence can demand higher wages when working for others (all workers are also consumers).
>> I wonder why there is such a universal notion of US vs. THEM that causes
>> us to divide the members of our species and assume we must work against
>> those that are not yet part of a commun[ity], thereby halting our growth
>> before it has even begun.
>
> Maybe because it's human nature to be greedy and selfish.
That reminds me of the "greedy" search algorithm we learned about in CS and how it is sometime sub-optimal. This is also related to the Nash Equilibrium or the Prisoner’s Dilemma - where an individual may choose a payoff that is not the best for the group, but is better than the worst for himself; maybe out of fear or because there wasn’t a prior arrangement that could have ensured the other party would also be bound to choose the best alternative.
>> The last few weeks I've been concentrating on the psychology of
>> economics
>> and why people tend to universally block the concept of fundamental
>> change.
>
> We humans are creatures of conditioning and habit. Fundamental change is
> very hard for us.
>
>> Could you please tell me why you will not at least *CONSIDER* what would
>> happen if we (the owners) were to treat profit in the manner I suggest
>> (as an investment for the consumer that just paid it)?
>
> Actually I have considered your ideas. Some of the ideas you're throwing
> around make a lot of sense. Others confuse me.
>
>> Is it because you have given up? Has everyone decided raw Capitalism
>> will always win no matter what we do, so any effort to the contrary is
>> wasted energy?
>
> No, I'm just lazy. I need serious motivation to make a real change from
> capitalism. That's why I suggested a while back, when we met in the
> parking lot of Maceys grocery store, that you try to figure out a way to
> apply the principles you're working on such that they could cause an
> immediate and enormous financial benefit. I thought it would be helpful
> to focus those principles, somehow, on mortgages, and insurance.
Addressing mortgages is especially difficult (but not impossible), as it will require us to purchase some land outside of a city and make a completely new city with the local tax (rent) system weighted against exclusion and other real costs instead weighting against improvements.
Addressing insurance is an integral part of the GNU General Public Law and can be understood as physical source ownership being a hedge against future calamity. For instance, you can insure your car by having ownership in a repair shop and in supporting the education and wages of mechanics for that shop. Health insurance is had by owning controlling shares in a hospital and in supporting the education and wages for doctors and nurses and also by investing in pharmaceutical research (done whenever you pay more than cost for drugs) and procedural research (done whenever you pay more than cost for procedures), etc.
Sorry for the length of this. I tried to keep it short, but I'm so often misunderstood I decided to some redundance might help.
Call me anytime at 801-602-4651 if you have long or short thoughts or questions.
Thanks for taking time from your busy schedule to work on this. I am preparing a reply to your other mail, and should be done within the next few days.
Oct-27-2007: Subject: Applying Source Freedom...
"N B" writes:
> Hey dude, can you describe some concrete simple examples of ways to apply
> your ideas?
>
> And please state these examples with the understanding that:
>
> 1) They have to work within the framework of current laws.
> 2) They can't have difficult exceptions (this is the one I struggle with)
> that would make them unworkable
>
> Let's take food for instance. How would you apply source freedom
> principles to food production and acquisition?
>
> Let's say I want to acquire an apple in an imaginary Source Freedom
> Society which resides within a country like the US.
Ownut writes:
Applying Source Freedom through the GNU General Public Law to an object and the physical sources of that object is not imaginary, it is realistic and legal in the same way that applying the GNU General Public License to "object code" and the virtual sources ("source code") is accomplished: it only occurs when private owners choose to apply it to their own property.
The GNU GPLicense is only applicable to non-rivalrous, copyrightable information or in other words 'virtual' objects such as software, DNA (genetics), mechanical design, music, video, etc.
But GNU GPLaw is applied to pure information such as software, genetics or mechanical design AND to the rivalrous physical objects such as the DVD, apple or an aerator that are required to 'host' that information.
The GNU GPLicense requires the virtual sources (source code) be made available "at cost" to any user that receives a copy of a virtual object (executable) whether the user pays a fee for the object or not.
The GNU GPLaw governs the virtual sources of any object with the GNU GPLicense, and ALSO requires the user (consumer) gain ownership in the physical sources by treating any price above cost as an investment from the user that paid it.
So let's say I start a Source Freedom business/community center in which I voluntarily place all the objects and their physical sources under the GNU General Public Law.
Here are some of the transactions that might occur there:
1. Sell consumable physical objects such as: apples, almonds, honey...
2. Rent durable physical objects such as: aerator, floor space, grill/oven, mini theater, popcorn machine, car/truck...
3. Hire skilled workers such as cooks, cashiers, shelf stockers, orchard tending...
4. Enable skilled workers to offer their services directly to other customers.
None of this is charity. Everything would be either sold or rented at the highest price the consumer is willing to pay. A consumer paying more than cost is simply communicating that they need ownership in the physical sources of that object[ive].
> Follow my train of
> thought here and you'll see why this is all so confusing to me. I
> understand that it would be a good thing for a consumer to only pay the
> price of production for the goods and services that they consume.
I use the term "Owner Cost" or sometimes just "cost" to represent what you call here the "price of production".
I do not suggest we (anyone selling a GPL object or service) should artificially hold the "Consumer Price" down at the "Owner Cost". In fact it is important that we DON'T do this, and that we charge what the "market will bear" since the difference between price and cost (what is usually called 'profit') is a good measure of how much the consumer is in need of investment, so should be gathered from them for the purpose of growth.
> I also
> understand that it would be nice if (somehow) any excess the consumer pays
> beyond cost went into increased ownership in the means of production (or
> did I get that wrong?).
Yes, that is right. There is no need to say (somehow), as it can be done by any owner that is willing to do so. There are such things as Not-For-Profit corporations right? They don't *require* profit to exist, in fact the excess money is sometimes a bit of a problem for them.
What I am talking about is similar except we simply stipulate at the time the corporation forms that the destination of those funds will be an investment for the consumer that paid them.
There are some details about the "increased ownership" that can be confusing: Current owners are never in danger of losing control that they do not offer up for investment. If an owner wants to keep full control of an orchard, then the profit (consumer investment) would target NEW land, trees, tools, etc. - hopefully in a location even closer to the consumer's home.
> Now, I don't have an apple tree (or, do I? are
> all assets partially owned by everyone?),
Again, this is not an imaginary situation. I understand (just as Richard Stallman understood) that current laws cannot be changed from the top down because we simply don't have the funds to purchase those changes (to be as cynical as we must in order to fully understand the kettle we are in).
The GNU GPL utilizes the current legal system (copyright in the case of virtual sources, and private property law in the case of physical sources) to help private owners to ADD the constraints needed to keep the Nash Equilibrium in place.
> so I go and buy my apple from a
> Joe (a source freedom participant). It seems to me that it's going to be
> enormously difficult for Joe to tell me the at-cost price right there at
> that moment. He may, at the end of the season, be able to determine the
> total costs of operating his orchard and divide it all up to figure out
> what he should have charged me, and what profits, if any, he made by
> overcharging me, or losses he made by undercharging me, but I think it'd
> be rather difficult for Joe to tell me the at-cost price immediately.
Again, Joe would charge you as much as possible which would likely be above operation costs since you are not yet an owner, so have few alternatives.
But to address the other part of this question, I think Joe *could* determine the operation costs at any moment by examining the costs over the previous 364 days plus today instead of arbitrarily breaking the year at January 1st.
> Now, also, imagine Joe has only one tree and there are many people asking
> for apples from Joe. How does this scarcity (the resources of Earth are
> not infinite) affect the at-cost price? You see, I'm already stuck.
Joe will charge a price *above* cost whenever he can. Real scarcity is the natural reason consumers should be investing. The "price above cost" (what is usually called profit) that those consumers pay will become their investments in yet more land and trees and water rights so competition is perfected (though never quite perfect because of the dynamic nature of consumers). This causes growth to wax and wane according to consumer demand as it should and distributes control among those that deserve it.
> I can't even begin to purchase this apple because Joe can't charge me as
> he doesn't know the price.
Joe will set "Consumer Price" at whatever the "market will bear", or in other words, Joe will simply be competing with other growers.
> Now, let's also say that Joe is less skilled than
> his friend Frank, who also grows apples. Frank's cost is less than Joe's
> because Frank knows what he's doing. Should Joe and Frank both sell their
> apples at their own cost?
They will each sell at whatever the "market will bear", which will be "price above cost" for as long as object consumers are not yet source owners in direct proportion to the amount they consume.
> If so, maybe Joe's apples will go bad because
> he's forced to not lower his price in order to compete with Frank, and so
> everyone goes to buy apples from Frank. What's more, Frank knew how to
> thin his trees and his apples are of much higher quality than Joe's, and
> still took less resources to produce than Joe's. Must Joe still sell
> at-cost?
Frank's higher quality may allow a higher "Consumer Price", and his lower costs will also mean there is more profit (remember, wages are a cost), so his orchard will cause more growth than Joe's. That is a GOOD thing, since we want skilled workers to succeed in their field and unskilled to fail so they move to profession where they fit.
> Probably, or else he will lose money. Must Frank sell at-cost
> if doing so will harm Joe (as no one will buy Joe's apples in preference
> to Frank's)?
The better worker should 'win' for the benefit of the community as a whole.
> And I still haven't purchased the apple. Now, let's say
> somehow that these (and I'm sure there are other) issues are all magically
> resolved and somehow I purchase an apple from Joe at cost. Great!
Again, you will most likely purchase at a price above cost.
> However, let's say that at the end of the season Joe discovers that I
> overpaid him (I won't even bother going off on the thread where I
> underpaid him), how does Joe factor this miniscule overpayment into future
> purchases that I make from him? Exactly what type of computation is
> performed by Joe during the next season when I purchase an apple from him?
That overpayment is your investment in more physical sources such as land, trees, water rights and tools - or toward paying off some of Joe's investments if he is offering them up for sale. The decision is initially up to Joe, but there needs to be some kind of delayed 'vesting' or "hand off" that I still don't know the details. Hopefully you can help with this 'bug'.
> Am I now a part owner in Joe's orchard?
Joe may have been applying your investments to an new orchard far from the one that produced your apples, or may have applied it toward paying off some of his previous investments.
If Joe applied those funds into paying off some of his own trees, then there comes the complication of access:
1. Either he must be also incrementally selling you the land under those trees and guaranteeing "at cost" access to them,
2. Or he must be guaranteeing "at cost" or "pass through" costs for your rental of those parcels for a time reasonably coincident to the life of that tree.
3. There are other probably other issues/bugs that need to be exposed.
> If so, how do I protect my
> "investment" if Joe decides to burn down his rotten trees because they
> just don't measure up to Frank's?
Joe has no legal authority over YOUR property. Before the "hand off" period that I mentioned - before your shares have 'vested' he may re-allocate those investments to some other land or toward a different tractor or toward other trees, etc. but you are becoming a real owner of physical sources SOMEWHERE.
The investments you make when paying price above costs become your real property that you have vote-weight in direct proportion to the % you own in "realistically divisible" granularity. I need to write more about this.
This will be more loose than it sounds because the community currency that is issued against those physical sources (that I call GNUrho) become a sort of retargetable "Deed of Ownership" and "Insurance Title" that I will write about at another time if you are interested.
> How is loss distributed? I'm at the
> point where I have so many questions about this simple transaction that I
> think I must stop at this point and back up and be pointed in the right
> direction or have the questions answered.
>
> While capitalism does involve profit, with consumers paying more than the
> cost of production, competition generally keeps the profits within reason.
> It seems to me that monopolies are the real danger to a capitalistic
> system, as they eliminate competition, and therefore remove the safeguards
> against price gouging. Capitalism is very easy to understand and apply.
> If you can somehow apply source freedom ideas to simple transactions in a
> way that is easy to understand and apply, without all of the difficult
> exceptions and gotchas, then I think you'll have hit the mark.
Oct-26-2007: HinduOnNet.com/fline/stories/20071019507610000.htm
"The spectre of free information" V. SASI KUMAR Interview with Eben Moglen, Professor of Law and Legal History, Columbia University Law School. >>The problem of the goods that have non-zero cost remains just as it was before. It is hard to make shoes and tables and chairs and automobiles and buildings in anything other than the capitalist economy because the marginal cost is non-zero and something has to be done to get the money for every unit.
Oct-25-2007: Reading FSFE.org/en/fellows/ciaran/ciaran_s_free_software_notes/transcript_richard_stallman_honorary_degree_speech_pavia_2007 >>The freedom to cooperate and the freedom to control our own lives personally. They go together because both of them are the opposite of being under the power of the dictatorial software developer that unilaterally make decisions that nobody else can change.
Listening to http://cisx1.uma.maine.edu/~wbackman/bsdtalk/bsdtalk132.ogg
Oct-25-2007: Thinking about the general problem of addressing complaints and requests, and wondering if we could understand political economy as just another buggy project in need of repair and refined features.
Oct-23-2007: Wondering how to present the Mode of Production or our Relations of Production through pictograms across time, or maybe as a Finite State Machine to make clear the results of 'running' a society with any certain economic kernel.
For instance, important nouns might include:
H = Human
S = Source (Means of Production such as a tree)
O = Object (product, output or objective such as an apple)
I = Investment as price above cost during Trade (was profit)
While some verbs are:
U = Use (rent or consume)
M = Modify (change)
C = Copy (produce)
T = Trade (share)
W = work (for a wage)
Oct-20-2007: MySpace.com/loanfunder writes:
> Bastards were spraying heavily last night & today in LA. Anyone else notice? I'm so sluggish and sick! Look up. It's for real.
My response is now the weather page.
Oct-20-2007: Trying to begin a thesis.
Oct-19-2007: Looking at the "Open Service" investigations such as at TieGuy.org/blog/2007/07/22/evaluating-a-freeopen-service-definition-rough-draft and OpenDefinition.org as to how it corresponds to FreedomDefined.org and to my own ideas about "Hosting Freedom" and "Source Freedom" as SourceFreedom.BlogSpot.com and SourceFreedom.GooglePages.com
Oct-16-2007: YouTube.com/watch?v=8zEQhhaJsU4 Ballmer stressing "'developers, developers, developers, developers'" makes me want to create a video collage of Stallman dance moves (such as YouTube.com/watch?v=Pube5Aynsls) while he repeats his mantra of User Freedom.
Oct-16-2007: Created user 'AGNUcius' at EmpowerThyself.com/user/135
About: I am a reality hacker dedicated to debugging the economic system that determines our human social condition.
Interests:
Physical salvation through lifeform care and replication. (permaculture)
Ad-hoc design and construction of need-based solutions. (instaneering)
Fundamental reconsideration of all that is considered obvious. (blaspheme)
Question, disrupt and overturn sacred traditions that conflict with truth.
Seek maximum divisibility (freedom to secede) and votes based on pure analysis without bias for popularity.
Oct-15-2007: Thinking more about Blog.P2PFoundation.net/video-lessig-on-corruption/2007/10/10
Most agree that sugar and drugs (two of Lessig's examples) are useful when used with care. Of course we need products, but some groups (corporations) want to trick the rest of us into consuming more than we really need. This is bad for our health, our environment and our personal finances.
This artifical pressure to consume is not part of all groups. When people are truly cooperating they want just the opposite; they want each to consume as little as possible so there is enough for the others and so there is generally less work to be done. But when we are not cooperating, this goal is INVERTED by the 'producers' who are seeking a prize beyond the immediate results of production.
Uncooperative producers also seek to increase scarcity and dependence. How could we have gotten these fundamental goals backward? Where or how do we go astray from our original goals of abundance and freedom?
Part of the difficulty in understanding the problem is the number of variables and overwhelming complexity of a large modern society. But economic truths are continuous. We should be able to begin with the minimal case of a small set of isolated humans trying to cooperate for their own sake and slowly scale it up until we see where it 'breaks'.
So let's say a small group of people is interested in starting an independent community (whether a commune or maybe some stranded islanders or even some planet pioneers) intending to produce their own food, housing, clothing, sugar, drugs, etc.. It is almost certain that most of those individuals will want to trade some of their skills with some of the others because of the increased efficiency that specialization brings.
Such a small group may have little or no difference between the rules of governance for their 'State' and the management decisions for the 'Corporate' activity because they are all "on the same side". This could be thought of as a type of Corporatism (the mixture of corporation and state) that is natural and good. That is right, government and business are naturally and safely COMBINED under certain conditions that usually appear when the group is very small and isolated because the goals are the same.
Capitalism tends to assume consumer goals as asserted by and producer goals must be SEPARATE and at odds with one another.
State-run Communism tries to rectify this by keeping business and government COMBINED but under centralized control.
Another (for now unnamed) approach keeps business and government COMBINED by assuming all collective ownership will act as a public utility for that good or service by insuring each consumer gains
Oct-15-2007: Posted to Blog.P2PFoundation.net/video-lessig-on-corruption/2007/10/10
But none of that explains WHY groups do this, only that they do.
Oh, forget it, I'll just tell you what is too blasphemous for anyone else to say:
The only reason the goals of these groups are inverted from abundance and freedom toward scarcity and oppression is because PROFIT is being misunderstood as a prize to be won against those that are not already developed, instead of being treated as an investment (in more productive sources) from the consumer that just paid it.
When profit (the difference between Object_Consumer_Price and Source_Owner_Costs) is thought to be value added by owners, the owners that receive it are incented to work against the consumer in a variety of ways, including the overproduction of sugar for the sake of profit itself, while the original goal of PRODUCT is forgotten.
When the consumer of an object (say an apple) is also the source owner (of the land, tree and water rights), there is no reason to worry if your neighbor is growing apples, and you don't try to overconsume, as your goal is product, not profit.
But when an owner begins selling objects to non-owning consumers, the amount they charge above costs (wages being one of those costs) is an indication of that consumer's DEPENDENCE (remember Lessig's use of this word) on that owner. That difference (usually called profit) should be considered an INVESTMENT from that consumer. By doing this, competition is maximized (every consumer becomes a partial owner) and profit is indirectly eliminated (you can't meaningfully charge more than cost to yourself unless you are investing in more trees).
Treating owner profit as consumer investment also distributes control at each transaction so governance becomes decentralized and non-representational. Once this is in place, business and government can be recombined, as their goals will be identical!
That's right, it creates a valid and useful form of Corporatism (the mixture of corporation and state) because there is no longer a conflict of interests when profit is understood to be a consumer's plea for growth, and is treated as such.
Oct-15-2007: S Rhodes responds at Blog.P2PFoundation.net/video-lessig-on-corruption/2007/10/10
I thought you might mean that. The conundrum has already been cracked by many. While I like discussion as much as the next guy, there is a wealth of information out there. I think Part 1 of Capitalism 3.0 by Peter Barnes is a good brief primer on the problem: http://capitalism3.com/files/Capitalism_3.0_Peter_Barnes.pdf
Further investigation will take you to economists such as Joe Stiglitz and the role of information asymmetry.
In short, there is a systemic problem, to quote the quote of a quote:
In the article "Summary: What P2P Means for the World of Tomorrow" [2007] Michel Bauwens delineates the current counterproductive logic of social organisation:
a) it is based on a false concept of abundance in the limited material world; it has created a system based on infinite growth, within the confines of finite resources
b) it is based on a false concept of scarcity in the infinite immaterial world; instead of allowing continuous experimental social innovation, it purposely erects legal and technical barriers to disallow free cooperation through copyright, patents, etcetera
I hope these materials help you dig deeper. You may find it helpful to turn your question on its head: how could a system built on these false concepts act toward the best interests of a cooperative community?
Oct-15-2007: Posted to Blog.P2PFoundation.net/video-lessig-on-corruption/2007/10/10
By "inverted drive" I was asking why the goals of so many corporations are in disagreement with the rest of humanity; I wasn't calling Lessig's efforts inverted.
Lessig's goals are fine at the level they question, but I would like to go deeper.
Instead of accepting a-priori that ALL corporations (groups of people) must ALWAYS act against society, I'm asking WHY corporate goals tend to be inverted from those of a cooperative community, especially as that corporation grows.
This may seem too stupid a question, but the FULL answer continues to elude my ability to put it in words.
Whoever is reading this, please write a little - even if just a few words that come to your mind - almost as a Rorschach Test so we can collaboratively crack this conundrum.
Oct-15-2007: Michel Bauwens responds at Blog.P2PFoundation.net/video-lessig-on-corruption/2007/10/10
Patrick,
Unless you assume that the state and public authorities will disappear tommorow, struggling to make them more accountable to civil society, rather than to the corporations, continues to make sense. This does not preclude a continued effort for a more autonomous civil society and peer governance, but transgressive behaviour alone is not enough, if it is not combined by a judicious combination of constructive new-world creation and engagement for changing the existing institutional base.
So Lessig's efforts make a lot of sense in that context.
Michel
Oct-15-2007: Posted to Blog.P2PFoundation.net/video-lessig-on-corruption/2007/10/10
Why do corporations act against society?
Asking government representatives to stop this pressure at the gate seems a tall order.
Can anyone tell me what generates this inverted drive?
Oct-15-2007: Posted to Lessig.org/blog/2007/10/corruption_lecture_alpha_versi_1.html
We seem to accept that all corporations will act against society, and then want our 'leaders' to stop them "at the gate".
I would like to take a step back and ask:
Why do corporations, especially as they succeed, tend to take courses that do not serve the consumer (citizen)?
Is it impossible to construct an organization (whether corporate or governmental) that continues to serve only the consumers (citizens), even as it grows?
Why do small groups (say on a deserted island) not attack each other in such blatant ways? What changes as the number of humans increases?
If some humans collectively purchased some land and capital (Sources of Production) dedicated to being a true utility for the public, what would they need to do differently to insure the cooperation would continue?
Oct-13-2007: JustForTheLoveOfIt.org >>Freeconomy is about sharing the skills you've learnt throughout your life and learning those you haven't. It's about helping others and providing an opportunity for others to help you. Freeconomy allows people to make the transition from a money based communityless society to more of a community based moneyless society, and to share the land they don't need or can't use to facilitate a local food community. In essence, freeconomy is about making dinner for a friend who was yesterday a stranger ...
Oct-11-2007: Host freedom.
Oct-11-2007: Distributism.BlogSpot.com/2007/09/libertarianism-and-distributism.html >>Several radical strands of classical liberalism, including some self-identified socialists, drew radical conclusions from Ricardo's observation that the income of landlords and capitalists came from value produced by labor. The radical direction in which they took their free market philosophy was just this: if the natural tendency of a free market is for labor to receive its full product, then the fact that labor does not receive its full product under existing capitalism can only result from privilege. Capitalism, as distinguished from a free market, is a system in which the state represents the owners of capital and land and intervenes in the market on their behalf. Its enforcement of special privileges keeps land and capital artificially scarce and expensive in comparison to labor, so that labor must pay tribute for access to the means of production. Let, therefore, the state remove its guarantees of privilege, and let the suppliers of land and capital compete in a free market without entry barriers, and land and capital will cease to draw monopoly returns; the wage of labor will rise to its full product.
AGNUcius >
Oct-11-2007: Posted to Blog.WIRED.com/monkeybites/2007/10/steve-ballmer-s.html?cid=86092266
The Open Source model (and more importantly, the Free Software movement), does not conflict with with the 'righteous' goals of commercial activity [ see http://www.gnu.org/philosophy/categories.html ], it only makes proprietary activity difficult.
Source Freedom does not stop commerce, it only stops the artificial scarcity used to perpetuate profit. This subjugation is enforced by disallowing the consumer "at cost" access to the Means of Production (for software this is primarily the source-code) so the consumer cannot "go around" the producers, but are instead at the mercy of those that were there first.
The GNU GPL is especially important in this regard because of the way it disallows re-proprietization while still allowing privacy.
This will be generalized into the physical realm when we finally understand profit to be an investment from the consumer that pays it.
Oct-11-2007: DavesWeb.cnchost.com >>The Center for an Informed America
Oct-10-2007: Freedomware.name >>Freedomware aims to unify all of the existing terms for free and open source software under one easy to use and understandable name. We are calling a cease fire in the age old battle. It is time to let the dust settle, let wounds heal, embrace a new and peace invoking term for all of the amazing work that has been accomplished. It is time to move forward together. Time to look for each others strengths and try to compensate for each others weaknesses.
Oct-07-2007: "Richard Epstein: Why open source is unsustainable" -- http://www.ft.com/cms/s/2/78d9812a-2386-11d9-aee5-00000e2511c8.html
Oct-07-2007: Distributism.org >>The Godly Alternative to the Servile State
Oct-07-2007: Distributism.com >>Distributism is an economic system in which private property, (especially the 'means of production'), is well distributed, in which as many people as possible are actual owners.
http://le.utah.gov/~2007/htmdoc/hbillhtm/HB0311S01.htm >>H.B. 311 Substitute - Utah Dairy Act Amendments
> prohibits cow-share programs
> "Cow-share program" means a program in which a person acquires an undivided
> interest in a milk producing hoofed mammal through an agreement with a producer that
> includes:
> (a) a bill of sale for an interest in the mammal;
> (b) a boarding arrangement under which the person boards the mammal with the
> producer for the care and milking of the mammal; and
> (c) an arrangement under which the person receives raw milk for personal
> consumption.
Oct-05-2007: "'The problem with the computer industry under capitalism - Free Software the answer?'" -- Marxist.com/computer-industry-capitalism-free-software240907.htm
YouTube.com/watch?v=3VLNNwiKvlE >>Millions were in germ war tests - Much of Britain was exposed to bacteria sprayed in secret trials http://www.guardian.co.uk/Archive/Article/0,4273,4398507,00.html
Oct-04-2007: AmericanProgress.org/issues/2007/08/care.html >>CARE, one of the largest humanitarian organizations fighting global poverty, announced yesterday that it would turn down $45 million in annual financing from the United States government because food grown in the United States under subsidies from the Farm Bill actually depresses the agricultural economies of the countries that receive food aid.
Oct-04-2007:
"N B" writes:
>> I got your message on my answering machine. I meant to call you earlier but I'm kinda lazy and it just didn't happen. I'll see if I can work up the energy to dial in the near future. :)
Ownut writes:
> N,
>
> Thanks for replying.
>
> I've recently decided to turn a new leaf.
>
> I used to be kinda fun to be around, but my /message/ has turned me into a confusing bore.
>
> So I would like to talk about your goals until I can be of service in helping with what I now know.
>
> Adios,
> P
> ----
>
> "N B" wrote:
>> Seriously? Wow. If you can actually pull that off it'll be impressive.
>> You've been so obsessed with social/economic/political corruption and injustice for so long that I'll bet it'll be hard to shift gears.
>>
>> My goals?
>>
>> Well, I have this crazy fantasy of being extremely self sufficient. I'd like to own a small homestead (somewhere around 5-20 acres). Stuff I'd like to be able to do with the homestead:
>>
>> 1) Have enough land (paid off, no mortgage) for livestock: chickens, cow, pigs, goats, horses, geese, ducks, turkey, etc.
>> 2) Have useful timber on my land (I'm thinking of Oregon's Willamette valley - good climate and lots of trees there) - use portable sawmill to make my own lumber - build my own structures with my own materials
>> 3) Be off the grid, using a hybrid power solution (solar, wind, hydro) as well as passive solar design
>> 4) Have water rights to sufficient clean water for drinking, cleaning, irrigation, etc.
>> 5) Grow 70+% of the food my family consumes. Garden, Orchard, Greenhouse, Fish Pond. Canning and preserving.
>>
>> The two biggest hurdles to accomplishing this are:
>>
>> 1) Getting the land. This one's the kicker, 'cause good land is not cheap. I think it's very likely that StorageCraft will be acquired within the next two years. I believe that my share , after the acquisition, will be sufficient to finance this. So I'm really hoping to get the ball rolling on all this within two years.
>> 2) Convincing Heather that we can be happy when we're more than 15 minutes from a Target. It's going to be a real challenge to move my family out to a rural setting. The further away from urban life, the harder it will be to convince her. I'm pretty sure that in order for me to actually accomplish these goals I'm going to have to develop the homestead as a vacation property initially - develop it slowly and not live there full time (which may make it VERY difficult to develop) and only move there permanently after it's well established and/or Heather wants to move to the homestead. She's convinced that our kids would hate it, but I believe that as long as we had good neighbors it wouldn't matter if our kids had to walk for 5 minutes to get to their house, they would still have friends. I'm also pretty sure that they'd enjoy that life style.
>>
>> Hey, are you working now, or have you somehow figured out a way to not work anymore?
>>
>>
> ----
>
> Ah yes, there are many who desire to begin the homestead to break free from the 'system'.
>
> I am tempted to talk about how the Security and Prosperity Partnership and the NASCO Corridor will be increasing the privatization (profiteering) of our water supply to the point of bringing us all into subjection under an international rule that we can only fight by banding together, but will restrain myself.
>
>
> Instead, tell me more about your goals:
>
> When trying to develop an area as you describe, of course you won't *actually* be doing *everything* yourself, since you will simply purchase many things that are far too difficult to make for yourself in any reasonable amount of time considering the limitations of your finances (such as the sawmill).
>
> This means that you are admitting that specialization (division of labor) is a useful thing, and yet you (and many others) are "running away" from society in an attempt to self-sustain.
>
> I fully understand the reason people do this is because the 'system' is truly failing to meet our needs.
>
> But if you were stranded on an island with a dozen college girls, wouldn't it be better to work WITH them instead of striking out on your own - so they could cook and sew while you hunted and harvested?
>
> What IS IT about sharing resources that tends to eventually lead a society to fail the very participants it was organized to help?
>
> Is it some size limit that we must stay under? If so, is it denoted by a number?
>
> Is it that we MUST be solitary for success? Wouldn't it be easier to finance and then share a sawmill between some other homesteaders by having each of you rent it from the collective others when using it (to cover the costs of wear)?
>
> What is the difference between sharing some land or capital in that manner and the collective holdings of a small city government?
>
> Using this point of view, what is the difference between tax and rent?
>
>
>> Nah, dude, I'm not trying to run away from society. I have no problem with division of labor. Specialization is a good thing. But just because specialization is a good thing I don't think this means that you'll have the richest, most satisfying life, if each individual spends 100% of their time only doing the thing(s) at which they're most specialized.
>
> Good point. Interacting with nature is beneficial for reasons I didn't mention.
>
>
>> I want to have a homestead because I just feel that there's no need for me to buy apples from the store when I can just grow them on a tree myself. No need to buy eggs when I can have chickens. Etc, etc. There's a lot that I can do on my own just fine without being an absolute specialist in those areas. And yet I intend to continue to work at my own specialty as well. I intend to selectively rely on the results of society's specialized services.
>>
>> Truly abandoning society would mean giving up on all of the goods and services that society offers, as well as fellowship, and that'd be an incredibly inefficient, lonesome, poor life, IMHO. I've no intent to do this. I guess I'm saying that I think that I can be more self sufficient by being more selective about the things upon which I'm dependent. I want to maximize the return for my efforts. If I grow an apple, I get the whole apple. If I buy an apple, I expend more than an apple's worth of labor to get it, generally.
>
> Yes! This is tremendously important! I will not pursue it now, as I am tempted to, but I am very happy you recognize this. If your statement were not true, then we could eat every meal at a restaurant (in fact it would be cheaper) since SOMEONE has to do the work, so why not allow a specialist?
>
>
>> I want to work with the college girls, when it makes sense, and when it will maximize the return on my own labor.
>> Damn! If I was stranded on an island with a dozen college girls... LOL... you kill me. That'd be horomonal Nirvana, of course.
>
> Just threw that in to keep you reading.
>
>
>>
>> Sure it makes sense to share resources. I'll most likely rent the sawmill rather than buy my own.
>
> But of course you will be paying much more than cost if you rent from a profiteer instead of from a collective group of other users.
>
>
>>
>> Tax is rent, isn't it?
>>
>
> Yes, except tax is generally weighted against your productivity (improve your lot and your property taxes go up, put a car on blocks in the front yard and they fall. Same with income tax: the more you make, the more you are punished.), and is not collected for the direct payment of the costs (including exclusion of others) to cover the resource in question, but is instead put into a slush-fund that can be drawn from in whatever way the corporate directed representatives see fit.
>
>
>> Are you a land baron now? How is it that you can survive without working full-time? If you feel that's none of my business, just ignore this question. I'm just curious.
>
> Sorry for skipping that question. I'm not currently receiving Federal Reserve Notes from an employer.
>
> I recently turned my 401k into an IRA and have drawn a bit from there, but will need to get something going within 6 months or so.
>
> The ~3 acres behind my house is not as in demand as a few years back because the housing market is getting soft (wages are not keeping pace with inflation), so I'm not sure we will be able to sell it for a 'profit'.
>
> Cindy and I would both like to get out of here, but are not sure where to go. She claims to want to live in a commune, but hates talking to me about any of the details because she thinks everything I say is too abstract.
>
> I've been thinking lately I should start a rental business that is also an internet cafe, gameroom, workshop, mini-theater, second-hand buy/sell store, etc. and place that land, building and tools under a contract as I have described in the past so the users incrementally become real voting shareholders whenever they pay any amount over cost.
>
> The reason I haven't (and probably won't) start such a thing is because I can't get anyone to understand this enough to help me work out the rest of the bugs, and I am very poor at public relations (being a "highly expressed" INTP), so would likely fail unless I could get some more charismatic humans to organize some of it and to work the front-line.
>
>
>> What type of commune is Cindy interested in, exactly? And, more
>> importantly, would there be lots of lonely college girls there?
>
> I asked Cindy and she said "one in which I can keep my finances separate".
>
> Later she alluded to an idea that I think she called "Dual Communes"
>
> . One would be a 'normal' commune out in the country that was trying to
> work from the "bottom up" - trying to establish agriculture and other
> Sources of production.
> . The other would be financially connected to the first, but would be
> located in a nearby city and would be working from the "top down" very
> similar to what I have tried to explain about the business I would like to
> start.
>
> This scheme is very much in line with what I have envisioned, but never
> thought of it in such a clear dichotomy. What do you think?
>
>>
>> Are you guys still thinking of moving to California?
>>
>>
>
> She talks alot about that, as she wants to be closer to her siblings, but
> every time she looks for land on the internet she mentions Missouri,
> Pennsylvania and some others I don't remember. Land there is very cheap,
> property taxes are low, and irrigation is not so important as here in the
> west.
>
> I'm all for CA myself, but have nearly given up on the whole idea...
>
>
>> You know, it could actually make sense for a commune to own and operate an
>> equipment rental company. That way, they could get at-cost access to
>> tools, and, assuming they wouldn't be using them all the time, they could
>> help to supplement the cost by renting them out to the public at a profit.
>
> Ownut writes:
> Wage is a Cost of Production that we will always pay in the course of trading labor (specialization), while Profit is an indication of the Consumers' dependence on the Source Owners.
>
> Why does anyone ever pay more than cost? It is because that consumer is not yet "set up" in regards to owning the Sources of the Object they just purchased.
>
> Will we always step of the undeveloped instead of heeding their cry for growth? Can you not see that profit *REQUIRES* poverty, and the mishandling of it (treating it as a prize for the owners) only perpetuates that state?
>
> I wonder why there is such a universal notion of US vs. THEM that causes us to divide the members of our species and assume we must work against those that are not yet part of a commun[ity], thereby halting our growth before it has even begun.
>
> The last few weeks I've been concentrating on the psychology of economics and why people tend to universally block the concept of fundamental change.
>
> Could you please tell me why you will not at least *CONSIDER* what would happen if we (the owners) were to treat profit in the manner I suggest (as an investment for the consumer that just paid it)?
>
> Is it because you have given up? Has everyone decided raw Capitalism will always win no matter what we do, so any effort to the contrary is wasted energy?
>
> Don't answer anything about my tired message directly, just tell me why you *WON'T* answer.
>
> ----
> BTW: This 3_min:25_sec George Carlin video is a partial explanation of the trouble with ownership concentration: http://YouTube.com/watch?v=9KVTfcAyYGg
Older entries: diary-sep-2007