Related: diary
Oct-29-2010: Social Hypervisor -- A legally binding ruleset which groups can use to help themselves co-own physical property.
Oct-25-2010: Email to mrc (eskerda)
My work is mostly centered around what I have recently been calling "Transaction-Reduced Production" which shows most trade in the marketplace is an unnecessary side-effect of property ownership being not yet distributed, and how the need for trade is greatly reduced as that distribution approaches 'perfect'.
The idea is for group members to trade *commitments* of labor and sources *before* production begins, and thereby avoid most external money by instead paying in 'receipts' which were issued by the group to each member according to the amount the did commit.
This makes barter more realistic because "simultaneous coincidence of wants" can be iteratively resolved over a period of negotiations instead of being a real-time immediate problem.
I am also working on a better way to explain how/why the owner of Sources is the owner of the Objects even before they are produced.
I will show the exchange of goods is an indication of property mis-alignment, and how treating Profit as Payer investment is a negative-feedback loop which removes that activity.
For the owner of an Almond tree (a Source) is also the owner of the Almonds (the Objects) even before they have blossomed - even if he must hire or trade with someone else to get the work done.
So when the user of an Object (say an Almond) is the owner of the Sources (an Almond tree), he must pay all costs, including wages, but does not pay Profit, for he does not buy those Objects but owns them already.
Here is a recent letter I wrote the OpenKollab email list:
Oct-14-2010:
Suresh Fernando wrote:
> Correct me if I am wrong, but this suggestion is an economic model for
> operating a cooperative. Is that right?
I wish it were the same so we could avoid the difficulty of re-thinking.
Cooperatives operate very differently from Imputed Production mostly because the investors do not have real, divisible ownership.
This lack of ownership is obvious when you look at the
Consider a small group that owns a small dairy.
You'll need to keep the sizes small during this mental exercise because we have been programmed to believe larger groups *MUST* be governed in a representative manner even though that is not true.
Imagine the number of members just 2 people if you must.
Now, when the milk is taken from the cattle and stored in the refrigerator, *who* is the owner of that product?
Will each of the owners be required to *buy* the milk from the collective as a whole, or will they just split it up according to how much ownership they each have in the dairy?
If there were just two people, will they each be required to pay into some strange pool that they will then pay themselves again?
Does this change at 3 people? 4, 5, 10, 20, 100, 1000?
In a Cooperative: Profits are re-distributed to members.
Imputed Production: Profits are *undefined* because the Product is never sold.
Profit is *undefined* when Consumers co-own the Sources directly.
But in a Consumer Cooperative, the organization itself *sells* the product back to the Consumer-Owners, and in doing so 'earns' Profit.
even though that product Owners should already be the owners], and in doing so, that faceless organization collects Profit and therefore concentrates power into a committee which then has no choice but to inflict "Tyranny of the Majority" upon all those who
This is a result of a poor arrangement where the owners have to buy the product back from themselves!
Even more astounding, when a worker (human) has sufficient ownership in the Sources of that which he consumes, then the 'problems' of abundance and automation disappear. There is no longer a reason to throttle production or destroy product or be afraid of innovation.
Those extra transactions are also targets for the containing governments to punish them with sales tax and open them to scrutiny as to whether they should be allowed to sell something as dangerous as raw milk, whereas what I describe side-steps these issues altogether.
Oct-14-2010: Suresh2323
Suresh Fernando wrote:
> not enough return to warrant the risk that investors take.
Hello Suresh,
I write to you personally instead of to the OpenKollab list because I
have a proposal that I am not sure is welcome, but is definitely
relevant.
I am a senior computer programmer with a degree in Computer Science.
I point this out to help you know I am able to think seriously about
design of complex systems.
I have discovered a way to solve the problem you mention, but
understanding this approach requires a fundamental reconsideration of
the meaning and purpose of organizing, so is not easy to digest.
I call the concept "Imputed Production" which can be described briefly as:
.) Attract middle-to-upper income consumers to "pre-pay" for goods and services.
.) These pre-payments are used like regular investor funds to buy Land
and Capital and hire Labor.
.) These investors become real co-owners of those Means of Production.
.) The product is not sold, but is distributed directly to each
consumer/investor/owner according to the amount they paid.
.) The return for risk in this case is not Profit, but is instead the
Product itself.
.) Notice this ROI is *identical* to the amount those consumers would
have otherwise paid if they were buying that Product in the market.
Let's consider a simple example comparing the two approaches:
====
- A regular investor invests $X in a Fruit and Nut orchard.
- His return is Profit ... which is the difference between Price and Cost.
- This payoff is based on the idea that some consumers will pay more
than it really Costs to buy those goods.
====
- A consumer-investor invests $X in a Fruit and Nut orchard.
- His return is Product ... which he receives at *Cost*. There is no
Profit to be considered because the last transaction (buying the
Product) does not even occur - that transaction is 'imputed' because
of the consumer's ownership in the orchard. He owns the Peaches
already, as a "side effect" of his owning the Peach tree.
- This payoff is based on the idea that some consumers will pre-pay
for goods that they will recieve at Cost.
Consumers that do not invest and own must pay Profit to 'regular'
investors for the risk those investors took.
Consumers that DO invest and own are taking risk upon themselves, but
cannot pay Profit, for Profit is undefined when the Product is not
sold. In this case the Product is not sold because it is already the
property of those who will use it = the consumers.
Thank you for your time. Let me know what you think.
Patrick Anderson
Oct-11-2010: GOSCON.org >>Government Open Source Conference
Oct-11-2010: CoalitionBlog.org/2010/09/stewardship-and-open-culture/
Oct-11-2010: PAEcon.net/PAEReview/issue54/Manifesto54.pdf
Oct-??-2010: Fund development through a barter/investment system with Use-Value returns.
Artisans commit to labor as a Promisory Note or Work Bond.
.) Land
.) Capital
.) Labor