Need v. Want (or, the Death of Art in the "Digital Economy")

[QuicksilverKite]

I am not an Economist.
I am not a business owner.
I am not a producer.

The PC is a noble idea, and I respect it as such. I respect the idea of the producers of real goods of real value sharing in an economy in which Production fosters more Production. But...

Where does the service industry fall in this new global economy. As I can see it, a product has value, a service has... Worth? I'm not sure if modern monetary thinking mind can separate the two ideas. How to explain...
Shelter, clothing, food and clean potable water are essential for human existence. A baker bakes bread, he produces, his product has value in that every living person must eat.
A dry cleaner, on the other hand, provides a service. While clothing is a need, removing a spot from said clothing is a want. While his service is not necessarily valuable, it does merit worth, but the worth it merits is only that which the consumer is willing to spend on it.
In a global economy where Production is the coin, services for the working class are marginalized and scarce. The worst part of this idea though, is the death of (for lack of a better term) "Creative Services."
Needed products have intrinsic value and worth, helpful services have intrinsic worth but extraneous value. Art, though, has no functional purpose, and is therefore worthless and devoid of value.

Throughout history, the societies which thrived to the fullest extent also fostered the arts as an almost necessary aspect of daily life. An economy which places ultimate value on production, will eventually lead to a decline in the arts.

People, whether producers, servers, or artisans, all need to live. The axiom 'Coin is king' will forever apply as long as there is coin.

People follow the money.
The money is in production.
Production increases supply.
Supply decreases demand.
Demand determines value.

A strictly product based monetary system is fatally flawed for this reason alone.

I want to believe in a better monetary system, please help me understand?

[Jordan]

First some assertions, then I'll back them up, then I'll attempt to show that you have some misperceptions.

1. We've been living under a monetary system that has essentially enslaved us AND we've been living this way for so long we've forgotten how powerful we are AND consequently how easily wealth accumulates.

2. In a free society with honest money, we can ALL be wealthy - relative to our condition today. This is not to imply that there shall be no disparity of wealth, for certainly there always shall be.

3. Wealthy happy people want services and lots of them.

So, first assertion.  The banking system as it exists today is highly predatory and requires exponential growth to keep itself going. Once the exponential growth stops the debt bubble causes massive deflation. As governments protect the wealthy and not the poor -- as the wealthy have access to government and the poor do not, governments inflate (print money) and give it to the wealthy to counter the fears of the wealthy. And spiral of doom, society collapses - in the end, nothing more than another pyramid scheme.  But I digress. . .my point is that under honest money, and in a free market there are many alternative systems not one, so good money shall chase out bad, just as people stop driving their 1973 Pinto in favor of their 2011 Camry.  Of course, newer isn't always better, so if you've got a Delorian no matter how old, you might be happy with it.  The point is that in a free market there is choice and people, as they share information in the marketplace, are acting as a massive supercomputer on steroids, shifting, selecting, testing, evaluating, sharing, and choosing better and better products AND services. This is why people who become wealthy selling a particular product or service seek out government regulation of their market over time -- they seek to stop the innovators/entrepreneurs from rising up and overtaking them, so they destroy the free market.  The bankers did this with the money supply long ago.

In a free marketplace, there is stable steady growth, not exponential, out of control, growth that leads to disaster. It's the periods of disaster that cause so much loss and transfer of wealth. Transfer as those who have access to the money printing machine buy up all they can, loss of wealth as a major part of the wealth of society is the relationships between traders.  Once these are broken, they have to be reestablished and that takes considerable energy. 

Second assertion, any stable honest money, will build tremendous wealth in society. The real question is whether or not we are FREE to act on our creativity, because creativity is what CREATES wealth. If we can be free to act on our creativity, then poverty shall disappear, people shall live comfortably, and there shall be no glass ceiling to silently suffocate us. If we have honest money and wealthy people have no means of regulating glass ceilings in place to keep down their competitors, then wealth flows around and does not accumulate.

http://www.youtube.com/watch?v=APr6exqcHgE

Third assertion, As economic growth is stable and not exponential with honest money, a collapse is near to impossible - or as near to impossible as IS possible. So wealth transfer and wealth destruction do not happen on a massive scale (as in a depression). This means that wealth accumulates.  This directs people to both create and desire things beyond basic needs and basic products into many and various services - ala 'Maslow's hierarchy of need'.

Hence, people spend and invest more of their money in services relative to products.

Western governments, during their exponential growth phase, show this to be true, as peoples basic needs are taken care of, the service economy grows.

Lastly, credit coin can be created for services as well as products, just as a masseur can give IOU coupons for his/her services as payment to those who accept it.

I hope this answers some of your concerns.

Cheers

[QuicksilverKite]

What about people?

A broad question, I know, but pertinent to any discussion of economic change.

The way I see it, the "free-market" way of thinking, while diametrically opposite in ideology from communism, still hits the same stumbling block. They both eliminate a realistic idea of what people are, and what they are willing to do, in their formation; and instead, inject a homogenized and ultimately benign creature in humanity's place.

"As a fellow human being I will tell you that I will work hard, contribute, and be a productive member of society."
"As an individual, I can honestly say, I will do the least possible work for the greatest possible gains."
If seven thousand years of human history have taught us anything, it is the stark reality that only one of those statements holds true. It is the one we curse as a lie, and the one which paints not just the few, but the many in a very ugly light. Yet, in the end, we see that we are lazy, gluttonous creatures.
Is it flattering? No. The truth rarely is...

Now don't read into that that I believe people are inherently evil, I don't. It is an observable and documented fact, though, that people are ultimately self-serving (altruism is so abhorrently unnatural to the human mind that we hung the last altruist from a cross). Regardless of how many incentives you give, how many roadblock are built into the system, or how morally bankrupt society views them to be, the individuals who seek to game the system will find a way to do so.

Although it may seem that I'm off on an unrelated tangent, let me bring it back into focus with your response.

In response to your first point I offer you Plato...
"Those who seek power are not worthy of that power."
Honest men are only allowed to rise to the top of any social structure so that the unscrupulous men have a steady pair of shoulders to stand on. Hucksters, charlatans, governors and bankers, all understand one simple truth, the individual is wary, savvy and logical, but people, well people are easily distracted and generally stupid.
You used automobiles as an allegory, I will use them as an example. Henry Ford did not revolutionize the Auto Industry with the assembly line, his contribution was purposefully building cars that broke down. You see, before Ford, the cost of purchasing a car was prohibitively expensive, maintenance and operation were on the other hand relatively cheap. Ford drove his competition nearly out of existence with an inferior product at a more affordable starting price. and then set the prices for aftermarket parts at an insane level. By the end of an automobile's life you would have paid far more for a Ford
than for one of his competitors cars.
Ford changed the business model, not just for auto makers, but all industries. 'Sell the public the most inferior product, made at the lowest cost to the company, in order to generate the highest profit. With that profit buy out your competition so that products of superior quality are not introduced to the market.'
The argument can be made that people are smarter than that, and while an individual is wary, savvy and intelligent. People are not. If the argument for the free market eliminating inferior businesses and products with the passage of time were true Ford would not have been able to sustain as long as it did.
But, Caveat Emptor right?

And as for regulation, we, the people, call for regulators.
Our children are getting sick from a water supply poisoned by factory run-off?
Litigation. Regulation.
A pharmaceutical product is rushed to market and kills hundreds?
More regulation is called for.
Regulation would be unnecessary if businesses practiced with ethical procedures and in good faith for the common welfare, but they don't. Throughout history the line is very clear; philanthropic organizations, charities, amnesty and human rights groups do what they can to lift up society / lenders, corporations, and businesses do what they can to lift up the bottom line. It's true that those two ideas sometimes coincide, but more often is the case where the common man is pushed, violently if need be, back to the bottom.
Have corrupt officials and businessmen twisted and distorted the regulatory process to suit their desires, yes.
Do they use backroom deals, laws, and regulations to lock the market, yes.
But, before we light the torches to burn their paper castles down, we should take a moment.

Think.

In an uncertain and wildly fluctuating market, to what ends would You go to secure your coin? If you can show me a man who claims he wouldn't fight with every means he has available to obtain security and stability, I will easily show you a liar...
I do not condone their political maneuvering, their manipulation of the markets, their distortion of the regulatory process, but I understand it.

A free market, unchecked, would grow wildly wealthy, and (I believe) benefit all of society... For a time.
But at what cost? The bad-faith businesses would thrive in a "transparent" market, and no one would look twice at their business practices until it was too late.
Greed, jealousy, and the lust for power are the boot on the throat of the free-market. Freedom, in all it's forms, not only requires, but demands responsibility. The powerful men and women, in a free society such as ours, owe a debt to the people they hold power over. We willingly give them the power they seek with the expectation of conservation, preservation, and the general welfare of society as a whole, and not just for us, but the generations which will follow.
But those who seek power now are not prepared for the responsibility of a truly free market or society. The evidence of that assertion lies in the inability of large businesses, banks and lenders, and our elected government to properly execute their responsibilities even in the current highly regulated market.

I agree that we are slaves to the idea of wealth and the monetary system that supports it.
I agree that society has existed this way for far too long.
I do not believe that we, the people, have forgotten the power we hold... We have simply forgotten the appropriate way to wield it.
And finally terms like "wealth" "value" and "worth" mean many different things to many different people. While it holds no monetary weight, I value intelligent discourse such as this and thus feel it is worth my time. I have a wellspring of love and emotional support from my wife and children, and even as we teeter on the edge of financial ruin, I can look you in the eye and tell you I am wealthy. Your ideas may differ wildly from mine on the meaning of those words, which I truly believe is wonderful.

Back on the subject though...
I tripped on your second point near the beginning, but seeing as how it and the point directly following it rely on the same fundamental principle, I will address both concurrently.
Money can be neither honest nor dishonest, so the idea of 'honest money' is a bit foreign to me. Coin will always be accepted by a business, whether it comes from the pocket of an honest man, a beggar, a liar or a thief. Coin holds no particular allegiance to the truth nor to any person, state or god. 'Honest Money' is a clever way to say honest people without revealing the lie outright.
Now, there are those people that believe that all people are inherently good, but Iwill say again, a man is only as good as his own best interests will allow.
I understand that that is a very cynical view of mankind, but throughout history it is, unfortunately, a very common theme.
From your assertions I can see that you passionately believe in a free-market and, as a strong believer in democracy and capitalism, I do too. But in order for a free market to exist, unchecked yet incorruptible, men must evolve into more globally and socially aware creatures than what we are now.

A free-market requires honest money. Honest money requires honest markets. Honest markets require honest men.
And men, as we are, are only as honest as we need to be to keep the coins we claim as our own in our pockets.

[QuicksilverKite]

I play the devil's advocate far too often, and for that I owe you an apology.
I am sorry, and now I will attempt to offer a solution to the problem. A free market in our current political/economic state is nearly impossible.

Step One: Abolish the international central banking cartel and forgive all foreign, domestic and personal debt.
Fractional reserve banking based on a single commodity will make that commodity completely worthless quickly. It perpetuates a needless "Boom-Bust" cycle and creates a nearly impassable gulf between those who Have and those who Have-Not.
Debt is the cancer of society. Every living person has a right to have indelible personal claim to their individual welfare and security and to that of their family as well.  Any property, real or personal, which an individual physically holds in perpetuity at the time of debt forgiveness is granted those assets in regards to their personal wealth. Titles for land, housing, farming, mineral and/or water rights HELD BY THE BANK are forfeit to the person or persons who reside within the titled property.
 
Step Two: Indroduce a monetary system that measures the true value of goods and services.
I have understood from a very young age that the monetary system that we have in place only has value if we believe it has value. A digital coin as a form of value measurement, with no real value outside of the product it represents, IS sound and honest.

Step Three: Educate the common man.
The reason why businesses can get away with socially destructive and completely unethical practices is because the average person doesn't understand how businesses should work. They do not understand that everything has value, but that the product or service's value is negotiable.

Step Four: Government Reform.
As long as there are taxes, a government and it's nation's economy will always remain entwined. Taxes are necessary to support state and national infrastructural. The government will be allowed to generate fiat coin in only the amount necessary to facilitate emergency funding for unexpected national crises. A balanced budget should not be difficult to achieve in a stabilized economy.

Step Five: Publicly Elected Regulatory and Safety Oversight Comissioners
In order for society to keep businesses safe and ethical, there MUST be a simple system of transparent oversight. This could be achieved through elected officials with finite non-renewable terms. Academics, or other high minded people, not politicians or businessmen will fill this role. These "regulators" will not interfere with regular harvesting, production, or fabrication of any business, they are simply a reporting agency. If a business is operating in bad faith the "regulators" will report this information to the public, the market (in theory) should self correct according to public opinion.


Okay... I'm out of salient ideas at the moment, but I'm sure more will come to me...

But, honestly, what do you think?

[Jordan]

I agree that change appears nearly impossible.  I believe that education helps the cause, but I'm unsure if it can be a solution. 

Do not think you are walking into a field of optimists. I too 'game' with the devil on my shoulder.  I did not come this far as a naive.

There is a small percentage of sociopaths (bullies) in this world. Of that number a smaller percentage are of average to high intelligence. Of that number a smaller percentage is sufficiently ambitious to seek power to control the behavior of others as a means of controlling their deep-seated, uncontrolled fear (what ultimately makes them sociopathic).

This small percentage head straight for government office. It is by far the EASIEST way of gaining power and quelling their fear. These people are not attracted to hard work and have no interest in morality, they are driven by the darkness in their hearts.

Therefore, so long as there is government, there shall be a cyclical rise and fall of civil society. I would be a fool to believe that education can stamp out all the fear that exists in the world, nor the hate that follows in it's footsteps.

I thus believe that we must create a new path for humanity.

I advocate, and am working toward, the development of a system of money that is peer to peer (bitcoin, or some variant thereof) that is PERMANENTLY outside of the control of any central group. It may take decades, but eventually, there can be no means for groups to control the economy excepting the full consent of EACH individual participant of that particular group.

The first step is to rebuild the Internet as a peer to peer network that is fully encrypted.  The I2P network is perhaps the solution to this, if not there is another technology that could be bootstrapped to achieve that ends. I won't detail that here, but it is a reality, not mere theory, it's just more complicated that I2P.

As this new network gains momentum, the control of information, and this necessary includes digital currencies, shall be unstoppable. In turn, the ability of governments to trace and tax individuals without their consent becomes impossible.

At this stage, governments no longer have a reason to exist as they shall no longer be functional vehicles for people to address their fears.

It matters not what sociopaths do or think in the end. This is how I know voluntaryists can win.