Print Money or Make Money?
The Universe as an Economy Part One
January 20th, 2007 by Aleksander Marchand
The Monetary System
The fact that we have the monetary system we have proves that virtually nobody actually understands the monetary system, particularly people who advocate raising federal taxes with a straight face (if you are one of those people that’s okay, ignorance can be dissolved, so read on). Our monetary system is in fact the biggest ponzi scheme ever orchestrated (as far as I can tell anyway), and all but a very few among us are paying for it. Summed up to its most basic elements, in the United States (a similar system is in place in most western countries), 10% of money is made from thin air by the quasi-governmental, private entity misleadingly known as the federal reserve. Then the other 90% of the money is made from thin air by private banking. An average private bank is allowed to lend out about ten times more money than it is required to hold in reserve, and so it is allowed to charge interest on money it invented (this fact wouldn't come out into the open though unless there was a big run on the bank requiring FDIC bailout). Consequently, a bank doesn’t just, for example, earn 10% in interest when it charges a 10% interest rate, but instead it makes 100% in interest. Plus, once that money is lent out, it almost inevitably gets put back into the banking system and so is lent out again. When this re-lending is factored in, the quasi-governmental private federal reserve makes 2% of the money and regular private banks make the other 98% through lending.
Why the Monetary System is a Scam
There are two main problems with this system for the average person who isn’t high up in the echelons of the banking industry. First off, the money is just made from thin air and so there is no real limit as to how much can be made by the federal reserve. Money is no longer backed by any hard, finite asset, like gold, which would limit the ability to increase the money supply. The fed increasing the money supply is inflation (decreasing the money supply is deflation), thus the fed doesn’t fight inflation as the ignorant and deceptive among us claim, but instead the fed causes inflation. This is why trough time money generally becomes worth ever less; it is a hidden tax. Yet, while the government can sanctify the printing of as much money as it wants, it can’t print labor at will and so the economy is still limited.
The second major problem with the monetary system is that interest is being charged on top of this invented money, both on the federal reserve level and the private bank level. Thus, the citizenry inevitably pays interest on the money issued by the federal reserve. The citizenry pays this interest not by merely returning inherently worthless fiat dollars to the fed, but instead in labor/productivity.
Even though this system is nutty, most politicians don’t have much problem with it because it allows the government to grow ever bigger by borrowing money (labor/productivity) it doesn’t have. In other words, it allows politicians to buy votes with goodies paid for by the citizenry; it is like a person buying you a present with your own high interest credit card. Ever bigger government becomes evermore essential in the personal lives of citizenry through both social programs and or employment and so makes for a self-feeding loop of dependence.
Lessons
What the monetary system teaches about making money is that the best way to make money is to literally make it. However, you have to be an authorized counterfeiter, like an official bank, to be able to legally make/counterfeit your own official government sanctified fiat money. So, if you aren’t part of the monopoly of official government money and you want to literally make money, you have to issue a different kind of money: you need your own private currency.
Labor & Private Currency
The most fundamental form of private currency is known as labor. Your own currency is your ability to exchange your labor for goods and services that are in other people’s control. Depending on what your skills are, and how much they are demanded, your own currency of personal labor is worth more or less. In Ithaca New York, there is actually a form of private currency known as Ithaca Hours whereby each full unit of currency equals a standard hour worth of labor. Such is a non-debt-based form of money that is integrally linked to the intrinsic value of money, unlike a federal reserve note.
Ladder of Abstraction
Human labor starts with the ability to find and secure resources that are vital to maintaining life. In other words, it all starts with food and water (and air too, but so far air is still mostly free, unless you want conditioned air or filtered air). Once a source of food and water is established, protection, such as in the form of shelter, is the next step. As food and protection are more efficiently taken care of, there comes to be excess time and energy that is put into things like finding more exotic foods (drugs), art, entertainment, research, experimentation, and the building of more elaborate shelters. When this system is carried out for thousands of years, people start to labor away at evermore abstract and inherently unproductive jobs that only seem productive within the artificial system that such jobs maintain (e.g. lawyers and miscellaneous paper pushers, which are outside of the system inherently useless, but within the system important).
Paper for Dinner
The United States, Western Europe and numerous other areas of the world are at this point in history post-industrial. Post-industrial economies are ever less about manufacturing and ever more about service. The service The United States seems to be the keenest on is financial service. The U.S. is becoming very much a financial economy; which is to say, it is becoming an economy based more and more on money itself instead of what money is supposed to represent. Such an economy consumes evermore than it produces because what it produces is increasingly a whole lot of nothing (nothing tangible). Having a financial economy is fine until it reaches a critical point where people wake up one day and find that they can’t eat paper (digital dollars) because the people still producing tangible, vital goods no longer accept a whole lot of nothing (inherently worthless currency) as payment.
Sustaining Post-Industrialization
While a post-industrial economy focused on finance is precarious, a post-industrial economy based on things like engineering has a firmer footing. There is an episode of The Simpson’s where Grandpa Simpson says, “if you can’t build a robot, be a robot.” And that just about sums it up. People who know how to build robots, don’t have to do robotic work. And robotic work is defined as work that could be done by a machine. As machines get better, more work falls into the category of being robotic. Yet, as long as there is human labor that is cheaper than building a machine replacement, there will be robotic jobs for humans. Which means that as long as there is a small supply of good robot designers/builders, it will often be cheaper to hire humans to do jobs better suited for robots.
A post-industrial economy is really only sustainable if it gets ever better at efficiently building machines to replace humans. That means the people in post-industrial economies need to get progressively smarter. Otherwise, the industrial and agrarian economies of the world become more valuable than the services (like designing robots) of the post-industrial economies. The objective of the post-industrial economies must be to bring the industrial and agrarian economies of the rest of the world up to post-industrial status by making human labor in manufacturing and agriculture obsolete. Unless we can make machines to take care of the basics, people somewhere will have to do the work.
Running Out of Stuff
Even if we figure out how to make robots to replace all human labor though, that won’t help us if we run out of material: stuff. Although raw materials like copper and zinc are things we don’t want to run out of, what we really don’t want to run out of is the stuff we use to make energy, like crude oil and uranium. In theory, if we ran out of, for instance, silver, we could make more silver if we had enough energy. That would require a major technological breakthrough though and or immense amounts of energy; like the amount of energy found in stars.
The way we get energy now, like from burning fossil fuels, dams, and through fission, just isn’t going to cut it if we want a post industrial world. Energy is the Achilles heal of the current economic situation. The more energy a person can control, the less amount of work that person needs to do. Just consider how much work it would take to travel a couple of miles from your home without gasoline (or some alternative to gasoline). The amount of energy you get out of gasoline is much more than the amount of energy you put into earning the money to pay for that gas. When a person considers just how much energy is in a gallon of gas, at any price under a hundred dollars a gallon, it is virtually free. I doubt you’d be able to find a person to pull you along in a cart for 25 miles for less than a hundred dollars.
New Energy
Perhaps the main reason there hasn’t been a big energy revolution in recent history is because we have only been looking for energy in places where our scientific theories on energy say we should be able to get energy. The Second Law of Thermodynamics and the 150 year old math of James Clerk Maxwell still provide the ground upon which most missions for energy research are mapped.
Anyone who is acquainted with this website knows that I give a lot of credence to the Second Law of Thermodynamics. And while I don’t think energy production within this universe that violates the second law is likely or even possible, strict adherence to Maxwell’s equations is another story. The following is a good old quote regarding the second law and Maxwell:
“The law that entropy always increases, holds, I think, the supreme position among the laws of Nature. If someone points out to you that your pet theory of the universe is in disagreement with Maxwell's equations — then so much the worse for Maxwell's equations. If it is found to be contradicted by observation — well, these experimentalists do bungle things sometimes. But if your theory is found to be against the second law of thermodynamics I can give you no hope; there is nothing for it but to collapse in deepest humiliation.” --Sir Arthur Stanley Eddington, The Nature of the Physical World (1927)
Finding new energy means tapping into a vast energy source that we previously wrote off, overlooked, or never even knew existed (such as energy from another dimension). There is a not so surprising quality to science and technology that makes it tend to mostly find things it knows to look for. That quality probably has a lot to do with the fact that money tends to flow into research that is conventional and follows the predominant paradigms.
Fortunately though, anomalies are not absent in the world of energy research. However, without an ability to explain the mechanics of such anomalies, the anomalies remain simply unconfirmed claims or impractically useful abnormalities. Thus, many people write such anomalies off as hoaxes or mere curiosities.
Beyond Economics
If a vast, clean, virtually free, globally accessible energy source were discovered, ideas such as working for a living and the pollution problem would become but historical curiosities. And whether we are at the brink of a major energy revolution, or remain floundering for the foreseeable future, the general trend is nonetheless toward increasing energy output and use. In Part Two of this series, we will look at what happens to money as more energy becomes available and how that changes the lives of the citizenry of the world.
Seven Billion Billionaires:
The Universe as an Economy Part Two
February 1st, 2007 by Alexander Marchand
Billionaires
The late visionary architect Buckminster Fuller once suggested that ''technologically we now have four billion billionaires on board Spaceship Earth.'' The rational for this statement revolved around the fact that regardless of monetary status, most contemporary humans are (were) able to enjoy conveniences not even available to the richest people of the world a scant hundred years ago. Most people don’t take this into consideration though due to the deceptive money game.
Energy Dollars
As the world population zeros in on the seven billion mark, the world would be wise to start to think less about money and more about energy. Because it is not an equal distribution of monetary wealth that the world needs, it is an equal distribution of energy. Monetary wealth is a fiction and easily manipulated for purposes of power and control. Those who control the supply of money are able to steal people’s personal energy (labor). As long as money makes the world go round, it will be a story of haves and have nots. However, if energy replaces money as the new currency, there would be little if no room for cheating.
While a lot of people talk about how we need alternative energy, just try to put up a wind turbine in your back yard or even solar panels on your roof. Unless you live out in the sticks, chances are that you’ll run into some notable hurdles, especially with the wind turbine. Yet, it is precisely the ability to cleanly harvest one’s own energy that will be required to make sure that every person in the world is free from the money game.
There is just so much energy out there in the universe to be harvested that the way we get our energy now is destined to look laughably archaic in the not too distant future. And once energy becomes cheap, clean, and plentiful, economics as they’ve existed throughout much of human history will have a chance to become for the most part obsolete. And if extremely vast amounts of energy become available economics will all but disappear.
Alchemy
Much of economics is based on expending energy to acquire goods. Some goods are renewable, like bananas, and some are limited like silver. However, with sufficient amounts of energy, anything could be turned into anything else. In essence, with sufficient energy, subatomic particles could be programmed to become whatever elements we wanted. So, in theory, if you had enough energy and a pile of dirt, you could turn that dirt into your very own solid gold house, and vise versa.
If every person had access to vast amounts of energy though, there would inevitably arise the problem of people using that energy to kill each other. However, if every person had access to vast amounts of energy, every person would be able to use that energy for self protection. So, access to vast amounts of energy would not be a problem if it was made available to all.
Robot Builders and Maintainers
Although the possibility of having enough energy available to turn piles of dirt into gold is not out of the question, it is still a bit far-fetched relative to current technology. A more realistic scenario is access to large but limited amounts of free, clean, decentralized energy combined with automated robot labor. If we were able to really master turning over labor to robots then a person could realistically live like a billionaire and only work about 12 hours a week. In such a scenario the only job people would need to know how to do is design/build and maintain robots. The education system would be schools of robot, design, building, programming and maintenance.
Only working 12 hours a week, people would have a lot of free time to do things like indulge in the arts, study physics, do medical research, etc. without having to worry about making money from such endeavors. Everything beyond infrastructure maintenance could be made a hobby, instead of a means of making a living. Thus, people would have everything they would need to live a life of convenience without having to do any work beyond just a little infrastructure maintenance and day to day living.
The only specialization that would be required in such a scenario is in the design, building, and maintenance of different kinds of robots, such as medical robots, farming robots, transportation robots, cleaning robots, mining robots, etc. Much of the specialization of the world these days has to do with the fact that humans are the tools instead of tools being the tools. With the right tools anyone could do any job.
For instance, with quality tools, anyone with average mental abilities could be a doctor. The tools or robots would do 98 percent of the doctoring. With the right tools, there would be so many people mentally capable of being a doctor that it would cease as a profession. Economics fall apart when everything becomes easy, because in such a scenario the scarcity upon which goods and services are valued is all but eliminated. If we could make all the necessities of life easy, such as food growing/preparation, health care, transportation etc. then the idea of economics as we know them today would totally disappear.
Are We Too Damn Dumb?
Although this scenario I’ve been describing is perfectly viable, it is questionable if the world is smart enough to implement it. A major reason this is so is due to the world’s general undue reverence for centralization (and tradition). Things in this world actually work best in a dispersed yet cooperative manner. However, we let things get big and centralized in this world all the time.
Centralization leads to black holes. For instance, when governments become too big and centralized, they become like black holes sucking in money with high taxes, high government employment, and overall high levels of invasiveness and dependence. The same is true with oversized corporations, stifling competition, eating up employment, and making consumers dependent on their sole product.
Centralization leads to vulnerability, because it is equivalent to putting all the eggs in the same basket. Just consider that terrorism only really works if there is a centralized, concentrated target. If you are living on a farm in Iowa, you’d have to be pretty delusionally paranoid to be worrying much about terrorists. However, if you live in the center of a high profile city, then you are essentially living in the bull’s eye.
Another problem with centralization is that it is inevitably hierarchal, leading to haves and have nots. Once power is given, good luck trying to take it back. Power protects itself, and much of that self-protection is at the cost of those without the power. The only chance those who are without power have is to ingratiate and or cannibalize to the top.
The political pipe dreams of the 20th century, namely the socialist currents of Marxism, warranted obese travesties in both communist countries and capitalist countries alike (gradated taxation and central banking). While the idea of a society of equal wealth distribution sounds nice, its implementation has historically been dependent on the force and coercion of hierarchal governmental authority, thus destroying the idea and turning it into a means of power and money manipulation
Stuck in a Hierarchy
Anything that empowers the general population is naturally threatening to institutions. The internet for example is one such beast. It is only thanks to the lack of vision of established institutions that the internet exists the way it does today. And institutional interests are constantly trying to mess it up. An energy revolution that makes economics obsolete is just as about as threatening to institutions as can be. Yet, such a revolution would be immensely beneficial for the whole.
In part three of this series of articles we will look at how the maintenance of scarcity works in economics as well as the entire universe.
Artificial Scarcity:
The Universe as an Economy Part Three
March 28th, 2007 by Alex Marchand
The Economics of Scarcity
A basic part of economics is artificial scarcity. In order to make a decent profit off a good or service, it’s supply must not exceed demand. Consequently, there is incentive to not overproduce. The price of a good or service is thus essentially a measure of that good or service’s scarcity relative to demand.
Consider that in the summer, there is usually such an excessive supply of heat that heat is free and so there arises a demand for cool. But when winter rolls around, there is usually such an excessive supply of cool that cool is free and so there arises a demand for heat.
Information Monopolies
Some products lend themselves to artificial scarcity more than others. Information, for example, is a product in which artificial scarcity is very prominent. Unlike a tangible product like corn, information can be multiplied and spread ad infinitum in little time with minimal effort using current technology.
Things like copyrights, trademarks, and patents currently protect the artificial scarcity of information. Such things assist monopolies on information. Information monopolies facilitate things like expensive prescription drugs and expensive software. Over the years, as technology has made copying and spreading information ever easier, the business of keeping secrets and selling information has become evermore problematic and has become evermore dependent on artificial protections like intellectual property rights and anti-piracy laws.
Pirates of the Copyright
The problem of information piracy is a problem based on poor and archaic business models. If a product is so unauthentic or open to manipulation that it can be copied, then that is a flaw in the product that needs fixed in order to remain economical in the contemporary world. The criminalization of people who exploit product flaws is a form of crony capitalism. If a product can be reproduced ad infinitum with no special capital investment involved, I’m sorry, but it isn’t a real product; it is flawed. As long as the copier isn’t committing fraud by trying to sell the copy, claiming that it is an original, then there should be no legal issue. And in societies where sanity and common sense are valued more than money, it isn't an issue.
The content of this website is licensed under an alternate to copyright called Creative Commons, which means it can be used and spread by others as long they credit me as the source. Information is advertisement in this context, not a product itself. Information in the form of a physical book or CD is a legitimate product--if that is something people demand--but transformed into an easily distributable electronic signal, that information is mere advertisement.
Selling physical media with content encoded on it used to be a viable and legitimate business until technology caught up. Now, the business of selling information is in dire need of some rethinking because the old artificial scarcity model is breaking down and turning consumers into criminals. The good thing about artificial scarcity though is that it is indeed artificial and eventually is conquered. However, things like the coercion of governments engaging in crony capitalism can make artificial scarcity last longer than it should.
The Coming Information Gift Economy
Eventually, nearly all products will be information based. And in such a scenario, nearly all products will be easily copied. This will be made possible by 3D printers that will be able to build things atom by atom. All you will need is one of these 3D printers and some raw material cartridges and you will be able to print out physical products based on information that instructs the printer how to build the object (you could even print out additional 3D printers).
The resulting economy of this proposed future will be based on energy, raw materials (elements), recycling, and human services. Information will operate in a gift economy fashion and so products derivative of energy and raw material will have no special value (including robots) beyond their raw material and energy value. The new incentive to putting in the work to design a product will be altruism or advertisement for either a name, an idea, a raw material, or a service. Barter of raw materials will likely replace money as the primary means of exchange. And a constant recycling of raw materials will allow for a nearly perpetual motion economy as opposed to a perpetual growth economy.
Some governments will try to keep information a viable product through artificial scarcity longer than others, but eventually there will be little choice but to succumb to the information gift economy.
Scarce Intelligence
All the stuff needed to construct the contemporary world existed thousands of years ago. It was merely that the information was hidden, secret, and yet to be uncovered. Information usually remains hidden longer than it should because this world suffers from an artificial scarcity of intelligence. By intelligence, I don’t mean the kind of superficial, robotic intelligence that translates to things like high SAT scores; instead I mean intelligence as the ability to think beyond established thinking; including the biologically established thinking that keeps people distracted by basic things like eating, sleeping, and procreating.
The future could exist today if we would merely utilize our self-stifled ingenuity to redefine what is possible today. The key to wiping out artificial scarcity is the abolishment of suppressed, hidden, and secretive information. This universe and this world hold many secrets. Every secret we uncover only seems to reveal a whole new group of secrets.
The basic formula is that the more secrets we uncover the more scarcity is revealed as artificial. For instance, today we do things like burn fossil fuels to get energy. Energy is somewhat scarce because we only know of certain ways to find and harness it. Yet, on another level, we know from things like Einstein’s energy equals mass times the speed of light squared equation that the amount of energy in this universe is huge. And it is just a matter of exercising intelligence to be able to discover new ways of more efficiently and abundantly harvesting that energy.
The Goal of Economics
The ultimate goal of economics (as well as everything) is to overcome itself: make itself obsolete. To the extent that economics (or anything else--such as government) does not work to overcome itself, it is not on course. Because when you really think about it, the goal of all goals is to have no goal. So, for instance, if you are hungry, your goal is to eat, which means your goal is to not be hungry, which is to have no goal. The same principle applies to everything.
The function of an economy is to facilitate a world where an economy is no longer needed; it is a temporary incentive for progress. In Buddhism, it is said that earthly life is suffering and that suffering is due to desire. Desire is similar to the concept of having a goal. And thus it could be said that the ultimate desire is to have no desire. Yet, obviously most people don’t ever really ponder that simple concept because for most people life is given a perceived purpose through the constant fabrication of desires (goals) that are merely derivative desires of the big desire which is to have no desires. Consequently, most people’s lives are lived in evasion of desirelessness (goallessness).
Economic Nirvana
Economies, like most human constructs, are systems that fabricate and fulfill desires. And unfortunately, economies tend to operate today with the goal of perpetuation instead of ultimate satisfaction. An economy should be seen as but a means to setting up a system where the basic needs of humans are automatically satisfied thanks to the development of super-productivity. The aim should not be perpetuation, but instead a kind of economic Nirvana where economics are transcended.
The economy at this point in history has started to facilitate conditions where information is beginning to transcend the economic structure. Eventually matter and energy will start to transcend the economic structure too. That is, if we are smart enough to embrace transcendence when it begins to emerge.
There are alternate versions of the future. And so I implore you to start thinking beyond the structures of today so you can choose to live in a future where economics is made obsolete. If we continue to think in the ways we’ve thought in the past then we can hardly expect the future to be anything more than a trumped up version of the past. Let’s make economics obsolete. And while we are at it, let’s make the entire universe obsolete too! But that is another topic. Remember, the goal of goals is to have no goals.
Exercises:
1. Imagine being sent thousands of years into the past. What knowledge would you be able to bring from the future to the past? In other words, what knowledge about the contemporary world could you reconstruct in the past? Would you be able to kick start major technological and philosophical progress? If not, start educating yourself now, because if you couldn’t go back in time and reconstruct the contemporary world out of yesterday, how can you expect to go forward in time and construct a better tomorrow out of today?
2. What are your desires? What are your goals? Regardless of what those desires and goals are exactly, realize that they are but substitutes for the ultimate desire/goal, which is to have no desires/goals.
3. Start to be more weary of intellectual property. An important step in making economics obsolete is progress. Progress does not mean enforcing outdated laws and enacting new laws to preserve old business models. Let your wallet take action by boycotting businesses that try to criminalize technological innovation that threatens artificial scarcity. In the business world, dinosaurs must die. In the new economic world, information is advertisement. Eventually the same thing will happen to physical products. Support the pioneers. Be a pioneer.
4. Start to be more weary of inflation, what it is and what its source is. Inflation is a devaluation of money due to increase in the supply of money and credit available, which is controlled by central banking (The Federal Reserve); it is a hidden tax. When voting, don’t support federal taxes or the federal reserve (unless you enjoy being a tool). State taxes are actually somewhat useful, but federal taxes are completely wasted on paying interest on federal government debt, which exists and accumulates precisely because federal taxes exist. So, deal with state taxes as you see fit, but don’t be suckered in by anyone who advocates sustaining federal taxes and ignorantly supports our current debt based fiat monetary system. It is just a big system of selling out the future.
5. Tell people to read this article (email them the link). Inform your friends; encourage them to not be tools. Don’t get suckered in by partisan politics that merely present the illusion of choice. Check out the additional resources listed below.
Additional Resources:
