What's Wrong With The Economy


1. Introduction

I was trying to figure this out for several days, without results...
Then I realized - how could I possibly figure out what's wrong if I don't know how it should be in the first place!

2. The basic purpose

Let's suppose there is this world, similar to ours, but with a big difference - there is no money. They do all trade by barter, by simple exchange.

("I fix your computer and you give me that chicken. No, not that one! That big one, over there.")

After a while, the people of this world think it would be good to improve the trading options, specifically:

1. To be able to trade even when only "person A" is profoundly interested in the trade, but what "person A" offers in exchange doesn't hold much value in the eyes of "person B".

("I want that computer fixed ASAP!")
("Yes, I will fix you computer, but I accept only chicken. No sledgehammers. And I don't require plumbing services either, thanks. Chicken only.")

In this case "person A" first has to find a way to trade what he offers for the things "person B" wants, which is often complicated by the necessity to make further exchanges, and definitely does not make the trade an easy process.

("Trading quality sledgehammers for chicken!")

2. To be able to accurately match the values of the subjects of trade.

("The work I did on your computer is worth two and a half healthy chicken. I need them alive. What are we going to do?")

3. To be able to hold value.

("Hey, that chicken is just about to drop dead, get me another one!")

3. An imaginary system

The wise and mighty beings of this realm have gathered together and developed a solution. The spokesperson pompously declared:

"May all of us Love ourselves and each other, in all our relations! Give, when it is the right thing to do, Take, when it is the right thing to do. Do, whatever is the right thing to do.
Let us Create, Live, and Exist in a harmonious, joyful, and fulfilling way! These problems will not even arise. So may it be!"

Then, he cleared his throat, and said, less pompously:
"We also have a backup plan. I will outline it briefly."

"An omnipresent supercomputer will be constructed which will be able to record all transactions. All records are viewable by everyone. Every person will be able to give and receive red dots (the transaction of which will be recorded by the supercomputer). The red dots will stand for the intent of the giver to accomplish meaningful work or provide resources, in relation to the quantity of the red dots given. The appropriate amount of red dots will be accepted by all as a fair exchange for resources or services provided.

Initially, everyone will have an account of 0 (zero) red dots. Transferring red dots from an account that has zero or less red dots will result in that account having that many additional grey dots (also called negative dots). Negative account grey dots can be filled in again by an influx of an appropriate amount of red dots.

Fractions of red dots can be given. To prevent abuse, a limit of 100 gray dots will be set in place (called red limit), no account may have less."

From another viewpoint, this means that all can owe to society until the limit, and others can relieve them of their debt, on the basis of fair exchange.

An amount of work is given without immediately being offered something in return.
In the longer run the benefits are much greater, because the exchange which before required a whole chain of difficult trade deals to be made now be solved with a single trade.

This system is sufficiently similar to our own.
So, what are the differences, and why doesn't our economy work?

4. The greatest problem

The biggest and most important problem is the lack of TRANSPARENCY!

Economy is a complex dynamic affecting all of its users and beyond, the pooling together of will/intent/resources it represents is a joint effort to make interrelations easier and more carefree: Therefore, by its nature, it is not a private matter.

A system such as this can basically be abused in two ways. The first is to break through the system (for example, simple stealing). The second is to use and manipulate the system as the means of abuse itself.
Possibly needless to say, the second way of abuse is FAR more dangerous!

A well built abusive version of such a system operates using the motto "Keep ignorant, divide, and conquer!".

Transparency is the ultimate built-in self-repairing part of the system. Once established, it flows almost effortlessly. It negates directly the first necessary part of the abusive system, namely the "Keep ignorant!" part.

Establishing economic Transparency would indeed solve at least half the world's problems in a matter of several weeks.

5. Lesser problems

By themselves they wouldn't even necessarily constitute a problem, but in combination with each other and the BIG problem described above they do cause considerable mayhem. These are the ones I can think of at the moment.

a) - printing of currency
b) - central printing of currency
c) - 'absolute centered' instead of 'zero centered'
d) - general, public (non)awareness of money
e) - mystique of money, corresponding behavior social structures and interactions

a) Printing money is a problem because the intent is solidified and tied into something tangible, therefore it can be manipulated in additional ways.

b) Doing so centrally "gathers" all the intent into one place and places it under the control of that agency. Combined with non-transparency it's a no-no.

With all these factors in place the system transforms from a guiding, information-providing system that helps exchange of various forms of energy into a system of manipulation.

c) Under the phrase 'absolute centered' I mean that all intent was taken (until a limit), and miraculously, solidified into a new form of goods (money), which doesn't have any intrinsic value. In this system there is no feel of balance, all intent of useful work is gathered and deformed. The total amount of money in the system is a positive value.

The 'zero centered' way offers a feel of balance, the point of balance being the zero point. The total amount of money in the system is zero. Your account can be positive or negative (until the limit which applies to all). No new goods is introduced, all there is an efficient system to keep track of existing goods and services.

Basically a zero centered system can be converted to an absolute centered one by multiplying the limit for a single person by the number of persons to get the total amount of money in the absolute centered system.

The basic difference is the feel of balance.
In the absolute centered system the natural goal is to have as much money as possible. In the zero centered system the natural goal is to be at the balanced zero point.

d) The general public has no awareness of what money actually stands for, only that they have to have more of it. Addiction!

Money loses power if no one believes in it. If at any point everyone agrees to stop believing in money, the system crashes. That's what will happen unless the exploitation of the system stops and the system itself becomes Transparent.

e) Closely tied to the (non)awareness of money is the mystique of money.

"I don't have a clear view of what it is, therefore it is strange and mystical, and it is powerful too! That must mean I have to worship it so I wouldn't invoke its wrath, and have none." This is the basic thought.

"Success in life is measured in how much money you have. I have much money, which means I'm smarter than others, and a very successful person!"
To such people this thought is the core justification and affirmation of their existence. Take this illusion away and their self-structure shatters to pieces. It is not uncommon to maintain this illusion until the moment of death. It is truly a devastating thought and moment to find out you have wasted your life. No wonder that to some living in denial is a preferable option, and choose to postpone the realization/acceptance as much as possible.

6. Conclusion

What a mess - are we going to clean it up?


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