A New Economic System
Summary
Most people who are involved in capital enterprise understand that the current growth based system is flawed at least or tragically incapable of handling the future production growth and demands. Many people frustrate themselves at the problems of the world and look to “fix”, hunger, poverty, education, sexism, racism and war in isolation of any other system. The fact is that all these problems are built into the fabric of the capital market system and are in fact symptoms of our monetary systems workings and the longer we use this system of exchange, the more of these symptoms are produced.
Unfortunately the current circumstance was decided the moment we let go at the top of the slippery side, once you let go, you accelerate all the way to the bottom. Once our society started to use a value exchange system that decides everything in terms of Monterey cost, we moved away from wise steward ship and into spiralling selfishness. By themselves a few selfish decisions do not hurt the society that much but when they are compounded into every part of mining, production, consumption, disposal and exchange on the planet; the effects are the total elimination of environmental, human and social consequence from the decision making process. Basically any exchange where money is the primary resource to be saved or considered, will by the nature of that exchange, be at the detriment of many other stakeholder. Now companies are very good at passing true production costs on as externalities and so deliver very cheap stuff to a select group but somewhere the true costs are eventually being paid.
All of the problems above could be solved in sort order but our current economic system has no mechanism to rectify these problems. Capitalist are still people and we feel the pain that is in the world but there is very little chance of changing the system because it is protected by the existence of corporate policy. This capital system was built to plunder the world and resist all efforts of men to stop it. It is not a cartel of the rich or a secret government plot that is destroying our planet, No it’s just a 400 year old system designed for a time when we had what seamed like an unlimited expanding pie. Once this system was in place as the frame work of all other decision making processes, It has justified 400 years of irrational social behaviour.
This paper is not aimed at re hashing the problems that exist as symptoms but to lay down a new frame work that could bring society out of this quagmire of inefficient, wasteful, manipulative production, Into an age of understanding. Understanding that consumption is not happiness and the planet is not ours to rape and plunder as we please. Understanding that all people have sovereign rights to not just live but thrive! Understanding that our best future is not secured with guns and fiscal manipulation but real security can only be found when the best out come for all the inhabitants of the planet is considered. Real security can only be found when we protect everyones right to a Happy and Healthy life.
The purpose of this paper is to consider the effects of the current value exchange system as it effects the following stakeholders and their future generations.
Stake holders considered
All peoples of the earth and their entitlement to clean water, food, shelter, education, security and free expression of culture, art, relaxation and belief where their rights do not intercede on the right of any other persons freedoms. The resources of the planet need to be considered not for their value to one nation but for their value to all people.
All the animals of the earth should not be exploited for food and entertainment where such activities impede on their wish for a peaceful existence. This includes all captive and free animals. Animals have always been respected for their contributions to human endeavour. However our current system only values animals in terms of dollars and neglects, even abuses their sauvignon rights to peaceful existence.
Plants and animals captive and wild need to be considered as having equal entitlement to exist and all human activities that would attack their existence should be carefully considered.
The planets environment as it effects every living creature, is not a commodity that can be used polluted or destroyed for the monetary benefit of one nation over another.
Standing armies should be disbanded as it is obvious that while ever we train people to hurt people and equip them to that end, we will have wars. Again because of corporations that equip armies having a vested interest in the sale and consumption of these goods, governments should be careful of the power they give private companies in the supply of military products.
Institutions and corporations, do not on their own have a right to exist as they were created by men and should serve the interests of all men. Any institution that acts without transparency or outside the interests of all the stake holders above should be dissolved. As the rights of every creature on the planet and the environment are above the rights of any document.
You remember when our streams ran clear, when we could catch a feed of fish and not worry about the toxins that might be in them be for we eat them? You remember when people took pride in their labour and handed down possessions like Watches, Furniture and Tools of trade to their children. Well loved and well used but also still in very good condition. It amazes me that in this modern era the best idea we have for keeping people working productively is to constantly increase consumption in order that we create job for people to make and distribute crapy products. Just 100 years ago people would have asked why we needed to buy a hammer for $3 just to have the head break or why we accept a supply chain that is hell bent on Planned Obsolescence just to increase company profits and keep jobs ?
In a world that has lost its way in material production and consumption it begs the question, How did we get here and what can we do to fix it ?
Well my name is Peter Johnson and I have authored some financial books and Completed a post graduate education in Applied finance, so I know just how confusing these questions are. This is a rabbit hole that is thousands of years in the making and it is going to be hard to climb back out. If I had any hope that I could just leave this problem up to smarter people than me to solve, I would but it seams all the smart people in the room have to many letters after their name to have any common sense.
I was alerted to this problem one day in my economics class when the professor very foolishly said that the roll of a economist is to keep year on year growth at a sustainable level of between 3 and 5% ? I put my hand up and asked, "What is sustainable about a compounding curve?". He not only had no answer, he seamed to not even know what I was talking about.... And he was teaching 350 of our brightest young people to think the same way about growth. When I questioned him after class he was still confused about the fact that a compounding curve at any growth rate, eventually needs unlimited inputs year on year and is therefore not sustainable just by definition.
So I decided then to go to the Library to find out if there was any other propositions or bodies of work that proved that growth was bad or if a economic model had been developed that did not rely on compounding growth.
Honestly I was Shocked !! Using the QUT (Queensland University) computers and doing a keyword search on all economic papers in english, Not one had even a thought that Growth is bad or how to deal with it in a finite planet. No wonder the world is falling apart.
So then I decided to choose my topic for my Research PHD, well the suggested list they gave me was a bit uninspiring. It included two years studying the effect of price label colour on the consumer, Wow you can call yourself a doctor for studying crap like that!! Nobody is even going to see a price label in a few years time... What a waste of my life that would be but then I would have a published peer reviewed work and I would be able to study something useful then apparently ... The creative genius that the world needs to bring new ideas to the worlds problems, obviously could not put up with that type of bureaucratic punishment. I guess that is why Einstein and many others only got honouree degrees after they had published works.
Anyway knowing this I put my research question "Prosperity with Negative Growth" to the Economics board to get support from the university to product a Theseus covering that question. Now Again out of a University faculty in the 1000's they wrote back to me and told me they had nobody qualified to supervise my question. I might say that the purpose of research is to find something that has not been found before and so I guess if someone was qualified there would not be much point studying the topic ? ... I know I am a uneducated simpleton but I thought a question that had never been looked into in economics would be like someone showing a mountain climber about a bigger mountain than Mt Everest that had just been found... Anyway long story short ... I left the university and decided I would research it on my own and self publish. So that is what this is and I wanted to give free thinking people a way to comment and help grow some ideas here in this place far away from the bureaucrat brains that are chocking our institutions.
Price should be the force in the market that drives innovation and quality but in our current system, price is becoming more and more linked to lifecycle because of a constant need of companies to sell stuff. The conflict is that if a workforce can produce more in a day that reduces production costs but it also places a obligation on the company to make more sales to keep the same workforce or they will have to pay staff less. One sure fire way to make more sales is to decrease the products lifecycle and increase consumption of that product.
As companies chase the consumption curve, everything gets worse. If companies could get paid for value instead of consumption, the problems in the world would be reduced. If price is the cost of production plus the needed company profit to stay in business until you find the next customer, then in the current model; a product with infinite lifetime value would have a infinite price and nobody could afford to pay for it even though everyone would want to buy it. Consider a pair of shoes that cost $30, if you buy a new pair of shoes every year the company has to pay for all the resources and labour to make those shoes for you 1 time per year.
This transaction would break down to about 10 for the materials, labour and profit for the manufacturer. Then $10 for the importers taxes, transport and profit. Then $10 for the marketer retailer for overheads, labour and profit.
If we could pay all these people for the production of shoes that lasted 5 years but only ship one pair of shoes every 5-10 years, the environment and labour force would all be better off. Everyone would work less and make the same money, which would actually increase consumption of quality products. Yes there are $150 - $300 (5 or 10 x $30) shoes on the market and they last longer but companies refuse to make shoes that outlast their ability to replace the customer with a new customer. So typically these shoes do not last 5 or 10 years either.
The person who can only afford the $30 shoes has no chance of helping the environment and that is why we need a new economic system that can rip price away from consumption and put it squarely where it belongs with Value. I call that "Prosperity with negative Growth" and it is possible if we just get enough companies to start increasing lifecycles and being paid for value.
The first thing to understand is the problem, the real problem and not just all the symptoms that are used by economists when they think about the economy. So firstly let’s take a step back and realise that every problem in the world only exists because of money. In other words companies pollute the environment because of a economic principle called externalities (costs that you push onto someone els) and human traffickers sell people because they can exchange forced labour for money. Even the Japanese whale hunts are driven by a accountant somewhere saying that the benefit of killing them and selling their flesh is more than the cost of fines or public back lash.
Now yes we would have some of these problems without money but money makes it so easy to convert ill gotten gains into something you want. Thousands of years ago it was not as easy if people wanted to barter what they had because they had no gold or money. Now I might also say that all the good in the world also came from the creation and use of money. Money is such a powerful and misunderstood commodity. Economists don't even understand that Hard currency is now a commodity, if you do not have it you starve even in a modern city. Money itself is a essential service that people need now days the same way as we need water, power and the internet in our cities.
Money is actually a fiction, it does not exist and in fact when you look into how banks make the money that the lend to us at interest on our labour, it is obvious that money is created as and when needed by the powers that be (Central banks). Money is a beautiful result of human beings being able to imagine something in the future we want and then pay some of our labour today for a promise (Fiat currency or Money) to get some equal benefit in the future. So one thing that is not well understood is like all commodities money suffers from a value problem. How do we value it? Well economists don’t do it very well, they never consider supply of money in the valuation and they do not consider the time value that money has embedded in every transaction.
Modern Economic theory assumes money to be scarcely traded by rational traders. Now one of the concepts that absolutely must be adhered to in order for the faith in money to be maintained is that it must be more scarce than any other commodity it is traded for. Now when governments forget that, it brings down their empire. Even if your economy has "Gold Backed", meaning the printed note is worth a certain amount of gold that can be claimed from the crown at any time Ie "Redeemable in Gold", if gold becomes less scarce than the other goods and services being traded, the value of the money in attacked.
Now the smart people in the room 1000 years ago built fiat currency around these ideas and they have had successes and failures. After many years they have been able to so pollute the idea of money, that most people have got no idea how frail the money system is. Here are some terms that you really should look into if you want to understand money. Most of these are covered in my book "Why Are You Still a Slave", so I will move on but it is worth mentioning that most accountants and economist do not know what is behind the meaning of these words.
Fractional Reserve lending
Inflation
Interest rate - As set by the reserve bank and not by the government
Externalities
Planned Obsolescence
Embedded costs
Capitalism and socialism and the built in conflict within those systems
CPI
GDP
Risk free rate
Rational investor
Speculation
Morgauge
Quantitative easing - what a stupid idea in its current form.
Systems of performance and production that exclude all other values than profit.
Compounding Growth year on year, month on month.
Corporation - as a entity with all the rights of a individual but not the same responsibility
Milgram experiment as it relates to how we think it is ok for our capital to hurt other people because governments tell us that it is ok
Systems of governance and laws that do not die, more laws are made but often as amendments and not as a repeal of in effective laws. We need systems that remove ineffective laws rather than just try to fix them because sometimes they need a totally new approach to be effective.
A breaking down of the balance of powers that was set up to keep Capital separate from state, religion and education. These institutions loose their worth when they stop working solely for the purpose they were set up.
The committee of they - the idea that 5 people with differing agendas can think clearer about a idea than one person. If they all have exactly the same goals then maybe it works but that never happens in these committees
Equality of social gender outcome versus competency hierarchy and the real effect that has on the economy.
Resource based economy - now don't stop reading because I have not read on resource model that addresses all the problems of that idea.
Marginal cost of production
I can assure you just like my economics professor did not understand basic maths principles, most accountants do not understand the real implications of the terms above as they relate to our economy, money and society. So that is the basic problem, horrible things are being done to people, animals and the environment all around the world in the name of increasing profit. Now a Child could tell you that if Debt is the problem, more of it will not fix the problem. So why are we trying to fix a broken system with the same set of rules we have used for the last 1000 years. These rules for how we imagine money are what got us into this mess and they have no ability to solve the problems we have. I am not the only thought leader saying hey wake the hell up before we run out of air to breath just have a look a this guys seminars (Albert Bartlett), he is a economist too. His youtube video seminar is a must watch if you are interested in what is wrong with our economy.
The real value of money is what we can buy with it right? so when a business decides on that price, they have to include all the following costs in that price of they will be out of business.
Cost of materials
Cost of labour
Fixed overheads of the business
Variable overheads of that sale
Research and development in order to sell more later (Not researching a better product)
Capital costs
Exchange risks for exporting or importing
Insurance
Warranties or future liabilities
Marketing and sales costs
The Lifecycle of your product, Time to next customer - The longer your product lasts, the longer this time will be and the more you need to charge up front. Companies in this economic system are literally incentivised to make less and less effective products because they are never paid for the true value of the product.
Now some of these are very easy to price today and know how much you should charge. Other costs are very much harder to figure out but they all have to be included into the price of this one sale or the company will be loosing profits. Building in all the future cost into each sale is something every company has had to do for 1000's of year and the more efficient they become at doing that the more they can compete against other companies.
What does a new frame work look like and who will implement it and why? Social reformers in the past, have failed to achieve very much because they rely on the current system to act outside of its best interest to affect change (Resource based economy by Jacque Fresco). This just does not make sense! how can you ask any man to make great lifestyle sacrifice today so that in 100 years society can have a better lifestyle as a whole?
The human mind is not capable of making decisions that are outside of its current best interest. No matter how good your argument or rational, the human being is hard wired to act only in self interest and diverges from this on rear occasions. Our brains will just build the rational and argument to justify the decisions that suits its current interest best. Whatever the change we desire, it needs to represent the interests of all stakeholders in a very selfish way. While still bringing great change to a broken system of exchange over time. As every value exchange involves money (Fiat Currency) or is valued in terms of money, it is the money exchange system that needs to change before we will see the symptom of the current broken currency system change.
What does the new economic frame work look like? My vision is for a global society that respects each others unique right to survive and thrive without being subjugated to the betterment of any other society (No corporate slavery). It should be a value based system of trade that uses interest on money to build communities and not to enslave them. We should remove the right of any government or organisation to manipulate technology or resources against their best use and install them into the service of our global needs. As the capital markets have developed a global response to governance, So should governance have a global response to any entity or cartel that acts in a global way. This global governance would stop one country from being raped of labour and resources for the use of another member country by its Corporations or Government with the weapon of Fiat currency. We will not effect this change with standing armies but with political, social and technical improvements as Alfred Nobel stated in his will when he advocated for great social change based on great advancements.
The foundation of this new frame work will need to reward the free flow of ideas in a new way and not just for their ability to expand consumption and profit. Idea’s are not possessions to be held and used to manipulate one against another. The irrational argument that without copy right and Intellectual property, their would be no social advances, is to say that this capital market system is the only way to reward people for original thought and effort... But that is not true. Social media and networking has rewarded many people for giving freely of their tenants and ideas. The age of Understanding requires us to commodify ideas for best use of our resources and best benefit to all humanity and not for most profit. This is quite impossible while ideas are only valued for their monetary profit. While consumption means profit, we will be trapped in this system of tragic environmental and human consequences.
Why is change fundamentally impossible under the current economic system? Because at the moment, this market system can only charge for the product and not for it’s benefit or long-jeopardy. So self interest would prevent any company that is acting in favour of the share holders, from producing a product by any other means than the cheapest production cost for the shortest Planed Obsolescence time. Now I hope you understand that it is not some evil plot but just organisations acting in self interest, to make very illogical and profitable decisions, who’s non financial consequences are irrelevant. We the consumer reward them for this and in fact the current frame work prohibits any other production method from being possible. It is actually law that corporations must act in the sole financial interest of the shareholders.
One night I asked my children how they would profit from selling a razor blade that never goes blunt and although I was very proud that my boys understood the conversation; when my 10 year old son Moses said, “put a unique battery in it that goes flat”, It made me question the system in a way I never had. I had always played the game to win and that has always advantaged me at the expense of others. Now I realise that I am not just taking money from people who can not play the game as well as me but I am actively creating a society that feeds on the exploitation of all other stakeholders.
We are in this position because of some flawed assumptions at the start of the industrial revolution and at the end of the Great Depression. These assumption were that:
We would never run short of natural or human resources to exploit as machines replaced labour and Technology solved every problem we could make.
That designed redundancy or planned obsolescence could increase consumption and create jobs without any other consequences. Increased consumption would continue to provide greater demand for workers displaced by machines.
Externalities are costs that corporations do not need to be responsible for and therefore should be allowed to pass any cost that are externalities out of its balance sheet and onto the balance sheet of society.
The natural world exist only to profit human beings as all aspects come under our control. In fact nature has no value until we exploit value from it for any profit we can gain, as we are supremely entitled to do so as human beings.
Some how because of our greed we have turned our greatest achievements into the tools of our oppression and destruction. Systematically reducing all man kind to his greatest profit potential when viewed on a profit and loss statement.
Our current capitalistic free market system has some serious built in conflicts, like companies want to reduce costs all the time, like labour costs but if we all pay labour less, then theirs less money for people to buy our products. If we pay them more then the cost of our products increase and people need more money to by them...
Seeing this as the legacy I was leaving my children inspired me to rethink the current financial system and hopefully find a better way. Out of that conversation and ones like it, I think I have developed a viable solution to our fault-erring consumption based system.
Imagine buying a razor blade that lasts 5 years, a computer, phone or white goods that lasts 10, 20 or even 100 years (They built a light bulb a 100 years ago that has been in constant use and is still going but what happened to it ?).
What about a house that costs 20k and it never has a power bill, water bill and it grows its own food.
A food products that are not wrapped in one use packets. Packaging that is grown, instead of plastic or foam the packaging is grown from mushrooms mycelium.
Fast food that does not destroy land, body or culture.
Toilets that flush without polluting drinking water but also use the resource that is poo.
Cars that do not use any fuel but clean the air as they travel.
Air travel without fossil fuel.
Oil that is 100% reusable.
Industrialize the natural food for our food IE insect farms to feed chooks. - Stop feeding wheat to cows they are built to eat grass, not beans or grain.
Clean water, food and housing in the 3rd world as a by product of their production.
Food that is produced for our benefit and not for profit.
Animals that are not just exploited to make stuff for us.
A house that does not have a rubbish bin out the front because it does not make waste. Nature has no such thing as waste and nor should humans.
Clean free public transport
Medicine that is cheap and works but is available to everyone freely because it is just code that can be downloaded on your phone and printed to treat any problem.
Cities and laws that build communities. Laws that are fair and consider the rights of everyone to live and thrive. Without the current system of greed above all other values, we would not have a need for war. Governance can not make happy people go to war.
None of these ideas could succeed in our current economic system, simply because they have no financial benefit to the people who would develop them in this system.
Everyone who has tried to address these social and capital problems have had very little success. There is too much invested capital in the current models by important stake holders. These companies own so much of a market that they will need to take up any new idea for it to succeed and they will not do that unless there is a substantial profit involved. This includes all market driven problems like poverty, energy, housing and transport. These interests have too much money to fight them and so any chance of change must be in their interest.
For Corporations the problem is that they have to build into the cost of each sale all future costs and that has to be enough to guarantee the company stays in business. The cost of materials, Labour, fixed and variable overheads are cost factors that are easy to understand. The cost of future development and customer acquisition are less easy to put a value on but every company must put some value on all future costs and wrap it up in the price of the sale… This effectively forces customers to pay for future benefits of the product even if it turns out that the product can not deliver those future benefits.
The other major problem is that corporate power exceeds the political will to change any of these global systems.
I have identified 6 key strategies for the successful implementation of a new economic system.
It must be able to work inside the current model and attract the support of the largest stake holders in production and consumption now.
The current stakeholders must see incorporating the new system of production and value exchange as acting in their self interest primarily, while effecting a 100% phase out of the old system of exchange.
Its implementation needs to transcend geographical, social, religious and capital boundaries and be in the benefit of all.
The customer demand for change must be measurable and specific before production stakeholders are involved.
The new economic system will add disincentives to the power of governance or propaganda from mass media to interfere.
New ideas for better production, distribution and consumption techniques must be rewarding for all stake holders, including the environment, employees, companies, consumers and share holders.
“Long Tail Production and Pricing” model
My proposal for a new age of understanding, a Value Based exchange system, is based on the fact that now we are in the information age, we know the outcome of almost all human actions and inactions. As yet we do not understand them in a way capable of affecting great change. As we enter this age of understanding, our reasons for social divide will become less important as people will no longer be rewarded with power or possessions. This will make any justification of conflicts like war, harder and harder to secure public support. Instead of governance and corporate policy driving production, wages and human rights issues, they will be driven by the largest force on the planet “consumers”.
Long Tail Production and Pricing Model
Change is possible within our current economic and political system, with the current technology. Here is my basic proposal for great change. The “long tail” economic model has been used by the Entertainment industry for many years with great success. Movie and music companies could not exist if they tried to put all the production costs of a performance into a normal pricing model. Until now this idea has never been adapted to fit a goods and services business and yet it is a viable model for any production method, where the cost of making a product to last 100 years is prohibitive. What is the main reason this can not be applied to the “normal” production and consumption business pricing model?
How do we maintain jobs and lifestyles for the factory workers and companies that made the product 100 years ago?
Well this could be solved by making everyone in the value chain of production and distribution part owner of the product in royalty based system just as if they had written a song or book. By redistributing wealth in this way we can make products to last a 1000 years and the staff that made them could be paid a royalty as owners of that production value for 1000 years.
Increasing the life cycle of products and reducing consumption will help the environment and provide incomes for people to buy products that are consumable, like food. Even true consumption industries like the food industry will become more efficient, cleaner and better as the tractors will last longer and the technology to produce these products will be build within the “Long tail production and Pricing model”
Framework for production requirements would include
Take every step to reduce waste in production, transport, labour and reuse of any items made, while considering all stakeholders. This can be achieved best in the design stage.
Have a “cradle to cradle” approach that ensures that each design considers all aspects of the biosphere and how its design can improve the quality of humanities total existence at every stage of the products use and reuse.
There will be no built in obsolescence in our products and they will be built with min design goals in mind. Future upgrades will be considered in the original design.
Minimum life expectancies will be set for all product categories. These expectations should consider the best technology and set standards based on what is possible and best for all stockholders without commercial considerations to monetary cost of production.
Zero tolerance to inhuman or unfair practices in the production, this includes humans, animals, cultures and environments.
Every product will be sold on the basis of the True embedded energy and environmental impact. Whether it is fashion, computers, cars or phones it must have a meaningful breakdown and build in the best current innovations and the ability to upgrade, repurpose or reuse in the future.
Any product that can be purchased once and used for a lifetime is far better for the environment than just about any plan to recycle that product every 2 years. If a product lasts a lifetime it deserves to be sold for a price equivalent of the value it creates That is almost impossible in the current system because only the super wealthy could afford to upfront cost and then the product would not benefit from the efficiencies of the economies of scale in production. But let the consumer pay for the value as they receive it and the whole landscape changes, a monthly income to the people who produced the value while ever the product produces that value. That is an idea that lets manufacturers bring their best ideas to the market and get paid for them forever.
Manufacturers today do product viability calculations like this, if we make it last twice as long will we be able to ask twice the price or at least twice the profit. If we reduce the life expectancy of a product, what is the lifetime value of that customer. All production efforts and business marketing are focused on selling more stuff to more people more often and nothing about that aligns with sustainable growth.
In an effort to maximise profits they need to consider how are we going to keep their suppliers and staff happy if we have no production? That is why suppliers or raw materials and staff need to get a ongoing slice of the captured value that every product produces. If the system only serves business profits and does not include the whole supply chain, it will fail as a viable alternative to increased consumption year on year.
Take car tyres, there is currently no advantage in the retailer, importer or manufacturer to make tyres that last longer and perform just as well. Even though technologies exist today to make a better tyre, a business man or CEO would be stupid to even put them on the market. Under my new system, a local manufacturer would have a market advantage because they would be able to capture that lifetime value of the customer without loosing any financial benefit to the companies survival and be able to make a tyre that lasted 10 times longer and get paid for the extra value that tyre delivered.
It might be that 1/4 normal retail price needs to be paid up front or at least the international price of the raw materials most used like rubber. Once a business has been paid for all the hard costs, then the balance over the life of the tyre pays the staff and other value chain owners to stay at home or work less for the same value added to society. That would put all the hard, known costs of production out of the way and then it would just be the profit from the ingenuity and product value that would be paid every month by the customer.
I believe the long term impact of these mandates will be to stop corruption in capitalism and reduce production costs as companies are incentivised to increase efficiencies. None of the above will work in the current wealth transfer system where companies do not get paid for value but only consumption. The above is just an ideal without a simple mechanism to drive the change. So here is my Genius.
How do you build an economy without increased consumption, Stop paying factories to produce and start paying them not too. More correctly, pay everyone in the production chain to produce products that consume less and last longer, IE pay for the value a product adds and not only its production. A model that will be gauged by “Prosperity with Negative Growth”, Increased lifestyles while consuming less. Reducing GDP is a the greatest single thing we can do to stop plundering the planet and yet nobody has even tried to find out how it can be done without driving us into the financial dark ages. Well that is because Prosperity with Negative growth is a oxymoron in the current value exchange system. It just can not be done!
We have to change the thinking around production form being paid for the cost of production to being paid for the value that product can deliver over its life. When production costs were high and it took time to product things, factories would product quality products because there was still a big market but now companies that succeed need to consider the lifetime value of a customer and convince them that the life cycles of goods should be shorter. We reward companies like Ikea who have done this very well but it is a crappy value for society to have.
People don't pay for a drill bit when they buy a drill bit, they are paying for the hole it produces but the company only gets paid for the drill bit. The true value of a drill bit is how many holes it can drill and how fast without breaking but that value can not be properly priced in a one time purchase cost. So while price is not linked to the true value of an item companies will continue to make and sell rubbish drill bits that need to be replaced after just a few holes. When people need a hole they will be forced to buy another one and that is great for company profits.
Action Planning “Long tail production” and implementation of the "Prosperity with negative growth model"
Reward efficient innovative production with long tail royalties instead of trying to build all costs (internal and external) of production into one price. In a similar way to how artists and authors are paid, not in proportion to production costs but the value their idea adds to peoples lives.
Build a significant customer base that has expressed a willingness to buy longest lasting, quality, ethical, environmentally sustainable, zero waste products. This customer base should have clear production goals and be a financial contributor to the concept by way of donation or membership.
Attach a MLM plan to the long tail so members and advocates can profit share from the promotion and setup of these ideas. This would make the membership an invitation only membership. This is important to the long term viability of the redistribution of wealth, as we need less and less labour in production. Any idea that consumes less, puts people out of work and as we only need work for income to buy stuff, we should build into the system a way to separate work from income. MLM can do that. Mind you some kind of value association using a product tracking that ties the value people add in the whole supply chain to them for the life of that product could also do it but that system has not been built or tested yet. Maybe a Bitcoin or QR code register that was used by a central payment receipt agency to distribute the funds as per their appropriate unit value added.
That is the Simple Part, Now for the implementation of the concepts. Implementation requires strategic steps to be followed. The following would be the steps for successful implementation.
Secure a company and business name and the appropriate internet space to develop the concept.
Secure the financial backing of a well know “champions” for new ideas and seek their mentorship, If need be sell shares in the company to capital raise for the ideas development and marketing.
Build a web site that outlines the problem and provides our solution. This site should outline our key production goals for products and ask customers to indicate what they are willing to pay for such items. It should also provide a place for people to post their new technology for production in a way that is safe. Members should be able to post solutions and discuss ideas under production headings like clothing, white goods, Computers.
The web sites Key features
Provide a club membership that funds the promotion and production of ideas based on a trigger point system. The key to this would be to have a target subscription for each idea that affiliate companies agree to start production when the idea has enough commitment from members. Members would make a non refundable deposit on each idea (Donation based) and that would come off the purchase cost at production.
Stated clear goals for minimum expectations from any company that provides goods or services. These goals would be along the lines of making 100 year products. Products that’s life cycle is fully owned by the manufacturer and has a zero waste and zero carbon production goal. It would aim to reduce transport, packaging, marketing and environmental waste. This process would make western industrial production and labour costs viable again. Best practice for any process should be used and these efficiencies will be paid for in the long tail of royalties.
Cost of living out line that explains how members are willing to pay a corporations perceived lost profit to build quality goods and how this will reduce consumption and the cost of living. Effectively rewarding companies to provide innovative solutions in a way not possible under the current consumption model.
Consumable goods will be listed with their individual outcome expectations and members will register their willingness to purchase such items on a long tail arrangement. The member bids a cents/day price and compares this to the normal consumption cost of these goods over the expected life of the innovation. This page will also inform the member of how much saving to consumption this product will have in terms of raw material like steal, plastic, oil, power and water. This will give a relative benefit ranking for each product. This will also state the amount of the long tail that will go to supporting the families of the producers of the goods.
Solutions wanted forum where current wasteful production problems would be published and allowed open discussion. Tenders for solutions could be offered in a private way which allowed profit sharing for the member offering the solution if adopted by an affiliated company.
RND idea’s page, This would be for manufacturers, entrepreneurs and start ups to post there idea for a innovative products and have the members bid on there value but also to set a trigger point for the production of the idea in terms of customers committing to buy and capital raising needed to develop and produce the product. This would be done by offering a stake in the long tail to members in return for risk capital up front. The trigger point would be shown by the deposit orders placed for any item. This will provide valuable market feed back for production companies.
Products that last longer than their needed purpose could just be returned and resold.
For even bigger bang for buck if we could somehow introduce the value based system of exchange where every dollar in society was represented by an equal dollar of work done, then we would have real significant change in both the public and private sectors.
Summary
Even Henry Ford would have built a car to last for 1000 years if he could have all his raw costs covered and pay his staff, fixed overhead and profit for a 1000 years from just one sale. This was not possible at the time of Henry Ford but now it is and so let's be the people who change the system and profit by it.
Pay companies for performance, Not mass manufacture of crap that kills the planet. Pay staff to stay at home the same as we pay share holders to stay at home. Stop forcing people to making poor quality stuff that will break, just so they can make it again, its truely insanity. All other stake holders can be paid a royalty in the same way, including Tax, Marketing, packaging, transport. As less products get repurchased because they now last longer, society will become much more efficient and production staff will work less and still make the same income.
Jacque Fresco and others have some great ideas but they have no way to bring them to market. I think this is the way to buy things in the future and because in the past there has been no incentive for a company to build a better widget. There are lots of great ideas out there and this selling platform will bring them to market in a way never possible before.
This has already been done in the computer software field, originally software writers struggled to get the total production costs back from a certain number of sales and then sold upgrades. Now look where it is today, you get free upgrades as long as you use the software at a very low monthly starting price. This has lead to more user friendly software and better quality as the writers get no benefit from service calls or complicated systems that require technical support. We would have similar market responses from introducing this system to manufacturing.
Finally: if all the worlds problems are a function of the availability of resources as a function of the effectiveness of money to deliver those resources and money (Fiat currency) itself is a creation of our imagination, then society as a whole just lacks the imagination to solve the worlds problems. So let's start imagining money in a more helpful and less oppressive way. Money is only a tool, not a commodity and as such it needs to stop being treated as if it is a real reason for society to have real problems like poverty, slave labour, environmental pollution, war. If we continue to have these problems and money could solve them, then we have to say that we simply lack the imagination to solve them and imagination is something we can solve with a "Prosperity with Negative growth" financial system.
Tell me what you think and Subscribe to my newsletter to get updates on how you can show your support.