Saturday, October 15, 2011

Outline for a new economy

I fully support the Occupy protests and gratified that some people are waking up and making their objections known. I place the demonstrations in the context of the Arab Spring uprisings and other demonstrations throughout the world. They have a common cause even if they have not identified it exactly - the economic inequity of the monetary system. To be successful, the single demand of each of these movements ought to be the phasing out of money to be replaced by an accounting system based on a value index.

To replace the irrational, inequitable and inefficient monetary economic system which prevails, a new rational, self-regulating system is necessary to meet current and projected global realities. The present model is ultimately based on the barter mechanism which grew into trade and digital exchange. Units of exchange came to be standardized to facilitate trade but the issuing of these units is strictly controlled, creating an artificial scarcity, and converting the currency itself into a commodity. These units are further hoarded and manipulated in such a way as to create debt, inequity and poverty.

It is difficult to displace such an entrenched paradigm, so embedded in every aspect of life that most people cannot even conceive that there could be an alternative. The silver lining to the current economic crisis is that people will be forced, perhaps for the first time, to examine their unconscious assumptions and stretch their cognitive range to allow for a different approach.

A value-based economy would look like this:

New Planetary Economy

The planet can sustain all life on it, though not at the level of consumption that obtains in developed countries. Everyone and everything has value. The sum of all unit values is Net Planetary Value. Value is potential until triggered into manifestation by activity. People realize value by accessing goods and services.

Each entity – individual, corporate, municipal, national, bioregional – is assigned an index relative to its contribution to NPV, which index determines its level of access to goods and services. Particular elements or activities may be indexed positively or negatively as it affects populations, infrastructure or the environment. Indices are computed algorithmically from a matrix of nine criteria: ethical, social and environmental qualified by a time dimension that embeds past provenance, present utility and future impact. Entities acknowledge each transaction by digital and/or biometric means. Data is transmitted to a distributed network which continuously updates all indices using algorithms in a self-regulating feedback loop. Built-in checks and balances adjust indices to mitigate excesses, waste and abuse.

Since it is not dependent or contingent upon monetary values, NPV can be implemented by any functioning economic unit. It will run parallel to the monetary system until that system strangles itself with its own contortions or belief in it is withdrawn, whichever comes first. Increased parity and efficiency are realized with the accession of each additional entity until universal inclusion is achieved. Each person is automatically assigned an index that gives access to food, housing, education and healthcare. Personal index is increased by life stage, training, skills and accomplishments, affording access to levels beyond basic needs.

There are no monetary limits. No budgets, no debt, no banks, no inflation, no price distortions. There will be less government, less corruption, less crime. Land ownership will revert eventually to occupancy rights. With basic needs guaranteed, many will no longer work at jobs. Traditional jobs are becoming obsolete anyway. People will choose vocations. It is a means to advance their indices. Every service rendered is rewarded. Each corporate entity likewise is assigned a base index that allows access to infrastructure and services. All corporate entities are by definition non-profit. Businesses compete and prosper by offering superior goods and services thereby increasing their corporate index with concomitant access to higher levels of goods and services.

Everyone counts. Everything is counted.

Sunday, October 09, 2011

From Arab Spring to American Fall?

The chickens seem to have come home to roost as young people, unable to get ahead, while saddled with unserviceable student loans, and older folk, unable to find jobs in a shrinking economy, are taking to the streets to express their disgust at a system which has left out 99% and benefits only 1%. The Occupy Wall Street movement has taken inspiration from Tahrir Square, practicing direct democracy and non-violence and setting up operational and social services in Zuccotti Park under the resurrected name Liberty Plaza. A library even. They've reminded the cops they too are part of the 99% and invited them to join in solidarity, reminiscent of the Egyptian protesters offering flowers to Mubarak's soldiers.

Right Here All Over (Occupy Wall St.) from Alex Mallis on Vimeo.

Their demands, published in a manifesto, are admirable, covering a wide range of abuses. Have the American people, who seem to be broadly represented, finally woken up to their condition of wage slavery and financial chattelry? Are the activists tenacious enough to occupy public spaces for long enough to wrest concessions from the Powers That Be? You can be sure even if all their demands are met it will result in superficial reforms and regulations that will allow the corporatocracy to continue business as usual maybe a bit less brazenly.

Talk of revolution and manifestos is well and good, creating media buzz and a feel-good camaraderie on the barricades and behind the digital redoubts, but nothing less than the dissolution of the monetary system will bring about real change. We have conflated the meaning of money with wealth and power for so long that it is unthinkable to even consider overturning the tables in the temple.

Ecological economists who promote a steady-state economy like Herman Daly, Bernard Lietaer and David Korten limit their proposals to reforms of the present monetary system.
Participatory economics touted by the left and being taught at Liberty Plaza may give the appearance of empowering the grassroots but the economic balance of power will remain substantially unchanged. Some like Charles Eisenstein promote the idea of a gift economy which relies on people's better angels to give freely without expectation of return. This may have worked for Trobriand Islanders of a bygone era but is not likely to hold much truck in today's complex global systems. I fully support localization and recognize that power down, downsizing and downshift are inevitable but i don't see people going back to trading a cord of wood for a loaf of bread outside of intentional communities. The few voices on the fringe who do advocate doing away with money, like Jacque Fresco and his proposal for a Resource Based Economy, promoted by the Zeitgeist Movement and others, are paid scant attention even by progressives. None have said just how the free-for-all would be managed.

The wealthy will not willingly give up their power. They hold all the aces in the house of cards. The solution then is to withdraw from their game, shift to another system of accounting and distributing wealth so they are left holding bags of worthless cash.