Sunday, 30 October 2011

Collaborative consumption

Further to my previous post, I'd like to put forward CC as a possible component of an RBE or the transition to it. It shares with Natural Capitalism the concept of people needing services rather than goods in most of not all cases. There are oodles of ideas and applications here that need participants and possibly establishment in your area. They are all based on hiring, sharing, swapping, collaborating and the like.

Making markets work

This is the heading of chapter 13 of "Natural Capitalism" (Lovins, Lovins and Hawker) that influenced me years ago. One of my favourite bits is where the authors directly expose tthe assumptions of the free market as, if not being invalid, having obvious exceptions. The authors say that "it's only because markets are so imperfect that there are exceptional business opportunities left."

I'm blogging this material here as to get to an RBE we need some transitional steps - and making the free market do what it theoretically should, or showing that it can't, may be one such step.

 It's a US focussed book, published in 1999, but the ideas hold up pretty well. Anyway, here are the 18 assumptions (in italics), interspersed with the "hang on though" exceptions (in the book you turn the page). All credit is due to the authors of the book.

1. All participants have perfect information about the future. If anyone had it, he or she’d be barred from elections and stock markets — and probably not given any credence by the rest of us.

2. There is perfect competition. Competition is so imperfect that exceptional profits are commonly earned by exploiting either one’s own oligopolistic power or others’ oversights, omissions, and mistakes.

3. Prices are absolutely accurate and up-to-date. Markets know everything about prices and nothing about costs.

4. Price signals completely reflect every cost to society: There are no externalities. Most harm to natural capital isn’t priced, and the best things in life are priceless.

5. There is no monopoly (sole seller). Microsoft, airlines’ fortress hubs, and your managed health-care provider come close.

6. There is no monopsony (sole buyer). Consider your utility, the Peanut Marketing Board, and the Federal Aviation Administration.

7. No individual transaction can move the market, affecting wider price patterns. What about Warren Buffet and the Hunt Brothers?

8. No resource is unemployed or underemployed. Thirty percent of the world’s people have no work or too little work. (Economists justify this by calling them “unemployable” — at least at the wages they seek.)

9. There’s absolutely nothing that can’t be readily bought and sold (no unmarketed assets) — not even, as science-fiction author Robert Heinlein put it, “a Senator’s robes with the Senator inside.” Most of the natural capital on which all life depends can be destroyed but neither bought nor sold; many drugs are bought and sold in a pretty effective free market, but doing either can jail you for life.

10. Any deal can be done without “friction” (no transaction costs). The hassle factor is the main reason that many things worth doing don’t happen.

11. All deals are instantaneous (no transaction lags). Does your insurance company always reimburse your medical bills promptly? Does your credit-card company credit your payments immediately?

12. No subsidies or other distortions exist. Worldwide subsidies exceed $1.5 trillion annually — for example, America’s 1872 Mining Act sells mineral-bearing public land for as little as $2.50 an acre and charges no royalties.

13. No barriers to market entry or exit exist. It’s hard to start up the next Microsoft, Boeing, or GM — or to get out of the tobacco business

14. There is no regulation. The world’s regulations, put on a bookshelf, would extend for miles.

15. There is no taxation (or if there is, it does not distort resource allocations in any way). The Internal Revenue Code exists.

16. All investments are completely divisible and fungible — they can be traded and exchanged in sufficiently uniform and standardized chunks. You can’t buy a single grape at the supermarket, nor an old-fashioned front porch in most housing developments.

17. At the appropriate risk-adjusted interest rate, unlimited capital is available to everyone. Many people are redlined, must resort to loan sharks, or have no access to capital at any price.

18. Everyone is motivated solely by maximizing personal “utility,” often measured by wealth or income. So why does anyone fall in love, do good, or have kids, and why do three-fifths of Americans attend weekly worship services?

Saturday, 22 October 2011

The Fear Index

Robert Harris's new novel of this title is based on the truth that brilliant physicists now work in the financial worls, in which phenomenally powerful computers trade (though it isn't really trading) with each other. To judge the speed, consider that 19.4 billion shared were traded on 6 May 2010 - more than were traded in he whole of the 1960s. We have the most powerful computers and human minds creating a  kind of cyber chaos-theory model, which has taken on a life of its own to all intents and purposes - it is out of human control, Harris argues.

In Harris's own words: "This then is the financial world in which we now live: ... A world in which thousands of the most brilliant minds on the planet are paid not to pursue scientific progress [many of the physicists were made redundant from the USA's particle accelerator], but to devise financial strategies that are mostly non-productive and sometimes highly dangerous." I think he may mean financially non productive, but I prefer the plain meaning of what I have quoted. He must mean financially dangerous. This trading cannot directly hurt us - only indirectly as all the £ is sucked towards the rich and powerful while millions lack the very basics of survival.

Growth error

Jolyon Connell, founder and editorial director of The Week magazine writes in the 8 October 2011 edition that Matt Ridley, wrote in The Times that "the West has been running a vast financial pyramid scheme, but the world itself is not in debt." Correct. We haven't tried borrowing money from other planets yet and the world is of course a closed system: This applies as much to finances as anything else and importantly physical resources. But Ridley continues: "the world economy actually grew by 5% last year according to the IMF." This is factually correct, I assume, but we are talking about growth in GDP/GNP (which are identical at world level). We can't have a pyramid scheme with real resources, because they are finite. If we "liquidate our natural capital and call it income" as the authors of Natural Capitalism term what we are doing, no restructuring, bailing out, quantative easing or any other financial tinkering will save us.

Koko ok: Motivation

Koko is a 40 year old gorilla with a sign language vocabulary of 2000 words, the intelligence to invent new compound terms from her existing vocabulary (eg "eye hat" for mask) and many qualities that humans can relate to. In an article about his visit to Koko, Alex Hannaford mentions that "Some sceptics have argued that Kok does not understand the meaning behind what she is doing and simply learns to sign because she'll be rewarded. Dr Patterson [President and scientific director of The Gorilla Foundation] admits that in the beginning she, too, thought [this] ... but the gorilla started stringing words together to describe objects that she didn't know the signs for." Hannaford adds that Koko "signed to achieve goals, but these goals weren't treats: They were to get me to follow her around the room, to get me to lie down, to get me to play with her - to interact."

Gorillas, I suspect, have no concept of money, and so it cannot take the place of  the actual needs it in fact helps us to satisfy (at least in part). Koko enables us to see what gorillas are motivated by. In seeing how 'human' she is, we might learn about what really motivates people.


Betrand Russell wrote that "a great deal of harm is being done in the modern world by belief in the virtuousness of work." I hven't read this maxim  context, so don't know precisely what point Russell was making, but I found the quote in a page torn out of a magazine. I found it not long after I had watched a video on the web of 'Occupy' protesters in Los Angeles, including one young woman who listed what "we want" from society. I don't disagree with her wish list, except that she included 'a job for everyone'.

This idea of a job as a basic need really is something of a blind-spot. Maybe Russell realised.

Friday, 21 October 2011

Is democracy sustainable?

Democracy is such a high ideal, but unfortunately it produces, at least in many systems, people who want to be elected. One way they try to get, or remain, elected is to keep talking about jobs and more jobs. People hear the words 'more jobs' and they broadly think that's good, but no-one every really says they want to meet human needs better. That could and should involve there being less work to go round.

More jobs means, in the face of more mechanisation and automation, more consumption, and we're using up the planet's resources unsustainably. Following through this line of argument with a friend the other day, he opined that loss of democracy now is too big a price to pay and the despoilation of our planet is a regrettable but unavoidable consequence. If this is correct, it is rather despairing.

Why aren't there politicians saying that they want society organised so as to meet human needs as best they can. What's not to like? Are people scared that there won't be enough to go round, so we'll have to compete somehow, or is something more sinister afoot? The motives of the rich are pretty blatant. The government says "we're all in this together", while the media portrays people who get more for this year's bonus than some people will earn in a lifetime. "Together" usually has connotations of co-operation and a sense of fairness, but in this context we're all in the same heap - its just that some are on the top and plan on staying there.

If we want to reassure people that there is enough to go round, we need to know how much there is in total. Maybe this needs to be the first step towards a resource based economy.

Cyclic consumption

Trying to get people to consume, or more exactly buy more things in order to keep people in work so that they can carry on consuming doesn't make any sense even if resources aren't finite. Even from infinite resources our aim should be to satisfy human needs for the minimum work possible and the minimum human work possible.

Sunday, 9 October 2011

The Osama Myth

A well and clearly argued thesis about the secret neocon government within the US government that planned the 9-11 attacks. In one slide the speaker shows the three types of player in this game:

The patsies - eg OBL. These people do not have the technical ability to carry out the physical events. They are not necessarily innocents, but they did not carry out the attacks.

The moles - these are charged with protecting the patsies from being exposed / arrested while the events are being set up. After the event they expose the patsies as much as possible to reonforce their guilt.

The technical people. These actuaall y set up and carry out the events. They are backroom boys probably motivated by money, not ideology.


This film doesn't accept the official story of what happened to the twin towers in New York on 11 September 2001. It can't accept the official story of the collapse of Building 7 because there isn't one (correct me if I'm wrong).

The film does not subsribe to any particular theory of who planned and executed the attacks, but it shows how the official story cannot be true.


It is a weak but unfortunately common argument technique to play down or ignore the advantages of something you are against, play up the disdadvantges of it, and do the opposite of the thing you are in favour of.

This is seen a lot by critics of TZM/TVP especially when they light on money, because of course in an RBE there would be no need for money, and some proponents see actively getting rid of money as a transitional step in bringing in an RBE.

Undeniably money was introduced for practical reasons - a means of exchange, a store of value, a unit of accounting - the classical purposes of money - and it is counter intuitive to claim to be able to do without these functions. [In an RBE we would account for every resource. Difficult, maybe, but look at all the intellect and technology that goes into finance and weaponry. Imagine if that was diverted towards fulfilling human need and measuring sustainability].

To balance the claim of the usefulness and inevitability of momey we can look at corruption as one example of something an RBE would eradicate. I saw a TV programme about black South Africans in shanty towns. Some of them were bribing officials to get what we would call a coucikl house. One family fetaured had applied for and been allocated a council house, only to find that the house was already occupied bu someone (equally desperate) who had 'bought' the house - ie bribed an official.

In an RBE there would be no money to bribe people with, and with resources shared fairly no desire to be bribed. With human needs put first there would be no-one living in a slum. Opponents of an RBE need to put their cards on the table. Do they actually want a world where human needs are met and corruption is designed out? If so, they need to fit it into the monetary system, where scarcity (in this example of decent homes) brings an opportunity to make money.

Free market capitalists often argue that their favoured system will eventually benefit all, but this promise of jam tomorrow doesn't seem likely to be fulfilled based on experience so far. And given that human need is not being well enough fulfilled the while the limited resources of the planet are being squandered as if they were limitless, I say we try something else. Maybe no system has so far been beter than capitalism, bt this doesn't mean no better system is possible.

Wednesday, 5 October 2011

New film about the 7 July 2005 bombings

This filmmaker does not espouse any particular conspiracy theories, but he does not accept the official story of these events, asking dozens of pertinent questions and presenting facts that expose the fact thAT the official account is not true / accurate.