Profit requires Scarcity.
And most Investors require Profit as Return for the risk they take.
So it would seem we *must* seek Scarcity - for how else could we repay
our Investors?
...
But a certain group can accept Product as the Return for their risk.
This special group already pays all the Costs of production anyway,
AND they also pay Profit (Price above Cost) because they buy the
Product late.
This special group are the people the Product is supposedly being made
for, and yet they must continually beg the Owners to do the right thing.
And yet those owners really *cannot* do the right thing for the
pleading Consumers because their Investors have conflicting goals.
...
So imagine a scenario where Consumers invest and become the co-owners
the Means of Production for their own, mutual benefit.
This is different from a traditional cooperative because the Product
is not sold and so there is no chance for Price to be above Cost.
Profit is *UNDEFINED* when Product is ROI because there is no sale.
The final transaction does not occur because the Product is already in
the hands of the person who will Consume it.
This short-circuit across the usual need for trade is a optimization
in that the Product is "pre allocated" to the person who needs it so
the Product is not bought or sold; it is already the user's property.
Governments cannot tax or interrogate the missing transaction. See
http://Wikipedia.org/wiki/Imputed_rent for a subset of the issue.
Monday, February 6, 2012
Monday, January 30, 2012
Use-Value Production
Production can be for the Use-Value of that Product, but ONLY if the Consumers co-own the Sources and accept Product as their Return.
In Use-Value Production, the Product is never sold* because it is already the Property of the person who will Use it. You might say it is "pre-distributed".
In Use-Value Production, scarcity is not goal, and abundance is not dangerous. For example, if you co-own a diary for your own benefit, then it does you no harm when another corporation 'dumps' milk in the area because you, as a co-owner, are not attempting to SELL the milk.
Only Consumers can Invest for Use-Value Production because only Consumers can accept Product as a Return for that risk.
(*) During Surplus, the Product can be sold to non-owners, and we should even charge Profit against those latecomers, but must treat that overpayment as an Investment from that Payer - so that each Consumer slowly gains the co-ownership needed to discontinue purchasing that Product in the future.
In Use-Value Production, the Product is never sold* because it is already the Property of the person who will Use it. You might say it is "pre-distributed".
In Use-Value Production, scarcity is not goal, and abundance is not dangerous. For example, if you co-own a diary for your own benefit, then it does you no harm when another corporation 'dumps' milk in the area because you, as a co-owner, are not attempting to SELL the milk.
Only Consumers can Invest for Use-Value Production because only Consumers can accept Product as a Return for that risk.
(*) During Surplus, the Product can be sold to non-owners, and we should even charge Profit against those latecomers, but must treat that overpayment as an Investment from that Payer - so that each Consumer slowly gains the co-ownership needed to discontinue purchasing that Product in the future.
Thursday, December 1, 2011
Property, Product and Profit
Corporations, in their current form, cannot do the "right thing" because they (and we) erroneously believe Profit to be the goal of production while somehow misplacing Product itself as the real end.
This is caused by our choosing investors who expect to be paid Profit.
This can be solved by choosing investors who expect to be paid Product.
But the only investors able to accept Product as a return are the future Users of that Product.
So we must organize Users to co-buy and co-own the Sources of Production for the purpose of receiving at-cost use-value.
Corporations organized in this way will have no reason to work against we, the people, except when selling some of that Product to non-owners.
For that we must write a Terms-of-Operation as a form of self-regulation to impose the constraint "Profit is Payer Investment" so that all Users incrementaly gain ownership in the Sources of the Products they need.
This is caused by our choosing investors who expect to be paid Profit.
This can be solved by choosing investors who expect to be paid Product.
But the only investors able to accept Product as a return are the future Users of that Product.
So we must organize Users to co-buy and co-own the Sources of Production for the purpose of receiving at-cost use-value.
Corporations organized in this way will have no reason to work against we, the people, except when selling some of that Product to non-owners.
For that we must write a Terms-of-Operation as a form of self-regulation to impose the constraint "Profit is Payer Investment" so that all Users incrementaly gain ownership in the Sources of the Products they need.
Wednesday, November 30, 2011
Product Maximizing Corporations
It is possible to change the goals of corporations we fund and control by compensating the investors' risk with Product instead of with Profit.
Paying investors with Product is possible if those investors are actual Users of the Product, and invest (whether Capital or Work) only as much as they intend to use for themselves.
These corporations will be Product Maximizers, while Profit will no longer be goal, and in fact will not even be present except during the sale of Surplus.
During the sale of Surplus we should charge Profit against those latecomers (allow the market to set Price), but then treat that Price above Cost as an Investment from that Payer - so that all Users gain as much ownership in the Means of Production required to create the Products they use.
This is a very different way of organizing our production. Please consider it carefully.
Paying investors with Product is possible if those investors are actual Users of the Product, and invest (whether Capital or Work) only as much as they intend to use for themselves.
These corporations will be Product Maximizers, while Profit will no longer be goal, and in fact will not even be present except during the sale of Surplus.
During the sale of Surplus we should charge Profit against those latecomers (allow the market to set Price), but then treat that Price above Cost as an Investment from that Payer - so that all Users gain as much ownership in the Means of Production required to create the Products they use.
This is a very different way of organizing our production. Please consider it carefully.
Saturday, October 29, 2011
Overview
I've noticed our system of trade needs a self-inflicted 'governor' - a negative-feedback loop - to allow the steam-engine of production to operate without the explosive danger caused when power is concentrated.
Much like a float and valve controlling water level, we would benefit from treating Price above Post as the Payer's Investment.
Profit measures the Payer's lack of ownership in the Sources of Production. A Consumer will pay a Price above Cost when he does not have sufficient ownership in the Means of Production because he is *dependent* upon those current owners.
This imbalance can be incrementally corrected by treating that overpayment as the payer's investment in the growth of that organization - so that Capital is no longer 'accumulated' into the hands of the few, but is transparently 'distributed' back to the very person who paid it as a deed of property co-ownership in more Physical Sources needed for that type of product. It becomes that consumer's investment in his own future.
This causes Profit to approach zero (as Price approaches Cost) and control to be move to the hands of those willing to work instead of being centralized into the hands the payees who would otherwise treat Profit as a reward for themselves.
Treating Profit as a reward for the current owners is a positive-feedback loop which concentrates property into the hands of those who already have more ownership than they can use directly (as proven by the fact they are selling the Product instead of using it for themselves). This makes the rich richer, as these established agents receive even *more* control while leaving late-comers in the cold - even though it is the Payers of Profit who funded the growth of that organization.
Treating Profit as an Investment from the Payer is a negative-feedback against over-accumulation - allowing growth that is both sufficient (according to the amount the consumer is willing to overpay) and auto-leveling (because Profit approaches zero as each consumer gains sufficient ownership in Physical Sources).
The owners of an Avocado tree must pay for all the Costs of that production, including any Wages for work they do not do themselves, but Profit does not even enter the equation because the fruit is not sold at the end of the season since it is already the property of those who will use it.
Much like a float and valve controlling water level, we would benefit from treating Price above Post as the Payer's Investment.
Profit measures the Payer's lack of ownership in the Sources of Production. A Consumer will pay a Price above Cost when he does not have sufficient ownership in the Means of Production because he is *dependent* upon those current owners.
This imbalance can be incrementally corrected by treating that overpayment as the payer's investment in the growth of that organization - so that Capital is no longer 'accumulated' into the hands of the few, but is transparently 'distributed' back to the very person who paid it as a deed of property co-ownership in more Physical Sources needed for that type of product. It becomes that consumer's investment in his own future.
This causes Profit to approach zero (as Price approaches Cost) and control to be move to the hands of those willing to work instead of being centralized into the hands the payees who would otherwise treat Profit as a reward for themselves.
Treating Profit as a reward for the current owners is a positive-feedback loop which concentrates property into the hands of those who already have more ownership than they can use directly (as proven by the fact they are selling the Product instead of using it for themselves). This makes the rich richer, as these established agents receive even *more* control while leaving late-comers in the cold - even though it is the Payers of Profit who funded the growth of that organization.
Treating Profit as an Investment from the Payer is a negative-feedback against over-accumulation - allowing growth that is both sufficient (according to the amount the consumer is willing to overpay) and auto-leveling (because Profit approaches zero as each consumer gains sufficient ownership in Physical Sources).
The owners of an Avocado tree must pay for all the Costs of that production, including any Wages for work they do not do themselves, but Profit does not even enter the equation because the fruit is not sold at the end of the season since it is already the property of those who will use it.
Wednesday, October 26, 2011
A GNU Production Model
We need to change why we Invest and how we Share Revenue.
1.) Product is Investor's Return: This is an Investment strategy that
uses Product as the ROI, and so requires the Investors be the Users
themselves.
2.) Profit is Payer Investment: This is a Revenue-Sharing strategy
that Invests some % of Profit for the User who paid it.
3.) Investments are Commitments of Sources and Skills: This is
a way to gather the Land and Capital needed (those committing
Sources would relinquish ownership to others in a group targeting
some specific Product) and also to insure the diverse work needed
would be accomplished without need to fight the "simultaneous
coincidence of wants" trouble with typical 'late' barter.
By committing Skills *before* production, we can trade Labor
between ourselves, and never need to trade oranges with apples,
since the co-owners of the Sources of those Products would
own their % of the Product *already*, even before they are
produced. I call this "Predictive Barter" - where we Swap Skills
early instead of attempting to Swap Products *late*.
1.) Product is Investor's Return: This is an Investment strategy that
uses Product as the ROI, and so requires the Investors be the Users
themselves.
2.) Profit is Payer Investment: This is a Revenue-Sharing strategy
that Invests some % of Profit for the User who paid it.
3.) Investments are Commitments of Sources and Skills: This is
a way to gather the Land and Capital needed (those committing
Sources would relinquish ownership to others in a group targeting
some specific Product) and also to insure the diverse work needed
would be accomplished without need to fight the "simultaneous
coincidence of wants" trouble with typical 'late' barter.
By committing Skills *before* production, we can trade Labor
between ourselves, and never need to trade oranges with apples,
since the co-owners of the Sources of those Products would
own their % of the Product *already*, even before they are
produced. I call this "Predictive Barter" - where we Swap Skills
early instead of attempting to Swap Products *late*.
Saturday, September 24, 2011
Burn-Ring Funding Model
* Potential users pre-pay to fund the purchase
of land and capital to form a Vertically Integrated,
Permaculture Mosaic (VIPM).
* The VIPM is a set of carefully chosen plants, animals
and tools required to create the solutions needed by all
of those workers such as food/drugs, shelter, cloth, soap,
sanitation, health care, dental, eyes, etc.
* If a payer has skills needed by the VIPM, they can
contract to work somewhere within the VIPM in exchange
for the VIPM supplying them with Products they need.
* Those workers receive co-ownership in the VIPM in a
form we call "Use Shares" which are similar to full co-
ownership, but with some initial limitations on selling
or renting those Tools or Products.
* Use Shares are used by the holder to prove that he has the
right to use the Tools (limited by schedule) or consume some
of the Products (limited by % of holdings within that Unit)
of any restaurant, apartment, bus, hospital, etc. operating
within the VIPM.
* The workers do not buy products from the investors, but own
those products already because of their Use Shares in the
VIPM awarded for commitments to Work or from commitments
of Land or Capital.
* After some amount of time, or after some series of events
the Use Shares should vest more fully to the payer to
allow for selling and/or renting of those Sources or the
Products of those Sources.
* Initial stages of development might have some workers living
in mobile homes and eating food the VIPM bought in bulk.
* Later, after the agriculture is installed and producing, the
system will become "self hosted", being able to operate
without requiring any external inputs.
* Soon afterward, the system will be producing surplus that can
be sold to outsiders to collect Profit.
* If Venture Capitalists helped fund the operation, part of the
Profit will be used as their ROI.
* We may want to distribute part of the Profit to the Workers,
since that is a popular thing to do.
* We may we to distribute part of the Profit to random charities,
since that is a popular thing to do.
* But we MUST handle some non-zero % of the Profits as though
that overpayment were an investment from the payer.
* We should charge Profit during those sales, for if we don't
collect the Profit, a middle-man will buy all that we offer
at Cost, and then resell it for a Profit anyway...
* So we will charge Profit against the Payer, but we will also
treat (at least part of) that magic value as Payer Investment.
* This causes these late-coming users to slowly gain ownership
and therefore to eventually stop buying that product too.
* Similar to how the GNU GPL enforces Copyleft through Copyright,
we propose to create a PropertyLeft document enforced through
Property Rights used to apply this requirement to the VIPM.
* This social contract can be applied by co-owners of any
material assets to insure freedom for all users.
* Notice this is also a literal form of Insurance.
* These users must cover all the real cost of production
just as any owners do, but they do not buy the product
since they own it already - and they don't sell the
product because they need to use it directly.
* The product is not traded unless there is surplus, and
in that case the Payer must cover all the Costs of that
production so the owner of Sources can be compensated
for paying when they didn't need to...
* The Payer will usually also pay Profit, according to how
much the "market will bear". Some % of that overpayment
must be treated as an investment from that payer so the
growth of the VIPM is incrementally autodistributed
to all those willing to pay for that growth.
* At some point, and under certain constraints, and mostly
to resolve disputes, subgroups must finally be allowed to
fork from the rest while retaining property ownership.
----
Ecologically, the system must be able to operate on it's own, without
external inputs.
This is done by the VIPM owning the Physical Sources of all the
Products being used. Another term for this is "Vertical Integration".
Initially no VIPM will be strictly closed-loop because we will
just buy shovels instead of trying to mine Iron ore, etc.
Economically, the system must allow the users to create value for
themselves without paying external entities.
This is done by helping the users gain real ownership whenever they
pay for that growth (usually when paying profit), and to retain that
ownership when paying costs (usually through work).
This can be imperfect as well, just so the payer receives *some*
ownership - for it is the ownership in Sources that eliminates the
need to buy Products. In computer terminology this is similar to the
concepts of "predictive schedule", "pre-cache" or "pre-allocate"
because the Product is not moved (sold) at the last moment, but is
already the property of the entity that will use it.
of land and capital to form a Vertically Integrated,
Permaculture Mosaic (VIPM).
* The VIPM is a set of carefully chosen plants, animals
and tools required to create the solutions needed by all
of those workers such as food/drugs, shelter, cloth, soap,
sanitation, health care, dental, eyes, etc.
* If a payer has skills needed by the VIPM, they can
contract to work somewhere within the VIPM in exchange
for the VIPM supplying them with Products they need.
* Those workers receive co-ownership in the VIPM in a
form we call "Use Shares" which are similar to full co-
ownership, but with some initial limitations on selling
or renting those Tools or Products.
* Use Shares are used by the holder to prove that he has the
right to use the Tools (limited by schedule) or consume some
of the Products (limited by % of holdings within that Unit)
of any restaurant, apartment, bus, hospital, etc. operating
within the VIPM.
* The workers do not buy products from the investors, but own
those products already because of their Use Shares in the
VIPM awarded for commitments to Work or from commitments
of Land or Capital.
* After some amount of time, or after some series of events
the Use Shares should vest more fully to the payer to
allow for selling and/or renting of those Sources or the
Products of those Sources.
* Initial stages of development might have some workers living
in mobile homes and eating food the VIPM bought in bulk.
* Later, after the agriculture is installed and producing, the
system will become "self hosted", being able to operate
without requiring any external inputs.
* Soon afterward, the system will be producing surplus that can
be sold to outsiders to collect Profit.
* If Venture Capitalists helped fund the operation, part of the
Profit will be used as their ROI.
* We may want to distribute part of the Profit to the Workers,
since that is a popular thing to do.
* We may we to distribute part of the Profit to random charities,
since that is a popular thing to do.
* But we MUST handle some non-zero % of the Profits as though
that overpayment were an investment from the payer.
* We should charge Profit during those sales, for if we don't
collect the Profit, a middle-man will buy all that we offer
at Cost, and then resell it for a Profit anyway...
* So we will charge Profit against the Payer, but we will also
treat (at least part of) that magic value as Payer Investment.
* This causes these late-coming users to slowly gain ownership
and therefore to eventually stop buying that product too.
* Similar to how the GNU GPL enforces Copyleft through Copyright,
we propose to create a PropertyLeft document enforced through
Property Rights used to apply this requirement to the VIPM.
* This social contract can be applied by co-owners of any
material assets to insure freedom for all users.
* Notice this is also a literal form of Insurance.
* These users must cover all the real cost of production
just as any owners do, but they do not buy the product
since they own it already - and they don't sell the
product because they need to use it directly.
* The product is not traded unless there is surplus, and
in that case the Payer must cover all the Costs of that
production so the owner of Sources can be compensated
for paying when they didn't need to...
* The Payer will usually also pay Profit, according to how
much the "market will bear". Some % of that overpayment
must be treated as an investment from that payer so the
growth of the VIPM is incrementally autodistributed
to all those willing to pay for that growth.
* At some point, and under certain constraints, and mostly
to resolve disputes, subgroups must finally be allowed to
fork from the rest while retaining property ownership.
----
Ecologically, the system must be able to operate on it's own, without
external inputs.
This is done by the VIPM owning the Physical Sources of all the
Products being used. Another term for this is "Vertical Integration".
Initially no VIPM will be strictly closed-loop because we will
just buy shovels instead of trying to mine Iron ore, etc.
Economically, the system must allow the users to create value for
themselves without paying external entities.
This is done by helping the users gain real ownership whenever they
pay for that growth (usually when paying profit), and to retain that
ownership when paying costs (usually through work).
This can be imperfect as well, just so the payer receives *some*
ownership - for it is the ownership in Sources that eliminates the
need to buy Products. In computer terminology this is similar to the
concepts of "predictive schedule", "pre-cache" or "pre-allocate"
because the Product is not moved (sold) at the last moment, but is
already the property of the entity that will use it.
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