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.

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.

Saturday, October 29, 2011


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 Cost 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

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.

Tuesday, August 16, 2011

Rewarding Risk with Product Eliminates Exchange

Capitalists must keep Price above Cost to collect Profit to pay their investors.

This unnatural arrangement is held in place through artificial scarcities and destruction of various kinds, and is also the reason Capitalist seek continuous Growth.

Users who co-own Sources can accept Product as their ROI, so do not sell the Product except when there is Surplus Product.

In that case, they only need to collect the Costs of Production to cover what they already committed.

But, since the latecomer is at a disadvantage, the Consumers+Owners are usually able to charge a Price above Cost (they collect Profit).

But since none of the Investors expect Profit to be treated as a reward, we are free to redirect that value as a growth vector - investing it *for* the latecoming user toward increasing production - with that ownership finally vesting back to that payer - so the control of that growth is auto-distributed to those who pay for it.

Rewarding Risk with Product eliminates exchange.

The Product is not sold because the user owns it already!

Profit is Undefined when Product is ROI.

Capitalism abhors competition because competition reduces profit.

Capitalism seeks profit to pay investors.

But investors are people too, and they need things besides tokens - like sandwiches and beer.

So we could start a business that shapes investments differently - where the purpose of ownership is solely to receive a % of the product itself as your payment for risk.

And when surplus is sold to outsiders, some % of that will be treated as an investment from that payer - so every user gains co-ownership in the sources of all that they pay to use.

When owning for product, the 'core' of the organization reaches semi-stasis and operates at-cost, while latecomers at the 'edges' pay Profit when buying surplus, causing them to gain the property co-ownership which finally eliminates their need to buy Product late, since the (co-)Owner of Sources is the (co-)Owner of the Product (in the same %) even before it is produced!

The owner of a milk-cow must pay all the Costs of Production, including any Wages for Work he does not do himself, but does not BUY the milk back from himself, but owns it *already*, even before it comes out of the cow.

The same logic, when be applied to co-ownership, eliminates the need to buy and sell Products except when the Consumer does not yet have sufficient ownership in Sources needed to insure he owns that Product now and into the future.

Saturday, August 13, 2011

Titles, not Tokens

Perfect competition drives profit to zero.
Customer ownership is perfect competition.

When you finally own your house, profit is zero.

When you (co-)own a network, the price of access *IS* the cost of operation.

I wonder why we, as a species, do not apply this to all production.

I wonder how we were fooled out of being the owners of the land and
water and seeds and tools needed to supply ourselves with the raw
materials of food, drugs, cloth, soap, building materials, etc.

How could our city governments be so insanely ridiculous when it comes
to finance?

Why would a city ever go into debt when it is also collecting taxes?
What a bunch of nonsense.

All we really need to do is buy a couple hundred acres somewhere with
plenty of natural water and attract 1000 people to commit their
individual skills toward the work we will need to apply to the Sources
in order to make the Objects.

We won't need tokens because we will not buy the Olives and Milk and Honey, since we will already own them already because we own the Trees and Cattle and Bees.