Our broken global economic model . . . and what YOU think we can do about it.

[kcw_one]

First, a question to all of you: to whom is our current globalized economic model meant to best serve?

There may be any number of ways to respond to that question, but obviously I have my own viewpoint in the matter that i'd like to share in order to get some discussion going on what appears to me to be one of the greatest sources of the trouble we see all around us at this time.

My response to the above question is that the current system is designed to benefit the few at the expense of the many. Rather than pointing our fingers at who this elite few are and how naughty their behavior has been, I'd like to examine how a few key problems we face are directly linked to the current economic model.

A thumbnail sketch of the way the current system works (I have no training in economics beyond being an active member within it) is that each of us possesses education, skills or resources that we have acquired, through various means, which we combine in various ways to have a "marketable" product or service that we can exchange for various other products or services that we deem necessary for our comfort or survival. A system such as this seems intuitively necessary for a social organism such as the homo sapien, yet the current model of economics which drives a vast portion of our daily activities for the first sixty or so years of our lives has some features that make it somewhat unfair for a rather large slice of the participating members.

In the first case, there exist arrangements and agreements which have sought to control the vast majority of the natural resources of our planet, be it through government or industry, controlling the supply, processing and distribution of most any product manufactured from raw materials. Ownership of these resources has been concentrated in the hands of a proportionately small number of individuals, who seem to have agreements amongst themselves that drives not only how goods are produced and distributed, but also in the rules that regulatory bodies create in relation to those products.

In the second case, we have a system of arrangements among the owners of the resources and means of production of goods which control the supply of goods on one side, while also artificially manipulate the demand of the goods on the other side. In the Keynseian model of economics, it is called supply and demand. More and more these arrangements have extended beyond the borders of any single country or territory to link together supply and consumption chains the world over.

Thirdly, we have a system of labour markets, again increasingly extended across borders and beyond regional boundaries, in which an individual seeks to acquire education, skills, or knowledge which they can "sell" to an employer, often for the employer's use in their efforts to create wealth in whatever product market they are involved in. To acquire such skills, one must purchase training in universities or trade skills, all according to the current needs of the particular industry or service.

This is an extremely simple overview of our current system, but it will suffice to support a discussion of some serious challenges we face as a global culture as a direct result of that system.

Take poverty, for example. Were it not for the concentration of the control of resources and the artificial "ownership" of land, would there be any reason that people everywhere could produce enough food to eat? Maybe, maybe not. It does seem that the true cost of food products is not always reflected in its monetary cost.

Take war, as another example. Can anyone provide an example of a war, present or past, which was NOT part of the imperialistic machinations of one nation or another? Control of resources, land and TAXATION of peoples seems to factor into these conflicts quite often. Those who start the wars, however, often give other compelling and often false reasons why it is necessary for our young men to fight, kill and die. Some may offer examples of wars based on religion, but I would argue that differences in religious doctrine are merely a reason for the controlling classes of the times to drive their flocks off to battle for the acquisition of slaves or the conversion of more sheep to pay their tithes.

Possibly one of the largest problems that we face, and certainly one that is easiest to link to our economic model, is pollution of our biosphere. In our cultures of mass production and mass consumption, businesses and industry cannot survive unless they not only continue to produce and sell stuff, but to produce and sell it at an ever increasing rate in order to consistently show increases in the profits of the corporation. Some results of this are the phenomenon of "disposable" items, cheaply made products of poor quality, and products that are designed to be replaced. If a company made and sold widgets, and endeavored to make the highest quality widget ever that would last for centuries and never need repairs or replacement parts or ever be thrown away, the company would be out of business in short order, as there are only so many widgets that the world will ever need. If, on the other hand, you can convince people that they NEED to have a pet stick, since all the celebrities have them, then you can glue googly eyes on a ton of sticks and sell them for a quick profit. Who cares if they get thrown out in a month.

Let's not forget about pharmaceuticals. Doctors will be the first to tell you that they will not prescribe a cure, but only a treatment. There is no interest in curing disease, only in creating a reliable treatment that the patient needs to keep taking. Why, if someone discovered the cure for the common cold, once and for all, they'd probably be shot -- it would take away too many customers.

And then there's the oil industry. Why are we still driving around in machines that have changed very little since they were invented A CENTURY AGO? Sure, they look different. Every couple of years they get little changes and little improvements, else why would anyone need to get a NEW car? There is no real interest in coming up with an alternative, because if we had cars that didn't need perpetual refuelling, the oil folks would lose customers. Why don't we have well made, super high quality machines that are made so cleverly and manufactured with such care and wise use of resources that they rarely break down and need replacement parts? BECAUSE IT WOULD TAKE AWAY CUSTOMERS!

We have a world that is full of waste. Things made to break so they need to be replaced. We waste so much energy turning raw materials into something useful, raw materials that in some cases took millenia to form in the earths crust, and then we use these things once or for a handful of years and then discard them! Not to mention the careless way that these resources are extracted, handled, and processed with little or no attention to the way that the waste byproducts and emissions impact the biosphere.

I realize that it took some time to articulate some of the challenges we face as a result of the way our economic system works, and at that I just barely scratched the surface of the true impact our economies have on our biosphere and our quality of life.

I get irked when others complain about problems and offer no solutions, and as such I do have some ideas. As do many many others. I'd like to hear yours.

[sjkted]

Wow. This is all terribly complicated.

I think part of the problem here is that we started with a good model, made a few wrong turns and have proven impossibly resistant to getting back on track again.

First of all, the different between monetary policy and fiscal policy.

(From Wikipedia)

Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest.

Fiscal policy is the use of government expenditure and revenue collection to influence the economy.

So, basically monetary policy is the administration of our money supply, the valuation and interest rates, and how many dollars are in the system, etc. and fiscal policy is how government gets revenue (taxation) and how it spends public funds.

The problem I see is that everyone debates fiscal policy when it is our monetary policy that is broken. In other words, it doesn't matter what we do right now -- good or bad -- because of the tremendous debt burden we are under and the interest rate and how many obligations the federal government has that it can't possibly meet.

So, why are we in this mess? We live in a society of instant gratification. We don't care about quality or morality or doing the right thing. We just need it now! Things weren't always this way.

Once upon a time, we had a gold standard which meant that for every ounce of gold, the Treasury could print $20.67 of dollars. So, the amount of dollars we had were limited by the amount of gold we had in Fort Knox. To some extent, this kept the government, banks, and people honest because you couldn't spend more than what you had. Because money was more scarce back then (less in circulation), money earned and spent was much more important. People would save up their money to buy things (there were no credit cards). When they bought things, they demanded quality. When their things broke, they would take them to be repaired. The government couldn't spend as much as they do right now because they only had so much at their disposal.

When we were lifted from the gold standard in the '70s, we were no longer living in an honest system. This created moral hazard, meaning that people, companies and the government could very easily benefit from doing things that were not "right". And, so they did. To the point where today, moral hazard is the rule instead of the exception.

Today, we expect our cars to be of cheap quality. When we buy a product and call their service department, we expect to be transferred overseas to someone who barely speaks English, doesn't understand the product, and has no authority to help. That is, if they still offer phone support. We expect 30-day, 60-day, and 90-day warranties, instead of 3-years, 4-years, and 5-years. And, we expect to be screwed over by the interest on our credit cards and loans.

This all happened from monetary policy. We live in a immoral environment. There is no way to be in business and be immune from this environment.

There's many words that could be used to describe this environment: leveraging our children's future, ponzi scheme, moral hazard, corrupt, injust, etc. but the bottom line is that the monetary policy needs to be fixed first!

So, the only way to fix it is to go back to having a sound money system which could be the gold standard or a number of other things.

But, there's a political problem in doing that. Even more moral hazard! We've literally promised the world, when we're flat out broke. There are government workers who expect to be paid, people who depend on social security, medicare, and a wide variety of government "services" that require big bucks. So, the only option is to default (as in not pay which is not politically possible) or inflate the money supply (print more money). The only reason we don't have massive inflation right now is because the economy is in the tank.

My solution is multifaceted:

(1) We need to return to a sound money system. When the dollar collapses, we will have no other choice.

(2) We need to get rid of functional obsolescence. We don't need to keep buying cars every four years, computers every other year, and constantly replacing all of our gadgets and trinkets in order to get the newest and the greatest. When we have a sound currency system, we'll return to saving our money for a purchase and expecting quality (with a long warranty) when we buy it. And when it eventually breaks, we can take it to a local repairshop, instead of throwing it in the trash and buying another one.

(3) Part of quality is craftsmanship. Craftsmanship cannot be mass manufactured. If you look at older cars, you'll see how much detail work went into them and a level of quality and aesthetic we no longer have. This creates jobs in the local economy.

(4) This whole idea of mass food production is absolutely insane. Every year, the food that is produced comes from further and further away, as it is uneconomical to produce food in large cities where everyone lives. Part of the push for GMO foods is because normal, organic produce dies if it doesn't get consumed quickly enough. GMO foods are basically dead, but they still retain some of the appearance of normal food. We all need to be growing our own food and redevelop our connection with the land and what sustainability really means.

(5) We don't need to use anywhere near as much petroleum as we do. With advances in technology, many people can work from home and if we started up local food production and local manufacturing, much of the freeways would be literally free (empty) as we wouldn't be driving as much.

(6) We need to invest in solar energy. As more and more people buy solar panels, the manufacturing efficiency will increase and they will become cheaper and cheaper. In 10 years, nearly everyone will be able to have solar panels at a very reasonable price.

(7) We need to develop biofuel domestically and use it. Biodiesel can be created from algae which is basically solar powered and can create biofuel even in desert areas where traditional fuel cannot be produced. We could all be running our vehicles on clean fuel at $0.50 - $1.00 per gallon. This technology has already been proven and is a viable replacement for any vehicle.

(8) We need to stop depending on the monetary system and the "grid". If we had free energy or dirt cheap energy, we would no longer need the government. In nearly every product or service, there is a cost for energy. It costs money to extract raw materials, ship them, manufacture them, ship the final product, etc. If the energy was free or dirt cheap, then nearly everything else would be as well. Government exists to divide up scarce resources (money), and they are not needed if we have abundance.

(9) One of the debate items when the US was founded was term-limits for corporations. I say let's bring these back. In order to become a corporation, the founders must prove they have a "pubic good" they are serving and would not be able to continue to operate as a corporation after 10-15 years. At this time, all of their patents/copyrights would be released into the public, and they could continue to operate -- but they wouldn't have the benefit of operating with the same rights as a natural citizen.

Some of this will happen naturally, as a ponzi scheme and moral hazard cannot continue forever. The rest must be left up to society to find the right path.

--sjkted

[Luke]

Ok. I can mostly agree to kcw_one and sjkted' s posts, but I need to add some caveats.
First. We need to differentiate between solutions within current paradigm and solutions that goes up and beyond it.
Current paradigm is that we live in materialistic and entropic world. From that stems problem of resource scarcity: only way to expand our "world" is to pillage resources from elsewhere. Those are the rules for now (we can change them but that means changing reality itself, which is quite tough, but when we will do it, all below bets are off).

So, there are limited resources. What we can argue about is how to use those resources in the most effective manner. There are two schools of thinking about that:

1. Free market school - individuals working towards their goals market their skills and goods they produce. Those providing best service at best price would receive payment from their customers and will continue to provide them to the moment the services would be not optimal, which will open window of opportunity for those willing to provide optimal service (mind, not olny best service or best price, you need equilibrium in that). It's holistic system, bordering or chaos one, for every one succesfull story there are 10 failures, but feedback is constant and waste is small. All you need to make it work is society that accepts and enforces sanctity of the deal between individuals. Sound money, like gold and silver (but not limited to those) are natural to this system, as people seek value in what they exchange. Savings are encouraged, as with expanding economy the prices go constantly down, meaning real values of savings go up (and you need no banks to pay you percentage)

2. Divine ruler school- with ruler being government , king, church, commission, corporation or other entity that have special privileges over "mundanes". It stems from thinking that normal people are unable to act rationally in their own interest, so they need to be guided by omnipotent wise beings (or their representatives). This means, rulers have their own goals and agendas and need energy to follow them. Only right "mundane" has is to give up as much energy as he can to rulers, and then hope to receive something from that. There are small difference between the rulers, in terms of how much energy they leech off and how, and there is level of competition between them, but all rulers are inherently interested in supporting privileges. Economically this system means there is little to no connection/feedback between energy going in and energy going out/back to the system - rulers, chasing their goals do not care if their actions makes sense economically, only what their actions would change in game between other rulers and how they will impact control of their chunk of mundane serfs. Propaganda is carefully crafted to ensure population's support, and laws created to dispose those threatening the system. Waste levels are enormous and to even produce effect of relative "progress' you need to pillage any energetic resource available.
-----
That about sums it. Free market is simply most efficient (and peaceful), so it is preferable choice in current circumstances, but people are simply scared of it because of years of constant propaganda programming, with even meaning of the word hijacked by power structure/rulers.
Sill it's just a first, moral, step towards breaking the confines of current material paradigm, which should be long term goal

[dreamchaser]

It seems to me that it would take people as aware, and consciencous as you guys on this thread to make a fair economy work for everyone.

Personally though Ive felt most of my life that monet just cant work for everyone. So many adults can be so much like children in the way they can and do treat other humans just for a thing. In fact in many instances they can be much more cruel and immature than children! I believe the world can work without money, and indeed I believe it must, IF we are going to grow to our full spiritual potential.

Of course I dont see money as the only problem. but to get over that obstacle I believe we would ALL be making a quantum leap forward! Much love and peace to all, Adrian. :love:

[Arpheus]

I saw this documentary on hemp not too long ago,and it literally blew my mind,i was like omg this is awesome,all the things you can make out of it including the cleanest environmentally friendly fuels,disposable cups bowls plates that are edible,the food that can be made out of its seeds that pretty much contain all the amino acids the human body needs to live,clothes and the list goes on and on,and NO i dont smoke weed,although i did some when i was in my teens hehe,but that's just one thing that could and should be done that would make a HUGE impact on everything when it comes down to regenarting the earths biosphere,now i dont wanna get into the economics of it because,we should just be rid of money altogether,but the way the world is today we would need a miracle in order for something like that to happen,perhaps when the system fails collapses we might have a shot but even then,there is a long road ahead,and i agree that as long as we are on some sort of monetary system in society it will hold us from spiritual progress evolution,so well that's my 2 cents anyway.:becky:

[kcw_one]

Ok. I can mostly agree to kcw_one and sjkted' s posts, but I need to add some caveats.
First. We need to differentiate between solutions within current paradigm and solutions that goes up and beyond it.
Current paradigm is that we live in materialistic and entropic world. From that stems problem of resource scarcity: only way to expand our "world" is to pillage resources from elsewhere. Those are the rules for now (we can change them but that means changing reality itself, which is quite tough, but when we will do it, all below bets are off). [/B]

I like the bit about the current paradigm and that which goes beyond. There are so many facets of our terribly complex system that have the cumulative effect of being one of the most powerful control mechanisms available to the PTB. In its very essence this is what the economic system is designed to do -- control people. It is a reflection of where the world is at spiritually at this point in our evolution. I like to think of it as contrast. We get a look at what we don't want in order to clarify for ourselves what we do want. For me, I want to be in a system that values the contributions of all members, and makes sharing and cooperation more worthwhile than greed and competition. Once we get beyond our current state of limitation and control, we'll no doubt be in a place to manifest a better way of working these things out together.

Keep in mind that the system we currently endure has been crafted with cunning and deceit by those who would be our masters. Every aspect is seized upon to enhance the control that the PTB have and increase their power to fit us into a heavier and heavier yoke. If (when) we can throw off the yoke of oppressive energies on this planet, a new and more enlightened system will naturally evolve from the honest wishes of all parties to create the most good for all people. Some may say I am being naive and that this is all pie-in-the-sky thinking, but I am certain that we are moving in a direction where things will get BETTER! We may have to endure more hardships to get there, as the night is always darkest just before the dawn.

What would a better system look like?

[Ty]

A very interesting thread with some very good points.

I find it difficult, though, to discuss problems in the economy without touching on problems with the government, since the two have become so intricately intertwined.

We have the remnants of a once free economy that rewards contribution and success. We have a government that increasingly implements policy to disincentivize success and incentivize failure. This is all done with the best of intentions of course, to support those who lack the skills or drive to find profitable work.

The question for me is, what system provides the highest sustainable standard of living for the most people? And I think as imperfect as it is, our current one has proven itself superior compared to any other alternatives. The poorest among us are far better off than most of the rest of the world.

As far as sustainabiloty I agree with the thoughts on obsolete and shoddy products. Recycling will help minimize the waste and recover resources but there is something perverse about a system that uses plastic, a material that lasts nearly forever, for disposable containers.

"I want to be in a system that values the contributions of all members, and makes sharing and cooperation more worthwhile than greed and competition."

Unknown to many, this country already tried the sharing and cooperation model once.

William Bradford, the first Governor of the new land, writes of the Pilgrim's experiment with collectivism/socialism, which was mandated by their sponsors in London...



"The experience that was had in this common course and condition, tried sundry years and that amongst godly and sober men, may well evince the vanity of that conceit of Plato's and other ancients applauded by some of later times; that the taking away of property and bringing in community into a commonwealth would make them happy and flourishing; as if they were wiser than God. For this community (so far as it was) was found to breed much confusion and discontent and retard much employment that would have been to their benefit and comfort. For the young men, that were most able and fit for labour and service, did repine that they should spend their time and strength to work for other men's wives and children without any recompense."

And what happened after collectivism was replaced by capitalism and the concept of private property?

"This had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise would have been by any means the Governor or any other could use, and saved him a great deal of trouble, and gave far better content."

The Pilgrims soon found they had more food than they could eat, so they set up trading posts and exchanged goods with the Indians. The profits they realized allowed them to pay off their debts to the merchants in London.

As nice as "sharing and cooperation" sound, I believe it fails because when push comes to shove, many people will act in their own best interest, not the best interest of the group. Maybe we'll evolve to that point but I have my doubts. If a group like the Pilgrims, in their dire situation couldn't make it work, I suspect no group can.

Greed - the promise of great reward for great risk and effort - is what got us out of the caves and into modern civilization. It's what creates most jobs now. People starting or growing companies for their own personal wealth is what provides opportunities for others to find work. Well that, and the seeming unending growth of government.

Anyone interested in this thread will likely find great pleasure and an eye-opening view of history by reading any of James Dale Davidson's three books, all available on Amazon.

[dddanieljjjamesss]

Self sufficiency, living with less, living off the land, taking care of all one's basic necessities on one's own terms...
not playing the money game at all.