Resource Based Economy

[Angolo-Di-Amore]

Okay people, you may or may not have heard of a Resourced Based Economy. I personally think it is a great idea, and want your take on it. Here is the basic idea:
Moneys original purpose was to regulate the distribution of scarce or limited resources. For thousands of years, the shot supplies of food, shelter, clothing, ect. were distributed based upon who had cash, and who didn't. So, why do we still use money if we have the resources to produce enough food, clothing, energy, shelter ect. for everyone? We have the resources to feed, clothe, shelter, and provide a comfortable existence for every individual in this nation. However, these surplus goods are still cash regulated, so we still have poverty, homelessness, and hunger in this nation. With our resources, even the poorest of our population should have lower/mid-middle class commodities. There is really no real need for money anymore with the surplus of resources. There is simply no reason to regulate these surplus goods with money.
So, lets say we did this. The government is put in charge of all the mining, farming, timber, ect. and uses these resources to give a comfortable middle class existence to every American citizen (Which, it is completely capable of.) and has resources left over. These surplus resources can be used to expand resource harvesting capability/research (among other things, of course) so that we get MORE out of our harvesting. Then with more resources, the standard of living increases, along with the surplus. Considering the potential in renewable resources, and following circular logic, we are looking at a future where every American citizen is living with upper class commodities in a continuously expanding economy. We are sitting on top of a potential utopia, but our predisposition to the traditional monetary system (Oh, and greed.) keeps us from making this all to obvious transition.
So, what is your take on this? Do you agree or disagree with this concept? Why or why not? You like it? You pissed that we aren't already doing this? I want YOUR take, and I will do my best to reply to every response I get. This is a conversational thread, food for thought for every one. If your thinking, it's working :]

[Camarohusky]

I think you are missing the complexities of paper money. Our money is not fixed in value. It both expands and shrinks in value compared to the amount of two things. First it shrinks or expands inversely depending on the amount of it in circulation. The more money in circulation, the less it it worth and vise versa. The second aspect of money is that it both reflects and dictates the value of everything worth selling. Surplusses are taken into account. The more items of value that exist for the taking the more value money has.

When money was taken off the gold standard it was meant to be fluid to refelct these things as opposed to being pegged to a certain weight worth of gold.

[SmilezRoyale]

I read the title and knew that the OP was someone who had read up about the Venus project or some other neo-marxist theory of economy without any prior background in sound economic reasoning. And i see you did not disappoint. The results are all too tragic.

At 7/22/10 01:52 AM, Angolo-Di-Amore wrote: Okay people, you may or may not have heard of a Resourced Based Economy. I personally think it is a great idea, and want your take on it. Here is the basic idea:
Moneys original purpose was to regulate the distribution of scarce or limited resources. For thousands of years, the shot supplies of food, shelter, clothing, ect. were distributed based upon who had cash, and who didn't. So, why do we still use money if we have the resources to produce enough food, clothing, energy, shelter ect. for everyone? We have the resources to feed, clothe, shelter, and provide a comfortable existence for every individual in this nation. However, these surplus goods are still cash regulated, so we still have poverty, homelessness, and hunger in this nation. With our resources, even the poorest of our population should have lower/mid-middle class commodities. There is really no real need for money anymore with the surplus of resources. There is simply no reason to regulate these surplus goods with money.

Your first mistake;

Money originated as a medium of exchange, more specifically it has it's evolution as a commonly traded commodity which had the features of what makes a GOOD money.

First, consider the barter economy. Trade between individuals becomes difficult when, in order to trade with someone, you need to find someone with the goods you want, who also wants the goods that you have. so for example, if you are a candle maker who wants tomatoes, you can't just go to any Tomato farmer, you need a tomato farmer who ALSO wants candles. This is known a a double instance of wants. The problems of this barter system are revealed in this funny old Cartoon from when i was a child'

http://www.clip4e.com/play_ed,_edd_n_edd y_116_who,_what,_where,_ed.htm

It would make far more sense for people in a community to find something that everyone knows virtually everyone wants, and thus instead of barter, you can trade your goods for this universally wanted commodity, and then buy the goods that you originally wanted. A modern example of a commodity money were cigarettes and Cognac in post WWII Germany and also in POW camps.

Gold and silver won out in the evolution of commodity money's because their properties make them great monies, they have a high weight to value ratio, they generally don't spoil with the exception of tarnishing, they are easilly identifiable and can be divided into uniform units. All of this, by the way, occured without what we would call a 'state' or what you euphemistically call a 'government'

From them gold and silver coins evolved into notes for gold and silver which were expected could be redeemed at any time from a goldsmith, or in today's terms a banker.

In the absence of any sort of monopoly on the distribution of money and by effect, purchasing power, money is meant to be (and i am dreadfully sorry for taking this out of Atlas Shrugged) an equivalent of goods produced. Without any sort of ideology backing notions that one can simply seize resources, or goods and services by handing producers pieces of paper. Money does not 'distribute goods', prices do that. Money simply allows for transfers to occur in a more economical way, without the existence of money, economic calculation would be impossible and producers would have no way of figuring out whether they were making profits or losses (Within reason of course), the economy itself would be blind and we would all be the poorer for it.

So, lets say we did this. The government is put in charge of all the mining, farming, timber, ect. and uses these resources to give a comfortable middle class existence to every American citizen (Which, it is completely capable of.)

On what basis do you make this claim? None I am guessing. Number one, what reason do you have to believe that an institution known as the state which grants itself a monopoly on the production of all major industries will service the masses, rather than doing the far more RATIONAL thing and servicing itself? (As it has and always does when it is given that kind of totalitarian power)

Second, denying the absolute existence of scarcity is denying reality itself. Everything save maybe the air you breath is scarce, your time is scarce. You do not have adequate time in your life to produce all of the things you want and so you must economize. Surely you are capable of seeing beyond the silly idea of a post-scarcity world brought about by a state monopolizing resources.

**sigh** the problem with arguing with this neomarxism is that the arguments are so light and seemingly illogical that it is difficult for me to put into words precisely why it is wrong. But consider the following.

Resources only have value because producers know that if they take those resources and turn them into goods, consumers (Who are in fact also producers of other goods and services at the same time) will be willing to pay for those goods. The value of consumer goods on the market determines what producers are willing to bid the factors for. This market mechanism maintains for the (relatively) efficient distribution of resources (pretend for a moment we don't have things like theft and violent seizure in an economy).

This mechanism requires a number of things which your system would inevitably destroy, number one, the existence of a medium of exchange so that producers could calculate as mentioned above. Two, it needs a system of voluntary exchanges. Consumer demands can only be determined by the actions of consumers, you can say whatever you want about the beneficence of governments, but We both know that governments are NOT psychic. A voluntary markets means that you CANNOT compel individuals to do anything for anyone, they must do it of their own volition, putting the government in charge of all industries (Ignoring the fact that this has been historically tried numerous times and all were uneconomical ventures) is to a market the political equivalent of a one party state.

As for greed. Number one, greed is a subjective term. People act to achieve the things that they subjectively value. If people value aesthetics, they will act upon that value within the constraints of reality. (scarcity being an example of one of those constraints) if people value material goods, they will, within their own perception of their morals, do those things which bring them the greatest material value. This sort of thing has nothing to do with what sort of SYSTEM people live under, and the idea that people are greedy only because of economic conditions. Now it is true that people in some countries may be willing to do more for material goods given their desparation, but it is a circular argument to suggest that the end of greed will bring material wealth, because material wealth will bring the end of greed. (And you mention circular logic, you are forgetting that circular logic IS fallacious). No political system in existence DOES NOT run on greed, all of them do whether they admit it or not. The question is whether you want to see the greediest of individuals in businesses making goods for consumers, or in government offices planning the economy and waging war on whatever or whoever they see fit.

But like i said, this whole thing seems so illogical and built upon unspoken presuppositions that it is nigh impossible to argue against. All that i can say is that you should read at least some literature on economics before you start expounding this neo-marxism.

I will say, however, that you are obviously not someone who is putting forward these ideas out of any anger or hatred for anyone in particular, and you, unlike some people on the BBS, were not malicious in how you put forward your ideas.

[Angolo-Di-Amore]

At 7/22/10 10:35 AM, Camarohusky wrote: I think you are missing the complexities of paper money. Our money is not fixed in value. It both expands and shrinks in value compared to the amount of two things. First it shrinks or expands inversely depending on the amount of it in circulation. The more money in circulation, the less it it worth and vise versa. The second aspect of money is that it both reflects and dictates the value of everything worth selling. Surplusses are taken into account. The more items of value that exist for the taking the more value money has.

When money was taken off the gold standard it was meant to be fluid to refelct these things as opposed to being pegged to a certain weight worth of gold.

I do understand that, that is basic supply and demand at work. But not every form of goods transaction needs to have that (or other characteristics of currency exchange) to work. For example, before the use of a currency bartering goods was the used form of exchange. This worked well within the small, isolated communities of the time. But when communities grew and began to envelop and react with each other, a more universal form of good exchange was needed. Hence, the invention of currency caught on for its ability to govern the transactions of goods all around, and its ability to regulate the distribution of scarce goods (With supply and demand, as you mentioned.). Bartering had its own ins and outs, and served perfectly fine until society grew out of it. And Currency exchange has it's own ins and outs (Like supply and demand). The two both served their own environments, although there internal working were different. So, although the Resource Based Economy does not possess the same internal workings as currency exchange, that doesn't mean that it couldn't work.
However, you are completely right about me over simplifying the concept of currency exchange. One could write a 500 page book on currency exchange, and could still be called out for over simplification of the concept, and rightfully so. As with all things in economics, the concept of currency exchange gets very complex and intricate.

[Angolo-Di-Amore]

Im going to try and reply to my points, but I am new to these forms and hole that I don't accidently make my sesponces illegable... If I do, I am dreadfully sorry.

At 7/22/10 11:22 PM, SmilezRoyale wrote: I read the title and knew that the OP was someone who had read up about the Venus project or some other neo-marxist theory of economy without any prior background in sound economic reasoning.

Actually, I heard of the RBE from a friend of mine :] However, I do admit that it is a very marxist idea, and that innitially turned me away from it. But I realised that, just as our system today isn't a pure capitalistic system, a nation running with a RBE dose not really need to institute it's strictest forms to reap its benifits. So I think that a good middle ground could be found with the RBE to avoid over marxist vibes to it.

Money originated as a medium of exchange, more specifically it has it's evolution as a commonly traded commodity which had the features of what makes a GOOD money...
First, consider the barter economy. Trade between individuals becomes difficult when, in order to trade with someone, you need to find someone with the goods you want, who also wants the goods that you have.

I tottaly agree with the above. The barter system was replaced by the currency exchange system because it just worked better. But if bartering was replaced by a more efficient system, is it to far fetched to beleive that we could find something that workes even better than money? Some may not think so, but I contest that it is possible. Even if the RBE never catches on, I think that a new kind of good exchange will occur somewhere down the line. Humans are intuitve, we will find something better some day I think.

without the existence of money, economic calculation would be impossible and producers would have no way of figuring out whether they were making profits or losses (Within reason of course), the economy itself would be blind and we would all be the poorer for it.

I personaly contend that with todays computer technology, keeping track of stokepiles and such would be fairly easy. Simply replace dollar value with weight and you have a equally accurate way to calculate cost vs production.

On what basis do you make this claim? None I am guessing.

Food:
<a>http://www.epa.gov/oecaagct/ag101/cro pmajor.html<a>
<a>http://import-export.suite101.com/art icle.cfm/most_valuable_us_food_export_is _corn<a>
About $41 bill worth of food is purchased yearly in the US. The US makes $11 bill in food exports. If we gave that $41 bill of food to people free of charge, we still have at least $11 bill left over. This is not taking unsold goods or stokpiles into account.
Shelter:
<a>http://www.pbs.org/now/shows/526/home less-facts.html<a>
<a>http://www.marketwatch.com/story/us-v acant-housing-hits-record-19-million-201 0-04-26<a>
There are about 19 million vacent houses in the US. The homeless population is about 2.5 million. If we gave every homless person a house for free, that is an estimated 17.5 vacent houses left in the US.
Energy:
<a>http://www.ecogeek.org/content/view/9 91/<a>
<a>http://wiki.answers.com/Q/How_many_sq uare_miles_are_the_US_total<a>
It would take 93 sq miles of solar panals to power the entire US. There are 3,537,441 sq miles of land in the US. There is no way that there is not a spare 93 sq/m sitting out there somewhere.

:Number one, what reason do you have to believe that an institution known as the state which grants itself a monopoly on the production of all major industries will service the masses, rather than doing the far more RATIONAL thing and servicing itself?

Like I said before, a good balence between total govenment control of the harvesting businesses and capitalistic pricipals could be found. What I stated orriginally was a pretty pure version of the RBE idea, and could definatly do with some tweaking, and definatly needs to have that totalitarian aspect down.

Second, denying the absolute existence of scarcity is denying reality itself. Everything save maybe the air you breath is scarce, your time is scarce. You do not have adequate time in your life to produce all of the things you want and so you must economize.

The statistics provided above show that we produce more of our needs (Food, shelter, energy) than we use. Those goods are surplus, not scarce. That un-used surplus can be exchanged with other nations to meet the quatas for things that we want that are scarce in this nation.

the problem with arguing with this neomarxism is that the arguments are so light and seemingly illogical that it is difficult for me to put into words precisely why it is wrong.

My innitial argument was shakey, yes. But people like you, those that point out the flaws and force me to patch the holes, are what can turn that "illogical" argument into a much stronger idea. So thank you.

I will say, however, that you are obviously not someone who is putting forward these ideas out of any anger or hatred for anyone in particular, and you, unlike some people on the BBS, were not malicious in how you put forward your ideas.

Thank you.

Now, I didn't reply to a big chunk of your argument twards the end... that is because, really, you are right. The problems you pointed out with a tottal and pure RBE were pretty well flaws that can not really be corrected. But as I said, we dont have to run on a PURE RBE system. What if we divided it, half in half? Needs are governed by a RBE like system, while wants are regulated with the currency exchange sytem? The companys that produce our needs, (Food, Energy, Shelter, ect) are either govenment owned or contracted. With the statistics I posted above, there is enough of our needs produced to go around for free, so we can afford to give them away. Surpluses could be exporded, or sold to companys making anything other than out basic needs out of them to help cover the costs of production and to stimulate the economy. Then, the current system of currency exchange could be used to govern who gets the things they would just like (A new TV, a car, ect.). That way, no American citizin is deprived of the things they need for a comfortable existance. But, we still regulate the things that we want with currency exchange, bringing along it's benifits as well as those of the RBE.
Thanks for responding, even though I picked up a little bit of a passive agressive vibe, hehe...

[SmilezRoyale]

I tottaly agree with the above. The barter system was replaced by the currency exchange system because it just worked better. But if bartering was replaced by a more efficient system, is it to far fetched to beleive that we could find something that workes even better than money? Some may not think so, but I contest that it is possible. Even if the RBE never catches on, I think that a new kind of good exchange will occur somewhere down the line. Humans are intuitve, we will find something better some day I think.

I'm not entirely sure when people describe a resource based economy whether they imply that resources will serve as a medium of exchange. I challenge you to do the following; first define what constitutes a resource and then inform me as to how it is possible to identify something as a resource.

If you intend on maintaining 'some aspects of capitalism;' I assume that includes the most important part of it; the Voluntary trade aspect. So would you be able to describe what function resources, as opposed to money, play in exchange of goods.

Because all of the articles I've read on a RBE are not terribly specific as to what role resources have in exchange (I get the impression that exchange does not occur what-so-ever) and why removing money will make exchange easier to facilitate.

I personaly contend that with todays computer technology, keeping track of stokepiles and such would be fairly easy. Simply replace dollar value with weight and you have a equally accurate way to calculate cost vs production.

Weight of what? Weight of goods? What is the value of a good? If you are calling for transactions to be measured in the name of some tangible item rather than the paper dollars you call money, I don't see how this is any different from the concept of privatizing money and the existence of free banking. If you intend for the government to measure value based on a physical standard of a sort established by a particular individual, know that no government would never consent to it. Irredeemable paper currency is very good for their interests.

It is my understanding that computers already do what you do with respect to calculating, just in terms of dollars instead of XYZ. Idealistically they would be calculating in terms of an emergent form of commodity money; I still imagine that today it would be gold and silver as it was in the past, but it could be in terms of 'energy', but it's very difficult to redeem your money for energy.

Remember that, historically, there was a time when people did in fact trade goods for food (And possibly clothing) I do know for a fact that pre-money post-barter exchanges were often done in the form of livestock, cloth might also have made good money because it was divisible, but the weight to value ratio of these kinds of money is rather low and the idea behind having gold and silver as money is that redeeming paper receipts for gold as a 'final check' on a bank is much easier than 'food' 'clothing' and 'shelter'.

The problem with measuring value in terms of food is that the quantity of food grows and shrinks and demand for certain kinds of crops could fluctuate very wildly, whereas precious metals are mined out of the ground at a relatively stable rate. (with the exception of the discovery of mexico which of course was essentially 'gold inflation' that destroyed the spanish economy, but today i think this sort of thing would not occur.

Measuring in terms of shelter is obviously riddiculous, there are a vast multitudes of shelter and besides, most people do not calculate the value of a home by the value of an empty house with no appliances floating in space (Thus absent of any real estate value), demand for homes is most always done on the basis of individual homes because there are so many factors involved in the real estate beyond the simple physical home itself.

Clothing and food have a deteriorating effect as well as the fact that fashions change over the years. It would make far more sense to measure value in terms of raw textiles rather than actual clothing. But again the problem is the storage of these things.

All of the suggested replacements for money pale in comparison to gold and silver and for obvious reasons, civilizations were allowed to experiment and compete with a wide variety of commodity currencies for at least several centuries.

Number one, what reason do you have to believe that an institution known as the state which grants itself a monopoly on the production of all major industries will service the masses, rather than doing the far more RATIONAL thing and servicing itself?

Like I said before, a good balence** between total govenment** control of the harvesting businesses and capitalistic pricipals could be found. What I stated orriginally** was a pretty pure version of the RBE idea, and could definatly **do with some tweaking, and definatly needs to have that totalitarian aspect down.

A balance of what? When an institution maintains absolute control over the distribution of all resources, this institution has nothing and no one to fear.

The statistics provided above show that we produce more of our needs (Food, shelter, energy) than we use. Those goods are surplus, not scarce. That un-used surplus can be exchanged with other nations to meet the quatas for things that we want that are scarce in this nation.

Scarcity has nothing to do with shortages and surpluses. Please take the time to read the economics definition of each of them. I am aware of the fact that, with respect to food and shelter, more is produced than is actually bought. We just had a real estate bubble, and governments often times subsidize bad farming pratices where farmers can grow as much as they want, but only sell a limited quantity because the government takes the surplus and destroys it or dumps it on other countries, destroying their agricultural sectors.

A shortage occurs when it is nearly impossible to acquire a good on the market, for any price. there are no shortages of Rembrandt's, you simply have to pay 10 million dollars for a Rembrandt. If the government decreed all rembrandts must sell for 1000 dollars, you would not find any rembrandt's for sale, people would hoard them. Price controls are the most common cause of shortages though not always.

In the Soviet Union, shortages of virtually everything were commonplace for reasons i lack the characters to discuss.

To claim that something can be produced for free implies that there is no opportunity cost involved in producing it. For instance, press a button and a car appears out of thin air. In order for production to take place on a massive scale, it requires a division of labor, this means that people work to produce goods for others and are in turn given 'tokens of value' (Money) based on the market value of the good they produce. Any and all production that takes time and labor will have a price, it will never be free.

Another fallacy is the idea that governments produce FOR humanity. Even in under a soviet system, individuals were the ones who produced, it was simply the state that directed their production. (Albiet irrationally) People produce things for one another, and as long as exchange takes place between individuals or groups of them, value for value, ratios of exchange are needed for this to take place, hence money.

or to put it another way, that people still need to LABOR in order to produce a good means that the goods will still be scarce. Labor takes time, and time itself is scarce. We are not yet at the stage where machines can provide everything we need for us without human aid, and those machines are built by other machines etc. etc. It is true that most production takes place with machines, but we still need, at some level, humans directing and working on those machines. This is why it is fallacious to say that things are produced 'for us' they are produced 'BY us'

[Al6200]

Let's look at this economic system through the lens of a hypothetical farm. In a market economy, the farmer sells what they grow on the market, makes a profit, and likely chooses to invest those profits in further technology/research/development/etc.

Now, suppose that we implemented the system that you propose. The farmer grows crops and gives them to the state. The state in turn gives the farmer what he needs to have an upper middle class lifestyle. The state leaves some of his money for investment in new technology/research/development/etc.

So what's different? We might point out that, in a real market system, some farmers make more money than others. Thus, some farmers will have an upper class lifestyle and most will have a middle class lifestyle. If the state gave the farmers what they needed, then they could choose to give all farmers an upper middle class lifestyle instead. Many consider this to be a very important advantage of central planning that makes up for its drawbacks.

The big problem with centralized planning is information. The farmer knows more than the government does. He has better information on what crops to grow and what to invest in. It is very hard for a central authority to determine what needs to be produced. Many economists and I believe that this is the reason why nations with centralized planning tend to be very poor.

[Imperator]

At 7/24/10 03:09 PM, Al6200 wrote: So what's different? We might point out that, in a real market system, some farmers make more money than others. Thus, some farmers will have an upper class lifestyle and most will have a middle class lifestyle. If the state gave the farmers what they needed, then they could choose to give all farmers an upper middle class lifestyle instead. Many consider this to be a very important advantage of central planning that makes up for its drawbacks.

OR:

1. The state could choose to give all the farmers a lower class lifestyle, saving more money for other things.
2. The state could choose to have less farmers, and only provide for a few, telling the rest to take up other ventures.
3. The state could choose to import the crops from other places, because transporting all the crops to a centralized bureaucracy, distributing them to where they need to go, reimbursing the farmers, and providing them the funds to continue is too much work, and too much money. If it's far easier and cheaper to import grain from surrounding peoples, why not just do that, have force your own people to take up other businesses or trades?

The big problem with centralized planning is information. The farmer knows more than the government does. He has better information on what crops to grow and what to invest in. It is very hard for a central authority to determine what needs to be produced. Many economists and I believe that this is the reason why nations with centralized planning tend to be very poor.

There are two big problems with centralized planning. One is indeed information.
The second is distribution.

Even with a large resource center and strong bureaucracy to effectively take in information and resources, it requires a large and effective distribution system to get all those resources where they need to go.

I'm sure we've all had the experience of something being broken, damaged, or lost in the mail or in transit. The difference is that probably wasn't the food you needed to survive, or the resources needed to run your business.

The larger the geographic territory, the less effective the state becomes as a provider......And the days of Knossos and Mycenae are long over.

[SmilezRoyale]

At 7/24/10 04:04 PM, Imperator wrote:

At 7/24/10 03:09 PM, Al6200 wrote:

the means of distribution under a state economy are less important than the information problem IMO, without prices the government is operating essentially in the dark with respect to distributing goods beyond the very basic essentials. Luxury goods like Toilet paper are always in shortages.