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<br>
Steve, Yo's-<br>
<br>
This is off the top of my head & with less than adequate time
for thought, just before I go AFK for a bit, but:<br>
<br>
Yes, there are economists working on valuing "ecosystem services,"
and that seems to be having some effect, when, for example, a dollar
value is placed on wetlands or forests.<br>
<br>
A potentially simpler approach is to just forbid externalities
entirely, or require internalization of externalized costs (e.g.
"clean up your mess or pay someone else to do it, but no walking
away from it"). This has the benefit of also being consistent with
the libertarian principle of voluntary transactions among consenting
adults: externalities are imposition of a transaction cost on third
parties without consent. This principle works across the
ideological spectrum.<br>
<br>
In general, "nature builds with few & simple rules", and humans
are well advised to do likewise. Regulatory Rube Goldberg
contraptions are hardly as useful as straight-up statute laws such
as "externalizing of costs is forbidden, and the fine shall be
quadruple damages." <br>
<br>
Growthism: <br>
<br>
The fact that human economies have not reached a steady state
before, is not proof that they can continue indefinite growth on a
finite planet. "Past performance is no guarantee of future
yields." <br>
<br>
Or to put it differently, if you can find a way to map an infinite
plane onto the surface of a Euclidean solid, I'll find a way to get
you nominated for a Field Prize (the math equivalent of a Nobel).<br>
<br>
Exponential growth always appears as if it can continue forever,
right up to the point where it hits the wall. And every species
eats right up to the limit of its food supply, and then has a
dieoff. Yes, that would be oscillation and chaotic behavior: waves
of mass death that make WW2 and the Holocaust look like warm-up
exercises. <br>
<br>
Now we can either surrender to the proverbial forces of nature on
this, or we can use our brains and our free will to create an
economic system that doesn't behave like bulimia. <br>
<br>
Albert Einstein and Edward Teller both agree: the exponential
function is humanity's most dangerous math. <br>
<br>
Investing vs. speculating:<br>
<br>
Speculating is short-term betting on financial transactions without
producing tangible goods and services. It's parasitic and
predatory, and should be strictly limited by law, and taxed into
insignificance. <br>
<br>
Speculators are an example of what I call "dissipative structures
type B" (DSBs) that feed off entropy gradients in such a manner as
to export an inflated entropy load to their ambient environments.
(Contrast to "dissipative structures type A" (DSAs) that don't foist
an excessive entropy load on the ambient.)<br>
<br>
Investment is also a "bet" on the future, but it works on longer
time scales and it produces tangible goods and services. <br>
<br>
Speculators care about the length of their brokerage's Ethernet
patch cords and fiber optic cables in inches, because every inch at
c counts in their microsecond-trading universe.<br>
<br>
Investors could care less about the speed of electrons in patch
cords or photons in fiber, because they're in it for the long haul.
<br>
<br>
Manipulation is the use of borderline-illegal means to influence
markets and outcomes. Borderline-illegal ought to count as
malfeasance. <br>
<br>
More later, I gotta scoot...<br>
<br>
-G.<br>
<br>
<br>
======<br>
<br>
<br>
<br>
<br>
<div class="moz-cite-prefix">On 13-05-06-Mon 10:55 AM, Steve Berl
wrote:<br>
</div>
<blockquote
cite="mid:CAB4gGnfYbgKhryaY=eNYn1B0jSORZvKk4WMLnvSpa0mTgr3k+Q@mail.gmail.com"
type="cite">
<div dir="ltr">Interesting. A few fine points that seem to be
bugging me though, and some terms that need to be defined
better.
<div><br>
</div>
<div style="">Seems to me that you can factor the "ecological
sustainability" into the more traditional models by assigning
a value to "ecosystem services" in just the same way you can
assign value to real estate or other natural resources. The
way a wetland filters storm water runoff or protects a
coastline from hurricane damage can be assigned a value in
whatever currency you choose.</div>
<div style=""><br>
</div>
<div style="">I have to object to the statement "<span
style="font-family:arial,sans-serif;font-size:13.333333969116211px">the
ultimate outcome of an economy is necessarily a steady
state". This is clearly not true based on both the past
history of human society, and an understanding of system
theory in general. There are plenty of systems that never
reach a steady state. Some systems oscillate and some
systems have chaotic behavior. Systems that converge to a
steady state are sort of a special case, and I see no
evidence that human economic systems are one of those cases.</span></div>
<div style=""><span
style="font-family:arial,sans-serif;font-size:13.333333969116211px"><br>
</span></div>
<div style=""><span
style="font-family:arial,sans-serif;font-size:13.333333969116211px">Coming
at it from a systems engineering point of view, I think that
"investing" or "speculating" means that someone believes
that they have a model which can predict future behavior of
the system based on some known inputs, and chooses to use
that model to bet on some future outcome. I'm not sure
exactly what the difference is between investing and
speculating. Perhaps someone can help flesh that out?</span></div>
<div style=""><span
style="font-family:arial,sans-serif;font-size:13.333333969116211px"><br>
</span></div>
<div style=""><span
style="font-family:arial,sans-serif;font-size:13.333333969116211px">"Manipulation"
seems to mean that not only do I have a model for the future
behavior of the system based on its inputs, but that I also
have control over some of the inputs.</span></div>
<div style=""><span
style="font-family:arial,sans-serif;font-size:13.333333969116211px"><br>
</span></div>
<div style=""><span
style="font-family:arial,sans-serif;font-size:13.333333969116211px">steve</span></div>
</div>
<div class="gmail_extra">
<br>
<br>
<div class="gmail_quote">On Sun, May 5, 2013 at 9:38 PM, GtwoG
PublicOhOne <span dir="ltr"><<a moz-do-not-send="true"
href="mailto:g2g-public01@att.net" target="_blank">g2g-public01@att.net</a>></span>
wrote:<br>
<blockquote class="gmail_quote" style="margin:0 0 0
.8ex;border-left:1px #ccc solid;padding-left:1ex">
<div bgcolor="#FFFFFF" text="#000000"> <br>
<br>
Sonja, Rabbit, Ryan, and Yo's-<br>
<br>
Re. alternative currencies: I've given a lot of thought
to this subject over the years.<br>
<br>
<br>
A currency is not only a transaction medium but a measure
of wealth in an economy: real resources that have economic
value. There are basically three types of resources:
natural resources, labor, and capital. <br>
<br>
Natural resources include: Renewable energy sources
(solar, wind, geothermal, tidal, biomass), non-renewable
energy sources (fossil fuels, uranium, thorium), minerals
(nonliving matter that's taken from the ground), and
agricultural products such as food.<br>
<br>
Labor includes: casual labor, unskilled and skilled
occupations, and licensed occupations.<br>
<br>
Capital includes: natural capital (land, monetized
resources), industrial capital (e.g. tools, plant &
equipment), inventoried goods, and financial capital
(equity and debt instruments). <br>
<br>
I'm inclined to treat real estate as a limited natural
resource (land) or as natural capital generally. Today it
is often treated primarily as a concretized form of
financial capital, which leads to speculative bubbles such
as the one that produced the present depression.<br>
<br>
A sustainable economy, in the purely economic sense
(ecological sustainability is a different axis of
measurement), is one that is largely resilient against
manipulation and fraud, and boom and bust cycles. Boom
& bust economies are like bulimia: binge & barf,
inherently unhealthy and harmful. <br>
<br>
Ecological sustainability isn't dealt with by conventional
economics, which works on a "flat Earth" model: as if the
Earth is an infinite flat plane. This is the most
important fatal flaw of conventional economics, and it
leads to the myth of infinite growth. The most important
foundation for a new economic paradigm is the recognition
that the Earth is not flat, not an infinite plane, but is
a Euclidean solid with a finite surface and therefore with
finite resources. From this, the rest follows. <br>
<br>
From this, two other things follow that are "taboo" in
conventional economics: the ultimate outcome of an economy
is necessarily a steady state, that can be anywhere on a
spectrum from the most egregiously exploitative (e.g. a
slave economy with a hereditary aristocracy) to the most
equalitarian ("from each according to ability, to each
according to need"). The most likely outcome of a
steady-state economy is the inexorable demand for economic
justice or "distributional equity," with its center of
gravity in a sustainable middle class, and viable paths to
economic sustenance for all. <br>
<br>
The role of currencies in building economic resilience is:
a) to provide negative feedback loops in the economy, that
prevent the positive feedbacks that cause booms and busts,
b) to minimize the occurrence of fraud and manipulation,
and c) to provide isolation or compartmentalization that
enables "quarantine" of economic damage: such as
preventing a local economic crisis from going global, and
preventing a global economic crisis from affecting every
locality.<br>
<br>
<br>
Currencies, with those points in mind:<br>
<br>
A viable economy would include three levels of currency:
global, national, and local/regional. The global currency
handles transactions between nations. The national
currency handles transactions between localities within
each nation-state. And the local/regional currency
handles transactions that occur wholly within the scope of
local/regional economies. <br>
<br>
The ideal global currency would be denominated in energy,
for example in joules as Rabbit pointed out. Ultimately,
energy is the foundation of all economic transactions: the
global common denominator. <br>
<br>
National currencies tend to be based on arbitrary measures
of value, whether gold or the credit of national
governments. But in general they tend to represent the
wealth of nations, plus or minus the effects of
speculation. If I was setting up a national currency
from scratch, I would value it in terms of natural and
industrial capital: real capital wealth. <br>
<br>
There's been much discussion of the proper foundations for
local currencies. In the Bay Area there is a group that
is working on the premise of a local currency denominated
in the food production of local agriculture. But one of
the most successful local currencies, "Ithaca Hours," is
based on the value of local labor. To my mind this is
correct: because labor is the one resource that is
reliably available in every local economy. <br>
<br>
I've studied the Ithaca Hours system in some depth, and
I'd suggest anyone who's interested in local currencies do
likewise, starting with a keyword search.<br>
<br>
The major value of a local currency to any local peoples
(such as ourselves) is that it enables us to maintain
functioning economies when the global or national
economies are in crisis. By analogy it's like having
rubber tires and shock absorbers on a bus, to insulate the
riders from bumps and potholes along the road. All other
factors equal, you don't want to ride on a bus where a bad
road translates to a bone-crunching ride. <br>
<br>
Even where many or most of our transactions are not local,
the ability of a local currency to insulate certain parts
of a local economy from national and global economic
crises, translates to the difference between having to
tighten your belt vs. not being able to eat, or having
less work vs. having no work.<br>
<br>
<br>
Re. the IRS: <br>
<br>
The question always comes up: what does the IRS have to
say about this? As it turns out, the IRS takes a
practical attitude toward local currencies. They have two
requirements, that are entirely reasonable:<br>
<br>
One, that the exchange rate between a local currency and
the US Dollar must be public, must be arguably reasonable,
and must not subject to insider manipulation. <br>
<br>
Two, that income earned in local currency must be declared
for purposes of income tax, translated to US Dollars at
the current exchange rate, and the taxes paid in US
Dollars. <br>
<br>
If we do those things, we're good to go. <br>
<br>
<br>
Re. Bitcoin: <br>
<br>
I'm highly skeptical of Bitcoin, precisely because it has
demonstrated a tendency toward bubbles and busts,
speculation, and manipulation by questionable actors.
These characteristics do not make for a stable holder of
wealth or a stable medium of transactions. <br>
<br>
The primary usefulness of Bitcoins is that they facilitate
anonymity of online transactions. This is all well and
good, but can also be accomplished by creating online
financial institutions that anonymize transactions made in
US Dollars or other currencies. By analogy think of Gift
Cards, that are issued by Visa and Mastercard, but that
aren't tied down to your legal name. <br>
<br>
<br>
Anonymization without speculation & manipulation:<br>
<br>
In the type of institution I have in mind, account holders
would have accounts in their legal names as they do at any
bank or credit union. Transactions would occur in two
steps: one occurring in your personal or business account,
and one occurring in the institution's account.<br>
<br>
For example you buy something online. A payment goes from
your account to the institution's common account, and
another payment goes from the institution's common account
to the person or company you're paying. The latter
payment is anonymized: it is made between the institution
and the person being paid, and assigned a transaction
number that you and they can use to track it. <br>
<br>
For example you sell something online. The buyer makes a
payment to the institution's common account and obtains a
transaction number and gives you that number. You use
that transaction number to move the payment from the
institution's common account to your personal account. <br>
<br>
The question has been raised as to whether this could be
used for, or seen as, a form of money laundering. I
believe the answer is No, because the institution itself
would maintain records of every transaction, and these
records would (only) be accessible for lawful uses such as
investigating crimes or as evidence in civil lawsuits.
The important difference is that the transaction records
would be private aside from those two exceptions (criminal
and civil cases), and not be accessible to Big Data, so
your purchases of (for example) consenting adult porn, or
your reading habits in general, wouldn't become part of
your dossier. <br>
<br>
As far as Porn-O-Mat or Amazon, Ebay or iTunes, or any of
those, are concerned, they are doing business with another
business entity (the Cyberia Credit Union or whatever we
call it). They have no need or desire for a "person name"
for every transaction, any more than Staples.com does when
they sell office supplies to a company that's an
incorporated entity. They are not going to turn down
transactions just because they don't have the legal
person-name of the soft squishy human body that sits in
the hypothetical office cubicle for which the office
supplies (or porn, best-sellers, flea-market goods, songs,
etc.) have been bought. <br>
<br>
In other words, we can get the most important benefit of
Bitcoin, without sticking our hands in the shark- and
piranha-infested waters of speculation and sabotage that
have become Bitcoin's habitat. <br>
<br>
So: is anyone here interested in creating a labor-based
currency, and/or an online credit union for anonymous
transactions?<br>
<br>
-G.<br>
<br>
<br>
===== <br>
<br>
<br>
<br>
<div>On 13-05-05-Sun 12:09 PM, Sonja Trauss wrote:<br>
</div>
<blockquote type="cite">
<div dir="ltr">+1<br>
</div>
<div class="gmail_extra"><br>
<br>
<div class="gmail_quote">On Sun, May 5, 2013 at 11:53
AM, Rabbit <span dir="ltr"><<a
moz-do-not-send="true"
href="mailto:rabbitface@gmail.com"
target="_blank">rabbitface@gmail.com</a>></span>
wrote:<br>
<blockquote class="gmail_quote" style="margin:0 0 0
.8ex;border-left:1px #ccc solid;padding-left:1ex">
<div dir="ltr">
<div>Someone was proposing a currency
denominated in joules which would represent
the ability to generate that much energy in
the future.</div>
<div><br>
</div>
<a moz-do-not-send="true"
href="https://medium.com/armchair-economics/183c2ad47b50"
target="_blank">https://medium.com/armchair-economics/183c2ad47b50</a><br>
<div><br>
</div>
<div>The exchange rate between Bitcoiny CPU
cycles and joules would be pretty
straightforward to figure out.</div>
<div><br>
</div>
<div>But: would this be more prone
to speculation and bubbles since it's based on
our estimation of what will happen in the
future? And what happens when everyone tries
to cash in their joules at the same time?<br>
</div>
<div><br>
</div>
<div><br>
</div>
</div>
<div class="gmail_extra"><br>
<br>
<div class="gmail_quote">
<div>
<div>On Sun, May 5, 2013 at 10:44 AM, Ryan
Bethencourt <span dir="ltr"><<a
moz-do-not-send="true"
href="mailto:ryan.bethencourt@gmail.com"
target="_blank">ryan.bethencourt@gmail.com</a>></span>
wrote:<br>
</div>
</div>
<blockquote class="gmail_quote"
style="margin:0 0 0 .8ex;border-left:1px
#ccc solid;padding-left:1ex">
<div>
<div>
<div dir="ltr">Hi All,
<div><br>
</div>
<div>I've been reading/following the
whole evolution of bitcoins as
currency and I'm still a bitcoin
skeptic (I prefer potential rather
than spent processing power :) ).</div>
<div> <br>
</div>
<div>So I was curious, has anyone in
the past tried to create a virtual
currency based on a resource value,
like future usage of CPU time (i.e.
$1 would equal an equivalent amount
of electricity and hardware wear and
tear for x number of CPU cycles,
which could be exchanged either for
the cycles, at a super computer bank
or for other currencies)?</div>
<div><br>
</div>
<div>To me it seems that bit coin is
like a spent CPU resource rather
than a future resource and by
flipping the equation to future
rather than past value a currency
based on this type of commodity
would be useful... any thoughts?</div>
<span><font color="#888888">
<div><br>
</div>
<div>R</div>
<div><br>
</div>
<div>
<div><br>
</div>
-- <br>
Ryan Bethencourt<br>
<br>
<span>Tel: <span title="Call
with Google Voice"><a
moz-do-not-send="true"
href="tel:%28415%29%20794%206463"
value="+14157946463"
target="_blank">(415) 794
6463</a></span></span><br>
<a moz-do-not-send="true"
href="mailto:ryan.bethencourt@gmail.com"
target="_blank">ryan.bethencourt@gmail.com</a><br>
<br>
<a moz-do-not-send="true"
href="http://www.bamh1.com"
target="_blank">www.bamh1.com</a><br>
<a moz-do-not-send="true"
href="http://www.linkedin.com/in/bethencourt"
target="_blank">www.linkedin.com/in/bethencourt</a><br>
<a moz-do-not-send="true"
href="http://www.logos-press.com/books/biotechnology_business_development.php"
target="_blank">www.logos-press.com/books/biotechnology_business_development.php</a><br>
</div>
</font></span></div>
<br>
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