[P2P-F] self-regulating markets

Thu Jun 23 18:56:29 CEST 2011

Yes People are producers and consumers. In every system, people produce and
consume... What is done though is that those actions are done in different
times, so this is not what i am saying.

What happens right now is that someone gives value to someone and hopes in
an naive way that the other will find a way to repay him. The other person
can only guarantee of his capabilities and that he is willing to work. He
cannot guarantee that others will like or have money to buy his products.
There are many reasons why others wont buy products from him, reasons that
are outside of his reach. So when the market doesnt help him make money, he
is to blame. No, I totally disagree.

Lets see how other systems try to work with this problem.

Banks try to find what assets he has, if he has a job. They try to predict
the risk of the loan.
Businesses  only care to sell products. They are not interested in
understanding whether there is a way for cosumers to make money. If the
business and their customers was a closed system, what businesses do is sell
products to their customers without knowing that their customers will be
able to provide value to the workers of the business so as that the cycle of
 flow continue.

People should understand the concept that for them to be able to work or
sell their products, others will need to work or sell their products.

Secondly, If we are to make a system that is rigid and is not prone in
creating debts that cannot be payed back, we should create contracts between
people that are based on concrete information and promises that they can
hold.

So this is the difference between the 2 systems.

With my system, the promise is that he will work if asked.
With all other systems(except barter) the promise is that he WILL work.

The one contract will always be fulfilled since the promises are concrete .
The established ways loans are done let the contracts contain the risk of
the market in themselves. They force the borrower to make promises that he
cant keep and thus contracts are prone to the failures of the market.

With my system, it doesnt mean that people dont care to create value for the
community. On the contrary, People will not be able to be given
value(products) if it is not certain that they can provide something in
return. This way bad transactions are stopped from the beginning.

But it also gives incentive to people to buy products so that they sell
their products. It creates economic activity so as to sustain or create more
economic activity.

The dichotomy of a person into a seller and a producer is wrong. Each
contract of my system is a small closed circle in itself. What happens when
more contracts come, the closed circle becomes bigger and bigger.

All contracts will be rigid, never to fail.

The general idea is this: It is not the fault of the small businesses or of
all those unemployed that they cannot keep up to their responsibilies if
they tried to find work, sell their products but failed. I hope we all
understand that people are unemployed because of reasons that are not in
their reach.(at least most of them)

... When I have time, I will make an example how a new investment changes
the flow of a whole circle(for example) and why the idea of having only
workers or consumers as investors is inadequate. (Being an investor is
different from the person that controls the way things are produced)

2011/6/23 Thomas Greco <thg at mindspring.com>

> **
> Yes, everyone is both a producer and a consumer. Alvin Toffler coined the
> term "prosumer."
>
> You can call the seller a lender and the buyer a borrower, if you like. The
> seller has in a way "loaned' real value to the buyer/borrower.
> The WIR required that lines of credit be secured by the pledge of
> collateral. That provides surety of contract.
>
> You say, "When someone is given a loan, the own that gives the loan,
> product(money) should have the responsibility to get the other a job to give
> his debt back, if he doesnt find a job for him, then he loses the credit he
> received.."
>
> Good luck selling that idea. As a borrower you want me to advance real
> value to you and find you a job besides?
> What is YOUR responsibility? It's up to you to provide something that
> community values and wants to buy.
>
>
> Thomas H. Greco, Jr.thg at mindspring.com
> Mobile phone (USA): 520-820-0575
> Beyond Money: http://beyondmoney.net
> Tom's News and Views: http://tomazgreco.wordpress.com
> Archive Website: http://www.Reinventingmoney.com
> Photo gallery: http://picasaweb.google.com/tomazhg
> Skype/Twitter name: tomazgreco
> My latest book, "The End of Money and the Future of Civilization"
> can be ordered from Chelsea Green Publishing, Amazon.com, or your local bookshop.
>
>
> On 06/23/2011 2:26 AM, Apostolis Xekoukoulotakis wrote:
>
> Yes , I  was just confused because of my english and because it is a broad
> definition that is not mentioned a lot.
>
>  Yes the fact that we use our money is very important. One important thing
> that could be used in Lets and is used in my system is this:
> When someone is given a loan, the own that gives the loan, product(money)
> should have the responsibility to get the other a job to give his debt back,
> if he doesnt find a job for him, then he loses the credit he received..
>
>  I recently read a bit about the WIR bank and how he was given assets,
> real money to allow a balance to go negative. Then Kevin very well said that
> negative balances can be backed by future work.
>
>  I go even further and say that the borrower can only give back the debt
> when others employ him or buy his products. The borrower can only give the
> promise that when asked about one of his product, he will give it to repay
> his debt. The market is not controlled by him and he is not responsible. The
> lender should be the one to lose his credit, since the borrower told him to
> ask him of a product and he will provide.
>
>  This is very important if we are to have flow of products in the economy.
> Someone will buy a product if someone else buys his product. The fact that
> in a transaction we differentiate the buyer from the seller is fundamentally
> flawed.
>
>  The buyer is also a seller. The employee is also the employer.
>
>  So we could change the LETS system to give an incentive to people to form
>  circles.
>
>  Let me now guess that the absence of such a system is the reason why LETS
> communities prefer to be isolated, to keep their credits locally.
>
>  2011/6/23 Thomas Greco <thg at mindspring.com>
>
>>  It's not all that complicated.
>> Yes, LETS is a form of mutual credit clearing.
>> Credit clearing simply allows us to use "our" money (that we create in the
>> process of buying/selling) instead of "their" money, which must be borrowed
>> from a bank or earned from someone else who borrowed it from a bank.
>>
>> If I do some work for you, we must agree upon a price. Your account is
>> debited and my account is credited for the same amount. I can then use my
>> credits to buy whatever I want, at an agreed price, from someone else in the
>> system. You must eventually provide value to someone in order to bring your
>> balance back to zero. If you default, the collective membership bears the
>> burden of that instead of me personally suffering the loss.
>> The system must have sufficient revenues to cover such losses as well as
>> its operating expenses.
>> I've explained all of this many times in my writings.
>>
>>
>> Thomas H. Greco, Jr.thg at mindspring.com
>> Mobile phone (USA): 520-820-0575
>> Beyond Money: http://beyondmoney.net
>> Tom's News and Views: http://tomazgreco.wordpress.com
>> Archive Website: http://www.Reinventingmoney.com
>> Photo gallery: http://picasaweb.google.com/tomazhg
>> Skype/Twitter name: tomazgreco
>> My latest book, "The End of Money and the Future of Civilization"
>> can be ordered from Chelsea Green Publishing, Amazon.com, or your local bookshop.
>>
>>
>>   On 06/22/2011 4:33 AM, Apostolis Xekoukoulotakis wrote:
>>
>> I tried to find information about mutual credit clearing Unions. I couldnt
>> find much, so I guess that the name itself explains it. I suppose that LETS
>> is such a system.
>>
>>  Let me make an example so as to see if we are talking about the same
>> method of exchange and to clarify things.
>>
>>  We have John, Michael and all the others. John is making furniture. In
>> fact he has 5 different kind of furniture that he is making. Michael is a
>> software engineer, he is paid by the hour and has expertise in a number of
>> programming languages and frameworks. Both of them had done previous work
>> and they have a reputation that distinguishes them from other of the same
>> work.
>>
>>  John decided that he wants to have a site advertising his furniture so
>> he goes to Michael and tells him to make him a site. Michael and John make a
>> contract. Michael through the (system)site knows  at which proportionality
>> has john currency, ie furnitute been exchanged with other currencies,
>> products even if that exchange is indirect. The system transforms to him
>> through past transactions or future contracts the currency of furniture into
>> the products he wants. This way Michael has an exact understanding of the
>> pleasure he recieves at a specific time vs the work he will have to do now.
>>
>>  John on the other hand understands the amount of 'happiness he will
>> receive' , ie the product. There is no need for such a transformation.
>>
>>  Both now have enough information to start trading, decide the amount of
>> work each one will be obliged to do and at what time.
>>
>>  Lets just say now that Michael now has a contract with John that allows
>> him to ask for a specific number of furniture of a specific design till a
>> specific date. That means that after this date John has no obligation to
>> make these furniture. He has no debt and he is free to abandon his workshop,
>> retire.
>> Till that date Michael has to find work for John so as to transform his
>> currency into another he likes. The system told him that most likely he will
>> transform it into the products he likes but it is up to him.
>>
>>  Let us say that someone likes the furniture of john and wants to trade.
>> At this time he can trade directly with John or with Michael.
>>
>>  As you can see if John decides to abandon his obligations the one to be
>> harmed will be Michael. This system doesnt have an abstract sense of money.
>> It tries to transform the currencies into currencies that we want.
>>
>>  How much value do 500 dollars mean to you?  500 dollars have different
>> value per person depending on the things they can buy with them. After a
>> period of time you will still have 500 dollars but the things you can buy
>> are different because the prices change. Not only that, the person or node
>> that has the money plays an important role on the value of money. Big
>> corporations buy stock with a lower price than smaller ones. Their value of
>> money is different.
>>
>>  *The topology of the graph plays an important role in the transformation
>> of money into goods. *
>>
>>  So Dollars or any kind of such a currency, like gold, doesnt contain
>> within it the pleasure, happiness we will receive with those money.
>>
>>  Now If someone were to give us how happy he would be if he were in a
>> specific situation( number of products, amount of work), if everyone did
>> that, I could take all those people and organize them in such a way,
>> automatically creating circles of flows, automatically finding the prices
>> and amount of products that are to be traded. If I am given enough
>> information, I could even tell an engineer how his invention will change the
>> flow of products and prices.
>>  I havent made the insertion of data user friendly yet, but I think that
>> It takes all parameters into account and the price is determined in such a
>> way so as that the individual maximizes his gain. You must also understand
>> that noone can cheat. If someone says something different from what he wants
>> , he will get worse results.
>>
>>  Savings equal the amount of money on negative balances. There are
>> methods to stop people from not paying and this should be enforced globally.
>> If someone has a flow of products every day, if he doesnt want to pay old
>> debts, he could be dropped out of the system, not be able to buy new things.
>> Other people could also insure someones debt.
>>
>>  As old debts are transformed into new debts by making new contracts,
>> savings change position from one person to another as debt changes hands.
>> You can undestand that those who will have debt will be the ones that are
>> thought as the most productive and usefull in the future. Another method for
>> savings allocation is proportionality of your savings to the goods you will
>> want in the future.
>>
>>  What I am saying here IS experimental. What is sure though is the fact
>> that it requires a lot of information to make it work.
>>
>>  Best regards...
>>
>>  2011/6/22 Thomas Greco <thg at mindspring.com>
>>
>>>  Dear Apostolis,
>>>
>>> Below are the links to my websites, and the title of my latest book.
>>>
>>> Clearing circles have been operating successfully for many years. It is
>>> an old idea.
>>> Now, the challenge is to optimize the procedures and protocols and take
>>> it to scale, then network local exchanges together to provide an means of
>>> payment that is locally controlled but globally useful.
>>>
>>> A debit balance in a credit clearing exchange can be looked at as a loan.
>>> It is a draft upon a line of credit that is extended by the collective
>>> membership. In a clearing system some accounts must be allowed to be
>>> negative. The total of negative balances (or positive balances) can be
>>> looked at as the supply of internal currency.
>>>
>>> Savings and investment, or *finance *is a separate function from *
>>> exchange*.
>>> Yes, they are related, but require different mechanisms.
>>>
>>> Thomas
>>>
>>> Thomas H. Greco, Jr.thg at mindspring.com
>>> Mobile phone (USA): 520-820-0575
>>> Beyond Money: http://beyondmoney.net
>>> Tom's News and Views: http://tomazgreco.wordpress.com
>>> Archive Website: http://www.Reinventingmoney.com
>>> Photo gallery: http://picasaweb.google.com/tomazhg
>>> Skype/Twitter name: tomazgreco
>>> My latest book, "The End of Money and the Future of Civilization"
>>> can be ordered from Chelsea Green Publishing, Amazon.com, or your local bookshop.
>>>
>>>
>>> On 06/21/2011 7:35 PM, Michel Bauwens wrote:
>>>
>>> Thomas has written a few books and is in touch with many local credit
>>> commons initiatives ...
>>>
>>> he's in cc,
>>>
>>> Michel
>>>
>>> On Wed, Jun 22, 2011 at 3:38 AM, Apostolis Xekoukoulotakis <
>>> xekoukou at gmail.com> wrote:
>>>
>>>> What you say was exactly the idea with which I started working.
>>>>
>>>>  Where is more info about it? Has Thomas created such a clearing
>>>> house?
>>>> Most importantly, has he found an algorithm to create trading circles?
>>>> has he studied the macroeconomy of such a system?
>>>>
>>>>  Why do we need to see the global network?
>>>>
>>>>  Well, in order to be able to make investments. New investments about a
>>>> specific product can have indirect consequences to the whole network. We may
>>>> then have to compute what percentage of the investment will have to be paid
>>>> by each peer.
>>>>
>>>>  We need to know about the global network in order to decide to which
>>>> persons we can store our savings and the ability of those currencies to be
>>>> transfered into goods that we will want in the future.
>>>>
>>>>  It is important to think of each peer as a producer, a seller, an
>>>> investor. Investors need information.
>>>>
>>>>
>>>>    2011/6/21 Kevin Carson <free.market.anticapitalist at gmail.com>
>>>>
>>>>> El 21/06/11 04:23, Apostolis Xekoukoulotakis dijo:
>>>>>
>>>>>  > What I am about to say needs testing and more thinking but let me
>>>>> tell you
>>>>> > what I have done so far to create an alternative to the free market.
>>>>>
>>>>>  We're probably using the term "free market" in a different sense.  The
>>>>> market can refer simply to the cash nexus, or the arena of commodity
>>>>> production for monetized exchange.
>>>>>
>>>>> But it can also be used, by market anarchist like me, to describe the
>>>>> entire spectrum of voluntary transactions and relationships --
>>>>> including cooperatives, gift economies, communal property, informal
>>>>> barter, mutual aid, etc.
>>>>>
>>>>> >>  I have created a new class of currencies that are very similar to
>>>>> the
>>>>> >> very
>>>>> >>  old currencies. What if each person used the creation of his work
>>>>> as
>>>>> >>  currency. When someone owns 5 paul's chairs for example , It is
>>>>> meant
>>>>> >> that
>>>>> >>  Paul will have to give him those 5 chairs in the future if he asks
>>>>> for
>>>>> >> them.
>>>>> >>  This is then some kind of loan. Someone gives something now in
>>>>> exchange
>>>>> >> for
>>>>> >>  something in the future. If he doesnt need the chairs, he might
>>>>> have to
>>>>> >>  exchange Paul's chairs with something else.
>>>>>
>>>>>  That sounds a lot like Tom Greco's mutual credit clearing networks,
>>>>> which I'm a big fan of.  Every member runs a balance that looks a lot
>>>>> like the balance in a checking account.  When you sell a good or
>>>>> service to a member your balance goes up, and when you purchase same
>>>>> it goes down.  And the system allows people to run negative balances,
>>>>> so long as the negative balance is limited to some value relative to
>>>>> their average monthly sales and the account continues to be active and
>>>>> turn over.  So "money" is essentially backed by the goods being
>>>>> traded; rather than being a store of value from past production, it is
>>>>> simply a unit of account for denominating trade of present-for-present
>>>>> or present-for-future production.  Nobody has to have a store of money
>>>>> from past production in order to trade, so there's no problem of
>>>>> economic stagnation for want of liquidity ("there's not enough money
>>>>> in circulation").  People create money by trading.
>>>>>
>>>>> --
>>>>>  Kevin Carson
>>>>> Center for a Stateless Society http://c4ss.org
>>>>> Mutualist Blog:  Free Market Anti-Capitalism
>>>>> http://mutualist.blogspot.com
>>>>> The Homebrew Industrial Revolution:  A Low-Overhead Manifesto
>>>>> http://homebrewindustrialrevolution.wordpress.com
>>>>> Organization Theory:  A Libertarian Perspective
>>>>>
>>>>> http://mutualist.blogspot.com/2005/12/studies-in-anarchist-theory-of.html
>>>>>
>>>>> _______________________________________________
>>>>> P2P Foundation - Mailing list
>>>>> http://www.p2pfoundation.net
>>>>> https://lists.ourproject.org/cgi-bin/mailman/listinfo/p2p-foundation
>>>>>
>>>>
>>>>
>>>>
>>>>  --
>>>>
>>>> Sincerely yours,
>>>>
>>>>      Apostolis Xekoukoulotakis
>>>>
>>>>
>>>>
>>>> _______________________________________________
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>>>>
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>>>
>>>
>>>
>>>
>>
>>
>> --
>>
>> Sincerely yours,
>>
>>      Apostolis Xekoukoulotakis
>>
>>
>>
>
>
> --
>
> Sincerely yours,
>
>      Apostolis Xekoukoulotakis
>
>
>

-- 

Sincerely yours,

     Apostolis Xekoukoulotakis
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