[P2P-F] Freicoin - Bitcoin with Demurage (Kevin Flanagan)

[Patrick Anderson]

Apostolis Xekoukoulotakis wrote:
> That doesnt explain though why the profitability
> in general decreased in the first place.

We are very confused about the origin of Profit.

There are many attempts to explain where it comes
from, but they conflict with each other, and do not
have a logical basis.

But we can find the real source of Profit by finding it's
'asymptote' - the conditions under which it hits zero.

One clue is to notice Profit only occurs if the Product is sold.

(When I say Profit I am referring to the difference between
the Price paid by the Consumer and the Costs incurred by
the Owner.)

Products are not sold when the Consumer already owns them.

For example, the owner of an Apple tree does not *buy* the
Apples from himself, because he already owns them.

Even if he paid someone else to do the work, those wages
are calculated as a Cost.

The owner must pay all Costs, but he does not pay any more
than that (he does not pay Profit).

The Price he pays is exactly the Costs of production.

This can be true of an Apple orchard co-owned by 1,000
people.  There is no reason for those people to *buy* the
Product back from their collective selves, but that is how
cooperatives work now, and so there is many troubles
caused by our misunderstanding the meaning and purpose
of Profit - causing control to be continually concentrated into
the hands of a few.

This seems to prove the origin of Profit is the Consumers'
lack of (co-)ownership in the Means of Production, and can
safely reach zero (actually UNDEFINED) when each
Consumer (co-)owns enough of the Means of Production
for each of the Products he needs such that he no longer
buys those Products, but already owns his % according to
the amount he (co-)owns in the Means of that production.


But that only solves the 'static' case, where each Consumer
owns *exactly* as much in the Means as he needs Product.

When there is surplus, and there are Consumers with
insufficient ownership (meaning they must by Product), then
there is a possibility for Profit (Price above Costs) to occur.

In that case, I believe we should charge Profit against those
latecomers - as much as the "market will bear", but then treat
that overpayment as though that payer had made an investment
in his future needs - so he eventually also gains the
(co-)ownership needed to stop buying that Product.

For example, if a Consumer pays $10 for a bushel of Apples
that only Cost $7 to deliver, then the current (co-)Owners
would receive $3 in Profit.

We would accept that Profit as normal, and use it to increase
the size of the orchard (buying more land and trees), but that
new property must eventually 'vest' to that Payer.