The Economy of Abundance

That's the Way it Goes

Things seem to fall apart, and the centre cannot hold. The economy is going into a shambles, exploitation in all fields of life still goes on, violence and mistrust among people and governments are rampant. Somehow, this is what we have come to create as we have come to believe what we have been indoctrinated to believe among many things, such as the ‘free market' and that Capitalism is God.

But Capitalism has turned out to be the God that has failed.

This piece will look at how we have come to be hoodwinked and have tragically bought into the myth of Scarcity and what this means as current economic events unfold inexorably before us. It will also look at a possible scenario for the future, if we so choose to take that route, which can be described as the path towards Abundance.

The first thing we need to do is take a look at the Triumvirate of Trouble, meaning interest rates, fiat currency, and a closer look at the surplus value of labor (henceforth, referred to as the Triumvirate).

The first two have been dealt with in these posts (as well as posts embedded within them) and for those who would like an in-depth look at those notions, these are good starting points.

The two links are:

http://www.realitysandwich.com/gpi_a_new_way_measure_progress

http://www.realitysandwich.com/a_new_kind_money_end_money

But a little should be said about the first two aspects of the Triumvirate before more is said on the third aspect: the surplus value of labor (SV).

It is the Triumvirate that has led us to believe in what the capitalist system has done for us: apparently great material wealth, money all around, high growth, military and political power, and well, what more could you ask for?

Yet not all is well. Throughout history and over the last century in particular, abuse and violence domestically and internationally has seemed the norm. Poverty has been the defining characteristic of many in so-called poorer states at the end of the last century and the beginning of the current one. Now, poverty and uncertainty are fast becoming the hallmarks of even more countries including some of the most developed ones.

What has gone wrong? Naturally, there will be numerous theories and reasons for this. But one aspect of the situation that cannot be ignored anymore is the abject failure of the capitalist system. The Triumvirate in seeking to carve up the known world into areas that it can govern indefinitely has inevitably led to creating the contradictions that are now coming home to roost, big time.

Some of the major culprits in this game of debt and deceit are Big Businesses, Banks and Governments affectionately known as BBB and G or more succinctly as 3BG. Through ignorance and willful manipulation, the Triumvirate has been the ruling façade for many 3BGs.

Interest rates on money loaned are usually nothing short of usury which has been frowned upon by virtually every major religion in the world. Simply making money out of lending money has been a traditional way of forcing people to compete among themselves for even more money to pay off the interest on loans. A useful story to look at on how this works is the one on "The Eleventh Round" here

http://www.realitysandwich.com/money_a_new_beginning

As for fiat currencies (see link on A new kind of money to end Money above), they have been the bane of economies in creating currency devaluation, unstable money, and constant inflation. A useful example is one taken from Ellen Brown's The Web of Debt.

Here we have an example of how 30 cents can get you a dozen eggs, but due to the currency fluctuations of fiat currency, the next day your 30 cents is actually worth 5 cents in purchasing power. But, does it mean that a dozen eggs are now transformed into 2 eggs (worth what 5 cents should be able to buy)? This is the price of not having a type of fixed exchange rate, but one that moves wildly depending apparently on the ‘free market'.

Thirty cents should be worth 30 cents, not 5 cents the next day. Twelve eggs are just that, not two. Yet that is the system we have bought into. We have allowed the manipulation by the US Federal Reserve and many other banks to issue currency based on nothing more than double accounting and a pyramid scheme with interest to boot. This is a system in which we are taxed in every sense of the word to sustain the interests of 3BG.

Think about it, a game of Monopoly has more stability built into it than the fiat currency system which we have taken to be as ‘normal'. In a game like Monopoly you get the same $200 dollars when you pass Go, you know what the fee for getting out of jail is etc. But in the game world of our current lives, we have allowed 3BG to determine the impossible, that is, we allow them to morph 12 eggs into 2 eggs overnight via the fiat currency system of arbitrary finance.

Does this make sense? Does it accord with any sense of reality? Does this sound like a just and fair system? Does this sound like what capitalism promised? Is there even a vague semblance to what democracy is supposed to be about? Who actually gains and is enriched by this? Look at your current economic situation and bank accounts and see part of the answer there. Think about this for a moment.

Let us take a look at a concept that is regaining prominence and use as a means of analyzing what has been happening around us, the surplus value of labor.

The Economics of Scarcity

We have been led to believe by neo-classical economists that there are limited resources for which we have to compete to create a sound economy. We have been led to believe in things called ‘factors of production' and how income comes from these factors; and that via the use of money and productivity we create growth. But pause for a moment and ask ourselves how we have come to believe such myths, which in the end increasingly hold no more credence than the story of Cinderella or Sleeping Beauty in the minds of many.

Simply this, that there has been an unprecedented amount of material growth and so-called wealth created since the start of Industrialization from the late 19th century onwards. We have bought these products, and seen many of them on TV, and are convinced that they ought to be sought after by media, marketing and advertising. A system that can deliver all this stuff and then some, surely WORKS. Communism has also failed (meaning the USSR and its brand of ideology) and remaining Communists (e.g. China) seem quite capitalistic these days. And yet, the housing crash in the US and the upcoming demise of Fanny Mae and Freddie Mac, and all that this is symptomatic of this tells of a different narrative.

To the surprise of many, Marx is coming back into intellectual fashion. It is also worthwhile looking at his notion of surplus value of labor (SV). My interpretation is an extrapolation of the ideas from the key works of Marx, including some brilliant expositions of his ideas in the form of David Harvey's The Limits to Capital and Resnick and Wolff's New Departures in Marxian Theory.

Basically, one of Marx's many conceptual breakthroughs in understanding how the economy, and capitalism in particular, works is his idea of SV. What we term as profit is basically skimmed off the value gained from what is produced by labor or all the rest of us working stiffs (irrespective of whether you sit in front of a computer...).

To simplify, when we pay labor X amount and sell its product for X + n amount and after cost deductions we have P as profit. The reason for that P is due to the fact that we have paid labor less than what it should have been paid for in the first place. It is exploitation plain and simple that allows for profit and, thereby, capital to grow.

What we think of as income that comes from various ‘factors of production' like land, labor and capital is essentially skimmed off SV that is recycled back into the economic system. So that the wages we receive are also from SV taken not only off our backs, but the backs of others.

Marx, of course, has a whole body of work to show this in all its complex and myriad forms. And most frightening of all, he not only largely makes sense these days, he seems to be well on the way to being proven right about capitalism in the way we are experiencing it today with all the hindsight and bloodbath of history to support it.

The thing is Marx has captured the essence of the way we live our lives in a world of duality. Because we believe we are all separate and are not One, we naturally fall into economic belief systems that lend ourselves to support the system of belief of 3BGs that convince us we live in Scarcity. There is a need to scramble for things and fight even more to keep them, and keep on fighting even much more to get more of them. It is Us against Them. The whole class structure to Marx is predicated on SV.

As long as one group of people live off and profiteer from the SV of others, they are the class of capitalists. So you can have people who profit from SV in the common work place or offices, and you can see the class structure there immediately: in the form of conspicuous consumption - the larger office, the bigger PC (or newest mobile phone), the car, the private secretary, the jet, the etc, etc. And due to duality we have been ingrained into thinking that it is what we should be aiming for as well. So we need to compete more (thinking that means being more productive), to move up the scale (class) so that we can be on the higher end of the food chain (SV exploitation), and finally we can then be the ones others kow tow to (success).

And yet we are so unhappy about many things, and the economy is falling around our ears. The thing is this, as Marx wonderfully points out, the whole capitalist system of duality leads to contradictions. Capital takes on a life of its own. In order for the system to sustain itself, it must create more capital. This leads inevitably to devaluation and the destruction of  capital.

Capital has to insist on more 'productivity', more innovation to increase 'productivity', more markets, lower salaries (meaning ‘competitive') for most in the work force so that SV can be increased, and this can also be recycled as big bonuses for corporate bosses and shareholders (rewards).

The workers in the firms and those who buy the products are mere cogs in the system: the whole purpose of the engine of capitalism is to create more capital ad infinitum.

Just talk to those you know in the corporate world and those who run large companies and they inevitably tell you about answering to the board of directors about growing markets and raising profits, and answering to shareholders. Where in all this is the welfare of their staff and the quality of products that they are churning out?

It is all about profit and SV (even if they are worried about the quality of their products). The more the drive for SV ratchets up, the greater the need for even more capital accumulation. Couple this with interest on loans and fiat currencies and you begin to see why most people seem to be working harder, and yet not knowing how they are going to afford to retire in peace (if at all).

But it gets better.

You see, there is a terrible price to pay for all this capital accumulation -- it devalues. This is part of the contradiction that sets in. And in order to prevent and counter the devaluation yet more capital must be produced, more people and markets must be squeezed as even more devaluation sets in.

Among the many aspects of the price of devaluation:

1. Currency devaluation (inflation) and collapses due to excess fiat money being created.
2. Economic bubbles start and burst as in the Asian currency crisis in the mid 90s and the current housing collapse in the US.
3. More manipulations of financial markets to counter devaluation which leads to more financial and banking problems (as in Europe). The current shocks to the banking industry are a prime example of capital devaluation of playing the SV game in an unbridled manner. And there will be more to follow.
4. Globalization and the discontent this seems to be bringing to many. Not only does capital need newer markets to expand in, but cheaper labor to skim SV from, or how else does capital sustain itself and pay CEOs their fat salaries and shareholders their ‘hard earned' bonuses? And many in the West are wondering why they are facing unemployment as jobs flow to other places where it is easier to gain the edge on SV through much lower wages there than in the capitalists' home countries.
5. The ultimate form of devaluation: war. This also comes from the need to grab more resources (which we are constantly told are scarce) and expand markets to keep Capital alive and kicking. Also, when you have that much capital there's nothing like expanding your military, testing its equipment and munitions, and doing some population control at the same time.
6. Devaluation of human life which has become a means to an end, because people become capital. An entire matrix of politics and economics is created through the mythology of ‘free markets', ‘democracy' and ‘freedom' to allow capital and the 3BGs to gain from this (and those who hope to gain from this by aligning themselves to this class structure). People are there to fit into GDP figures and fight wars.
7. Alienation of humanity from doing any form of meaningful work or leading their lives the way they think they should be able to lead it. To many people, work is ‘just a job', it ‘puts food on the table' and it doesn't have to mean much more than feeding the three headed hydra of the Triumvirate and trying to stay alive.

One of the things Marx also introduced, especially in the path breaking volume 1 of Capital is to show that there are three basic ways of placing values on things, that is, we have value, use value and exchange value. The question Marx was aiming at but never seemed to quite ask and answer (though he may have done so in a way that was not clear enough to me at least) is what exactly is the value of something, or a product?

Recently, I asked a friend of mine who is a CEO of a company that is part of a multinational conglomerate what he thought was the value of a glass tumbler on the table we were sitting at. I told him discount the water in it, just consider the value of the tumbler itself.

He answered, as we all have been trained, that depending on the market and where it was sold the value of it would vary. This would depend on how useful it was (use value), and what its value was ($ amount). So I asked him, what did he think the so-called $ value of it was. He said that it could range from $5 per piece to even $50 depending on how it was marketed and what kind of demand there was.

So here it is, the ‘free market' and so-called 'demand and supply' are quite arbitrary. It does seem that the whole field of neo-classical economics has grown from this mythology in working out fantastical realms of ‘perfect markets' with ‘perfect equilibriums' while all those wonderful marginalist theories and intricate calculations are there to show that you can just charge what you want for a product if someone wants to pay that amount. There is no value as such, it is an arbitrary amount we place just like our fiat currency, that is, today $10 is worth so much, tomorrow thanks to manipulation or poor policies emanating from 3BGs, it's worth something else, more or less.

What this proves is that there is no way to actually ascertain a value of a thing. Without being too metaphysical, its value is, in all honesty, immeasurable (or im0). If it was not the case, then how is it possible for such wildly fluctuating prices to be given to a glass tumbler depending on ‘the market' and ‘demand and supply'?

Unless we want to insist that it has no value: now that takes us into even deeper waters which we shall stay out of here.

Because everything is im0 we can assign whatever value we want to it, including the failing fiat currency money value based on mythical theories of economic equilibrium (when in reality we are in a constant state of Disequilibrium).

[In due course, a piece will be done on how faulty the neo-classical concepts of economics are and possible ways to work round it and undo the damage it has done to us all. Fortunately there are pioneers in this, and it is a matter of taking the trail up from them.]

But this is the point I am trying to make: if an inanimate object is im0 how much so a human being? Can value actually be placed on humans in terms of $ and their output etc? This is what I believe Marx and many others, who see the severe problems of neo-classical economics, are trying to point out in their own ways.

A slight detour on this: just take a look at the wage system that has been introduced. This is what we believe to be ‘normal' and which we all live by largely because ‘we have no choice', etc. Peter Linebaugh in his The London Hanged provides some interesting insights on how capital punishment in English history (specifically in the 18th century) was a means of punishment by Capital.

That the landed interests of capital introduced and supported the gory mass killings of those who stole and defied the authority of the ruling class as a means of keeping people in their places.

The wage system is a means of telling everyone to know their proper place and not rock the boat and the structure of 3BGs so that everyone gets what they are told they are worth, take it or leave it. If you challenge this, then there will be laws that will deal with you. That seems to be one of the messages from Linebaugh's book.

When you can put a price on a person's head, literally or otherwise, it is easy to take the next step in the commodification of a human being: which is killing them.

Of course, it can be argued by many that severe crime needs to be punished and that psychotic murderers should not be able to walk freely, and many would agree to that if only to preserve some sense of order and sanity.

But the subtle point being made by Linebaugh, for instance, is that many laws and punishment (especially of the capital variety) are a form of punishing many who have come to their ways of crime because of the way capital accumulation and its devaluating effects have shaped people. When you live in duality, it is easy to harm or steal from someone else because after all it is robbing someone else and it is for your 'own self interest and is that not what society teaches we have look out for first and foremost...?'

Coming back to the point on value: the moment we place $ value on a person and his output and relegate this to ‘market' forces which are subject to the dictatorial vagaries of the Triumvirate and the self interest of 3BG, we begin to see why we are to a large extent in the situations we are all currently in around the world.

The cornerstone to this is our sense of duality in which we live in fear of scarcity of products, and $ (even though there is a lot of it, it is just not distributed evenly enough), anxiety over health, family and many other issues. After all, the other guy is out to get us (not that there is never any truth in this). It is this paradigm of scarcity, doubt and fear that lends us to control by 3BG and others. Greed is not good, manipulation of others for personal gain is not the high point of existence.

So where do we go from here? Perhaps, as a form of a thought experiment, we can look at one of many different possibilities. One such modality I would term the new Economy of Abundance.

The Economy of Abundance

If duality seems to be a central problem of human nature, how are we exactly going to change that? It seems that we may have little choice but to deal with changing it or at least making a serious effort at it. The current problems of the economy, apparent shortage of fossil fuels and environmental issues coming to the fore will necessitate, it does seems, an entire re-look at how we intend to lead our lives.

Some assumptions need to be made here. That the inability to squeeze more oil out of where we choose to squeeze it out from is going to lead to more scientific research on alternative energy sources, which is happening right now. For instance, perhaps the means will be found to harness not just solar and wind power, but the power that comes from the tides that rise and fall all the time. Turbines under seas and means of converting, storing and transferring such power could provide a serious alternative to fossil fuels.

Also let me further clarify what I mean by Scarcity and Abundance. The term scarcity was used in an economic sense earlier, but the mention of duality was meant to focus on a more esoteric sense of the term. With duality and a sense of mistrust we build among ourselves, we convince ourselves of lack and scarcity which is only reflected in our economics. This is not to say that fossil fuel is limitless and we can go on using it forever. This certainly doesn't seem to be the case. But when we live in a state of competition with everyone around us thanks to the Triumvirate among other things, we live in scarcity of what we can gain from life around us.

Abundance here means a mindset change that will lead to a change in the way we do economics which should lead to an economics that focuses on abundance. And that is looking at what is not only immeasurable in the im0 sense of the term, but what is truly Immeasurable or Im0.

Let's ask ourselves, what exactly is the value of the earth, the water, the plant and animal kingdom, and the human life on it? Is there really a $ value to this? Whose currency are we using? Is this a fiat currency whose value is less stable than that provided by the game money of a Monopoly set? Does this value vary? Can it ever be fixed? Who gave us this planet anyway? Are we just here by accident and so we can do whatever we want, to whomever we want, however we want? Does the concept of stewardship and passing on the world from one generation to another in better condition, or just as good a one, from when we inherited it make any sense?

What is being suggested is to look at one possible scenario. As more of these ideas come to the surface it is easier to interface with them and to put it this way: a more community driven approach is what is needed, and that is probably what we will be forced into anyway.

Part of this involves looking at a new currency system as mentioned in posts recommended above. It would also mean a way of looking after people and societies belonging to low income groups in a sustainable manner, as opposed to just giving aid or charity, or hoping they will die off with as little inconvenience as possible. One direct link to this concept of social businesses can be found here:

http://sanjayperera.blogspot.com/2008/05/money-beginning-of-end-antithesis-part_5722.html

This will also call for greater use of local/new/complementary currencies. Another direct link:

http://sanjayperera.blogspot.com/2008/05/money-beginning-of-end-synthesis-part-3_30.html

This would take place within a broad political framework as envisioned by the great political philosopher John Rawls. His vision is for a political conception of justice in democratic societies. A link to help see more of Rawls's ideas in detail:

http://www.realitysandwich.com/justice_fairness_revisited

What these ideas allow for is to try to lessen the view of duality of ourselves and to see ourselves as One. This is a hard call, but no less difficult than problems we are heading into. My point is, for those who don't believe in altruism and the like, learn to accept the fact that we may not have a choice but to work with one another closely, which may be bad news for the cynics out there.

It is interesting to note that a film like The Dark Knight addressed some of these issues. For those who saw the film, you will remember the ending when different boats of people (one full of convicts) had the choice to blow the other up so as to save themselves from all being blown up by the Joker (played magnificently by Heath Ledger).

Sorry for the spoiler here, but duality and the mentality of scarcity almost led each boat to blow the other up, yet somehow neither did so. And Batman, of all people given his issues and complexes, says that people are capable of much more than just survival instincts that have been ingrained into them. 

But going beyond the movie, there needs mention of the ideas from a fascinating thinker -- Georges Battaile. In his masterpiece The Accursed Share, Battaile talks about how economies are driven by exuberance and waste. A rich economy or the very wealthy exemplify this by being wasteful and extravagant to show that they can afford to destroy surplus. The ultimate capital accumulation devaluation as Battaile himself concludes is the destruction of humans via war (for example), and that is because that ‘surplus' human being can be ‘wasted'; hence, that particular human becomes the accursed share.

This resonates with Marx's notion of how capital leads to the contradiction of devaluation and destruction of itself and all that it requires to keep itself going. This in turn rests on the fundamental view of duality between us and others that engenders the exploitation of the world and one another.

Battailes raises another important point. If there is scarcity around, how is it that we have population explosions or life coming into being. There is, if anything, a great deal of energy and exuberance around the planet and in life forms. There is plenty. There is abundance.

We simply choose to believe otherwise and to live in duality from others. With the belief of scarcity and competition (reinforced by 3BGs) we exploit, abuse and waste resources as a result of following a system of capital accumulation and devaluation.

What we need is balance.

If, as this thought experiment goes, we do see ourselves as One. Then in a community form of living within the context of our larger society, country, regional grouping, the world, we will start trying to build collaboration and trust. Some of these ideas are eloquently explained in Deep Economy: The Wealth of Communities and the Durable Future by Bill McKibben.

In terms of the new kind of money we can use, there are complementary currencies used in the form of time banks. For instance, people do services and give things to others in exchange for other services based on the time they log in which is generated into a form of points/currency. So some people may car pool and someone does the groceries for a neighbor, in return for someone doing their laundry or cooking a meal.

In terms of straight forward barter, a couple I know in England exchange the local produce from their backyard for produce from their local grocer.

As things in themselves are im0 and in the greater scheme of things Im0, barter exchanges, time banks, and complementary currencies as means of value, use value, and exchange value make complete sense, and are non-exploitative. There is no surplus value being skimmed off, as what is being done is largely from goodwill and cooperation.

But many have questioned this idea of goodwill, and one person told me that goodwill is not the answer because in the ‘Real World' that's not how things work.

Well, we are all still awaiting for someone who actually is the expert on the ‘Real World' to help solve the world's problems. My counter query to the ‘Real World' exponent was if he fell down on the street and needed help to get up because he was injured, would he ask for help? Or did he think that in the ‘Real World' no one would bother?

The answer was since it had not happened to him, he could not know but he knew many instances when people wouldn't bother to help others (presumably because they were answering to the dictates of the Triumvirate)...and that's in essence the ‘argument of the Real World'.

Yet, everyday, we manage to get by with our difficulties because many times people just decide to try and be decent about things. Amazing, but true. A community that sees itself as One, and a society and world that see itself that way, can slowly but surely edge past the Triumvirate which is in its state of final decline and move onto a new paradigm.

Perhaps, to the ‘Real World' enthusiasts they may grudgingly accept that if for no other reason than to survive, we will have to make a move towards community living and use different ways to measure progress.

This will make us see that if we do not rush and want MORE all the time, that there is such a thing as enough, that there is such a thing as balance; and that people who have had enough of the way 3BGs have been doing things will take advantage of the coming economic difficulties to demand from their leaders that things have to be done differently, and a new way of thinking can be brought into place if only it is given a chance.

It will be rightly pointed out that perhaps I have not given enough details here about what this Abundance really is and I would humbly agree to that. Perhaps we are still some way off from things like genuine trust, neighborliness, mutual respect and consensual agreements in deciding things; where people and the environment are given a priority and go beyond mere $ measurement, because the human species and the planet it lives on is Im0 in value. Pehaps that's because we are in the process of creating it and we haven't gotten there yet.

But I would also point out this parallel. Many never could have imagined the depths of suffering and horror that people could live and survive through. Yet the species has gone through innumerable wars, concentration camps of all types and tortures of the vilest sorts.

Is it so hard to imagine a human resilience in a reverse situation that goes onto a different paradigm where the horrors are a thing of the past and, while there will still be some fighting and differences among people over various issues, we start to live with a sense of justice and fairness, of balance, of community; and in the good that comes from this a mindset of Abundance, and an economy that finally reflects it.

To all the nay sayers I have only this to add for now.

Has it ever striked you as strange that we live on a planet, in a solar system, in a galaxy in constant motion in a Universe that is Im0 (which may be just one of multiverses as science now reluctantly admits), while many still think that the purpose of the human race is to make more Coca Cola and bombs?

It takes a certain kind of Ego to think the Universe revolves around us.

The Copernican revolution was meant to show us how wrong we have been, and we still are.

It is time for us to try something different.