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New economic system for post-peak ?

Discussions about the economic and financial ramifications of PEAK OIL

New economic system for post-peak ?

Unread postby Mercani » Thu 03 Mar 2005, 03:47:47

In the long run, it seems that the real problem is not peak oil, but the idea of sustainable infinite growth = capitalism, which is totally non-sense.

I assume most of the people would be enligtened after post-peak about this fact.

Therefore I propose a new economic system to replace Capitalism, for discussion. I haven't thought about this deeply, so never mind if it is crap.

Could we create a different economic system where "free market" is a principle, but a person can own at most some specific amount of wealth. Overpassing this limit is illegal, you have the spend the excess wealth in some limited time, and reduce your wealth. Otherwise government forcefully takes it and uses it for some good purpose(HIV research, aid to starving Africa, etc)

That would limit the incentive for growth.

e.g. once a "Bill Gates" goes over this limit(for example $1 million), he should be forced to spend the excess wealth he has, and reduce it to $1 million. Therefore in the end Microsoft would be owned by millions of people. Does this also kill the incentive of Microsoft to develop new products?

Is there a fundamental problem with this approach?

One problem would be, what happens when nearly everybody becomes rich and owns $1 million? This seems like everybody is equal, too much like Communism.

Another problem:
The economy can grow only at the rate of population. Therefore this may push even population up faster. Now, we have to put a legel limit on the number of births.

Is this utopia?

What do you think?

Is it possible that we are stupid enough to stick to Capitalism after peak-oil is all over?

Is it our destiny to hit peak-whatever after we hit peak-oil?
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Unread postby kpeavey » Thu 03 Mar 2005, 04:27:57

I am completely opposed to everything you propose, from the very core of my being. It will never happen. You completely disregard human nature.

If you took all the money, property, and possessions in the world and divided them equally with all the people in the world, within a few years, the people that have wealth now, will have it again, the people who have nothing, will have nothing again. Stupid people make stupid decisions which keeps them poor. Smart people make smart decisions which makes them wealthy.

When you limit rewards, you limit incentive, not just for growth, but for accomplishment. Why should a person strive to achieve if some millionaire somewhere is forced to hand over his hard earned pay to make things "fair". Where is the incentive for the hard working creative guy to keep producing once he gets his million?

Capitalism is not an ISM, it is simply what people do naturally when they are free to do as they please. If the economy were to collapse tomorrow, I expect a barter economy would develop rapidly. There would be masses of people who would barter themselves homeless. There would be many who would barter themselves sustainably. They would be a few who would barter themselves into a position of wealth and power.
"what happens when nearly everybody becomes rich and owns $1 million? "
It will never happen.

Your plan does not accept the fact that all humans are not the same. People are not equal, never have been, never will be.

Someone has filled you head with ideas of fairness and equality. You should find out who that person was and kick the shit out of him.
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Unread postby Mercani » Thu 03 Mar 2005, 06:26:28

My intention is not to propose a system where everybody is equal. Even if everybody had $1 million, some people would work less and maintain that level, while some others (less intelligent or lazy ones) would need to work more and have less time for leisure. (of course if they don't want to decrease their wealth)

There is still competition. Because if I work an hour a day and you work 2 hours a day to have the same standard of living, that means although I am earning same as you, I could be enjoying my money more. And more importantly Bill Gates could be earning and spending $500K a month, while average joe could be earning and spending $5K a month.

Due to differences in people, while some people are earning more(and working more) and consuming more, some other people may be working less, earning less and consuming less.

Therefore it would be fair to limit excessive wealth accumulation. If you know that you cannot have more than $1 million, but you are still trying to increase your wealth, you aren't fair to yourself !

You say that the incentive for hard-work is to accumulate wealth. I am saying, the incentive should not be to accumulate, but spend what you earn!
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Unread postby americandream » Thu 03 Mar 2005, 06:29:05

kpeavey wrote:I am completely opposed to everything you propose, from the very core of my being. It will never happen. You completely disregard human nature.

If you took all the money, property, and possessions in the world and divided them equally with all the people in the world, within a few years, the people that have wealth now, will have it again, the people who have nothing, will have nothing again. Stupid people make stupid decisions which keeps them poor. Smart people make smart decisions which makes them wealthy.

When you limit rewards, you limit incentive, not just for growth, but for accomplishment. Why should a person strive to achieve if some millionaire somewhere is forced to hand over his hard earned pay to make things "fair". Where is the incentive for the hard working creative guy to keep producing once he gets his million?

Capitalism is not an ISM, it is simply what people do naturally when they are free to do as they please. If the economy were to collapse tomorrow, I expect a barter economy would develop rapidly. There would be masses of people who would barter themselves homeless. There would be many who would barter themselves sustainably. They would be a few who would barter themselves into a position of wealth and power.
"what happens when nearly everybody becomes rich and owns $1 million? "
It will never happen.

Your plan does not accept the fact that all humans are not the same. People are not equal, never have been, never will be.

Someone has filled you head with ideas of fairness and equality. You should find out who that person was and kick the shit out of him.


Ah well, you'll be one less mouth to feed when we have no other choice but to set up a command economy or face death...we'll simply offer folks like you the little white tablets.
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Unread postby Jack » Thu 03 Mar 2005, 06:37:10

Mark me down as absolutely and utterly opposed to your scheme.

I would use every tool I had to subvert the system, and to help others do likewise.

If I could possibly escape from the system you describe, I would do so, taking whatever assets I could. If I couldn't escape, I would powerdown my productivity to the point that nothing - absolutely nothing - was generated. You may rest assured that there would be no volunteer work and no charitable contributions, either.

In such a system, there would be only one way to prevent escape - and that's with a gun. So I suppose that, ultimately, I would be executed. Which would be better than living in the chains described in your scheme.

I am reminded of an old quotation from MacBeth:

Act 5. Scene VIII

SCENE VIII. Another part of the field.

Enter MACBETH
MACBETH
Why should I play the Roman fool, and die
On mine own sword? whiles I see lives, the gashes
Do better upon them.

8)
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Unread postby Mercani » Thu 03 Mar 2005, 06:49:47

If somebody is opposed to this system, he should better explain how Capitalism (infinite growth) will be sustainable. Or you could propose your own system.

If I could possibly escape from the system you describe, I would do so, taking whatever assets I could. If I couldn't escape, I would powerdown my productivity to the point that nothing - absolutely nothing - was generated. You may rest assured that there would be no volunteer work and no charitable contributions, either.


Do you love to have excessive wealth? Is $1 million not enough for you?

Why is Bill Gates trying to own one more billion dollars, when he can live very very well by not working any more. Heck, he would have to find clever ways just to spend what he is earning !

Is this rational human behaviour? I don't think so.
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Unread postby kpeavey » Thu 03 Mar 2005, 07:52:38

Capitalism based on infinite growth is not sustainable. I refer you to the Club of Rome report Limits to Growth.

Let's say I had lots of money, Billions in fact. My ideas and hard work earned me that money. It is my reward for my hard work, efforts, and ideas. Would you take it away from me to give it to someone who did not work hard or come up with ideas? For what purpose? You would be rewarding laziness, lethargy and ignorance while penalizing success, enterprise and creativity.

It is a fact that I earn a handsome paycheck. I have no debt other than my mortgage, which takes me about 2 days to earn. A week of effort will pay all my bills for a month. According to national income statistics, there is a high probability that I earn more than you do. I certainly make more than the guy across the street. Should I simply get your name and address and write you a check for half the difference between our incomes? By your plan, regardless of what you do, have or earn, I should give you what I have because I have more than you. I would like to get more land and add on to my house. With your plan, I work hard so the guy across the street can get more land and add on to his house.

Let's turn the tables around. The guy across the street is a total loser. Because you have a computer, I have no doubt that you have more than him. You need to start writing a check to him every week. He deserves it, and you have so much more than him. you won't miss it. He can do a much better job of spending your money than you can. Probably on pizza and beer from the look of his garbage-can't miss it, it's all over the yard.
This guy will not work regardless of how much you send him each week.
You send him more money each week, he'll put more up his nose.
This guy is a scumbag. He will never be a useful or productive member of society. Nonetheless, you still have to send him part of your income.

Why is Bill Gates trying to own one more billion dollars, when he can live very very well by not working any more. Heck, he would have to find clever ways just to spend what he is earning !

Is this rational human behaviour? I don't think so.

This is called AMBITION.
By YOUR standards, Mr Gates could live very very well. What about Mr Gates' standards?

So someone has more than you do. Do they owe you something? What gives you a claim on what that guy has? You can spend this guys money better than he can?

Your ideas are simply fantastic to me. I cannot possibly begin to comprehend how you find this to be a reasonable concept.

Whatever drug you are using, its gotta be some GOOOOOD SHIT!

---------
Ah well, you'll be one less mouth to feed when we have no other choice but to set up a command economy or face death...we'll simply offer folks like you the little white tablets.


My possible responses:
-Better give me a whole sack of them pills, I'll have no part of this system.
-There will be no need for the pill, as one of us will be dead.
-FASCISTS!

-----------
In all reality, if such a system were in place, I would be deeply involved in a movement to overthrow and remove from power those who make the system possible. Absolute lawlessness is favorable to your plan. This is the stuff of Revolutions.
If you want a picture of the future, imagine a boot stamping on a human face--for ever."
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Unread postby Doly » Thu 03 Mar 2005, 08:39:43

People confuse capitalism, free market, and a reward-based salary system. They are 3 different things, and they can be separate.

Capitalism means that a business will try to make a profit (also known as capital). In other words, there's nothing left after the business has paid the suppliers, salaries and other costs of running the business.

Free market means that anybody is allowed to buy and sell freely.

A reward-based salary system means that people are paid better if they do a good job and/or their job is more difficult.

There is no reason why a system where businesses don't make a profit couldn't reward people that are good at their job with higher salaries, or have a free market.

What creates the tendency to unlimited growth isn't personal wealth or free markets, but the natural tendency of a business to grow because it makes a profit and has to use that profit for something.
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Unread postby Jack » Thu 03 Mar 2005, 09:26:02

Mercani wrote:If somebody is opposed to this system, he should better explain how Capitalism (infinite growth) will be sustainable. Or you could propose your own system.

If I could possibly escape from the system you describe, I would do so, taking whatever assets I could. If I couldn't escape, I would powerdown my productivity to the point that nothing - absolutely nothing - was generated. You may rest assured that there would be no volunteer work and no charitable contributions, either.


Do you love to have excessive wealth? Is $1 million not enough for you?

Why is Bill Gates trying to own one more billion dollars, when he can live very very well by not working any more. Heck, he would have to find clever ways just to spend what he is earning !

Is this rational human behaviour? I don't think so.


First, you presume that capitalism requires infinite growth; or, for that matter, growth of any sort. Capitalism is a method for allocating resources - and during a period of general economic shrinkage, efficient allocation may be more critical than ever.

Yes, I love excessive wealth. No, $1 million is not enough for me. Or, for that matter, anyone who wants to live well.

Bill Gates accumulates money because it's a tool to bring his ideas to bear. And a way to "keep score" - money is an effective way to determine if an idea is good or not. Thus, something that sells well - whether the Harry Potter series of books, or the McDonald hamburger - has been accepted by large numbers of people as something worthwhile.

You say he would have to think of clever ways to spend money. Nonsense. If one could make $200,000 pre-tax on a million, consistently, they would be a financial genius. Out of that $200M, they'd get to keep about $140M. One car would take care of that....

And that's the thing. Accumulation is normal, rational human behavior. Or as rational as humans get, anyway. 8)
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Unread postby Mercani » Thu 03 Mar 2005, 10:17:14

kpeavey,

Please read my post again. I never said that rich should give their money to poor. Basically if you are earning a lot you should spend it, not give it away. Buy something. Anything. Or don't work too much if you don't want to spend , thus don't give anything to that loser.

Government already gives very poor people food coupons ! But that's not the point. Government can use excess money to build roads, dams, power plants, etc.

Why are you accumulating? How good is a money in the bank if you're not gonna use it? Well $1 million was arbitrary. It might be $10 million. It should basically cover your living expenses in a meaningful manner till you die.
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Unread postby Mercani » Thu 03 Mar 2005, 10:21:28

Doly,

Why does the corporations make profit? Because their share price rise, when they make profit. And shareholders increase their wealth. That is the point. If all shareholders of a corporation are at the wealth limit, they wouldn't care about any more profit.

Free-market and reward-based salary are good. capitalism is bad.
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Unread postby Mercani » Thu 03 Mar 2005, 10:39:14

Jack,

You wrote,
First, you presume that capitalism requires infinite growth; or, for that matter, growth of any sort. Capitalism is a method for allocating resources - and during a period of general economic shrinkage, efficient allocation may be more critical than ever.


In capitalism,
If a company doesn't make profit, its share price does not rise. Shareholders want share price to rise(or get dividends)
Therefore main incentive for the company is to make profit, which brings economic growth.
Well, economic growth is good until you hit environmental limits. No more oil. or no more water, or no more uranium. Then you crash. Peak oil is the crash of capitalism.

If one could make $200,000 pre-tax on a million, consistently, they would be a financial genius. Out of that $200M, they'd get to keep about $140M. One car would take care of that....


Some CEOs make millions a year. Maybe a month. Anyway, how come anybody can need a $140K car every month !
Actually he can buy a car every month, but at some point he will own too many cars(more than 10), and it can be considered as wealth accumulation instead of spending. If he is planning to sell these cars later on, he would be going over the limit and that would be illegal. So he is stuck with a bunch of cars. Basically he was earning more money than he could consume.

This may be the weak point of the system. How do you decide whether something is bought for consumption or investment?
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Unread postby Wildwell » Thu 03 Mar 2005, 11:06:11

I haven’t thought of a good economic system yet. Capitalism is about the best we have come up with, but as can be seen it’s not perfect and I don’t think any economist would agree it is. Heck, they’ve been arguing about Keynesian, classic and macro and micro economics for years, at least the last 100.

I would think a future system might work on values or different three things:

EV – Energy value – Eg how much energy did it take to make a certain product and get it to market.
NV – Environmental value – The environmental cost.
MV – Monetary value.

I’m absolutely for a system of freedom and choice though, but we need a way of weighing up external costs better and natural limits. People shouldn’t be scared of money or wealth though – it’s just a replacement for barter which has been going on since the beginning of time. It’s just messing up things for the planet and screwing resources they should be frightened of.
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Unread postby pip » Thu 03 Mar 2005, 13:28:07

This is silly. If I have to spend $1,000,000 this year what the heck am I going to spend it on that will be worth nothing at the end of the year? I will still have the same or near same net worth, just not in cash.

This idea reminds me of that Richard Pryor movie. Brewster's Millions or something like that.
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Unread postby Tyler_JC » Thu 03 Mar 2005, 15:17:43

I'm with Jack. If you try to enforce your system on me, I'd try to stop you. Theft is a crime and I would be within my right to stop you. Bill Gates uses his extra money to invest in the economy. If you want to increase his taxes and use the money to pay down the national debt, I wouldn't be as opposed. But your "wealth limit" is foolish, EVIL, and counter-productive.

Also, you have absolutely no idea how the system works. My mother owns a small business. She has several workers. She is a capitalist. They work for her and she pays them a salary. If you put a wealth limit on my mother, she would hire fewer employees. This would put several people out of work. They would have no way of feeding themselves. How does this help her workers?

Peak Oil may change a lot of things, but a natural economy (a market economy) is not one of them.
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Unread postby lotrfan55345 » Thu 03 Mar 2005, 15:57:46

kpeavey wrote: Stupid people make stupid decisions which keeps them poor. Smart people make smart decisions which makes them wealthy.


I hope you don't realyl belive that. Most rich people were born rich, got the family company/estate and stayed rich!

It isn't people fault they were born in the ghetto and can't afford to go to collage. It isn't people's fault they are born in Africa with no food. I mean, how are you supposed to "smarten up" and "get rich" when you don't have anything to eat?
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Unread postby Jack » Thu 03 Mar 2005, 18:06:25

Mercani wrote: In capitalism,
If a company doesn't make profit, its share price does not rise. Shareholders want share price to rise(or get dividends)

Therefore main incentive for the company is to make profit, which brings economic growth.

Well, economic growth is good until you hit environmental limits. No more oil. or no more water, or no more uranium. Then you crash. Peak oil is the crash of capitalism.


Umm, no. Capitalism is not restricted to corporations, or shares of stock, or dividends.

Capitalism simply means private ownership and control of assets, the right to use those assets, and to profit from them. Capitalism in its purest form can be witnessed at a small independent café. The owner purchases goods, puts labor and creativity into transforming the goods into a product, and then sells the product. If everything works, the owner makes a profit. And if something doesn’t work, a loss is incurred. Thus, there is a reward for good decisions; and, a penalty for poor decisions.

Now, you start speaking of economic growth, but that’s a different issue. It’s true that in a growing economy, the cost of bad decisions may be (probably will be) less. And the reward for good decisions may be more too. Even in a shrinking economy, individuals, and individual enterprises – from sole proprietorships to large corporations – can succeed, can grow, and can make a profit. Do not think that the end of oil represents the end of capitalism! Rome had entrepreneurs as surely as New York does today.

Understand that capitalism facilitates creative destruction. This is the movement of resources from inefficient or unprofitable enterprises to more efficient or more profitable areas. That may mean a transition from manufacturing Hummers to horse drawn carriages, but the principle remains. The alternative is for some individual or group to dictate how resources are to be allocated. Historically, these command economies have proven to be sure losers. The surest way to soften the landing is by encouraging economic restructuring – through capitalism. A hard landing will be much more likely if individuals seek to rule the markets.


Mercani wrote: Some CEOs make millions a year. Maybe a month. Anyway, how come anybody can need a $140K car every month !

Actually he can buy a car every month, but at some point he will own too many cars(more than 10), and it can be considered as wealth accumulation instead of spending. If he is planning to sell these cars later on, he would be going over the limit and that would be illegal. So he is stuck with a bunch of cars. Basically he was earning more money than he could consume.

This may be the weak point of the system. How do you decide whether something is bought for consumption or investment?


Here’s another problem. We have tremendous consumption now. Do we really want to encourage consumption? Do people need to eat more caviar, lease more jets, have more plastic surgery? Wouldn’t it be better if they built a little company that specialized in small, energy efficient houses? And built them for those seeking to power down their lifestyles?

They might even get rich. Would that really be so bad?
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Unread postby Ayoob_Reloaded » Thu 03 Mar 2005, 18:09:40

Jack,

Please read Guns, Germs, and Steel.
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Unread postby Tyler_JC » Thu 03 Mar 2005, 18:17:08

Most rich people were born rich, got the family company/estate and stayed rich!

Less than 20% of millionaires got their wealth from their parents. Stop making stuff up!
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Re: New economic system for post-peak ?

Unread postby smallpoxgirl » Thu 03 Mar 2005, 19:24:54

Mercani wrote:Therefore I propose a new economic system to replace Capitalism, for discussion. I haven't thought about this deeply, so never mind if it is crap.


What was wrong with the old Potlatch system? You can accumulate as much wealth as you want, but everytime you have a big event in your life, a wedding, an adoption, birth of a child, or a death, you are expected to have a big party and give away all your possesions. If you don't then you are considered a rude pig and everyone in the community shuns you. If you're really that attached to all your crap guys, it's time to take a look at what you're doing with your lives. Seriously...wake up and smell the coffee.
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