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J. O. Quantaman

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State of the Union
10/26/2009 1:37:40 PM    [ Flag as Inappropriate ]

Three Important essay on the economy and human justice.

* * *

Homeland

More than 7-billion human beings reside in large cities where poor folks have basic necessities and rich folks enjoy much more. Most have a place to flop and a “common” sewer to flush their crap away. They drink potable water, eat foodstuffs deemed relatively safe, buy consumer goods, use comm links, draw metered electricity and enjoy travel options.

For the past 150 years, humans have migrated from rural communities to large and larger cities. Urban dwellers occupy the top of the food chain and gobble resources from outlying regions. The dynamic economy of consumption is divorced from the natural environment. City folks will fight for personal comforts before they worry over the loss of a few species of beetles. Urbanites have tuned out the warnings of climatologists. It’s easier to soothe one’s conscience by purchasing carbon offsets or to support eco-evangelists who have made a business out of exposing scapegoats. Eco-evangelists receive funding from urban donors and corporate sponsors, so they tend to single out black sheep and small-time culprits in woebegone locations. Thus, subsistence hunters are considered barbaric, whereas millions of veal cuts from force-fed cows are consumed without a 2nd-thought.

ZEST is supposed to evaluate human activities using the rigors of science and then to hand down impartial judgments. Unfortunately, member nations have their own teams of accredited scientists, many of whom are appointed for political reasons. A few contrarians can object to almost anything, since truth in science is often hedged with doubts. Thus, ZEST has banned fusion research for dubious reasons. It has slowed the deployment of helium-cooled mini-reactors with kilometers of red tape, even though mini-reactors are safer than oil-fired generators. ZEST has also been responsible for the exorbitant taxes on aviation fuels, much to the delight of the dirigible industry and regardless of climatologists who have assigned contrails a minor role in global warming. Meanwhile, ZEST has awarded kudos to China for improving the air quality of its largest cities, although cleaner automotive fuels have come from coal gasification plants, which are major polluters.

The first casualty of the 21st-century has been the notion of national sovereignty. Nations still fly their flags; citizens still sing anthems and pay taxes for protection and social order, while borders are still patrolled, and cultural identities still raise sentiments in patriotic hearts. But kilotons of good and services move from nation to nation with token scrutiny, whereas money flashes around the globe at the speed of light. Financiers send billions of €uros to wherever those investments will reap the greatest rewards. Springtime consumers in Canada buy fresh apples grown in Australia. Belgian factories produce delicious chocolate treats from cocoa and sugar imported from equatorial Africa. South Africans navigate through hypermalls using AR glasses manufactured in China. Mongolians spray their yurts with photovoltaic films produced in Germany. No one can say that 100% of his or her possessions have been produced locally. Like it or not, we live in a global economy; we find ourselves in the same lifeboat. We have a common interest in maintaining the biosphere of earth.

So, how do we manage earth’s biosphere without snubbing each other’s toes?

First, we must acknowledge that a wide diversity of flora and fauna is needed to maintain our human species.

Second, we must purge ZEST of its meddling politicians and special interest groups.

The tribunals should be reformed until they are able to resolve conflicts with scientific objectivity. People will accept the consequences if they trust the judges. Therefore, scientists who make judgments must divulge arguments in ways that are understandable for ordinary folks. Dirty products as well as clean products that shed toxins during fabrication or assembly will incur extra taxes to discourage sales. New standards will reward products for longevity and ease of recycling. Consumers with access to the test data can verify which products deserve greater taxes.

Such measures will likely raise prices and change economic practices. However, governments can ease other taxes to neutralize the effects on their citizens. A transition period of 20 years will spread the impacts over a longer timeframe. Five percent of the eco-tax can be applied in the 1st-year and then raised 5% each succeeding year until 100% of the surcharges are added to retail prices. During this phase, regional jurisdictions will adopt new commercial incentives, and venders will market less offensive products while improving the assembly techniques for existing products. Consumers will suffer less tax burdens if they choose venders whose products are ecologically benign.

Later on, property-use incentives may be introduced. Corporations that disrupt natural ecosystems for commercial ends should pay the piper. For example, a developer that installs parking for a hypermall should set aside a trust fund to cover full restoration of the land. Moreover the developer should pay annual fees to compensate for lost parkland, lost crop yields, lost habitat for native flora & fauna, lost oxygen production, etc. Firms that preserve their landscapes from ecologic damage will be encouraged, whereas firms that pollute land or sea will pay extra until such damages are rectified.

If these measures make sense and if you care about your children’s future, please support Concerned International and Environmental Research Scientists (CIERS). Lobby your governmental representatives; ask them to endorse this important initiative.

---CIERS Webcast circa 2074

* * *

Money

Money is traded for goods & services. It acts as a proxy for venders and shoppers. Postmodern money cannot quench your thirst or satisfy your hunger. It corresponds to ephemeral code inside digital processors. Money cannot change social injustices or restore natural resources.

Investors peg the monetary values in lieu of future expectations. For nominal fees, bankers keep a running score on commercial transactions. These financial records are validated by government watchdogs that uphold public trust. Financiers quicken the flow of money when they draw on private pools or national reservoirs. Retail prices depend on the liquidity of exchange as well as the total amount of money in circulation. If the money supply rises faster than economic output, prices will skyrocket. If the money supply falls below economic output, prices will drop while bankruptcies and unemployment will rise. Fast money stimulates consumer demand while slow money brings on the vultures that feed on choice morsels languishing in the bayous.

Money is not free. It carries hidden charges beyond the obvious accounting fees extracted for everyday transactions. Postmodern commerce cannot function without public exchanges that hedge the values of currencies, treasury bonds, stocks and basic commodities. Financial markets determine not only current prices but also prices at various dates in the future. This rating system resembles “consensus guesswork” since no one knows what the future may hold.

The financial sector increases the cost of products insofar as the producers of goods and services depend on financiers for loans, investments or trademark exposure. Such capital costs are eventually passed onto consumers. Financial markets consist of institutional traders, brokers, arbitrators, bankers, lawyers as well as investment firms. These players must earn their livings, so they inflate prices without adding any real value. As well, advert costs add substantial amounts to retail prices. If markup prices are set twice as high as the production and retailing costs, consumers get only half-value for their cash.

The system of high finance brings order and efficiency to international trade, although layers of middlemen exact heavy tolls. Well-established corporations reap full benefits from a cadre of market makers, but small startup firms cannot afford to grease the palms of so many intermediaries, even though middlemen are needed to bring prototypes into mass production. Small firms must seek sponsorships vis-à-vis friendly backers or unfriendly buyouts from larger corporations. In practice, small firms tend to be cannibalized by the behemoths. Transnational corporations do little but manage hundreds of affiliates that provide the actual goods and services. Yet, transnationals employ thousands of workers whose salaries are ultimately paid for by consumers.

Despite such “hidden” costs, market capitalism has proven it can gratify consumers and reward skillful employees. Money signifies success in the urban game of euthenics. In developed nations, more than 85% of the workforce has moved from primary industries to service-oriented jobs. Automated shortcuts or laborsaving devices aid shopworkers and repairpersons. Hard physical labor has been relegated to fitness clubs or prison work gangs. Quebies have access to more consumer items than ever before. They may select from multiple brands, each providing similar or identical functions. There is a media-driven impetus to buy the newest, cheapest or “hottest” products on the market, which leaves domestic abodes cluttered with stuff that has been used once or twice and then set aside to gather dust.

Corporate venders don’t really care what happens after the sales have been made. End-users are responsible for usage, maintenance and disposal. End-users must pay fees or taxes to have garbage removed and waste water sanitized. Economists choose to ignore the environmental side effects caused by postmodern industry. They downplay the infrastructural costs that go with “bargain-basement” consumables.

National currencies are forever changing values. They rise and fall with respect to other currencies. History has shown that all major currencies depreciate over the long haul. This phenomenon applies to corporate and ethnic cultures as well as imperial cultures. Cultures rise to the forefront on the strength of innovative technologies that manifest competitive advantages. The paradigm works well for the honeymoon period. As time passes, competitors will jump on the bandwagon, multiply the userbase and dilute the economic advantage. Likewise, crucial resources that bolster the advantage become more difficult to obtain. Unless new technical innovations are developed, the lead culture loses its competitive edge and must devalue its worth.

Cultures have risen and fallen in the past. Today’s interlocking global economy is no exception. Folks of many cultures have bought into the notion of evermore prosperity. Each wants his or her fair share of personal comfort. The trouble is capitalism is skewed and inefficient; it churns out more losers than winners. To complicate matters, 20th-century producers have largely depleted the cheapest and most available resources. Capital markets downplay the per capita downtrends by glorifying smaller slices of pie for greater numbers of consumers. Economists discount the present costs of future goods and services. In effect, they guarantee future yields that are not feasible. Politicos seek acclaim in the limelight of national identity, so they must ensure that homeland shops are well-stocked with affordable consumer items. No one pays heed to the plight of future generations. No one dares to look under the veil hiding deep pits of entropy.

Contrariwise, spacer colonists have pioneered an unorthodox economic system that is adapted to cylindrical habitats. These “soupcans” purify and recycle the air, water and other crucial nutrients. The habitats enclose more than 1,200 cubic kilometers... a gargantuan size that dwarfs the largest earthside structures by three orders of magnitude. Structural integrity in space must be reliable to maintain living organisms amidst unforgiving conditions. Hence, spacers favor robust life-support components and durable consumer products, for which they are willing to pay higher prices. The extra costs ensure better quality and make allowances for material rental, human labor, spin-off consequences, excessive energy usage (if applicable), cross-pollutants, recycling and disposal. Retail prices are set to give a fair return to producers, and prices only fluctuate in direct response to brief quirks in the supply-demand equation. On the whole, SOAR consumers will pay the same lofty prices in the future as they do at present. However SOAR consumers cannot choose alternate brands, since very good or service has only one producer... the workgroup that has shown it can deliver the most useful product with the lightest environmental footprint. SOAR’s marketplace is highly regulated, not for profit and interdependent on the availability of natural resources. Price stability comes as a side effect of SOAR’s monopolistic milieu.

Many economists attribute the buoyancy of Solar$ versus earthside currencies to the beamersats, which create a huge trade surplus. Less well known is the fact that spacers are returning this surplus to earth by underwriting an experimental megapolis in western Canada. The strength of the Solar$ has less to do with balance sheets than investor sentiment. Money traders realize the amount of Solar$ in circulation is dependant on a complex formula that is tied to the inventory of available resources and the number of citizens. In other words, natural capital and human capital regulate the amount of money in circulation. SOAR manages a steady-state value for its currency, unlike most earthside jurisdictions that spur economic activity by increasing money supply and thereby cheapening the unit value. Money traders know that Solar$ will maintain value over 10, 25 or 50 years. Indeed, solar bonds are popular among earthside investors, even though there is no interest accrued, only face value returned at the allotted period of time.

Commerce in space exits in utopian isolation, due to the high cost of moving goods from surface to orbit. Earthside consumers who are used to multiple choices of brands will not welcome the draconian consumer restraints that spacers seem to tolerate. Although some forms of regional self-sufficiency may offer advantages, a total reliance on local suppliers will likely invite noxious disputes between nations, regional trade wars and ominous fallouts in global relations. Indeed, local authorities will find it difficult, if not impossible, to achieve self-sufficient economies because of the predominate influence of transnational corporations.

Nonetheless SOAR’s economy merits careful review. For example, central banks ought to link their money supply to environmental capacity, which will encourage a sustainable marketplace and ecological certainty for now and the future.

---Xinghua Blog

* * *

Workplace

Colonists in space have not only survived; they have maintained and improved the comsats that link our world together. Their beamersats are responsible for one-third of the electricity used around the globe, without which many jurisdictions would fall short of their ZEST targets for reducing greenhouse gases. No one can deny that spacers have contributed to the quality of life here on earth. Let us take a more serious look at SOAR’s not-for-profit economic framework.

Colonists benefit from the output of worker-managed cooperatives... co-ops as spacers call them. Spacer communities, whether in orbit or on earth, can boast of virtually zero unemployment, which is praiseworthy in itself. Individual co-op members show a remarkable commitment to achieving co-op goals. They exhibit loyalty and solidarity. They pride themselves in producing superb goods or delivering topnotch services. By & large, members feel useful and esteemed, no matter where they stand in the pecking order. Members who feel snubbed or constrained may transfer from co-op to co-op until they find their personal niche. Such transfers don’t evoke penalties with regard to accrued earnings.

All members earn the same spendable income, regardless of their seniority in the co-op and regardless of the value of the goods they produce or services they render. Communal wages are geared to the cost-of-living for the region wherein members live and work. Communal wages allow for comfortable if modest lifestyles. The wages cover foodstuffs, housing, health needs, decorative tastes and recreational pursuits. Such ordinary incomes may not appeal to consumer spendthrifts or wealthy elites. Workers don’t complain since everyone has access to low-priced amenities of the commons. Even health care is quaintly democratic, driven as much by users as healers.

Co-op members have real incentives to excel and improve the functioning of their co-op. Beyond spendable wages, each member is paid nonspendable wages that are converted into voting shares. The percentage of members’ wages that are nonspendable depends on the capital requirements of their co-op. A mining co-op that deals with the exploration, extraction and processing of minerals will withhold a greater percentage of income for major capital outlays... whereas a food service co-op will only require outlays for current inventory and utensils. Voting shares transfer freely between co-ops when members switch co-op affiliations, although new co-ops may require a get-acquainted period before the shares count as votes. When members reach the august age, their shares are converted to solar bonds that fund their senior years. Co-ops award overachievers bonus shares, which add to the number of nonspendable shares and increase one’s voting clout in the co-op. Bonus shares acknowledge one’s contributions and quantify the esteem of one’s peers.

Many critics have assumed that SOAR has given birth to a rigid, noncompetitive and doomed economy, because co-ops are given exclusive rights to produce and market their goods or services. In truth, co-ops are granted monopolies which are reviewable every five years. Indeed co-ops compete fiercely among themselves to obtain these concessions. Every five years, they must prove themselves the best possible choice all over again. A sophisticated computer program acts as judge and arbitrator. The digital criteria will always select production methods that cause the least damage to the environment, even though such products may cost more for consumers. The criteria favors goods and services that bring substantial benefits to both users and nonusers; in other words, newer versions must be backwards compatible, and older versions must continue to be supported by the provider. Thus new or old versions harmonize with the social milieu.

SOAR encourages healthy competition as well as individual freedom of choice. Spacer citizens may not be able to accumulate great wealth, but they can and do garner influence and respect vis-à-vis their bonus shares. Among citizens there are very few complaints if one can believe firsthand testimonials.

---Marcus L. Drusus Blog

* * *

ZEST = Zanzibar Environmental Standards Tribunal

SOAR = Solar Omnifarious and Aspiring Republic

Quebies = cubical jockeys




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More Blogs by J. O. Quantaman
• Loose Threads in Color - Thursday, April 23, 2015
• Criminal Websites - Sunday, April 19, 2015
• RE; Haida Gwaii - Tuesday, April 14, 2015
• Loose Threads - Tuesday, April 07, 2015
• Occupy Wall Street - Thursday, October 20, 2011
• Root of All Evil - Monday, January 18, 2010
• Focal Points of History - Saturday, November 07, 2009
•  State of the Union - Monday, October 26, 2009  
• Competitive Markets - Monday, October 12, 2009
• Trust is the Glue - Wednesday, September 30, 2009
• Ethics for Sci-Fi Writers - Monday, September 21, 2009
• Rundog (by J. O. Quantaman) pen name - Wednesday, September 02, 2009


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