TDDPirate’s Ideas

Bibi Netanyahu was excellent Minister of Finance, who saved the Israeli economy from the fate of Argentinian economy. Too bad people do not recognize this fact and are angry with him due to cutbacks in handouts to poor people. They do not realize that if Netanyahu hadn’t cut back those handouts, those handouts would have suffered much more serious and less controlled cuts as the Israeli economy collapses.

Bibi Netanyahu was OK as Prime Minister.

However I am not happy with one thing which he failed to accomplish.
This failing is a reason why I and other people do not remember the exact date of the first Zionist Congress at 1897.

You see, Bibi Netanyahu was Prime Minister at 1997. However, he failed to arrange for celebrations to mark 100 years since the first Zionist Congress. The event could be used to explain to the world why Zionism was necessary given the status of the Jews in Europe and Russia at the time. Why Zionism is not as discriminatory as an affirmative action type movement. What problems Zionism set out to solve.

However, since the original Zionist ideology was different in details from Netanyahu’s ideology, budgetary excuses were invoked to avoid celebrating the event.

Ten years later, we have a chance to partially fix this oversight. At 2007, we can celebrate 110 years to the first Zionist Congress. Let’s start preparing for this.

According to Paul Graham’s What Business Can Learn from Open Source, people are more productive when they work at their own hours in their homes. He uses the examples of software startups versus established software companies.

This leads me to wonder how should businesses, which have a lot of capital invested in equipment, manage the work hours of their employees. The employees have to be in contact with the machines at scheduled times, if the machines are to be operated efficiently and economically. Examples: Intel’s semiconductor FABs with their process developing and monitoring physicists and chemists, airline companies and their pilots and airplane maintenance technicians, car assembly plants.

Maybe it is a significant fact that those businesses, which have expensive equipment, do not lock into uniform office cubicles those employees, who deal with the equipment on daily basis. Sailors on a ship sometimes need to be available 24 hours a day to handle emergencies. They work under different weather conditions. They have shore leaves. Shop workers need to be in the shop during its work hours, because it is when the customers come in. However they do not sit in offices or waste time in meetings. They stand and serve customers, reorder the inventory, or whatever. The “expensive equipment” in their case is the shop’s inventory and fixtures which entice customers to leave their money in the shop.

So it seems that it is only those businesses, which do not need to provide their employees with expensive capital equipment, do lock their employees into a 09:00-17:00 day in boring offices and lots of meetings. It is precisely those companies, for which Graham’s conclusions seem to be true. The work done for those companies could be done from employee’s home at his own hours - the inexpensive equipment (such as a PC with one or two specialized peripherals) could be installed at his home. The profession is not necessarily software development. It could as well be a telemarketing operation (heaven forbid).

It seems to me that after each bubble (like the American stock market speculations of the 1920’s or the 1990’s dotcom bubble) , an economic depression ensues.

Possible explanation?

When a bubble happens, several people lose their sound judgment and spend their capital and precious time on nonprofitable business dealings. They waste their time on activities, which do not create food and other life’s needs. Without feeling so, they get into debt, one way or other. Eventually, the bubble bursts and they realize that they didn’t make a profit from the work and capital spent.

Since their capital is gone and time was spent on other than profitable work, they find themselves without money to buy the necessities and luxuries of life. Hence, depression.

Depression ends after people work few years and pay off their debts (both real and virtual) and again have money to spend.

I have read a book about alternative money schemes. It is called “Funny Money”, written by David Boyle (who has a Web site at http://david-boyle.co.uk/). ISBN 0 00 653067 2.

The book offers alternative points of view on money - as time, as information, as religion, etc. One of the alternative money schemes has people earn “time-dollars” for helping their elderly neighbors, running their errands, keeping them company, etc. They can pay with “time-dollars” for help to their own grandparents or parents, or even themselves if they themselves are old.

In another section of the book, the author explains that all of us are already exposed to various alternative monies, and he does not mean foreign currency. There are the air-miles handed out by airlines, “points” given by the credit card issuers for purchases (worth in Israel about 1 agora per “point”), etc.

I found two oversights in the book.
One oversight is the Free Software world. You pay for your use of Free Software by adding your pet features to it and allowing the entire world and his niece to use them.
Another oversight is understandable. It was due to the fact that the author wrote his book as an account of his trip in USA, which of course excluded Israel. The book does not cover the economic systems developed in Israeli kibbutzim at intermediate stages of privatization.

The important point I took home from the book is that the meaning of money is - that in exchange of my labor, I get a promise that someone else will work for me sometime in the future, when I need this. Bills or gold bars are concrete manifestations of this promise.

Of course, if someone collects more promises of labor than other people can deliver within reasonable working time, then they would eventually find a way to renege on their promise. This is inflation.

One complicating factor of money as a promise of labor is that an hour of one person’s labor is not equivalent to an hour of another person’s labor. Education, experience, availability of capital equipment (such as hammer and screwdriver or an oscilloscope with voltmeter or a stethoscope or a PC) apply a factor, which can be very large in today’s Hi-Tech based economy. The value also varies over the seasons of a year (or a business cycle). At some times, certain professions are in demand and an hour of their labor is worth more than that what it would be worth at other times.

When designing an Utopia, one needs to consider also how people who do not fit in are treated in the Utopia.

One way in which someone may fail to fit in is by being unsuccessful when trying to play by the Utopia’s rules.

In capitalistic regimes, unsuccessful people are poor, hungry, have poor health and bad (or nonexistent) housing. They then have a good reason to try to overthrow the present regime, in the belief that in a better regime they will have higher quality of life.

Another kind of unsuccessful people are those, who do not have the patience and long attention span to build their wealth slowly and on solid base. Such people indulge in various get-rich-quick schemes. They typically become real estate and insurance agents. They start the classical makework businesses. They do not consider the benefit to society when planning their business, only how it can funnel money into their pockets. Such people are behind business scams and Enrons.

A third kind of people are ones, who are better at organizing (i.e. influencing) people than in creating something. They become salespeople and politicians. They are the ones, who might believe that their personal success would come from organizing poor people to overthrow the present regime.

The real test of an Utopia is in how it deals with all those kinds of people and how can they find their opportunities in it without harming other people.

At any case, there will always be some people, who feel very dissatisfied with the Utopian regime, and who would try to overthrow it, or at least get it to change. Such people are necessary for the future evolution of the Utopia and for updating its workings according to the changed times. Those people would be good at pointing out abuses of the establishment and at getting it to change before it is overthrown.

I wrote elsewhere my suggestion that people be paid to study, if they don’t currently have a job.

The gift economy concept fits with the above approach.

When people compete for status from having the greatest & biggest skill set for coping with emergencies, or for having made the best contributions to scientific research, or for having had contributed to the coolest software projects - rather than for having the most expensive car or the biggest house or expensive jewelery - the world would be a better place to live.

Makework = what you need when you perpetuate an outdated, pre-automation 1940-era workweek discuss another way to deal with the makework problem.

They propose to “timesize” jobs i.e. reduce the number of hours per work week.

However, they don’t address the real problem: many work hours are not needed anymore to operate and maintain the means of producing the basic human necessities. On the other hand, the only way to sustain an economy in the long range is to reward people in proportion to the quantity and quality of work they put in.

Thus, there is a dilemma.

Previously I wrote about the make-work problem of developed countries’ economics. In brief, the problem is that to produce the needs of a population, only small percentage (i.e. much less than 100%) needs to work. Thus, a system is needed to:

1. Distribute the fruits of the producers’ labor among the entire population.
2. Discourage people from being freeloaders incapable of doing productive work should this ever be necessary.
3. Allow people to choose to work more (or make effort in another socially acceptable way) in exchange for more luxurious lifestyle.
4. Develop and maintain excess capacity to work. This excess will allow the population to recover quickly from disasters.

There are some possible solutions:

1. The conventional solution is to use advertising to develop artificial demand, and to get people to work to meet this artificial demand. I wrote elsewhere about some consequences of this solution.
2. A better solution is to let people work in smaller and less efficient production units (factories, farms, or whatever) if they cannot pay for the products of bigger production units. On the other hand, people may find themselves working so much and get so tired that they cannot get ahead by studying.
3. Even better system is to get people, who don’t have a job, to spend time learning something which will improve their productivity in the future.

The first two solutions are such that no special mechanisms are needed to cause cash to flow in a way which holds them together. This is why several economies implement them. The third solution needs special mechanisms to get goods to flow from the producers to the students, as there is no direct benefit to the producers from the fact that students spend time studying.

Now, I would like to propose a solution to this problem.

Welfare - both taxing of high incomes and handing out of money to people with low incomes - is now an established and accepted part of several economies. The welfare systems do a lot and get abused a lot.

My proposal is to replace existing income-based criteria for getting welfare by willingness to spend time studying something new.

Under this proposal, anyone, who did not (or was too lazy to) find a job, can get money for studying something. Welfare applicants would be evaluated to get a recommended course of study. However, they will then be free to study whatever they wish, at least some of their time.

Single mothers would be provided with services which look after their children while they study. People, who have learning disabilities, will be catered to by special methods of instruction, matched to their preferred studying style.

Just by studying, people would be able to get a minimum level if income. Certain subjects, which are deemed to be in demand, may carry higher pay tag. People, who study those subjects, will get more money while they study them.

Let’s assume that thanks to advances in technology, it is sufficient to support the basic needs - food, clothes, shelter, medicine - of a 1,000,000 people population by the efforts of 10,000 people working normal work weeks.

This leaves 990,000 people unemployed. Applying the current economic model of requiring people to work in order to get goods and services would mean that 990,000 people would die of famine or illness even though there are resources to keep them alive and well. There are possible good and bad solutions to the problem, and several of them were used, to varying degrees, and for better or worse, in the world’s economies:

1. The 10,000 people are made slaves of the entire population. They are forced to work and support the other people. For example, by means of high income tax and high sales tax (or VAT) - accompanied by generous welfare handouts to people without jobs.
2. Make work. People without jobs persuade some of the 10,000 job holding people to part with some of their money, to buy doodads and fake services. This can be carried out by means of religious brainwashing, advertisements, and educating children to consume.
3. People who have a job - work. People who don’t have a job go to school and study yet another occupation. Some of the studies are from books and other people. Other studies are performed on nature itself and known as ‘research’. Someday they may have a job which utilizes what they learned. But even if not, they get paid for the time they study. Today’s universities are an example of this.
4. Special kind of make-work: deploy smaller manufacturing plants, which need more labor per unit of produce, but can be operated by more people. An example: small high-labor organic farms operating next to big farms, which save labor by using all kinds of agricultural machines. People who find a job work for a large concern. People who don’t find a job - operate their own farm and sell its produce. The disadvantage is that the extra labor leaves them with less time for studies.

I believe that the best system is the one in which people either have jobs or study or mixture of both. However, I don’t see yet a good solution how to construct an economic system, which transfers value from the 10,000 workers (in the above example) to those of 990,000 who study and who exercise wisdom in their choice of subjects to study.

Thought experiment

A thought experiment illustrating what is wrong with the economics
of today’s developed countries.

You built a space station which has room for one million inhabitants.
You are its BDFL (Benevolent Dictator For Life) and you are responsible
for initial allocation of property rights among the settlers coming
to live in your space station.

You already paid up all inventors for all patents being used by the
space station, and you are licensed to do whatever you want with all
relevant patents as long as you do it in the space station.

The space station is highly automated. Everything is recycled and
all energy sources are renewable. The space station is environmentally
friendly in that it does not pollute the space with any un-recyclable
trash.

Human labor is needed mostly to repair and improve machinery.

The employment needs of the space station are as follows.
- 1000 engineers and technicians to maintain the food and air production
machinery.
- 1000 engineers and technicians to support the energy collection,
distribution and disposal (in the form of cooling) systems.
- 10000 highly trained medical practitioners, who attend to diseases
of the general population.

- 10000 workers of all trades involved in housing construction and
maintenance.
- 1000 workers to maintain the cloth production facilities.

In other words, 23000 people are sufficient to support the basic needs
of 1,000,000 people.

The question now is what system is to be used to fairly “distribute the
income” among all inhabitants of the space station?

If the 1000 maintainers of the food and air production facilities “own”
the facilities and earn all profits from selling food and air, how will
other people (besides the other 22000 who have other jobs) pay for the
food and air?

The communist solution would make those 1000 maintainers slaves who work
to their best ability, and get only their share of food and air, like
everyone else in the space station.

If people don’t have to work for their food, air, housing, clothes
and medical attention - the spacestation will become full with
freeloaders. Those freeloaders would prefer to follow other interests
than contributing to the maintenance of the space station. So there
must be some relationship between work and benefits.

On the other hand, if there are no jobs for most of the population, how
can they prove that they are not freeloaders in spirit?

How the problem is being solved by today’s Earth

The way the developed countries of the Earth solve the above problem
is as follows.
1. More than 2.3% of the population are still needed to provide the
basic needs of the whole population.
2. Several jobs are essentially “make work”. Entertainment, fashion,
religion officials, advertising, competition of brands which are
essentially the same, tourism, spectator sports, laws which stand
in the way of utmost economic efficiency.
3. Taxing the income of producers and using some of the proceeds to
support non-producers.

Historically, any “excess prosperity” was disposed of by means of
wars. Nowadays, as wars went out of fashion, spectator sports substitute
for wars.

Disadvantages of today’s solution

When people must prove they can work by actually hold a job in order
to get life’s necessities and luxuries, jobs must be created even if
by artificial means.
When jobs need to be artificially created, demand for the work must
be pushed up artificially.
Demand is pushed up artificially when people are brainwashed into
buying goods and services which they don’t really need, and even going
into debt for this purpose.

When people are not in the mood of buying goods, economic depression
sets in and people lose jobs and are impoverished - even if there is
plenty of food and other life’s necessities.

Proposed solution: smarter make-work

We must recognize the fact that large part of the economic activity
in developed countries is make-work with no real value. We must also
free ourselves from the ideological constraints of Marxism, Communism,
and their capitalistic counterparts.

Once we have passed this intellectual hurdle, the following solution
presents itself (described in the context of the spacestation).

The 1000 engineers and technicians, needed to maintain the food and air
machines, need say 20 years to train for their jobs. Let’s pay them
good salaries also for the years they spend training. We’ll also allow
them to retire after one year of actual work. Let’s also train also
a group of replacement workers, who will pitch in if there is an
emergency which requires coordinated work of more than 1000 workers.

Then each one of 40000 inhabitants has something to do for 21 years
(20 years of training; half of them will have one year of actual work,
and the other half will be prepared for “reserve duty”).

We have similar arrangements for all other essential professions.
Given that people need extra skills to cope with emergencies, it
is possible for all of them to be as busy as they like to doing
(by learning or working) something which is of value to the society.

In short, everyone will be paid also for the time he/she spends
training for his/her job.

Industrious people will spend more time learning new skills, and they
will be paid better and be able to enjoy luxuries. Less energetic
people will spend less time learning, and they’ll be paid proportionally
less. But this is fine as this was by their choice.

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