But in general I'd bet that only a minority of mainstream economists in the field would disagree with the notion that property/place and institutions are also significant sources of producing wealth independent of labor. That's the mainstream idea already, as shown in the seminal report by the World Bank, "Where is the Wealth of Nations?" which finds that intangible wealth (education and social capital -- the institutions and property rights/places that you speak of) make up most of the wealth in the world, not productive capital or labor resources.
My question is, So what?? How does that change a policy recommendation regarding financial systems?
How does that change a policy recommendation regarding financial systems?
Firstly, if there is a State intermediating financial transactions then it should tax unearned income from the rents which derive from privileged property rights. Secondly, if, as I believe, the State may be dis-intermediated, then we will base undated credit on what in my analysis are the true 'Factors of Production'. ie Location, Energy, and Knowledge.
This disintermediation will take place, in my analysis, through the viral spread of Peer to Peer Finance.
Forget policy 'recommendations' - that assumes others implement policy. I'm backing my analysis by working with others of like mind to implement P2P finance as a reality.
Reality-based community - Wikipedia, the free encyclopedia
And while you're studying that reality--judiciously, as you will--we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors...and you, all of you, will be left to just study what we do
But here's one aspect that I think needs further research (and economics, to date, hasn't addressed it, although sociology and policy studies are beginning to): If factors of production are location, energy, and knowledge, you are in effect assuming that political power is not such a factor, and this seems to me problematic because so much of value, according to the institutionalist school of thought, is determined by political power. A particular piece of real estate has value, for example, not just because of its random location, but because of the politically determined benefits that a certain location provides. This seems problematic for a project of dis-intermediating economic activities from the state. I.e., P2P is entirely dependent upon an accommodating political environment, just like markets are.
The position now is that parties are organisations which create policies based on an ideology, and these are then subject to the process of representative democracy and implemented by an executive.
I think that an optimal policy (there must be one, and it must evolve organically) may be defined in protocols by - as J A Wheeler puts it - through continuously asking the right questions of reality. An evolving optimal policy would actually come to define the movement which gathers adherents who act within the policy framework to develop and implement specific implementations.
By way of example, I might write a document - call it a manifesto or kernel - of 'Open' policies based on partnership protocols.
Then any politician who subscribes to these policies could say so, or sign up consensually, and we could then get Open Labour, Open Lib Dem, Open Green, and Open Tory candidates standing for election. The way I see it, I would not have created a Party - merely the basis of an 'Open' movement.
I think - from having had the benefit of long conversations with John Banks (who recently died aged 95) that a Movement, rather than a Party, are what he and the founders of the Common Wealth Party actually had in mind. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
then we will base undated credit on what in my analysis are the true 'Factors of Production'. ie Location, Energy, and Knowledge.
I see the sense in making location and energy the basis for currency, but knowledge? Knowledge is not limited other then by fiat, and that is fiats that are notoriously hard to upheld. There is a logic in taxing privilege, but I think you should separate between necessary limited factors of production - like land - and those the political system created as limited factors. Otherwise I fear that you could as well base undated credit on the monopoly of trade with India. A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!
I see the sense in making location and energy the basis for currency, but knowledge?
In my analysis, Labour may be deconstructed as to:
(a) Energy (aka manpower) - which is maybe what Keynes was referring to as 'unqualified labour' - and is of course sustained by kcalories; and
(b) Knowledge - in its subjective form, which is what resides between our ears, dies with us, and consists of knowledge, contacts, skill, wisdom, intuition, common sense and so on.
Both our Energy and our Knowledge have a use value over time, and it is an individual's subjective Knowledge that allows him to deploy his energy to optimal effect. Individuals can and do enter into the more or less formal contractual agreements which define 'enterprise models' and enable collaboration and efficiency gains.
Knowledge also exists in an objective form as recorded data patterns of all types, including bit patterns, sound and video, and we are accustomed to the concept of the legal protocols and claims over these data patterns which combine in the concept of Intellectual Property.
IMHO there is not yet a satisfactory legal model for the intellectual property relationship. The transition into a Knowledge economy has been turbo-charged by the direct instantaneous connections of the Internet,and if we can create new forms of property right - using new interactive protocols - then I think that the result will be revolutionary.
Note finally that our (subjective) knowledge and energy/manpower form the basis of credit simply through the issue - by individuals, not banks - of IOUs to each other within a framework of trust provided by a mutual guarantee. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
Looking at the new forms that emerging with the Internet - creative commons, open source - they emphasize the common use and are mostly a hack of the current legal code to protect against enclosure. The results are revolutionary:
When using open source makes you an enemy of the state | Technology | guardian.co.uk
It turns out that the International Intellectual Property Alliance, an umbrella group for organisations including the MPAA and RIAA, has requested with the US Trade Representative to consider countries like Indonesia, Brazil and India for its "Special 301 watchlist" because they use open source software.
But as these forms are against the enclosure of knowledge, I do not see how they could be made into a basis for a currency. A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!
Karl Marx is the classical economist most invested in the argument that labor is the source of all value
