Archive for February 3, 2010

Minimal Consumption Entitlement: 04

February 3, 2010 2 comments

I will try to answer some criticisms of the MCE concept in this post by paraphrasing them.

What about the integrity of currency etc?

As long as we avoid a total collapse, who cares? Ask yourself a simple question, which brings dictators to power- deflation or inflation? Why did so many countries go down the dictatorial path in the 1930s? Coincidence? I don’t think so!

You see, the choice is not between ‘sensible’ and ‘loose’ monetary policy. It is a world with dictators, wars, chaos and deprivation versus one in which people are merely complaining about lost savings but still have a job, food and necessities. Which one do you want to live in? Remember this: when people are out of jobs, money, food etc they look for saviors in the form of men who project power and certainty. We all know how that worked out the last time around!

But won’t we become a more unequal country like those in south america?

No! We cannot, because of an overlooked but important factor. The richer white minorities in south america and africa could not exist without a rich and prosperous west to back them up. Once that crutch is gone, it is over for them. Ever wondered why so many of them have such close ties with the west? It is not just racial solidarity. The west is their plan B, if they are overrun.

So what happens when you remove both the backup and plan B? Think about it..

What about the psychological effects of such an idea?

This is by far the most problematic part of my plan. Human beings are creatures of habit and our perception of the world is influenced by many factors, including concepts that are actually counterproductive in the world we live in. I will devote a future post or two entirely to this problem.

Having said that, I can understand the lament of the architect in the matrix, about ‘lesser minds’ rejecting a world where nobody suffered. The agent smith monologue about humans defining their existence through misery and suffering also made a lot of sense to me, when I first saw that movie. I believe that unless we evolve past ourselves, certain aspects of human behavior can only be mitigated not eliminated. The solution lies in creating a system that is less imperfect, not perfect.

What about parasites? What do you define as productive?

I prefer to see unemployed people on MCE as symbionts, that help prop up the “productive”. What is the use of productivity if there is nobody left to consume? Even a slight deflationary spiral combined with high productivity will quickly take us to a place where very few can consume what the even fewer productive people can produce or service.

My definition of “productive” jobs are those without whom the current system would unravel very quickly. So people who grow food, make agricultural chemicals, extract and process petroleum products, bulk chemicals, CPUs (big and small), mine and process minerals, make and maintain machinery, build and repair infrastructure etc.

The world could still exist in a very functional form if every MBA, almost every corporate lawyer and most doctors disappeared. Similarly investment bankers, most commercial bankers, bureaucrats and most of law enforcement are dispensable. It is these groups that are the true parasites on our system.

However the world as we know it cannot survive loss of consumers, and if everyone cut back on spending we would end up in a world where nothing worked. Think what gradually starving yourself would do to your body. Beyond a point, it would fail and be not rebootable.

Would people not leverage in this system, just like the one we live in?

Yes, they will try. But the effects are easier to mitigate in my scheme of things. This is why..

Most people get involved in leverage based scams because they want more money for an uncertain future. Few are motivated by pure greed.. and those that are usually run such scams. Remove excessive uncertainty and you get less greedy people.

Technological progress and its spread has converted many luxuries to commodities. This is a process that is very likely to continue, and help deflate the cost of many items, including those that are currently expensive. How many of would have anticipated the penetration of high technology based items in the poorer parts of the world, even 20 years ago. Consider the spread of air-conditioned apartments with decent facilities in places that were supposedly too poor to afford anything above thatched roof huts.

I was not kidding about the guillotine part with regards to financial type shysters.

The next post is now up: Minimal Consumption Entitlement: 05