Thinking About a Resource-Based Economy

I have recently read Looking Forward and other writings by Jacque Fresco (http://www.TheVenusProject.com) and re-watched The Zeitgeist Addendum in an attempt to connect the dots regarding an alternative to the failing money-based economy. Fresco, in particular, is saying that we need to transition to a resource-based economy. While one needs to do a lot of reading to understand what this really means and why it could actually work (which I encourage), here is a short introduction so you can at least understand what I am talking about. Note that unless you have read about these ideas before, much of what I am saying will not fit together. That's why there are books and movies on the idea rather than just a short article.

First, a money-based economy is artificial because money is artificial. That is, you can't eat it, transport yourself on it, ... While you probably understand that, most people don't really understand how artificial it really is. The first part of The Zeitgeist Addendum explains the Fractional Reserve System in a way that is easy to understand. This will fill you in. You will probably be surprised.

The most important thing you can learn from the operation of the Fractional Reserve System is that under it, no money at all exists and the only way more currency can be created is by creating more debt. Think about how, whenever a war is necessary the money magically becomes available. This magic process is critical in understanding what a resource-based economy really means.

The next step is to see how shortages, most artificially created for the benefit of those in power, are the basic cause of most social problems. If those shortages can be eliminated, most crime will go away. (While that sentence will appear to be a leap of faith, there is a lot of good information that backs it up in the resources.)

With that basis, Fresco asserts that if we stop asking "do we have the money to do X" and instead ask if we have the resources, we will find that the answer is yes. His argument is that it is those in power, whether that be political or financial, (which John Perkins points out is really the same thing—the Corprotocracy) that puts artificial limits on those resources. The best example is in the energy field where alternative energy sources, electric cars and such always seem to be impractical even though technologically they are not.

Fresco's position on resources is not that we can just live as we do now but that everyone in the world can have a standard of living equal to or better than the best available for anyone today. Again, you are most likely going to need to do a bit of reading to come to agreement on this but a big ingredient here is that the current systems are very wasteful in how resources are used.

One of these wastes which I offer only as an example is that there are amazing costs associated with protecting the haves from the have nots. If you can offer everyone what they want, the have nots no longer exist. Thus, these protection costs go away.

Jumping to employment, if you don't have to be a wage slave because there is no money, replacing workers with automation is a good thing for everyone. Exporting jobs from the first world to the third world is no longer necessary and there is no benefit on either end for lower-wage employment.

Now that high unemployment is a good thing rather than a bad thing, (or, put another way, a shortage of jobs is no longer a problem because they are not needed) people have more leisure time. While we have been told that this will lead to a combination of more couch potatoes and more crime, the assertions are that this is not the case. First, crimes against others become unnecessary because we can have whatever we want. A second group of crimes, victim-less crimes, can be eliminated simply by eliminating the laws designed to be social engineering.

As for the couch potato problem, I have to agree with the theories that elimination of wage slavery will decrease the number of couch potatoes rather than increase them. If you no longer have to do something you don't want to do in order to pay the bills you are more likely to want to do something you find interesting.

OK, enough of the idea. I have been plugging these concepts into my personal views in order to see how they fit. Here are my initial thoughts.

Plugging the Idea into My Life

  1. I already know that I am not a couch potato. Even in High School I found my required time in school to be a distraction from my interests. Today I am in a situation where I no longer need to work to pay the bills. I tend to fill my time with research and experiments. So, while some people may become couch potatoes, free time clearly is not going to turn everyone into one. In fact, I can point out that many times in my life, having to work to pay the bills actually prevented me from doing some things that were more interesting to me and probably would have offered more to the world than what came out of my day job.
  2. The information I have seen defines "religion" as a problem. (Another movie, The Naked Truth will help explain the issues.) What seems to be the issue is dogma rather than a personal spiritual choice. My conclusion is that my spiritual choice, Taoism, fits well with what is being presented. (Of course, many say Taoism is not really a religion.) The only apparent discrepancy is that a Taoist view seems to suggest you minimize what you feel you need but that really doesn't conflict with the resource-based idea that you can have whatever you want. If anything, it just helps establish an equilibrium.
  3. As soon as I started thinking about Free Software and the resource-based economy ideas I realized that Free Software was a perfect example of what Fresco is talking about. It also supports point one. In fact, it is probably the easiest way for me to explain the concepts being presented. It is likely that it will also be easier for others to understand because it is an already established example rather than a theory.

Do I think the idea of a resource-based economy as presented is perfect? Certainly not. I do think, however, that as each potential problem comes up we need to step outside our list of traditional approaches to see how it can be addressed.

One obvious situation is where there there is a real shortage. Take radio broadcast spectrum, for example. If you back up from available frequencies a bit and think about what is trying to be done, there are technological ways to address it. Assuming a serious communications infrastructure reaching virtually everywhere (which is required for lots of other pieces of the proposed reorganization) there becomes less and less reason to use wireless broadcasts of any significant distance to deliver programming. Anywhere where there is a large enough listener base, there will be the needed infrastructure to deliver the broadcast. Anywhere where the population density is low, short-distance wireless communications frequencies can be used to deliver what is needed.

Part of what is presented in Looking Forward is the need to be asked (yes, asked, not required) to contribute a bit of your time to help address problems. Personally, I find this idea very appealing.

The Free Software Example

When I first started writing this article I had no idea it was going to lead to Free Software as being an example. I hadn't thought about it before. What actually got me there was that there is a typical copyright on Fresco's paper Designing the Future and I was thinking that if he was serious about a resource-based economy, his work should be freely available.

While there is a lot more Free Software, let me take four specific pieces for my example: The Linux System, the OpenOffice suite, the MySQL database and the Apache web server. For each of these items there are other free alternatives, for example FreeBSD for Linux, KOffice for OpenOffice, Postgres for MySQL and an assortment of more targeted alternatives for Apache but my selection represents the most popular. I mention the others mainly to point out that there are choices all at the same price, free.

To put this Free Software suite into perspective, we need a bit of background. I will try to keep this brief and I am not writing a book on the evolution of software.

The Linux System is the most complicated part of the picture because I am talking about a complete system for a computer rather than just a single piece of software. The kernel of the operating system was written by Linus Torvalds as a college student doing a project which interested him. The basic idea came from the UNIX operating system which was developed at Bell Laboratories about 40 years ago. It is worth mentioning that UNIX itself started its life as a hobby project rather than a Bell Laboratories product. It received company support when it was seen as a solution to an internal problem, typesetting documentation.

The other pieces of what makes up The Linux System come from an assortment of sources. Two big contributors are The Free Software Foundation and BSD UNIX, a free re-implementation of parts of the Bell Laboratories project. The remainder of The Linux System comes from a combination of personal contributions and company-supported free contributions from around the world.

Let me make it clear that some of these contributions were made with the intent of helping the contributing company. For example, IBM contributed resources to get the Linux operating system running on IBM mainframe computers. Their interest was clearly to sell more computers.

The OpenOffice suite evolved from StarOffice which, apparently, was initially funded at least in part by IBM. Since then, Sun Microsystems funded further development and OpenOffice is now a free product of Oracle who has bought Sun Microsystems. OpenOffice, for those who are not aware, is a complete office suite similar to Microsoft Office with the main differences being that it uses Open Standards, runs on many different systems and happens to be free.

MySQL started as a commercial product but evolved into free software. Like OpenOffice, it became a project of Sun Microsystems and is now a product of Oracle. While some will find it strange that a company whose primary product is a proprietary database is supporting a free alternative, that is what is happening.

The Apache web server is the most popular web server in the world. It freely evolved because of its superiority over alternatives. In fact, IBM joined the team and abandoned its own web server efforts.

As most people will be familiar with Microsoft software, it is worth mentioning their path to the market. First, Microsoft bought an existing operating system from Seattle Computer to get started in the market. Microsoft Office, to the best of my knowledge, really was developed within Microsoft. It is interesting, however, to mention that the first computer geek to leave Microsoft was Bob Wallace, famous for developing a free word processor called PCWrite.

For a database, Microsoft bought the rights to Sybase. Microsoft's web server was apparently developed internally.

As this software does exist and is not scarce—that is, it is available to anyone who wants it at no cost—we should be able to see changes in other parts of the economy related to this difference. In fact, we can. When I was living in Costa Rica in 2002 Microsoft had decided there was a serious software piracy issue in that country. They addressed this by Microsoft employees (I was told they were lawyers) teaming up with the OIJ, Costa Rica's equivalent of the FBI, to help stamp out this software piracy.

If we look at this in traditional accounting terms, Microsoft saw a good return on investment (ROI) by spending resources to force people to pay Microsoft money to use their software. (Based on what I am privy to, there appears to have been a quid pro quo that allowed the Costa Rican government to benefit from their OIJ-related costs.)

In traditional economic terms, this effort was worthwhile but, in terms of resources, it was a net loss. There was no cost in terms of resources to Microsoft for pirated copies of their software to be in common use in Costa Rica. What they did was expend resources in order to create a shortage which ultimately would increase their income.

The argument in economic terms is that Microsoft needed to expend more resources in order to have the necessary revenue to continue to improve their product. But, again, that only makes sense in a money-based economy. In a resource-based economy, all such efforts are no more than a waste of resources.

Now, some will say "but software is just bits—it is not something physical. Clearly, that needs to be explored if we are going to see if a resource-based economy works for something other than what is now considered only intellectual property. I will pick personal transport as my non-bits test. Note that while I considered personal computers, I decided something more universal would make the most sense.

First, note that I said personal transport rather than cars. While I don't know where this will lead, it seems that a personal car is not necessarily the right answer to personal transport needs. Dictating that we all need personal cars is a perfect example of what is seen as inefficient use of resources.

This quickly starts to get complicated because many uses of personal transport that we have today (going to the store to buy groceries, for example) is but another example of inefficient resource use. I am not suggesting that you should not be allowed to do this because of inefficiencies involved but that a system which distributes what is needed directly to your house would generally make more sense.

As you have no job you don't need a vehicle to get to work. And with no money, you don't need to go to the bank. And so forth. Now, let's look at how much time you really use your car today even if you drive to your work five days a week, buy groceries and so forth.

If your drive to work takes 30 minutes each way, that adds up to 10 hours per week. Let's toss in another 10 hours per week for buying groceries and such. That is a total of 20 hours. That adds up to less than 12% of the time. While you may make the argument that your vehicle is not available an additional almost 50 hours a week because it is parked at work, that is hardly equivalent to in use. And, of course, if you don't have to go to work, this issue goes away.

Without a lot of other arguments, it seems pretty reasonable to assume that you really don't want a car but really a personal transport option at your disposal. Sometimes that might mean the equivalent of a bicycle, other times the equivalent of a small car, other times a large car. In our current system, this flexibility means the purchase of multiple vehicles along with the need to store them and, of course, responsibility for their maintenance.

With no imagination at all, bicycle pools and an assortment of sizes of taxis, free to use and dispatched quickly, would satisfy your needs. With virtually no jobs, rush hour would no longer exist so there would no be a specific time of peak demand. Thus, the size of the pool needed is reduced.

Unfortunately, this idea created a job—that of a taxi driver. The solution should be obvious—vehicles that don't need drivers. Can this be done? Of course. It is just that this technology only seems to appear in space vehicles (e.g., lunar landers) and weapons systems (e.g., cruise missiles). While these systems are expensive in terms of money, they are not expensive in terms of resources. The economy of scale along with automated construction makes this relatively easy to realize.

Additionally, if there is no advantage in getting to sell another vehicle in a few years to replace a worn out one, vehicles can be designed to have longer lives. Clearly if we can send a complicated combination of electronics and propulsion systems into the unknowns of space with no one around to repair it during its lifetime, we should be able to make a terrestrial vehicle that lasts at least as long.

Traditional Political Views

The assertion is that the idea of a resource-based economy is not political. I tend to agree but looking at the concept in terms of known political positions is interesting. I will pick three political positions which I feel roughly correspond to what a Communist, a US Democrat and a US Republican would suggest is the right political way to solve, well, everything.

I selected these three positions because they are likely to be fairly well understood by a majority of the readers or, if not understood, at least things the readers are well aware of. For those who want to be a bit technical, Communism is an economic system as is Capitalism and the choice of two US political positions is simply two different data points in a current implementation of Capitalism. I feel, however, this practical look is a lot more useful than an argument involving the economic theory behind these positions.

The Communist position can be defined by looking at the statement "From each according to his ability, to each according to his needs." It says we all need to work as hard as we can and we will get back what we need. Thus, work becomes a requirement. On the need end, it is clear that there must be something which decides what one's needs are and it probably isn't the recipient. The only compatible item here is that there is really no reference to money—everything seems to be about resources.

A US Democratic position is pretty much based on re-distribution of money. In general, some sort of plan that takes from those who have too much to help out those that have too little. This suggests a re-distribution plan with a lot of administrative overhead and where really none of the people who give to or receive re-distribution have any input. And, of course, the end result still creates haves and have-nots and few if any satisfied with the end result.

A US Republican position is pretty much one of saying that those who have, have and those that don't, don't. Attempts to equalize resources generally do just the opposite. For example, using pooled funds to make more and better roads tends to benefit those with money to spend on and use better vehicles.

Clearly, each one of these positions never looks at elimination of shortages as the necessary step to address problems. While some will feel that is the case because there will always be shortages, it really does make a lot more sense to ask the scientists rather than politicians if this must be the case.

Human Nature?

One attempt to discard the idea says that it goes against human nature. But, what exactly is this thing they are attempting to label as human nature? It seems that, in most cases, they are trying to assign this label to learned behavior.

Starting off with a big one, let's take the idea that it is human nature for humans to form one man-one woman groups and produce children. First, that is certainly not universal. There are groups that feel each man should be allowed to have more than one wife. There are others that feel men and women should not couple at all. We also have groups who feel that man-man and woman-woman relationships are completely natural.

No matter where you stand here, if your try to apply your preference, social norms or religion on others in order to say that their choice is invalid we are not talking human nature. We are talking learned behavior.

Where we should be able to see human nature in its purest form is with young children. Of course, we as parents quickly start applying our learned behavior to these children quickly corrupting anything that might have been human nature. For example, when one child takes the toy of another, one gets a lessen in how they need to share and the other in property ownership. That is not human nature, it is our learned response of dealing with a resource shortage.

In Looking Forward the one thing that is restricted is children. Population is fixed and a new child is created when someone dies. Note that I said created—people don't have children. For sake of this discussion let's just think of them as what we today call a test tube baby. What is important is the process of introducing this young person into society.

They are not brought up by a family unit but, rather, in a facility for preparing them to live in the resource-based economy. The idea is clearly designed to let human nature, if there is such a thing, develop without social conditioning. In the book, it somewhat casually mentions that at age five the new person is now eligible to have their own apartment. This whole test tube to controlled, parent-free environment to live on your own at age five is certainly something that tests us. That is, it is a big stretch of our social conditioning.

The first question we need to ask is whether the technology exists to do this. The answer is yes. The second question is whether a five year old can live on their own. This is harder to answer because it requires a lot of separation of our social conditioning from the abilities of a five year old. The best way for me to evaluate this is think about when I actually did live with a five year old.

What we, the adults, did for her was what I will call service. That is, cook for her, do the laundry, drive her to school, to the park, buy supplies and generally be her servant. I am not saying there was not love here but those things that made it possible for her to live in the environment offered in 1990 Seattle was service work.

In the envisioned home of the future, all these things can be managed by a five year old. For example, the house prepares and serves your meals and cleans up afterwards. A five year old is completely capable of deciding they are hungry and selecting (in the book, asking for by voice command) their meal. In fact, even in a non-automated environment, what is really needed is just something (human or otherwise) who can cook, get more crayons, ...

What about love/emotional support? Below the age of five, there will be adults around to take care of the children. Much of what is to be done will be automated eliminating repetitive menial work. As people no longer have jobs, where do these adults come from? Volunteers. Thus, you end up with a work force who is there because they want to be rather than those that need a paycheck. The other piece here is that you have parenting being done by people who actually want to do it, time limited by how much time they want to put into it. I assert this is a better environment than many current home situations.

One other important piece of the picture is that we are only saying the five year old is entitled to their own apartment. They are not required to move out of the nursery environment. Further, they are free to associate with others so, for example, two or five young adults can elect to live together. They might also opt to live with one or more adults. Some children just won't be ready to live on their own at five and that's just fine. They just have a lot more choices than they have with the current systems.

Is This Possible?

That's the bottom line. In my suggested reading/watching there is a lot more information which addresses concerns. The more I read (and write) the more I see the issue as getting over our pre-programmed ideas that this cannot work. The biggest doubts seem to be a function of our established social and political norms.

As Fresco points out, the type of government makes no difference. All governments tend to support the status quo. As an extension of the political system, those who have more than most tend do what they can to maintain their superior position. It is a lot more appealing to those who have little to hear of a system that will give them what they need than to say this to someone who already has in excess of what they need and close to everything they want.

The way the current money-based economy works, the fears of those on top are easy to understand. We continually come up with plans to re-allocate the money of those that have it to satisfy the needs of those that don't. Each such plan also has all the administrative overhead to implement it. To have enough resources for all, overhead needs to be addressed.

While automation is seen as the way to get everyone what they need, there is a lot more to overhead in the current system than you might first think. Here is a short list of jobs that can just be eliminated—not just automated— in a resource-based economy-

  • Any job related to money. That includes, stock brokers, bankers, accountants, financial advisors, insurance salesmen, credit card services.
  • Lawyers. While this will not be obvious until you do your homework, the entire legal system and, in fact, all laws can be eliminated.
  • Sales jobs. Things aren't sold. In a resource-based economy, a typical purchase would be done electronically. In many if not most cases, work from fabrication to delivery can be automated.
  • Marketing jobs. Unlike sales which have to do with a transaction between a buyer and a seller, marketing is only about increasing profits of business entities. With no money, there is no profit. People can decide to buy what they want without external marketing influence. There is no advantage to anyone/an business to promote your product over another one.
  • Politicians. As Fresco points out, the technicians and engineers solve problems, not politicians. Decisions on which technical approach should be taken should be based on the merits (in terms of what is best for all people) of the options rather than a temporary political wind. I offer the Hurricane Katrina disaster in New Orleans as but one example. The technicians were aware of the potential dangers—it was politics that prevented the solutions from being implemented before it was too late. Suggesting that we didn't have the money to prevent the disaster is absurd in light of the costs associated with not taking the preventative action.
  • Police, National Guard, and Military. When everyone has equal access to resources without shortages, we no longer have to protest the haves from the have nots. Clearly, the elimination of such things as domestic violence will not happen immediately but elimination of shortages and elimination of victim-less crimes moves this idea forward very rapidly.

In many of the remaining job areas, certain measures can be taken to decrease demand. Two things mentioned in Looking Forward are good examples. Both deal with decreasing the demand for medical care.

  1. Accident-proofing transportation systems. Current transport systems, particularly roads, depend all to much on drivers following the rules. There is no reason collision-avoidance systems could not be an integral part of every vehicle.
  2. Automatic health checks. The specific idea presented was a daily automated check which would only take a few seconds. It would record your current weight and other characteristics and compare it to previously recorded data. An ongoing deviation would offer early detection of possible health problems.
For me, working on the design of systems such as these has a lot more appeal than working on something to repair a broken body.

I see the bottom line as what is being suggested is possible if we the people decide to make it happen. That means all people—all people on an equal footing. The only real sacrifice required of anyone is in terms of their ego. And even that is questionable. There is nothing built into a resource-based economy that says you can't get ego-stroking from coming up with a great idea. Beyond that, if you can already have anything you want (except control over others), having more money than the other guy becomes meaningless. That, of course, is exactly the point the resource-based economy is trying to address.

If we go back to Linus Torvalds and Bill Gates, I feel I can make my point. They both created some very popular computer software. Linux Torvalds gets the satisfaction of knowing that anyone who wants what he created can have it. Bill Gates, on the other hand, gets to sit on his pile of money that he got by creating a shortage where Torvalds created an abundance. Gates then gets to donate a part of his money to those he feels should get it. I am clearly on Linus' team.

I have never talked to Bill Gates so I suppose what I am saying here is rather one-sided. I don't feel it is inaccurate but it does include some input on one side that isn't available to me from the other side. In any case, I talked to Linus when he was still living in Finland but was considering accepting a job in the U.S. He had multiple job offers. Maximizing his income was not an issue. He wanted to continue to work on Linux development and he wanted to feel confident his selection of an employer did not offer what appeared as favoritism to any one computer manufacturer who offered systems that could run Linux.

If we continue with the Torvalds vs. Gates model we can see how this difference extends to others. Thousands of people have worked at Microsoft on the efforts started by Bill Gates. Thousands of people have contributed to the further development of Linux. I interviewed Orest Zabrowski, an early contributor to Linux (he was responsible for getting the X Window System working on Linux) who happened to work at Microsoft when I met with him. His work at Microsoft seemed pretty insignificant compared to his Linux contribution. I asked him why he worked there. His response was "They pay well."

Clearly this transition can't happen overnight. Looking Forward even describes some of the pieces of the gradual transition. Zeitgeist Addendum offers some relatively painless first steps you can take to help make these changes possible.

Comments

Re: Thinking About a Resource-Based Economy

Thanks.

I skimmed this and will have to get back to it when I have time to read it all and think it through. It seems to be in line with what I've heard from Manfred Max-Neef. I'd like to read his book ("Outside Looking In: Experiences in Barefoot Economics"), but even Amazon.com can't help with this one.

I did recently finish "Es Cuba", which is mostly a love story, sort of a diary, but insightful. Cuba has done a lot with little, and at the same time has walked itself into a corner and can't understand the concept of turning around.

Nevertheless we can learn from them.

The longer I live the more I agree with Marx that it's all economics (haven't read Marx either but I think I get the basic ideas - heh). I'm thinking lately that the next revolutions in thought and economics will be Latin American, followed closely by Africa. I expect few will see this coming, but there is huge potential in both places, both in economics and in thinking about life, the universe, and everything.

From "Democracy Now": Chilean Economist Manfred Max-Neef on Barefoot Economics, Poverty and Why The U.S. is Becoming an "Underdeveloping Nation". November 26, 2010: We speak with the acclaimed Chilean economist, Manfred Max-Neef. He won the Right Livelihood Award in 1983, two years after the publication of his book Outside Looking In: Experiences in Barefoot Economics... http://www.democracynow.org/2010/11/26/chilean_economist_manfred_max_nee...

Chilean Economist Manfred Max-Neef: US Is Becoming an "Underdeveloping Nation". September 22, 2010: While President Obama is reporting looking into tapping a former corporate executive to become his next top economic adviser, many economists question the path the United States is on... http://www.democracynow.org/2010/9/22/chilean_economist_manfred_max_neef_us

And also: nice to see you've returned from the void. I'm still tentatively planning to make the move in June. We'll see.

-- Dave (NL Username: davesailer)