Our concept of the social responsibility for the economic well-being of individuals in our political economy is being disrupted. With the advent of globalism the very idea of separate political economies is under pressure. It is becoming clear that we must be both more generous in our societal amendments to income and education and more strict in our fiscal accountability, a neat trick I must admit.
The health of a political economy, production, distribution, and administration, is now and will be forever measured by the comparative value of its currency in relation to world currencies in a free market. There is no absolute measure of a healthy econom, only relative health. Basically, it works or it doesn't. This series of blogs is an attempt to systematically address the black box of the allocation of wealth for socioeconomic good in the hope of rationalizing that process to achieve economic and social accountability in the political economy.
By creating an equation that measures the effect of social spending on the 'goodness' of its currency, I have created a theoretical metric measuring the abstract health of a political economy in terms of its currency without comparative valuation. It is an index useful in judging the wisdom of expenditures beyond current economics so that the politically possible will be realized efficiently and responsibly.
What of the politically possible? It is becoming conventional wisdom that our consumerist capitalist political economy cannot maintain both growth and capital concentration without priming the pump of consumer spending. The idea of a basic income is not just to replace social welfare programs but to cut to the chase of putting more money in the hands of consumers to maintain growth and the concentration of capital. As I argued earlier, a licensing fee for automation would accomplish that in a fair bargain.
While the bar to education is coming down, online schools and access to texts and explanatory materials for the autodidact, the bar in the workplace for necessary paradigms and skill sets is going up. This happy coincidence also requires monetary support in order to work. We must provide it. There has never been a period of creative destruction quite like the one we face.
And that brings me to the subject of venture capital. It is not in the nature of venture capital, a mass industrial institution, to provide funds on a substantial risk/ moderate reward basis and the only mechanism we have in place to manage this intense creative destruction is venture capital. We need to create a public venture capital corporation to fund the small bespoke factories of the future and their economic infrastructure on a breakeven basis. Faced with the social default of meaningless existence, we must assert our better nature, our life force, and move ahead into a world of possibility and meaning.
Thank You Kind Readers,
Do Well and Be Well
Sunday, May 20, 2018
Saturday, May 19, 2018
Bespoke Production: The Humane Resolution of Mass Industrialism
Blog 3
What I am calling Value Dilution Economics is based upon the observation that when one leverages their economy, whether with Keynesian mechanics or supply side mechanics, one either overcooks their economy or overcooks their society and dilutes either the value of money or the quality of their social existence. It is a very reliable and historically evident relationship. We are now moving into the Age of Productivity, a smart-machine enhanced manufacturing process and a smart-machine enhanced distribution system. What will that entail? First, some attempt must be made to envision what this economy will look like and, second, how can it be managed to a humane end? Certainly, unless one defines civilization as a death cult where machines do all the work and we lay around taking drugs and watching bad television, it must be managed. We must direct the machine and not the other way around. Certainly, it must be to a humane end. We must enhance social existence, nothing less makes any sense whatsoever.
While there are a number of areas of intense research and development, three stand out as pointing the way to a humane society.
Artificial intelligence has the capacity to enhance human existence, both economic and social, by handling the mundane, tedious, details and protocols that harass us and devour our time.
Derivative of artificial intelligence are robots, even autonomous, thinking robots, those fearsome, delightful inventions.
Third, there are 3D printers, now even capable of placing metal in computer defined patterns, that can build intricate objects. Using these three elements I envision a humane factory as follows:
The human factor- a clever resourceful person of some mechanical insight.
The AI factor- a production manager, a business manager, a marketing manager, all under the direction of the human factor.
The robot factor- assembly robots, AI driven, able to learn new tasks reasonably quickly, capable and flexible.
The 3D printer- industrial 3D machines that can make intricate parts to exacting specifications for robot assembly.
The criteria for a Bespoke factory is- can it make an assembly robot with minimal outside components? Can it make a 3D printer with minimal outside components? That autonomous capability is beyond mass industrialism. It is the mark of the Age of Productivity.
The scheme for the Age of Productivity is simple:
There are factories. There are virtual markets matching production and sales. There are brokers directing AI assistants staffing those markets. There are AI enhanced points of sale. There are human consumers whose income is enhanced by a basic income, whose free education is AI enhanced.
If POM + POS generate z amount of dollars minus reasonable net profit then expenditures on education, basic income, and government equal z amount of dollars minus net profit. Of course, that's theoretical. Deviations would be normal.
This gives an x=5 equation for Value Dilution Economics. That is:
(POM+POS)/(education+basic income+ government+2)= .4 as value dilution factor
The value dilution is high because the Age of Productivity reduces human access to value addition, to the simple creation of wealth, in POM and POS. It necessarily is weighted to social utility as:
(money in circulation)(.4)= 'goodness` of currency
Do Well and Be Well
Next Blog:
The Necessity of Basic Income and Free Education in the Age of Productivity
What I am calling Value Dilution Economics is based upon the observation that when one leverages their economy, whether with Keynesian mechanics or supply side mechanics, one either overcooks their economy or overcooks their society and dilutes either the value of money or the quality of their social existence. It is a very reliable and historically evident relationship. We are now moving into the Age of Productivity, a smart-machine enhanced manufacturing process and a smart-machine enhanced distribution system. What will that entail? First, some attempt must be made to envision what this economy will look like and, second, how can it be managed to a humane end? Certainly, unless one defines civilization as a death cult where machines do all the work and we lay around taking drugs and watching bad television, it must be managed. We must direct the machine and not the other way around. Certainly, it must be to a humane end. We must enhance social existence, nothing less makes any sense whatsoever.
While there are a number of areas of intense research and development, three stand out as pointing the way to a humane society.
Artificial intelligence has the capacity to enhance human existence, both economic and social, by handling the mundane, tedious, details and protocols that harass us and devour our time.
Derivative of artificial intelligence are robots, even autonomous, thinking robots, those fearsome, delightful inventions.
Third, there are 3D printers, now even capable of placing metal in computer defined patterns, that can build intricate objects. Using these three elements I envision a humane factory as follows:
The human factor- a clever resourceful person of some mechanical insight.
The AI factor- a production manager, a business manager, a marketing manager, all under the direction of the human factor.
The robot factor- assembly robots, AI driven, able to learn new tasks reasonably quickly, capable and flexible.
The 3D printer- industrial 3D machines that can make intricate parts to exacting specifications for robot assembly.
The criteria for a Bespoke factory is- can it make an assembly robot with minimal outside components? Can it make a 3D printer with minimal outside components? That autonomous capability is beyond mass industrialism. It is the mark of the Age of Productivity.
The scheme for the Age of Productivity is simple:
There are factories. There are virtual markets matching production and sales. There are brokers directing AI assistants staffing those markets. There are AI enhanced points of sale. There are human consumers whose income is enhanced by a basic income, whose free education is AI enhanced.
If POM + POS generate z amount of dollars minus reasonable net profit then expenditures on education, basic income, and government equal z amount of dollars minus net profit. Of course, that's theoretical. Deviations would be normal.
This gives an x=5 equation for Value Dilution Economics. That is:
(POM+POS)/(education+basic income+ government+2)= .4 as value dilution factor
The value dilution is high because the Age of Productivity reduces human access to value addition, to the simple creation of wealth, in POM and POS. It necessarily is weighted to social utility as:
(money in circulation)(.4)= 'goodness` of currency
Do Well and Be Well
Next Blog:
The Necessity of Basic Income and Free Education in the Age of Productivity
Sunday, May 13, 2018
The Analytical Basis of a Humane Economy: A Speculation
Blog 2
It is necessary in proposing a new analytical model to show critical failure in the old model [Kuhn, 1967]. How hard is that with classic economics? 1872,1929, 2008. It's a piece of cake. It is not that those catastrophes occurred. It is that they were unexpected and in each case complex market interventions were required to keep the factories running,
The problem is not capitalism. If markets did not exist, we would invent them. Talent is a naive concept. It exists in the mind long before it is recognized in the person. That economic talent would be graced with unequal reward is intuitive. Likewise the essential arbitrage relationship, that greater risk requires greater reward, is very real and very human. Capitalism, in itself, is humane in the sense that it is all too human. We are too clever by half for our own good and we have win/lose outcomes wired into our cells. Capitalism is not the problem. It is the myopia of the economic analysis.
That analysis, in the process of utilizing available technology, has created our productivity driven mass industrialism with its aggregate demand and GDP. It is by these metrics definitely not human scale. It is by definition, in terms of any specific individual, not humane. Throw in the machines that make it go and the fact that its mechanisms manage to reduce humans to minions of the automated machine process and it is not incidentally inhumane. It is actually hostile. So, how do we characterize and analyze economic behavior so as to create a humane economy? Here is my speculative, somewhat naive, try:
Value Dilution Economics
There are two major aspects to economic behavior and, while each is perfectly comfortable with classic economics and accounting, the relationship of the two, production and distribution, is imperfectly expressed in the current model. To correct this, I propose two theoretical units, Point of Manufacture, POM, the point that the product leaves the factory, and Point of Sale, POS, the point that the product is in the possession of the end consumer. The number of socioeconomic sectors, education, basic income etc, between POM and POS I label x.
Arbitrarily I give each POM and POS a numeric value of 1. I then write the equation:
(POM + POS) / x = y
y is the dilution factor of the 'goodness' of the money used in all the transactions. Obviously, the value of y will fall between 1 and 0. Why do this? Because money, a value calculus allowing the comparative valuation of disparate products and services in a market, has only economic value. The social utility of economic activity varies inversely with its economic utility. Using money for its social utility dilutes its value much as putting too much in circulation does.
A humane economy has a target value of .5 because any greater number will be excessive economic utility and any lesser number will be excessive social utility. It is a matter of plugging this equation in across all transactions to calculate the goodness of a currency.
Material existence, the stuff of economics, lasts around 75 years at best. Social existence is the stuff of eternity. It only makes sense to balance social utility and economic utility and it makes absolutely no sense to do otherwise.
Do Well and Be Well.
Nest Blog:
Bespoke Production and the Humane Economy
It is necessary in proposing a new analytical model to show critical failure in the old model [Kuhn, 1967]. How hard is that with classic economics? 1872,1929, 2008. It's a piece of cake. It is not that those catastrophes occurred. It is that they were unexpected and in each case complex market interventions were required to keep the factories running,
The problem is not capitalism. If markets did not exist, we would invent them. Talent is a naive concept. It exists in the mind long before it is recognized in the person. That economic talent would be graced with unequal reward is intuitive. Likewise the essential arbitrage relationship, that greater risk requires greater reward, is very real and very human. Capitalism, in itself, is humane in the sense that it is all too human. We are too clever by half for our own good and we have win/lose outcomes wired into our cells. Capitalism is not the problem. It is the myopia of the economic analysis.
That analysis, in the process of utilizing available technology, has created our productivity driven mass industrialism with its aggregate demand and GDP. It is by these metrics definitely not human scale. It is by definition, in terms of any specific individual, not humane. Throw in the machines that make it go and the fact that its mechanisms manage to reduce humans to minions of the automated machine process and it is not incidentally inhumane. It is actually hostile. So, how do we characterize and analyze economic behavior so as to create a humane economy? Here is my speculative, somewhat naive, try:
Value Dilution Economics
There are two major aspects to economic behavior and, while each is perfectly comfortable with classic economics and accounting, the relationship of the two, production and distribution, is imperfectly expressed in the current model. To correct this, I propose two theoretical units, Point of Manufacture, POM, the point that the product leaves the factory, and Point of Sale, POS, the point that the product is in the possession of the end consumer. The number of socioeconomic sectors, education, basic income etc, between POM and POS I label x.
Arbitrarily I give each POM and POS a numeric value of 1. I then write the equation:
(POM + POS) / x = y
y is the dilution factor of the 'goodness' of the money used in all the transactions. Obviously, the value of y will fall between 1 and 0. Why do this? Because money, a value calculus allowing the comparative valuation of disparate products and services in a market, has only economic value. The social utility of economic activity varies inversely with its economic utility. Using money for its social utility dilutes its value much as putting too much in circulation does.
A humane economy has a target value of .5 because any greater number will be excessive economic utility and any lesser number will be excessive social utility. It is a matter of plugging this equation in across all transactions to calculate the goodness of a currency.
Material existence, the stuff of economics, lasts around 75 years at best. Social existence is the stuff of eternity. It only makes sense to balance social utility and economic utility and it makes absolutely no sense to do otherwise.
Do Well and Be Well.
Nest Blog:
Bespoke Production and the Humane Economy
Saturday, May 12, 2018
Technology and Venture Capital in a Humane Economy
Blog 1
Introduction
We live in an age of humanist defeatism. We are surrendering the human joy of making to the machine and have been for centuries. Consistently the only objection is the lack of a safety net to dislocation. The only justification is productivity increase and the context is always mass industrialism. We need to sequence from mass industrialism to bespoke production and this needs to be done in a humane manner to a humane end. It is the object of this blog to argue that human exceptionalism is expressed in the concept of talent; that markets reward talent; that no autonomous machine economy, and that becomes ever more possible with AI, could be legitimate in the sense that human economies, serving human material existence and by doing that, serving the totality of human existence, social, spiritual, and intellectual in a sustainable harmony with all that exists, can be legitimate.
It is necessary and becoming increasingly urgent that we rationalize the process of innovation, that we manage change, in order to remain valuable, meaningful beings. Capitalism is a system in which, incidental to 'moving' plenty to scarcity by the mechanisms of market and price, rewards vision and talent by the allocation of resources, land and capital in classic taxonomy, to them. Consumerism, which is Keynesian in its emphasis on increasing aggregate demand, is a variation of pure capitalism. The legalization of the printed form installment loan contract is a market intervention, not an evolution of markets. It is also a condition of existence here in the United States, institutionalized and legitimized by usage. It is not subject to repeal. It is the mainspring that drives the mechanism of our disneyland economy created by the exigencies of mass industrialism and, in order to maintain the integrity of that economy, must be honored in terms of value and consideration by income earned in the addition of value in the production and distribution market system.
I am not arguing for economic determinism in the nature of the human soul. I am simply saying that economic prestige figures in both self-esteem and healthy cognition. I am saying that the pursuit of the next logical step in technology is opening the deep chasm of meaningless existence that stands between us and the proper employment of technology. We must direct the machine with wisdom and not let it direct us in order to cross that chasm. In short, I am arguing that reclassifying robots as a hybrid Capital Good/Labor, a labor good, and licensing their deployment but not their development would pay the social cost of their use in an honest bargain and rationalize both economics and innovation.
Do Well and Be Well
Next Blog: A Speculation on a Humane Technological Economy
Introduction
We live in an age of humanist defeatism. We are surrendering the human joy of making to the machine and have been for centuries. Consistently the only objection is the lack of a safety net to dislocation. The only justification is productivity increase and the context is always mass industrialism. We need to sequence from mass industrialism to bespoke production and this needs to be done in a humane manner to a humane end. It is the object of this blog to argue that human exceptionalism is expressed in the concept of talent; that markets reward talent; that no autonomous machine economy, and that becomes ever more possible with AI, could be legitimate in the sense that human economies, serving human material existence and by doing that, serving the totality of human existence, social, spiritual, and intellectual in a sustainable harmony with all that exists, can be legitimate.
It is necessary and becoming increasingly urgent that we rationalize the process of innovation, that we manage change, in order to remain valuable, meaningful beings. Capitalism is a system in which, incidental to 'moving' plenty to scarcity by the mechanisms of market and price, rewards vision and talent by the allocation of resources, land and capital in classic taxonomy, to them. Consumerism, which is Keynesian in its emphasis on increasing aggregate demand, is a variation of pure capitalism. The legalization of the printed form installment loan contract is a market intervention, not an evolution of markets. It is also a condition of existence here in the United States, institutionalized and legitimized by usage. It is not subject to repeal. It is the mainspring that drives the mechanism of our disneyland economy created by the exigencies of mass industrialism and, in order to maintain the integrity of that economy, must be honored in terms of value and consideration by income earned in the addition of value in the production and distribution market system.
I am not arguing for economic determinism in the nature of the human soul. I am simply saying that economic prestige figures in both self-esteem and healthy cognition. I am saying that the pursuit of the next logical step in technology is opening the deep chasm of meaningless existence that stands between us and the proper employment of technology. We must direct the machine with wisdom and not let it direct us in order to cross that chasm. In short, I am arguing that reclassifying robots as a hybrid Capital Good/Labor, a labor good, and licensing their deployment but not their development would pay the social cost of their use in an honest bargain and rationalize both economics and innovation.
Do Well and Be Well
Next Blog: A Speculation on a Humane Technological Economy
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