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A Short History of Economics: From Game A to Creditism

Mahinism: Making Money Real


p 19, 20
Money is a commodity that a society agrees to use to trade for every other commodity or service in that society. Money ultimately represents the work of the holder of the money, and, as with all forms of work, it is subject to the laws of thermodynamics. While that work has been represented by a bushel of wheat or an ounce of gold, the representation can be anything the society agrees to use as a counter of the work being exchanged.
Money represents work properly when the society uses it as though it is work. If the society uses it in another way, it represents something else.
There is no “more” to money being a representation of work than making the laws that affect money conform with the laws of physics that affect work.
Our society uses money that represents debt with interest: this is how we create and use it. Our lenders let us use their “work”, but when debt plus interest is repaid they have obtained more “work” without adding any of their own. Conservation of energy forbids this. For a society using money as debt, interest demands growth or becomes theft.
p24
Money is a commodity that a society agrees to exchange as payment for every other commodity or service in the society. It can be a real or an imagined thing, as long as it is something the society deems to be a universally acceptable form of payment.
p37
Our banks are creating money on demand, so the money we use in our daily lives represents debt with interest. The only real limits on this process are the bankers’ belief that they will ultimately be repaid, and if applicable, the Central Bankers’ estimate of what amount might result in unacceptable levels of inflation.
Our societal money is thus an abstraction of promises to pay without effective limitations. All the dollars in all the wallets in all the pockets of all the people in all the cities of all the countries on this planet are backed by the unlimited debt that created them.
p40,41
If growth is built into our definition of money, there can be no long-term stability. Such a system is not sustainable. Our definitions must at least permit us to keep our civilization and our economic system healthy without growth1.
We use an erroneous definition of money as “debt with interest,” thus violating the law of conservation of energy to “make money work for us.”
We use our erroneous definition of ownership as having “self-propagating benefits” to allow ownership to make money.
These violations represent additional work accruing to the lender or owner, i.e., work that appears as money in their economy without work being done. It is impossible to do this sustainably, and it is always theft in some sense. The additional work demanded in such cases can only be supplied from work belonging to someone else, somewhere else. It does not matter if the other person agrees to the transaction or if they exist in the present or the future. The owner/lender is being paid for a legal condition that has no limits, in a transaction that makes no sense in the real world.
This is described as “rent-seeking.” Rent-seeking2 occurs when someone tries to increase their share of existing wealth without creating new wealth; it is a form of theft, whether it is legal or not. It is one of the perks of being in the owning class (referred to as the rentier class by some) and it is a basic tenet of “capitalism,” despite the observation that something owned must rot, rust or return to dust unless work is added to it. The father of capitalism, Adam Smith1, asserts that rent to the landlord is a valid component of the price of corn. ​“In the price of corn, for example, one part pays the rent of the landlord, another pays the wages or maintenance of the labourers and labouring cattle employed in producing it, and the third pays the profit of the farmer.”
Adam Smith, explained rent as follows: “As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce. The wood of the forest, the grass of the field, and all the natural fruits of the earth, which, when land was in common, cost the labourer only the trouble of gathering them, come, even to him, to have an additional price fixed upon them. He must then pay for the licence to gather them, and must give up to the landlord a portion of what his labour either collects or produces.” In my opinion, Smith never questions whether rent or rent-seeking should be a fundamental part of his economics. Both of them had always been a constant in his world, so the question never arose. Nonetheless, it is impossible to read the above passage today without recognizing that rent is not payment for work: it is payment for fences that prevent work.
It is a form of legalized extortion that benefits the owning class.
p50,51
An attempt to break the first and second laws
To break the first law, the boat owner also charges the fisherman for the right to use the boat. Effectively, this constitutes a charge for the ownership of that boat. Call it one fish—so the owner gets 2 rather than 1, or call it theft because this fish is not exchanged for any work by the owner. Either way, the fisherman must catch extra fish, so his work increases for no actual benefit on his part. The “owner-maintainer” charges the baker 3 extra loaves “profit” as well. There is no limit to ownership: it is a legal condition, but there are hard physical limits to the work that can be done. This is the way that “money from ownership” breaks a society. Profit is a similar concept, as it is additional payment to a worker as a premium for the product of work rather than payment for the work itself. The owner now has an extra fish and 3 extra loaves every week as profit, and they are magically able to be stored indefinitely without becoming garbage, which breaks the second law. We are all aware that it only takes about three days for fish to stink and bread to go stale. If only our existing money did the same. As the owner now gets fish and bread without working, he accumulates many fish and a lot of bread: he becomes “wealthy.” He buys another boat and hires other people to do maintenance on it. He brings in more fishermen and bakers. The economy is thriving? Not really. Now there are 10 boats, 10 fishermen, 10 bakers, and 10 sets of ovens. The owner gets 10 fish and 30 loaves for nothing and has hired 5 people at 1 fish and 3 loaves each to do the extra maintenance. The catch has gone from 3 fish to 40 fish. Instead of 3 people taking 3 fish, there are 26 people taking 401—but there is more to this than just the wealth of the owner increasing by 5 fish and 15 loaves per week now. The growth of this economy is now unlimited. The owner sits on the veranda, sips his drink and contemplates his “well-deserved” success. Others in the society look on in envy and aspire to that sort of wealth as well, driving even more growth. The more the economy grows, the wealthier the owner becomes and the more unequal the society becomes as an ever-increasing number of fish have to be caught to support it. And we have not even touched on grain and ovens yet. The owner has become wealthy, the society has become unequal, and the fish stocks will quickly be depleted—all in the service of profit from ownership that breaks the laws. The owning class has been created and the fishing sector and the society are both doomed because this is a demand that can never be satisfied. ​No matter how many fishermen there are, more and more fish are required to pay the owners.

p54
Unreal money fuels real consumption. Promises of work flood the system with a false ability to consume, causing our economy to become both overheated and more unequal while it inflicts damage on our environment and incurs physical debts on which our children cannot default. When this environmental debt is added to the monetary debt, we create a total that would reduce an astrophysicist to tears.
p61
If all the existing money in the world represents debt with interest, the interest on that debt is money that does not yet exist. In terms of real money, new work done (growth) is required to create that new money. If that does not happen, something else has to break because the first law cannot be broken. So, whose “something else” gets broken, and how?
The money for the interest is stolen from future generations of workers (ownership produces no work, so the work has to be taken from others, and they are not consulted) and environmental destruction is also a form of theft from future generations. The money for the interest is either a wealth transfer from workers to the owning class, or growth that we can no longer afford.
p63
Consumption has to grow continuously in order to service the debt with interest. This explains why goods are designed to last long enough to get them home and to be unrepairable when they break.
The profit from the interest is, of course, the basic business model of the banker. It is a challenge for the banks when we try to fix the definition and remove the interest charges.
p65
The demand for continuous growth was not itself a bad thing until we exceeded the carrying capacity of our environment. It gave us very rapid development of technology and knowledge, along with the surpluses supporting artists and sportsmen and researchers everywhere.
p69
The supply of money is unlimited, whereas the natural world clearly is not. The destruction of the environment threatens human civilization1.
p76
Held in thrall by the owning class, we are bombarded by propaganda from the think tanks and media that they control and fund. We are told to view the owning class as “wealth creators” and our media assume they deserve to be admired and respected for their successful accumulation of money, instead of being regarded as the metastasizing cancer they have actually become.
p81
Are we able to govern ourselves or are we already enslaved, owned, and helpless to save ourselves?
p87
knowledge is the most important evolutionary advantage contributing to the survival of Homo sapiens,
p88
Accumulated knowledge is a vital part of what each generation of humans inherits from its ancestors. Many lives depend on our knowledge and it comprises the largest part of our real wealth—
p89
This does not prove we “have to” do something, but it does establish consequences for inaction. The Darwinian imperatives, “adapt or die” and “survival of the fittest,” apply to us both in terms of our individual survival and through the survival of the societies of which we are members. Size matters and growth has always been an advantage in the competition for survival. Growth was demanded by our societal competition and warfare. The measure of growth that our societies commonly use today, the “Gross Domestic Product” (GDP), was defined to measure wartime productivity. Until recently, that growth has provided a decisive advantage in the competition between societies, and the most rapid growth of all occurs when money is defined as debt with interest to demand it.
p94
BASICS FROM HISTORY (HUMAN REQUIREMENTS)
“Where does government derive its right to govern?” Democracy was inherent in the thinking of the authors of the Constitution and this first requirement is drawn from Thomas Jefferson: ​“I know no safe depository of the ultimate powers of the society but the people themselves; and if we think them not enlightened enough to exercise their control with a wholesome discretion, the remedy is not to take it from them, but to inform their discretion by education. This is the true corrective of abuses of constitutional power.”—Thomas Jefferson1
p95
Our survival as human beings depends on the survival of the society of which we are a part.
p96,97
BASICS FROM OTHER SOURCES (HUMAN REQUIREMENTS)
Those listed below are derived from the Charter of the Green Party of Aotearoa New Zealand3. Monbiot lists 16 principles in Out of the Wreckage, which is his discussion of a new form of society4.
Ecological wisdom The basis of ecological wisdom is that human beings are part of the natural world. This world is finite; therefore, unlimited material growth is impossible. Ecological sustainability is paramount. ​Social responsibility Unlimited material growth is impossible. Therefore, the key to social responsibility is the just distribution of social and natural resources, both at a local and global level. ​Appropriate decision-making Decisions will be made directly at the appropriate level by those affected when implementing ecological wisdom and social responsibility. ​Non-violence Non-violent conflict resolution is the process by which ecological wisdom, social responsibility, and appropriate decision-making will be implemented. This principle applies at all levels.
p98
You are only paid for what you do, never for what you own.
p99
Margrit Kennedy:
“A further reason why it is difficult for us to understand the full impact of the interest mechanism on our monetary system is that it works in a concealed way. Thus the second common misconception is that we pay interest only when we borrow money, and, if we want to avoid paying interest, all we need to do is avoid borrowing money.” ... “this is not true because interest is included in every price we pay. The exact amount varies according to the labour versus capital costs of the goods and services we buy.”
p100
LIST OF REQUIREMENTS For human society to thrive, we require the following (in order of necessity): 1. Survival 2. Money that respects entropy (second law) 3. Ownership that does not make money (first law) 4. Ecological wisdom 5. Democracy 6. Social responsibility 7. Appropriate decision-making 8. Non-violence 9. Growth

p131-135
The statement “benefits of ownership are self-propagating” seems to be universally accepted in economics and in our lives, without evidence or justification. The concept just appears, without any comment, in our definitions of ownership. Economics assumes that it is true, and the origins of this assumption are obscure and possibly as old as money itself. This principle is, by itself, a violation of the first law and nonsense in human evolutionary terms. It is trivially true in a society of one person, but the benefits then accrue to the owner as the society.
The assumption that we can profit from ownership by offering those benefits in trade is not justified. We can trade work that we have done for money, but the benefits of natural increase must not be sold for profit.
According to Locke’s formulation, people “own” the fruits of their labor—they still do: when we work, our labor enters into the object that we work on, and as a result it becomes our property. He extended this to land, and also offered some limitations (the Lockean proviso “at least where there is enough, and as good, left in common for others”) which were ignored in the frenzied capitalism that evolved from the initial error of self-propagating benefits.
The economic benefits of property are currently provided to the owner without limitations. All of the energy (work) that flows through the property belongs to the owner: The sunlight and rain making crops grow, the electricity from the river running through the hydroelectric dam, electricity collected from our rooftop solar. Every kWh of work that is a function of the item owned rather than the work done by the owner is handed to the owner, who does no work at all by the current rule. If the owner is paid for this by the society, everyone else in the society (including many not yet born) pays that owner for doing nothing at all.
The “owning class” is everyone who makes money by owning things—the bankers, the rent-seekers of Ricardo, and the rentiers of Marx. To the extent that they work to maintain the things they own and rent to others, their income is legitimate in thermodynamic law. People must be paid for their work (unless they have volunteered to do things for free). However, if owners hire someone else to do that work, the owners should obtain no work or money from us solely based on the legal condition of ownership. In our society, as it stands, the owners obtain the right (should they have a monopoly) to demand everything we have.
I will repeat this answer as it is critical to understand the limitations. The owner has the right, within the bounds of the society, to refuse to let other people use the things that he owns. He can use the land himself, or let it lie fallow, but he cannot obtain money or work (beyond maintenance) from people for allowing them to use it without effectively stealing that money from the rest of the society.
The owner is privileged in the current system to let his property work for him. Moreover, he pays a lower rate of tax on the income from that ownership than workers pay when they produce things.
p137-141
In this pure-capitalistic view, our rights are total. We can rent to someone else, sell rights, build, extract minerals, and collect and sell anything of value that our property produces. We can sell or lease some of our rights to others while retaining the rest. We can sell to people who are not members of our society—people who are not even part of our nation.
This is the form of ownership that the capitalist aspires to—ownership with no limitations on the owner and no responsibilities to the society. Restrictions only appear when their activities interfere with the rights of other owners.
Pure capitalism removes the concept of stewardship, allows the assets of a nation to be sold out from under its population, enshrines inequality based on ownership, entitles owners to grow wealthy on the work of everyone else in the society, and excludes all publicly owned parts of the environment from any protections whatsoever. (The oceans and the atmosphere are cast into the purgatory of “No-One-Owns.”)
Why? Because it detaches the value of work done from the people doing it and reattaches it to the owners of everything. This system allows the owning class to profit from the work of everyone not in the owning class.
It succeeds only to the extent that there is some profit left for the society as a whole after the owning class has taken its unearned rentier income out of the working economy. The economy has to grow to replace this money to enable that theft to be ignored. As the concentration of wealth intensifies, the advantage of ownership income over the workers’ wages increases, turning productive workers into wage slaves desperately trying to get a foothold on the “property ladder” (escape). Our revolutions change the names and mechanisms by which we are owned, but not the disadvantages of being slaves.
Most nations restrict foreign ownership to some degree to ensure that their assets are not sold out from under them. Most nations have environmental laws to enforce good stewardship. Most have some tax on Capital Gains to capture part of the unearned wealth stream that owners enjoy (though none of them have raised this to a confiscatory level that would properly implement the first law). And all nations have a form of “eminent domain” that permits the state to force an owner to surrender land that is required for the purposes of the state (some compensate the owner fairly, others not so much).
Historically, there has also been a “debt jubilee” to periodically reset the debt and the advantages of ownership1. This fell out of favor as more extreme capitalism took hold and debts became more enduring.
So, we can see some of the restrictions.
• No foreign ownership • Environmental responsibility enforced on ownership • Capital gains taxed (but usually not enough) • Eminent domain The degree to which these restrictions are employed in a society can make this form of capitalism a nearly reasonable choice or an impossibly unreasonable mess. There will be Americans reading this who object to eminent domain, but they forget Franklin’s admonition: ​“...private Property therefore is a Creature of Society and is subject to the Calls of that Society whenever its Necessities shall require it, even to its last Farthing.”
The problem for capitalism is that capitalism and sustainability make uncomfortable bedfellows. Our efforts to improve the sustainability of our property ownership actually eliminate people’s ability to generate or accumulate capital. The wealth that so distorts our economies is not available.
The accumulation of wealth and automation of theft are effortless and unlimited for the owners.
p144
Mahinism makes money a creation of the state; it is not necessary to tax people to obtain it.
Effectively, we are only making society the owner of the land and the means of production when it comes to stewardship and profiting from that ownership.
p149
The very concept of “profit” as we know it (profit for the individual) is thus a creature born of ownership and the introduction of money. It does not exist unless there is a society providing the money, as well as “trade” based on ownership.
p151
The profit is due to ownership, not work, and thus cannot represent work that benefits the society. If it does not represent such work it cannot be the basis for additional money to be created by the society. If additional money is not created then this profit, whether agreed to or not, is a form of theft from everyone else in the society. If the society creates money that it is not allowed to create by the laws, it creates inflation which is a form of theft from everyone else in the society.
p152
The actual profit in the barter exchange comes from efficiencies of specialization and is shared throughout the society (of two) as a whole. The advantage to a larger society emerges from the collective efficiencies of each person in a chain of production doing what they do best. This provides profit to the society overall. This is what profit actually means in terms of real money: a positive benefit to the society as a whole.
p157
We rely on the market and the profit motive to simply and automatically discover the value, which is estimated by the aggregate price the members of society are willing to pay, after being swayed by advertising. Thus, the value to our society is distorted by the advertisers and subject to the motives of those who obtain the profits, pay the advertisers, and buy legislation to restrict any possible competitors. The invisible hand belongs to the owning class, and it is literally giving us all the finger.
p159
Cost vs Value, Need vs Want, Society vs Individual are all ignored when we adopt the invisible hand of the market and a price set by supply and demand.
p164
This design provides real markets in place of our distorted markets created by advertising. The cost savings of any innovations or efficiencies are passed to the consumers. Producers who create or obtain those efficiencies and innovations are rewarded. There are incentives to produce good, cheap bread. Competition in terms of cost, quality, and price is still present. Tastes and preferences still affect the market. Anyone with the skills can take out a loan to start a new bakery and add to the supply. The loans carry no interest, so the cost of entry can be low, but a business case has to be made to the bankers.
We have not removed competition and our pricing reflects costs. However, we have removed pricing set by scarcity and profits that come from ownership.
p165
We can measure whether bakers are “better” by measuring efficiency (raw materials and energy used in production). We can also measure whether bread is better based on its nutritional value, so we can also have efficiency and nutrition quality adjustments. The market measures quality based on how easily the loaves are sold (flavor). The society can even “put its finger on the scale” and add adjustments to encourage more production, pre-empting the market when shortages are anticipated.
p167,168
Profit is currently the additional money on top of the cost of production that an individual can extract from the market. Such profits are accumulated by the individual. Profit needs to become the additional work made available to the society as a result of the efficiencies of specialization in the supply chain, and the introduction of new sources of energy. Such profits would then be shared through the entire society. 1 This is my opinion. The laws of thermodynamics do not restrict the use of wealth to determine who has access to scarce resources, they merely make doing so logically unsupportable and the morality we already had (but seem to have forgotten) relevant again.
Profits belong to the society, and the individuals producing them are to be rewarded according to the quality and quantity of the work they do, not the scarcity of the goods or services produced.
p170-172
As a society builds and develops cities, roads, concert halls, libraries, schools, and hospitals around a piece of land, the value of that land to the society increases. The more people who live on it, the more the society thrives (up to the limits of its carrying capacity). This is the value of the land, and self-propagation of this benefit of ownership transfers wealth to the owners.
The notion that you own the energy from the Sun, the water in the river, or the wind is fairly odd when stated baldly. The idea that you should get “money for nothing” because of the legal condition of ownership is equally absurd. Yet, that is the way it has been for most of the history of Western civilization.
Ownership of the solar array and the land it is on should not earn societal money. We can be paid for the work of building and maintaining the array, but the Sun does the work of making the electricity and nobody owns the Sun. If I am connected to the grid and sell a portion of it back to the grid, I am entitled to be paid for the work I have done to install and maintain the panels and connection; I should not be paid for the energy—it is not mine. My society has more money to distribute as UBI, and a portion of that is my contribution. I can be paid for my work, and there can be an entrepreneurial aspect to it, but I cannot be paid for owning things.
Each of these has a cost in the form of work associated, and that cost must be paid. With or without money, it is work that has to be done for the system to provide the additional work.
p185-187
What follows is a suggestion; the details themselves are negotiable.
Much as patents work today, the first person in the patent office with the invention”‘wins.” The reward is then based on the degree to which the society uses the idea. Each use of an idea has to be counted to the credit of the person who first publishes (provides the keywords and explanations of) the idea. When the originator publishes the idea, they can assert a timeline and a cost of development and publishing with the patent office. There is likely to be a standard amount that can be easily justified, and a requirement for greater justification (and evidence of time and expenses) as the scale of the claimed costs increases. Publishing work is paid at a standard hourly rate; development work is paid at a starting rate that is a fraction of the standard rate (a third will serve as a guess here) when the idea is first used (so when the idea has been used 3 times, the inventor will have been fully paid). After that, a somewhat smaller fractional multiplier can apply for each use. The inventor is paid additional ISR for that development work for each use, so successful inventors are able to become quite wealthy. This is similar in effect to our current arrangements, apart from who is paying the inventor and the greater accessibility of ideas for use. The multiplier may be adjusted to slow the increase in income as usage increases if the increases in income from a single idea are excessive (greater than 10x the UBI perhaps).
Firstly, the user may use inventions at no cost. This is a major change. Ideas can be used, inserted as a reference, or be part of another more elaborate invention. Each use is counted and is always free. Usage is tallied up to the credit of the idea originator. The society itself is the real beneficiary of the idea, so the society pays. As said, if the idea is used at least three times (according to the previous assumption), the inventor is deemed fully compensated for their work, while ideas that are not at all useful do not pay for themselves. If ideas are important, popular, and continually used, the compensation continues over the inventor’s lifetime, or for a specific time period. This (roughly) reflects the value that the society obtains from the work of the inventor, and enables a seriously productive inventor to make a lot of money. Just as he, or she, should. Ultimately, the society pays for the idea because it benefits from the idea, and payment is limited to the inventor or his direct heir(s) if he dies prematurely.
p 202
Capitalism cannot be maintained as a stable social structure because it relies on an accumulation of wealth that is made possible only by ignoring both the first and second laws.
p217
Sovereign money is not borrowed into existence; it is created by fiat by the society and spent into circulation.
218
THE TREASURY DETERMINES THE QUANTITY OF MONEY The work done that is available to the society which determines the amount of money to be kept in circulation is the net sum of all the available work done that the society deems valuable over a given time period. It could also be said that real money represents wealth created. The term wealth created yields a slightly more precise definition as it is work that has value to the society, but the created wealth is always work done.
p227
So, I can make money by digging holes in my lawn and filling them in? The digger of holes has expended their personal work, but there was no gain to the society whatsoever. Therefore, they do not receive or generate societal money in compensation. They have merely thrown away some of their life: work that was valuable to them alone1.
p237
In any event, we now have the ability to control our money electronically, and many of us carry around nothing but a bank card and a code to access our accounts. Our money is now in the cloud; we have undergone a phase transition from liquid to vapor.
p246
Money is not protected, it is not free, and it is not speech. If money is “protected free speech” then it must be equally available for every citizen to freely use, and the failure of money to be, in fact, free, makes the court decision in “Citizens United” a travesty of jurisprudence in support of inequality. However, the owning class, the class that effectively owns the court, obtains its money without working for it, so this is not actually a surprise, is it?
p247
In the present system a loan is used to create new money, and a repayment is used to destroy it. Mahinism automatically destroys unused money, so the repayment seems unnecessary.
p249
We create the money and use it to purchase work from some other economy, and they hold and use those dollars to purchase work from us.
p250
A UBI is a distribution of some of the common wealth of the nation, and money created to represent the net amount of work done1 may not be sufficient to grant everyone in a nation everything they might need unless some people work.
p252
“People who dismiss the unemployed and dependent as ‘parasites’ fail to understand economics and parasitism. A successful parasite is one that is not recognized by its host: one that can make its host work for it without appearing as a burden. Such is the ruling class in a capitalist society.”—Jason Read
p253
I believe that our work within the society is not optional. We instinctively feel greater security and a stronger sense of belonging when our work is accepted and appreciated by our fellow humans. It is part of our identity and has been for long enough that we automatically seek this particular validation of our existence. It is part of our emotional health as human beings.
p254
We are buying something from someone who has put the work of a different society into that product. When we buy from them, they get money that represents the work of our society, not theirs. The goods we get in return may be produced using slave labor or environmental destruction that is not embedded in the price. This will distort any market they participate in, including ours. Adjustments to compensate for the distortion cannot be avoided, and there is no way to prevent their “owners” from taking a profit.
p256
If you borrow, you always borrow from the earnings of your future self, not from a bank. The people who pay it back are you, your children and their children, always.
p257
However, the bankers retain control over money to this day. Their profits from interest and their resulting control over governments remain unabated, even in the face of a “global financial crisis”. The world collapsed financially in the Great Depression and a century later, Professor Kelton made the same basic point again to a still blinkered, intransigent mainstream economic community that has learned absolutely nothing in 100 years except how to better protect the owning class. Our inflation and interest rates are killing our citizens and economies, and the banks are still making record profits.
p259
Until automated work replaces all human employment, society cannot give everyone enough to live comfortably without the work of people who are able to work. There is no guarantee of “enough.” There is no such guarantee in physics or in the real world. In the real world, any organism can and will die if it is unable to find enough energy, or if it does not do enough work to maintain itself—a human society is no different in this regard. People who can work should be incentivized to do so. The social design may be cooperative, but a market and competition to provide things remain essential aspects of the design. For the near future, citizens who receive the UBI alone will merely be uncomfortable rather than desperate. Nobody should feel that they HAVE to work, but there is still no free lunch.
p261
Simplistically, the percentage becomes part of a multiplier. If 100% of the loaves are sold, the full count of hours worked is used. If only 80% are sold due to overproduction or excessive prices, the multiplier might be 80% of the count. We can call it the usage multiplier. It is one of the control knobs the society can use to manage production. A negotiable skills multiplier for each worker is applied. This enables companies to compete for and reward the best workers.
p262
A business efficiency multiplier rewards the more efficient (in terms of the work done per unit output) producers of goods with a higher ISR. [like our Bonus idea]
p265
• Produce more and sell it all, get paid more. Check. • Produce more than society can use, get paid less. Check. • Produce better/more product(s), more gets sold, get paid more. Check. • Produce more efficiently, price goes down, more gets sold, get paid more. Check.
p266
This is at the heart of the problem for the existing system, a system which has—albeit erroneously—ownership earning income and debt-backed money to make more money.
p270-274
3. An efficiency improvement is applied so that the bakers can bake more bread: The person who has the idea that creates the improvement (*whether manager or worker*) is compensated as an inventor. The bakery receives a boost in ISR for all the workers as efficiency increases. 4. The bakery’s efficiency increases to such an extent that it requires fewer bakers: This is similar to 3, except that some bakers now have to find new work. The ones who must leave the bakery get a transition ISR to cushion the financial blow, and additional management work is required to ensure that these workers are treated fairly and provided for properly.
Work done by robots is still work, and the UBI will increase as they continue to take over jobs that are boring and repetitive. This will release human beings to learn more and do things that interest them.
Our need to be needed is a potent reinforcement of the reasoning we employ to rein in our more animalistic desires, and our work is an indication to us that we are needed.
We are limited by available energy as well. With our debt-backed money, “cheap” fossil fuels and the unrealistic pricing on our emitted CO2, it may have seemed that this did not apply. It does.
In reality, the automata are going to be limited by the resources and energy available. These limits will apply to us with or without robots for the foreseeable future. There will be an optimal mix of robot and human labor, and some humans will still have to work as a result. The society as a whole benefits when it produces and consumes the greatest sustainable amount of work. A lot less than what we are consuming today.
The pay of all the people involved is over and above the UBI they collect, and is not taxed. The entrepreneur is paid the standard management multiplier ISR based on efficiency and also a successful innovation multiplier when a successful business is sold. Businesses can still fail, but the personal risk to the person making the effort is greatly reduced. Thus, an entrepreneur is not bankrupted by failure: they still get the UBI and are still paid for their work while they make every effort to succeed. A lack of success limits their access to a ZINT investment share to try again.
p276,7
The cars are rented according to the costs of storage and maintenance, loan paybacks, equipment purchases, damage guarantees, and all the other overheads. These costs are paid by the people who need a vehicle for a day or a week. The entrepreneurs (and their staff) are not paid for owning the cars or the business, but instead for the work they do to provide the service. Damage guarantees are collected in the form of a returnable deposit, which imposes a level of financial responsibility on the person renting the car. This ensures that the resource (a rental car in this case) is not abused by the renter.
Planning, a management structure, and project planning teams are paramount for large-scale projects. This requires high-level organizational skills, documentation, cross-checking, and oversight. These are not trivial skills and there is always a shortage of them, so they would be compensated at a higher rate than the skills of a barista, for example. [How are labor costs deleted for service companies who don’t sell products or services? Or is it all sales]
p282
We have now abandoned standards and we have surrendered our ability to argue based on the same facts.
We suffer because we no longer have shared knowledge. Each sub-group gets a different version of reality from their media, and those people whose version of reality is sufficiently absurd (remember Voltaire) can be persuaded to run gas chambers or drink Kool-Aid. We need something like the “Fairness Doctrine.” Human civilization and human societies cannot afford either the division or the misinformation.
So, we need the truth, the whole truth, and nothing but the truth...
p284,5
Shipping distances and costs will be an important piece of information for us and while the internet does not really care where you are, your phone now knows your location.
• We need to know what is available to meet our needs. • We need to know the specifications for each product— if it is a loaf of bread, the type of bread, and the list of ingredients. If it is a computer, what OS, how heavy it is, how much memory and disk, speed, etc. • We need to know about the company or person who made it. What is their reputation for quality and taste as a baker, or security and reliability as a maker of chips or computers? • We need to know how much it costs. What the seller charges for it. • We need to know how much CO2 is created by making it and delivering it to us. • We need to know whether it is in stock or a special order, and how fast we can obtain it.
p287
When producers of widgets know the market for widgets is saturated, they recognize that their business must branch out into producing and selling other items to make more money—rather than advertising to create more demand for widgets. As ever, competition remains in the area of specifications, quality, reputation, and price1. With effective Mahinism, advertising and “investment banking” have almost no place at all. Madison Avenue and Wall Street must become irrelevant to our economy, though keeping them as museums and lessons to future generations may have some possibilities.
So, advertising is still required, but it must inform rather than manipulate our society.
p289
These days, the most important propaganda is that offered up to promote the so-called “free market” of neoliberal mythology (which actually exists nowhere on the planet). It is also used to create the incessant conflict between “us” and “them,” which in turn feeds the war and destruction that is required to keep consumption high.
p294
All forms of publication are a societal resource. They are all, to some degree, a source of our news and information. We read and watch and believe what they say based on their reputation for telling the truth. Reputation was what small communities and tribes used, rather than simply silencing (or killing) people for disagreeing with the status quo.

p302-7
The existing business models and structure of the banking, investment, insurance and real estate sectors of the economy are broken when we define money as work done and apply the laws of thermodynamics. The new definitions do not allow any other result. This is not actually a surprise when we consider the amount of debt-backed money currently represented in the financial sector, and the actual work done by people who are “letting their money work for them.”
We obtain cash by exchanging some of our credit or savings in the bank for tokens that contain specific quantities of our money. In current practice, this quantity is durable and maintained through decades of use or storage. The tokens are transferrable by virtue of possession. It is our money until we willingly give it to someone else in exchange for services or goods (or get mugged).
Our Business-As-Usual (BAU) is almost entirely about “making your money work for you” when money cannot ever do that. No matter how honestly or earnestly the entrepreneurs, businessmen, or bankers attempt to deal fairly with their customers, the process can only become theft from someone. Profits from ownership cannot be tolerated.
It has to be unraveled; people who have put money into it should get that same money out. Not the money they have made from money, but the original money they invested. This may prove to be quite difficult, but some effort to return original investments is required. [this is a key piece. value of stocks, bonds, etc is converted into Credit based on purchase price, that way it doesn’t matter what the current price is, therefore the effect behavior prior to transition]
The money is never the limiting factor.
In the end, we borrow from ourselves or our children. We and our children are the ones who benefit from debt, pay it back or (in the worst case) write it off. Our society invests. [why in the worst case? doesn’t demerrage do this?]
p310
We are wrecking our society to increase the wealth of our owning class.
p311
The people, banks, and corporations who own houses and land are making money from that ownership without doing work. Those owners resist any measure that would increase the actual housing supply in their neighborhood or tax their unearned income.
p314
NOBODY is entitled to ownership-based wealth—and all the great fortunes of our civilization are based on ownership.
We are entitled to our share of the common wealth of the community and the wealth that results from our own work.
p319
I suggest a very minimal set here: • Trustworthiness—we must be honest. • Kindness—we help others when we are able. • Respectfulness/Tolerance—we allow others the same freedoms we enjoy.
p320
All major religions tell us that greed is bad; they all agree that it is wrong to charge interest.




p324-330

Summary

Mahinism is a socioeconomic system that uses money based on work done and accurately represents work in accordance with the laws of physics. The salient features of the society are:
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