Identifying the inherent problems of a monetary system

[Jim Graham]

......refers to the ability of those with a monopoly in a market to reduce the quality of their goods to a standard below that which one would find in a competetive market.

 

 

..................you are considered old-fashioned or uncool if you own a box shape TV. It plays on our sense of the material object representing a status symbol, so in essence it's very manipulative- there's nothing particularly 'better' about a flat screen, it's just fashion.

 

Also, before you decide that automation can't replace humans...........

 

Also obsolescence is NOT natural. Please take a look at the actual history of humanity and one thing you'll notice is that human cultures pre-1900 are remarkably conservative with regard to their production of material culture, usually over periods of millenia. For example, the stone hand axe was made by humans in a broadly similar form for about 2.6 million years. The ancient Egyptians created their statues and wall paintings using a remarkably conservative and limiting set of 'artistic rules' over 2 thousand years. If obsolescence is so 'natural' to humans why didn't these early cultures subscribe to a rapid pace of material culture change?

 

 

 

1. How many companies have got a monopoly on their market? I would suggest not many. But, I will buy the idea that some companies make products that can't be upgraded

 

2. If very stupid people want to rush out and get the new iPad because it's a conversation piece I don't think that's a problem of global corporate greed. It's just exploiting stupidity. Nothing wrong with that. I will buy the idea that fashion in all things drives much of business and it is very wasteful of resources but that's not a problem of capitalism.

 

3. I'm still not buying your automation argument either. It may be creeping into some areas but I doubt they'll make a machine that can plaster a wall or run in electrical cables and water pipes. Mechanisation can only go so far. Have Tesco got a machine that can fill the shelves, change the price labels or collect the trolleys from the river?

 

4. I am not sure what your last point is about but perhaps a stone axe was just the best tool for the job until something better came along. I am guessing Ugg the Caveman didn't go to Harvard Business School

 

 

Personally I think you are looking at a chaos system and seeing patterns that simply aren't there.

 

Any suggestions for that product that has been invented but is kept off the market by a global conspiracy? Thought not.

[Jim Graham]

 

UK workforce has to ask for increased salaries from their employers to make ends meet, so the cost of labour is continually increasing.

 

Things won't pick up until the standard and cost of living abroad outstrips the UK and with extreme pverty in countries like China and India that's going to be a very long time, if ever. Only when it will be no longer a viable option to export to the UK, will our industry pick-up and I can't see them letting that happen.

 

 

Surely one of the reasons wages have risen sharply in this country is the booming taxation system to fund public services. As more money is demanded in taxes so more money is required in wages. Half the money I earn already goes in tax. If I didn't have to pay tax I could offer my labour much more cheaply and my employer would be much more competitive.

 

Countries like India don't have expensive public services but if they did they would be less competitive. It seems to me we either cut the cost of the public sector to make us more competitive or we export the NHS to India and let them cope with that expensive burden.

 

Undoubtedly we need some public services but not at the expense of making the country uncompetitive in the world. The alternative is to stop trying to compete on cost and develop new products and services. That requires an education system fit for purpose.

[Anna B]

1. How many companies have got a monopoly on their market? I would suggest not many. But, I will buy the idea that some companies make products that can't be upgraded

 

2. If very stupid people want to rush out and get the new iPad because it's a conversation piece I don't think that's a problem of global corporate greed. It's just exploiting stupidity. Nothing wrong with that. I will buy the idea that fashion in all things drives much of business and it is very wasteful of resources but that's not a problem of capitalism.

 

3. I'm still not buying your automation argument either. It may be creeping into some areas but I doubt they'll make a machine that can plaster a wall or run in electrical cables and water pipes. Mechanisation can only go so far. Have Tesco got a machine that can fill the shelves, change the price labels or collect the trolleys from the river?

 

4. I am not sure what your last point is about but perhaps a stone axe was just the best tool for the job until something better came along. I am guessing Ugg the Caveman didn't go to Harvard Business School

 

 

Personally I think you are looking at a chaos system and seeing patterns that simply aren't there.

 

Any suggestions for that product that has been invented but is kept off the market by a global conspiracy? Thought not.

 

As we rarely know who owns the large Corporations (or has the 51% of the shares,) or whose company has taken over what, it's hard to know who has the momopoly of a particular market. It's going back a long way but at one time Unilever used to own mearly all the major brands of washing powder. despite them coming in different branded boxes.

 

The whole of the fashion industry relies on 'stupid' people going out and buying stuff they don't need just because it is in fashion. There is a megabucks industry geared to creating this 'need.' It's called advertising.

 

As for craft industries, so many artisan's jobs have gone that I'm surprised you think this. Woodworking is highly automated and will become more so, as is pottery and cutlery making. As for house building, look at the Swedish model for prefabricated houses which can be put up from scratch in 4 days because all the services are built into the walls ready to be connected up. (yes it still needs some people but I think it's a team of 4 plus a crane driver.)

Yes, Tesco have got a fully automated store, it was on the news recently (because it was having trouble with its technology...)

 

I think the stone axe argument was about the rate of change. It's speeding up expo

[IAchilleasI]

2 of your problems assume monopoly capitalism & don't really exist in most markets, the other one just doesn't really exist.

 

Artificial scarcity & Planned obsolescence would need either a monopoly or a very tight cartel to operate. In a competitive market at least one supplier should see that they can gain a competitive advantage by overcoming these problems.

 

A product has to break down or technically expire within a set amount of time in order to force the consumer to buy a new one, supporting the circulation of purchasing power and sustaining the economy, in spite of the excess waste created as a result. Doesn't require a monopoly.

 

Consumption of bottled water quadrupled from 1995 to 2005. The estimate is placed at an average of 200 billion bottles of water every year. The pollution of the water table, combined with the image that bottled water is somehow “purer and cleaner” than tap water has allowed for the growth of this industry and the value of a gallon of bottled water often placed higher than oil! It is clear that the scarcity of an item or material raises its value and is therefore profitable. Hence, it is in a company’s highest interest that what it sells is scarce or at least perceived as such. The water bottling industry isn't a monopoly and there certainly isn't a conspiracy going on among them.

 

The designer of the EU currency system, Bernard Lietaer (1997), said:

“…greed and fear of scarcity are in fact being continuously created and amplified as a direct result of the kind of money we are using…We can produce more than enough food to feed everybody…but there is clearly not enough money to pay for it all. The scarcity is in our national currencies. In fact, the job of the central banks is to create and maintain that currency scarcity. The direct consequence is that we have to fight with each other in order to survive.”

 

But he's just a conspiracy theorist right?

 

Technological unemployment happens, entire industries can be wiped out by advances in technology, but those advances bring with them new economic activity & a net gain.

 

As an aside, I suggest you do a bit more research into what mechanisation and artificial intelligence is capable today.

Do you know of any sectors capable of replacing the service sector?

 

John Maynard Keynes (1935):

“We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come – namely, technological unemployment. This means unemployment due to our discovery of means of economising the use of labour, outrunning the pace at which we find new uses for labour.”

 

Wassily Leontief (1983):

”The role of humans as the most important factor of production is bound to diminish in the same way that the role of horses in agricultural production was first diminished and then eliminated by the introduction of tractors.”

 

Note that these quotes are from recognised economists who foresaw 30 and 70 years ago what we fail to see right in front of us.

[IAchilleasI]

Capitalism is ruddy brilliant!

 

Once again, I am not arguing capitalism, I am arguing the monetary system. A monetary system can exist in various political structures, whether its capitalism, communism, fascism, feudalism etc.

 

PS. 1 billion people living in chronic hunger would disagree.

[Longcol]

In the interests of keeping this interesting, but inevitably growing longer, discussion, civil and on subject, could I suggest anyone joining at a later stage such as Longcol and Anywebsite read it right from the beginning to understand the initial premise and the build up of the argument, then we won't descend into the nitpicking sidelines of stuff which isn't really important but cloggs up the thread.

 

I for one am finding it really good to hear different points of view well argued.

 

I have read it from the begining you presumptious person. And I take it stuff you regard as "unimportant" is anything that shows some statements made by IAI are patently false.

 

Why don't you just get to the Zeitgeist stuff - I assume this is where the thread is heading.

[Hemibr]

And did these visionaries provide any resolutions ?

 

(Keynes and Leontief)

 

Im not over impressed with predictions of the blindingly obvious - of my time i have seen butter mountains and wine lakes manipulating the economy whilst those whose very survival could be assured by re distribution pay the ultimate price of being the wrong place in the wrong era.

 

We do however get the quirky live aid or philanthropist type Bill Gates circumventing governments etc but that only affects distribution by providing a different access to the capitalist markets anyway so i believe we are all in fact doomed and the machines will eventually rule.

 

Hemibr - 2012

[Longcol]

A product has to break down or technically expire within a set amount of time in order to force the consumer to buy a new one, supporting the circulation of purchasing power and sustaining the economy, in spite of the excess waste created as a result. Doesn't require a monopoly.

 

.

 

Far too simplistic - you're ruling out technological improvement and appear to be assuming all spending is on consumer durables or similar.

 

Unsurprisingly most peoples outgoings are on housing, heat and light, food, transport and the like. I might by a new car, TV or PC something like once every 7 years.

[Jim Graham]

As we rarely know who owns the large Corporations (or has the 51% of the shares,) or whose company has taken over what, it's hard to know who has the momopoly of a particular market. It's going back a long way but at one time Unilever used to own mearly all the major brands of washing powder. despite them coming in different branded boxes.

 

The whole of the fashion industry relies on 'stupid' people going out and buying stuff they don't need just because it is in fashion. There is a megabucks industry geared to creating this 'need.' It's called advertising.

 

As for craft industries, so many artisan's jobs have gone that I'm surprised you think this. Woodworking is highly automated and will become more so, as is pottery and cutlery making. As for house building, look at the Swedish model for prefabricated houses which can be put up from scratch in 4 days because all the services are built into the walls ready to be connected up. (yes it still needs some people but I think it's a team of 4 plus a crane driver.)

Yes, Tesco have got a fully automated store, it was on the news recently (because it was having trouble with its technology...)

 

I think the stone axe argument was about the rate of change. It's speeding up expo

 

 

 

You can only have a monopoly if you have the rights to the market. Many companies have proprietary products but there are always substitute products. Unilever may have dominated the market but they didn't have a monopoly on it. There were always competitors. Unilever probably bought some of them out but that's a failing of regulation not a global conspiracy. The people who regulate are the ones we vote for so are you taking a big leap in suggesting politicians are allowing big corporations to control markets?

 

If people are stupid enough to be sucked into the "fashion" cycle they deserve all they get. I see that as a sign of weakness and insecurity and exploiting it is a legitimate business practice. Perhaps they should learn to think for themselves. I consider myself to be reverse fashionable. If everyone is getting or doing something that's a good reason for me not to get it or do it. There's no mystery to it and definitely not part of a global conspiracy.

 

On your house example I think you'll find a lot of people involved in fabricating the houses and delivering to site, preparation of the site, provision of utilities etc etc. Perhaps if we didn't have a minefield of wretched bureaucracy in this country we could build cheap affordable houses that could be put up in 4 days and solve another crisis.....................housing.

 

The rate of change has accelerated and nothing is going to stop it. It may get a few setbacks but progress is inevitable unless a few Luddites decide to smash up Tesco's machines......................................not really going to stop progress though is it?

[Jim Graham]

John Maynard Keynes (1935):

“We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come – namely, technological unemployment. This means unemployment due to our discovery of means of economising the use of labour, outrunning the pace at which we find new uses for labour.”

 

 

The obvious solution to that is to produce less humans.

 

I think Keynes was observing a natural consequence of a system. He wasn't suggesting it is deliberately designed into the system by a cabal of wealthy oligarchs which is what the OP is suggesting.