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We should fix the economy now

"The most precious asset... is time."
—Warren Buffet

There are three, interrelated assumptions of importance to an industrialized world, where economies of scale put high-quality products within financial reach of the average individual:
 ‣ Additional labour by an employee will always provide benefit to other individuals in a society, by decreasing the cost of that good or service or increasing access at a given price
 ‣ Wasteful spending by wealthy individuals decreases the amount of that good or service available to the rest of society and the total amount of economic output other individuals have access to
 ‣ Refraining from wasteful spending, thus reducing the utility of money, will lead to a reduction in the source of income allowing that money to be spent by other people

Adhering to all three of these principles causes a society to experience increasing accumulation of wealth in the owners of factors of production, but the reason becomes more complex for a subset of conditions. When the outflow of wealth as a result of wasteful spending happens due to disproportionate value of higher qualities of a certain good with no increase in the quantity purchased, instead of wasteful spending as a larger quantity of the most cost-effective version of that good, then combined with the first of the above assumptions the resulting currency flow effectively forms a loop or eddy in the higher socioeconomic tiers of a society, as a result of insensitivity to prices due to the lack of alternative uses for the same money which prevents other sellers from competing in that market by driving down the price.


The way to fix this is to encourage people to reduce their hours spent working if they feel they can accept the drop in income that results, and instead use that time for other life goals. The decrease in marginal utility for using cheaper products is very small, allowing quality of life to increase due to non-monetary goal completion.

More: http://pastebin.com/Q86Zhgs9

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    Jun 22 2011: so you've stated in your description box. There is definitely something wrong the economy. Its a self destructing parasite and completely outdated. The solution is a resource based economy not a monetary based economy we have today. Check out Jacques fresco and the venus project and the Zeitgeist doc film series.
    • Jun 22 2011: I've looked at the Venus project years ago and was inspired by the artistic designs plastered in the videos and on the site.

      The art is inspirational, the ideas of a resource based economy are as childish and simplistic as the story Utopia where the community leaders say gold has no value and the the citizenry just accept the idea like sheep.

      Rarely do these ideas answer questions related to unavoidable scarcity, limits on current technologies or physics.

      There may be problems with our current economy but it works much better than communism.
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        Jun 22 2011: A resource based economy is very simple concept indeed because it gets rid of the monetary system and just gets to the point of it all. The reason why we have money in our system is to trade resources. Today money has the power to decide where resources should go and it shouldn't be that way. Resources should be sent and distribute to places that need it the most. A resource based economy has the ability to manage our resources wisely.The point behind a resourced based economy is that it gathers information of the worlds resources and makes its decision from there for instance which place has the strongest winds to plant windmills or which places has accesses to clean water, etc ? I hope this will answer your question about scarcity. The venus project is not just an artistic expression, Jacques design the project based on efficiency and conserving resources. As far as technology, our current society considering as to how it functions today are many years behind. Many of the technology just coming out today in the market existed years ago. We can do so much more than what average joe is offered today which is usually a brick or wooden house and a gasoline powered car. Our thinking is also hundreds of year behind. Which brings me to another point in a resourced based economy. Before society can transition into a resourced based economy people have to start aligning to the laws of nature and understand that we live in a finite world. This is completely thrown out in the window in the monetary system because the motto is to spend spend spend and waste waste waste. People have to have an awaking before they can transition into a resource based economy in order for it to work. As for your reference to the project as a Utopia, there is no utopia. This is just an idea the is better that the one we have. There is always be more improvements and changes along the way. The world is not stagnant and society shouldn't be that way either.
        • Jun 23 2011: "Resources should be sent and distribute to places that need it the most." Who will say which places need it most? What if two, three, four countries are hit by massive tsunamis and are in dire need of fresh water but only one ship remains intact to transport a little water to one location? Will you trust in the magical techno logistics network proposed by the Venus project to make the right choice? What if there is no "right choice"?

          You are living in "should land" which ignores or glosses over facts. I understand because the imagery is so tempting.

          I'll try to point out a few ways on how the resources based economy is utterly a flawed idea.

          "It is a system in which all goods and services are available without the use of money, credits, barter or any other system of debt or servitude. All resources become the common heritage of all of the inhabitants, not just a select few." (http://www.thevenusproject.com/en/a-new-social-design/resource-based-economy)

          When resources become the common heritage of ALL inhabitants, this ignores the idea that resources are finite and when resources belong to everybody, they belong to nobody because, at any time, a person can lay claim to what you may be using or wanting to use.

          "At present, we have enough material resources to provide a very high standard of living for all of Earth's inhabitants."

          Who defines the standard of living? What is considered a high standard of living? Having a car and a television? Some would define a high level of living in such a manner.

          "Only when population exceeds the carrying capacity of the land do many problems such as greed, crime and violence emerge. By overcoming scarcity, most of the crimes and even the prisons of today's society would no longer be necessary."

          If resources are finite and the population continues to grow beyond carrying capacity, how can we overcome scarcity?

          "Although air and water are valuable, in abundance they cannot be sold."
          HAHAHAHA Ever hear of bottled water?
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          Jun 23 2011: Yep couldn't of said it better Nhan, thank you!! I agree with a Resource Based Economy 110% its truly the best way forward for our children! If we continue with this corrupt capitalism monetary system our children will be doomed to repeat the same mistakes, we must move on this NOW!! No more talk we need action, support TZM, TVP, Atlas city, new-Z project, OPEN SOURCE, Anonymous group, world strike 2012 and anyother group who want a change for the better.
          I believe our transition to a RBE system will be easy, its called EDUCATION.
          We have TED, we have Singularity University, WE (still) HAVE THE INTERNET lets move. :) Profit for our planet, not our pocket.
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      Jun 22 2011: "resource based economy" is a meaningless term. not surprising it is not even defined. it sounds good enough to sell well without too much explanation.
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        Jun 24 2011: I guess you haven't searched hard enough. Look up the venus project.
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          Jun 24 2011: i guess you haven't looked around here had enough. i'm bashing the venus project for its vagueness and nonsensical nature for a long time. it is bollocks.
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    Jun 24 2011: The answers to overpopulation regarding scarcity involves two parts for a solution: technology and education. Human civilization if it will be able to survive to that point will probably be able to start colonizing in planets within our solar system, which is according to physicists, Dr. Michio Kaku, a type one civilization. Education: if people start aligning to nature and see that science is the guide to life, then they would start to be more responsible and cautious about their impact on the environment, including reproduction, pollution, etc.The "who" that you keep referring to in your response is not a figure, but the planet. It is the planet (the laws of nature) that we must answer to in order live prosperously and peacefully. IN order for our species to survive! In our society, sadly, its the other way around. We could be so much happier, and the world we live in deny us of that possibly, so I can understand where your skepticism comes from. I think you should look at this situation in another way, and this could be applied to any other situations that you look at. See how our current system is doing in solving this situation of overpopulation and others mentioned or even if it addresses them at all. Then look at this one. And mold your thinking from there. Plus its very hard to open yourselves to ideas when you resort to surface associations as reasons to debunk ideas.
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    Jun 24 2011: Bob,
    Yes i will trust in the "magical" techno logistic network. For one thing, I think just by being here on TED we can agree that technology is as concrete as anything and is not invented by mythical unicorns. I trust that when the computer said that 14325X8976 is 128581200, that it is 128581200. And when it comes to asking these calculating questions I will trust its data more than I would trust in economists and in politicians who have the say in our resources. And for your question. Using all the compiled data, the answer to this question will depend on many variables. The main goal of course is to save as many people as possible, so distance, the magnitude of the disaster within each area, etc will be calculated first to arrive at the best decision. I said the best decision because this is not a utopia where there is a "magic" solution for every situation. It is very much scientifically driven. For your first reference, in my interpretation what Jacques is saying is that once we are born on this earth we have immediate rights to access our resources as we deem necessary. Scientifically the city, the state and the nation is not our home, but the Earth is our home. Logically, if Earth is our home than all the resources belong to everyone living in it. But of course this is obstructed when politics, economics, and ignorance is stubbornly holding on to it's influences in our society. Just because this project realize that each individual should have it's basic needs met, which in our current system record's for accomplishing that realization is a big NO, doesn't mean that it does not follow on the concept that our resources are finite. The goal is to distribute resources to everyone based on the amount of resources that available within our planet. I hope that answers your standard of living reference as well. But if resources a wisely used, then that will create abundance.
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      Jun 24 2011: "Logically, if Earth is our home than all the resources belong to everyone living in it."

      it is not logical. it just as well could be that different parts of it are owned by different people.
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        Jun 24 2011: I know that different parts are own by different people. What I'm trying to get at is that society is not align with science.
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          Jun 24 2011: i didn't say they are now owned by different people. i said your statement "logical..." is not logical at all, since other solutions are possible too. you have to argue for your solution in a lot more depth than "logical".

          in fact, personal ownership is more logical than collective ownership. collective ownership is hard to imagine. how decisions would be made?
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    Jun 22 2011: i'm not willing to read that long text, because it starts with two sentences that does not make too much sense.

    let's get started.

    "Additional labour ... will always provide benefit ... by decreasing the cost of that good .. or increasing access at a given price"

    exactly how would an additional worker lower costs? obviously it rises them. the exact opposite is true in two ways:
    1. if the production cost decreases, it makes hiring more workers profitable
    2. if demand rises, price goes up, and this makes hiring more workers profitable

    "Wasteful spending by wealthy individuals decreases the amount of that good ... available"

    first observation: it is pointless to separate the spending of wealthy and poor individuals.

    second observation: personal spending can not be wasteful because value is subjective. a $200 bottle of wine can be a very good purchase for a given person, and a waste of money for another. we have no tools to judge it. the only wasteful spending would be buying something i perceive i will enjoy, but turns out that i don't enjoy it. this is hardly a problem of our economy though. it is insignificant.

    final observation: you link that article in every topic that even loosely related to economics. i'm not sure it is an appropriate behavior.
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    Jun 22 2011: And for your sheep comment. You can say the same for the society we're living in today that people are blindingly submitting to our current state of affairs. It just a matter on which side of the river you stand on. And lastly on your last comment. Capitalism may be better for you, but if you put your shoes in people living in other countries like china, Cambodia, and Africa working day in and day out for little pay in the name of capitalism so you can get your 5.99 t shirt at wall-mart you'll understand that capitalism really SUCKS for them. In the "free market" if someone gains someone looses. I hope you see that.