Terry Freeman

Executive Editor, Public Eyes Risk Forum

This conversation is closed.

Devise an economic system not based on personal property rights that will support such brilliant concepts as Justin Hall's Tipping.

Our current economic system is based on personal property rights. If energy and water come freely from our environment then there is no property to own with respect to production and thus no wealth to be generated (no one owns the supply). Those who are currently deriving wealth from energy and water production will surely resist.
What would a system look like that allowed for the creation of wealth from free energy and water. Would it not be very different from our current one? Could it possibly create even greater wealth on a global scale?
Perhaps that is the key. Could we measure wealth as a global aggregate of well being rather than an accounting of haves and have-nots? What would be the metrics of such a system?

  • Nhon Ha

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    Nov 10 2011: Terry - thank you for the wonderful insight to the ideas you talked about.
    To encourge your ideas to come to fruition, I believe it's the way we raise capital that can help your ideas become real faster.
    Right now with the stock market - the problem here is that those that have shares in the company don't really care what the company do - as long as they are making money then the shareholders are happy. But then those that are affected by the company are the ones that losses (if the company is doing something negative - eg Bp oil crisis in America - the shareholders overseas will lose profit if Bp payout for all the damages it caused to locals and to the US Government)
    The best way to help fix this is by creating a system that businesses can raise capital directly to the investor that uses their goods/services or whom live locally.
    If the system is done properly - you will be able to have businesses being owned by those that live near them or that uses their goods/services - not by the banks/investments companies etc.
    This way - you will have these businesses in competition with current companies in the current stockmarket and then you will see better competition - why? Because then you have factors such as pollution, CEO bonuses, etc being taken into consideration by that company as their investors will want them looking after their interest.
    I have this vision for my business empire now - my company will be owned by the people but me controlling the company. Without the people there will be no company. The only problem here is that if I happen to be evil - then the company will go down and the people will loose their money - but if I was evil then my Customers will see it and pull their money out or not invest in thefirst place.
    You can do the system with the use if the Internet.
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      Nov 12 2011: This is very insightful. It has been said that we have globalized our economy but not our representation. In practice, how would it be possible to limit the raising of capital to the represented population that must bear the burden of risk for the enterprise under consideration. This would solve the problem of externalities. Theoretically, this is currently solved by regulatory practices that try to levy monetary assessments to the damages done to those not benefiting from the enterprise. We have seen how regulatory oversight can be subverted so I give a thumbs up to your concept if the political mechanisms could be found to implement them.
      • Nov 12 2011: Terry: You wont find this through the political system. It is corrupted by those in power due to conflict of interest. Sometimes those in power want change, but they cannot as they are controlled by those behind the scenes.
        It sounds like conspiracy theory, but do your research, and you will see the truth in how the world operates. There are too many sides of a story, so be open to all ideas.
        The only way to do this is to use internet technology and go straight to the people.
  • Nov 9 2011: Terry, you might be interested in this idea:


    From the website:
    "The term and meaning of a Resource Based Economy was originated by Jacque Fresco. It is a holistic socio-economic 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. The premise upon which this system is based is that the Earth is abundant with plentiful resource; our practice of rationing resources through monetary methods is irrelevant and counter productive to our survival."

    There is also a short video of Fresco talking about the concepts.

    It's certainly a pretty interesting idea, but a far-out one at that. It requires a total redesign of the worlds social-economic system, but perhaps that's what we need to ensure we survive as a species, beyond 2100.

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      Nov 9 2011: A very fascinating proposal but with many practical holes. It comes across more like a religion than a solution to specific needs.

      Perhaps, as others have suggested in this conversation it would be better to think of how we can build on our economic model to make it more flexible. Certainly, societies can decide on what should or should not be in the domain of corporate development. Capital markets are a valuable means of raising money for an endeavor that is too large for a single entrepreneur to tackle but societies can decide to raise money collectively for some things (like highways or energy) when it is deemed to fill a universal need. This still leaves the capital markets intact to pursue things that can be developed for profit without negatively impacting the common good.

      I started this conversation to provoke thought on how we can regain the humanity expressed in the phrase "We the People". I have noticed lately that we as a culture seem to have lost sight of our options in this regard as we increasingly see only capital markets as being capable of accomplishing anything. What is lost in this is the capacity for the people to have a say in how we live. Corporatism has become the new tyranny as all power and wealth have risen up to a relative few leaving the overwhelming masses to compete for mediocrity with diminishing resources.
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    Nov 2 2011: Terry,

    The themes you touch on here relate to the work of Nobel Peace Prize Elinor Ostrom's common pool resources.

    A snippet from an essay (http://www.newclearvision.com/2011/10/29/rebuilding-the-commons/#more-982) by an acquaintance who wrote on the themes, after doing a panel with Ostrom when she visited our community recently:

    "Based on her extensive work, Ostrom offers eight principles for how commons can be governed sustainably and equitably in a community:

    1. Define clear group boundaries.
    2. Match rules governing use of common goods to local needs and conditions.
    3. Ensure that those affected by the rules can participate in modifying the rules.
    4. Make sure the rule-making rights of community members are respected by outside authorities.
    5. Develop a system, carried out by community members, for monitoring members’ behavior.
    6. Use graduated sanctions for rule violators.
    7. Provide accessible, low-cost means for dispute resolution.
    8. Build responsibility for governing the common resource in nested tiers from the lowest level up to the entire interconnected system."

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      Nov 4 2011: This sounds a great deal like our constitutional government. I don't know how that got so disconnected but even a casual look at current events suggests that it has failed to be maintained. Perhaps group boundaries defined as states in not applicable any more. Perhaps globalization has blurred the definition of local needs and conditions as well as the members of groups affected by rules.
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        Nov 4 2011: Terry,

        Near as I can tell, it got lost in number 8.

        Two reasons:

        1. Top-down power-mongers
        2. Apathetic "lower" levels that see gov't as in charge and or as parental.

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    Oct 30 2011: Interesting challenge ... but not one that's going to be easy to implement. When little kids discover the concept of "it's mine", they take to it like ducks to water. Even my dog has a sense of "personal property" (try to take its bone away, and it'll show you). Who wants to go to the trouble of sowing, if everyone's free to harvest? Unfortunately, free trade can lead straight to monopolized supply, through economy of scale.

    Karl Marx tried, and failed. Research has shown that personal property rights become less important, the smaller a group is, and the heavier the external pressure it's under. So, the only way I think Marx could have gotten rid of personal property, would have been to reduce the global human population to a few million, and make sure we're all living in peace. And even then, I think the monster would have popped its head up again, the moment he'd turned his back.

    There are ways of reframing the question, however, and making it more specific, for example about taxes. Today, a lot of people see the problem as being "how to keep taxes as low as possible" and "letting me keep what's mine". That's pretty infantile. The big problem needs to be reframed as HOW HIGH taxes should be, in order for society to function optimally. What common services do we need? How should they be paid for?

    Take roads as an example. Today, it's fully possible to reduce the road tax to zero, by privatizing all roads, and letting the road owners charge tolls instead of taxes. That's how the "robber barons" did it in Europe during the Middle Ages, and it worked back then. Today, it would work even better: We could all have microchip transponders in our cars, which would cut the cost of toll collection to nearly zero.

    If you frame the discussion that way, even a "TEA partier" should understand that their "Private Property" model won't work without a government that reduces the road owners' freedom to cooperate about prices.
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      Oct 30 2011: Jorgen, Thanks for a thoughtful reply. It is far to easy to have the "gut" response of defending capitalism against socialism or communism. My challenge is not against capitalism. It is to find an economic mechanism by which a society can determine to what capitalism can apply. We already do this. Utility industries are regulated to provide consistent availability of energy and agriculture, the postal service and rail systems in America have been heavily subsidized for similar reasons. You are right about children. They are born with only a sense of themselves and must, through the maturing process, learn the concept of self with respect to others. The limitations of children and dogs should not be the basis of our mature thinking about global issues.
      It is possible for a society to decide that some things are too fundamental a need to be left to the fluctuations of the market but the question is how to mitigate this risk. In the case of energy, if the production of power were as ubiquitous as Justin Hall envisions then the benefit of "economies of scale" are overcome by the gain in availability and the security of a distributed system.
      The cool part of this shift would be that, just like the American Revolution created massive opportunities for the monetization of natural resources through manufacturing, a new economy that is not constrained by the cost of energy would open up massive opportunities for the monetization of many energy dependent technologies. I see this search for a new economic system as a potential salvation for capitalism because our current system is strangled by the absolute monopoly of our current sources of energy which are tied to geographically bound property. Our economy literally is oil and transportation. Isn't it aboutt time we moved on?
      I don't see taxes as having anything to do with the problem. Taxes or other government action are not going to produce energy. This is about creating wealth with different rules.
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    Nov 12 2011: Internet technology connects people more efficiently but it does not bind them. Legal systems are required to bind people in a common language and purpose. It is easy to rail against the "political system" but that is the medium for resolving these issues. Do you expect the world to simply embrace in a giant internet kumbaya?

    Human interactions require negotiation, coordination and contractual efforts. These are the functions of our political system but I'm beginning to realize that no one remembers or bothers to study just how intricately our constitution was worded to allow for the very things that you wish for. Unfortunately it is simply easier for everyone to vilify those engaged rather than become engaged themselves and work for the utopia they envision.

    Consider these specifics. The constitution makes no mention of the rights of corporations to representation, consideration or voice. Corporate charters are the prevue of states who can lay down rules for any given corporate charter, asses fees and revoke charters if corporations are not compliant with their charters. The preamble to the constitution says "We the people" not "we the corporations" and its time that we the people took our rightful place in responsibility for our situation and quit whining. To that point we have to be willing to stop looking for corporations to solve our problems. They are simply entities chartered to raise money from investors to engage in commerce on a scale larger than is possible by a single person or a partnership of people.

    We the people must take charge of our society and we do that through a very thoughtfully structured political system. Start using it.
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      Nov 12 2011: Terry,

      You are correct: the US Constitution in no way stipulates or implies corporations are individual citizens.

      I agree the US legal systems in theory and intent are held in regard for employing common language and purposes that best represents the Constitutional rights of US citizens, as set forth by our government.

      The legal system upholds government laws, but was never intended to create them. The other two branches of political government, the executive (Presidential) and legislative (Congressional) are called to create laws that uphold the Constitutional intent and We the People standards.

      These are all part of the political system you speak to.

      I agree the foundational structure was thoughtfully construed. Challenge is contextual interpretations increasingly belie both the foundation and practices the construction of our democracy asserted. Corporations and congressional leaders have unique access and impact on these interpretations.

      This uniqueness, in great part, has to do less with their positions of power than most citizens are wiling to question.

      It has more, to your point, to do with citizens not engaging in political processes that go far beyond voting. If US citizens wish to live in a civilized nation, US citizens need to get far more involved in civil life. Not as consumers of corporate or congressional "goods," but as co-creaters of them.

      The challenge for citizens is to collaborate with other citizens in communities, cities, county and country issues in sustained and clearly conveyed ways.

      An idea:

      Plan a large citizen-led "Town Hall" meeting.

      Just as lobbying groups and political campaigns do. Only non-lobbyist, non-campaign affiliated citizens serve as organizers and leaders of it. Promise and deliver a large group of bipartisan citizens serious about collaborative processes and concrete outcomes.

      Distribute tapes of citizens compellingly but civilly "leading" politicians in We the People processes.

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        Nov 12 2011: Great idea although a massive forklift for a sagging engagement prone population. How about this? Take away the unique access and impact of corporations by accepting that they have no representative rights under the constitution. The accommodation for this however has to be that corporations are not subject to taxes since they are not entitled to representation. A fair trade I say.

        Will corporations, carping about too high taxes, be willing to come to the table on this and will the people be willing to forego milking the fat cow for the freedom to have more impact? This is a true challenge because what I see in the popular dialogue is that everyone wants a free lunch but the other guy's fee lunch is always socialism while your free lunch is the blessed reward for hard work.
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          Nov 12 2011: Terry,

          Yes to revoking Citizens United.

          I doubt corporations would come in good faith for any sustained negotiations to the ends you propose. Due to "He holds the gold" perception. And, in great part, because corporations are multi-national.

          Interesting re: taking away unique access via no taxation, no representation. And, what of economic development grants and property taxes? Where to with those?

          If I have it correct, your model would call for both necessarily having to go away, too. As would lobbyists. Which brings me back to my doubt corporations would come in good faith to the table.

          I'm thinking Jon Corzine, ML and UPenn here.

          Seems whistleblowers are the only ones who can even begin to get these big boys to come to heel. And only then after much blood has been shed.

          Very troubling.

          As is this interview Lesley Stahl did with Jack Abramhoff on 60 Minutes: http://www.cbsnews.com/8301-18560_162-57319075/jack-abramoff-the-lobbyists-playbook/

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        Nov 13 2011: You are right. All representative accommodations to corporations should go away and that includes lobbyists. Corporations already have avenues of redress to the states that charter them. They are not entitled to representation in the political spectrum because they are not sentient beings "endowed by their creator with unalienable rights". Their rights are negotiated with the chartering state and are subject to scrutiny with respect to the rights of the people represented by the state.

        This should not even come close to being a point of argument particularly with respect to the popular movements to interpret the constitution from the viewpoint of the framers of that document within the context of its writing. Corporations have only the rights which are given by the chartering states. They have none with respect to the Federal Government per the constitution. Corporations are "legal persons" only with respect to the courts in that they can be held accountable for their actions and are not represented persons with respect to legislative processes.
  • Nov 4 2011: If there's no wealth to be generated from energy or water it's likely that for a new economic system "wealth" would require redefining as you suggest to emphasize greater well-being since most would already have their basic needs met (in theory). I think to create this sort of shift you have to redefine prosperity based on metrics that most feel strongly about - as much so as basic needs. Since you often get what you measure this would be a shift away from current measures of "success" such as average lifespan and GDP, to things such as child health/development, and environmental condition/impact. If we could agree that things like these are worth competing for just as much as energy and resources then maybe we could all be empowered to generate wealth...
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    Nov 1 2011: I listened to his talk now, and remain a sceptic for the time being. He says that energy will be "free", but the materials he's talking about, will cost something. The investors who pay for the plants and machinery, will want a return on that investment. If someone produces more power than he needs, he should be able to sell it off into the old-fashioned grid for the amount of money that it would cost to produce the same amount of power in alternative ways. That's what we're doing with our hydro power here. It's very, very cheap to produce, but Norwegians don't get to enjoy that cheapness directly. Our power companies sell the excess abroad, keeping Norwegian power prices at roughly the international level ... but they are heavily taxed and often publicly owned, so we get to enjoy the profits that way.

    So it's not going to be "free". Hopefully, it'll be competitive. If it's competitive enough to remove our dependence on coal and oil, we're going to have to write off a lot of tankers and oil rigs, and Norway will be a poorer country - but a healthier one. I don't think you'll need any new political system. And yes: If it's cheap enough, it could help generate tremendous wealth.
  • Oct 31 2011: We could devise a completely new system or we could try to make the one we have better. It is idealistic to imagine a world without property rights. At the end of the day every single one of us likes to come home to a house they call there own, with their favorite spot on the couch in front of the TV, drinking out of their favorite cup and relaxing with the family.

    We shouldn't have to deal with having a stranger come in to sleep in the bed that technically everyone owns because we should all share. There has to be a way to distinguish from what is mine and what is yours. Property rights provide an environment where people are able to keep the fruits of their labor. The real problems that arise in this type of resource allocation though, is when there are distortions in the market. Be it through monopolistic practices from a corporation or monetary distortions which come from governments or central banks.

    Because of these distortions some people are able to profit without actually contributing anything to the economy. These are called "free loaders" because they have found a way to manipulate the system and re-route "stuff" where it wouldn't go otherwise; often known as "malinvestment." If we can find a way to diminish or eliminate this we could surely have a fairer allocating system, not perfect but certainly better imho.

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      Nov 1 2011: This challenge is not a repudiation of property rights but seeks to find mechanisms of more effective trade in energy. I do not envision a world without property. Throughout history things that were once the foundation of economic boom have become commodities freely available to all through widespread trade and from time to time these same things cycled back to objects of brutal conflict. Energy used to be much more hard to come by when it was a function of cutting down trees. Now almost ubiquitous when a function of pumping it from fossil remains of many millions of years in process. The problem is that it is anchored in sources that are limited in their accessibility and availability.
      There is always no shortage of naysayers Please step forward if you have the courage to imagine a different solution. This specific challenge is around the economic enablement of new technologies not the feasibility of such technologies. Economics is the basis of human trade and no other species, to my knowledge, engages in trade. It is what propels us.
      • Nov 1 2011: Thank you for your answer and clarification. In response I would say that it seems like what is most frustrating, especially in terms of energy, would be converting energy into a useful manner that people can use. Unfortunately this has been the challenge of all life as we know it since the beginning of time (to put it lightly). Energy is the one thing that absolutely everything competes for from the smallest bacteria to us with our space shuttles and iphones.

        Luckily we as a species have been fortunate enough to perceive energy in a whole new manner other than just plain ol' sustenance. But again how to convert? fire, solar, wind, water? It seems like any solution is still going to involve blood, sweat and time away from your kids to develop it. Whoever does is going to want to get paid for this work. I'm not saying that in the end it won't get extremely cheap or even free for that matter, but it will certainly take time.

        To me it just seems like the laws of supply and demand always apply. I can only think of one thing that is completely free to everyone and that's oxygen: if you want free energy make the conversion of it so abundant so as to flood the market, and make it so that every individual can do so him/herself so it can never be taken away from them.
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    Oct 31 2011: As an addendum to this idea, perhaps we should consider redefining property. Unless we reach out into extra terrestrial areas for colonization, our earthly resources are finite.
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    Oct 31 2011: if water and energy are free, why do we pay for it? why don't you just bypass the providers, and get them for yourself for free?
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      Oct 31 2011: Actually we would but there is an elasticity to demand. Our individual capacity to generate these things are less elastic. This is what promotes trade. When Justin talks about "free" he refers to the fact that it is derived from our environment is such a way that there is not middleman in the production of it. There would nevertheless still be a market for energy traded among individuals based on fluctuating demand.
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        Oct 31 2011: i haven't watched that talk, but i'm kind of certain that elasticity does not make things free. free means we need to do nothing to get. both energy and water is something we don't have in the form we need and at the place we need. it has to be transformed and transported, which involves cost.
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        Oct 31 2011: i did. what a waste of time it was! this talk contains no information at all. electron moves here okay. this is hollywood quality. how much the material costs? how much window area i need to cover? what is the lifetime? who has the patent? when it becomes viable technology? what waste the technology generates? just a few questions, i could go on all night.
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          Oct 31 2011: All very valid points if this were an engineering discussion. The discussion here is not about the engineering viability of it but whether or not we have an economic environment that would support it. Many things are technically feasible but economic mechanisms are what make them happen. There currently are not real mechanisms for people trading energy in an open market, only limited capability to sell back to the grid in some countries.
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        Oct 31 2011: luckily, our investors in our "economic environment" does not often support anything with no "engineering viability". present the data, mr hall-tipping, and spare us the tales of the electron.
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          Nov 1 2011: Here is one thing that I have observed over the last 60 years as well as indirect experience through historical account. Technology is always available. Collective will is not. Economics is the domain of collective will and therein lies the challenge. Investors of yesterday who walked away from opportunity because there was no demand through collective will gather today when someone has the courage to move the collective will through thought leadership.

          I am casting my net for those who have the vision to offer potential avenues for technologies like this to flourish. This challenge is not interested in the myriad obstacles to fulfillment. Before Steve Jobs tackled the mobile phone, everyone agreed that it had certain limitations. Similarly, we have all agreed to limitations in the energy market. I do not. I think there are innovative people out there who can bring the requisite intellect to bear to change these preconceptions and make history with bold new approaches to old problems. If you have a crazy idea, this is the forum to offer it up and I hope those with crazy ideas respond. We all know what the limitations are. What if we assumed no limitations? The future belongs to those who accept no limitations.

          Visionaries, speak now or forever hold your peace to the detriment of mankind.
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    Oct 29 2011: Over two hundred years ago in the American Revolution we redefined wealth in terms of personal property, that is the distribution of property from the aristocracy down to the individual person. Now we have wealth aggregated back up to a corporate aristocracy rather than a social aristocracy. I think we need to find a way to democratize wealth again. This would open up the world to a great expansion of all these cutting edge technologies which are not based on physical property.
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    Oct 29 2011: Not like a commune. Like free trade but without the monopolizing of supply. This is not a topic that seeks simplistic labels.
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    Oct 29 2011: like a commune? call it communism??