This Idea Came To Me In A Dream - How To Survive Economic Collapse

"TEOTWAWKI" - The End Of The World As We Know It.

This is an idea that came to me in a dream, last night, after listening to a recent C2C on survivalism.

Some people are saying we are facing an economic collapse of nightmarish proportions. Potential breakdown of law & order, chaos in the streets, dogs & cats living together...

All because of an economic system which was doomed to fail.

Once the privately-owned Federal Reserve / banking system creates so many dollars that it becomes apparent to everyone that our fiat currency is worthless, a financial shakeup is in order.

What do we do then?

Clearly, humanity will still have needs. How to buy & sell when the United States hits economic conditions making the great depression look like a picnic? No one will have any money to buy or sell with (or the money they have will be worthless)...

Well I think this might be the answer: THE BARTER STORE

Here's how it works:

Normally, in a barter system you and another person exchange what you have with each other for what you want. The problem is that the person you are trading with might not have what you want. This is usually where money comes in. You can get what you want right now by giving the person money, so they can use the money to trade for what they want later. But what if there is no money? Are we limited to trading one-on-one again?

No. Imagine this...

A store opens. You come in to it, bringing with you something of value. It could be clothes, books, food, furniture, collectors items, or your skilled services by the hour... whatever. A store clerk looks at your stuff, and you negotiate a supposed “value” of the items. This value is written onto a store receipt. You have a choice to negotiate with the clerk, or any other at any other store elsewhere. The value of your goods would fluctuate with demand, and your reputation for providing a good product or service.

Then, you wander around in the store with your receipt for this sale, and “buy” other people's items with the value you just paid with what you left at the store.

Whether you're bringing in apples or shoelaces, there will always be some sort of value to whatever you have. And you will always be able to exchange that value for something else you need. Whether you have skills as a farmer, a seamstress, a carpenter, or whatever, you can bring your product into the store. You could even trade in your value as a laborer, in certificates vouching for hours worked, to be bought in the store.

The best part is that money creation will be taken out of the hands of the bankers, and put into the hands of those who are creating value in the economy. When much value is created, much money exists. If everybody sits on their behinds, no money is created. The value of the currency would reflect the value of the productive workforce. Money would not be subject to fluctuation due to speculation, derivatives, currency exchange, debt, interest, or inflation/deflation.

If a crate full of apples is worth a lot (because you will be able to buy a lot with it when food is scarce) then people will come to understand that quickly, and begin to try and plant & harvest food. Once the supply of food is plentiful, its value goes down in the store. It would be a natural balancing act between value, supply, and demand.

And the best part?

NO ONE NEEDS ANY STINKING MONEY.

The way you survive and get along in this world is to pull your own weight by producing something of real value.

There wouldn't be wealthy profiteers magnifying their riches with compound interest, or freeloading off of others by charging usury. It would be much harder to do either of these things in a system like this.

The way the store's employees (clerks) would see it worthwhile to “work” there is that they would get to “spend” some store value on available items.

The store would operate by taxing purchases a tiny percentage (say 1%?) to cover costs of labor for those who work there. Buyers could trade in 10,000 units of value a day, but spend 9,900. The remaining 100 units of value would go to the employees, who could “shop” there just like the customers.

Most importantly, a workforce in the economy would get to see the benefits of their labor almost immediately, and everyone will be able to go to work again doing whatever their community finds most valuable... and this will all be possible whether anyone has any “money” or not, so unemployment will virtually disappear.

Many stores like this can pop up all over the place, each catering to certain types of products or services being sold. Small and large, common or esoteric, they can supply the needs of the economy even if money itself disappears.

This is how we can survive the next great depression if the economic infrastructure which provides essential commodities breaks down.




[edit on 21-4-2008 by ianr5741]

reply to post by ianr5741


That's a great idea.I wonder how this will work for the elderly or the infirm? The only way to keep this barter store working is by trading your labor for goods or services.If you run out of trading goods and you either have no valuable skills or are to old or sick I guess you're out of luck.
Sounds like the start of a welfare system doesn't it?

Well, it just depends on what is considered valuable.

Everyone can do something. Like I said, you could even "sell" your hours of labor. Let's say you're an electrician. A person can come in with a pile of dresses they sewed at home, sell them to the store, and buy the electrician for a few hours to come and fix her house. That's how it would work.


I'm not saying it's perfect and would provide everything we're used to today. But at least we're looking at a pretty useful system to fall back on if everything else collapses.


This type of "store" would be possible to start by almost anybody. There would be big ones and small ones. A farmer's market, a labor trading market, a goods market or any mix all wrapped in one. Best thing is that even if a big company doesn't hire you to be one of their slaves, you can still do something and get "paid". You've got a choice of where to work and what to do there. And you can change what you do at anytime, without having to go out and look for another "job".


Chairs are in demand? Cut down a tree and start widdling. If you know how to make a good chair, you're in business. What if people need a plumber? If you've got the tools and know-how, sell hour certificates at the store and buy up stuff with them. Then people come and hire you by buying your certificates.

The prices of all these goods will fluctuate with supply and demand, and people will naturally gravitate towards doing the things that are highly valued.

And the best part is that none of the Federal Reserve's notes ever come into play in this equation.

(Oh they're gonna hate me, but too bad. The idea is out there and I wash my hands of it :-)

Originally posted by ianr5741
Folks, copy & paste and spread this word around!

Um, no, actually this one thread will be sufficient. We don't really encourage chain letters and thread-pasting to other forums. Plus, you might want to reconsider a number of your ideas before you consider them to be earth-shattering.

Originally posted by ianr5741
All because of an economic system which was doomed to fail.

I'd love to hear why you think we're using an economic system that was "doomed to fail". I'm not saying it isn't, but rather I'm curious as to how deep your understanding of economics is, because the rest of the post seems a bit lacking in overall comprehension of Micro and Macro economics, capitalism, and the free market in the United States.

Originally posted by ianr5741
Once the privately-owned Federal Reserve prints so many Federal Reserve Notes that it becomes apparent to everyone that paper money is worthless, a financial shakeup is in order.

Actually, The United States Bureau of Engraving and Printing, part of the Department of the Treasury, prints paper money. The Federal Reserve buys and sells securities to help establish and maintain the value of that money.

Now, technically, yes, the actual piece of paper that has that we call a dollar bill is worthless, except for what other uses pre-printed cotton and metal-fiber paper would be used for. However, as I will hopefully demonstrate to you, this is not the point of money. It is to carry an established value based upon many, many factors in an portable, convenient form.

Originally posted by ianr5741
No one will have any money to buy or sell with (or the money they have will be worthless)...

On the contrary. You not only have the foreign currency market, but also gold, silver, gems, water, food, ammo, etc. Society will quickly establish a new currency in the interim. Ever since the invention of currency, coming up with a currency has never been a problem. It's almost instinctual at this point. The problem has been in trying to control the value of it without over-limiting or over-extending the currency itself.

For instance, if tomorrow, every single current currency in the world collapsed, your local area would quickly choose a replacement. If they chose, say, leaves as currency, everyone would instantly be very very rich, and prices would rise (inflation) to astronomical levels. Likewise, if they instead chose granite monoliths as currency, there would probably only be any miniscule handful of people with any currency in a several mile radius, and so prices would lower (depression) to ridiculous levels just to get any piece of the pie whatsoever.

Thus, what, in very rough terms, controls the "value" of money is a careful balance of the supply of money against demand for it. The supply of our dollar is a combination of virtual money simply whizzing around modems and the internet, and real money, such as dollars and change. The demand for it is, well, hopefully obvious. Then you've got various levels of combination between the two, such as money created when banks loan money out, credit debt, equities, securities, etc, that are both supply and demand at the same time. It is an extremely complex ecosystem so intricately woven together that it's a lot more like galaxies connected by dark matter than some sort of imaginary house of cards.

Originally posted by ianr5741
A store opens. You come in to it, bringing with you something of value. It could be clothes, books, food, furniture, collectors items... whatever. A store clerk looks at your stuff, and you negotiate a supposed “value” of the items. This value is written onto a store receipt.

Then, you wander around in the store with your receipt, and “buy” other people's items with the value you just paid with what you left at the store.

You mean like a legally binding note establishing an agreed upon value that may be used in exchange against any good or service? Congratulations, you've just invented currency and credit, the two things you just got through condemning and claiming were doomed to failure. Except you've further hindered the system because now the value of currency is no longer universal, but rather established on a market by market basis by people who may or may not have any understanding economic theory.

So instead of having a group of college educated people heavily scrutinized, constantly watchdogged, and with decades of experience in dealing with the minutae and the macro of economics, doing nothing all day but trying to figure out whether a change of a fraction of a percentage point will encourage or discourage inflation, you've got Maw and Paw Kettle deciding one day that oranges are going to be worth 50 points, and the next day they're worth 50000 points, depending on their mood or whatever suits their fancy.

Further, since the entire economic ecosystem you've suggested takes place within a single market, you end up with "company store" syndrome, also known as the "truck system," which is so susceptable to corruption and economic enslavement of the workers that it is illegal in almost every developed nation. In fact, Merle Travis wrote a song about it called "Sixteen Tons" that you have probably heard of before. It's the one that goes "I owe my soul to the company store."

Originally posted by ianr5741
The way you survive and get along in this world is to pull your own weight by producing something of real value.

Except you've forgotten about two very critical factors. The first is that not everyone produces goods. Some people provide services. A roof-mender, for instance, has a heavily abstract value. During a calm summer season, in your system, he might have extremely low prices to get by. But in the spring, after the high winds and during the rains, he might up his price by 1000%. Except that the value of the scrip that you propose would be so highly unstable from day to day, much less year to year, there would be even less control than that. In present day, certainly roofers earn a bit more after hail and wind storms, but market forces prevent them from price-gouging. Your system offers no such protection.

Originally posted by ianr5741
There wouldn't be wealthy profiteers magnifying their riches with compound interest, or freeloading off of others by charging usury. It would be much harder to do either of these things in a system like this.

I take it you've not read too much history on this subject. I suggest you do so. It is precisely because of money-lenders that economies grow, otherwise you have a purely mercantile economy that stagnates, inflates, and eventually results in stagflation (which is far worse than depression). If you look at the wealthiest nations in history, compared to their poorer counterparts, you will see one of two things: they either had access to a resource that no one else did (such as the Nabataeans with Frankincense), or they legalized money-lending (such as the Venetians). In areas where money was not lent, the economy was stuck in the stone-age, such as Pre-Columbian England.

Originally posted by ianr5741
This is how we survive the next great depression without a hitch.

I'm afraid it's actually how one would ensure that, after an economic collapse, no lasting recovery were remotely possible. It would, however, allow one to more easily enslave a populace under the Truck System.

Now I'm not saying our current economic system is the end-all, be-all of economic theory now and forever more. Barely 200 years ago, people were still using Mercantilism (protectionist hording) as a basis for international monetary policy. Less than 40 years ago, we were still on the gold standard. The science of economics is still quite young, and I'm sure that as time goes on, we'll find more and more ways to encourage economic growth, recovery, and so forth that make our current system look primitive by example, but you could say that about any science, at any point in history.

Your system, however, is actually going backwards several steps. In a civilized area that hadn't broken out into panicked violence, looting, pillaging, etc, and the area were rather secure, militarily, the truck system might work until market forces and self-correction established a new currency with a new system to guide it, but as a long-term solution, it is a revisitation of the days when coal-miners and plantation workers were trapped because no one else would accept the company scrip they got in lieu of pay, and the price-gouging put them so far in debt they couldn't legally leave, even if they had the resources to do so.

reply to post by ianr5741


Teotwawki ?? Did you make that up or is this a Native American word/phrase/place/thing/being ?


Or do you mean Teotihuacan ?

;9
Or am I not aware of this "clique" slang ??

Oh I just remembered happy 4/20 people (for yesterday) lol I'm slow and couldn't celebrate yesterday.

Originally posted by trilateral
Teotwawki ??

It's short for "The End of The World As We Know It".

I'm going to edit the title for Ian to clarify the subject matter of the thread.

I'd love to hear why you think we're using an economic system that was "doomed to fail". I'm not saying it isn't, but rather I'm curious as to how deep your understanding of economics is, because the rest of the post seems a bit lacking in overall comprehension of Micro and Macro economics, capitalism, and the free market in the United States.

Since virtually all money that comes into existence in the United States does so as an interest-bearing loan... the interest from all the loans which created our money is compounding constantly. Unless payments are made to reduce the principal, the interest on this debt will exceed the production capacity of the economy. At this point it will make no economic sense to go on anymore. You just can't keep up. Also, because banks create the principal but not the interest, there is more debt out there than there is money. It would take 4 earths of wealth to pay off all the debts owed to banks. Now, I know this doesn't jive with common sense but this is the result of compound interest.



Actually, The United States Bureau of Engraving and Printing, part of the Department of the Treasury, prints paper money. The Federal Reserve buys and sells securities to help establish and maintain the value of that money.

Yes, there are layers and processes in place to obfuscate the fact that the Federal Reserve is creating money. I'm trying to keep it simple.


On the contrary. You not only have the foreign currency market, but also gold, silver, gems, water, food, ammo, etc. Society will quickly establish a new currency in the interim. Ever since the invention of currency, coming up with a currency has never been a problem. It's almost instinctual at this point. The problem has been in trying to control the value of it without over-limiting or over-extending the currency itself.

When "currency" is created by producers, not banks, then immediately spent, it makes it much more difficult to manipulate the value of the currency itself, because there is little time and no middlemen between the buying and selling process.


Thus, what, in very rough terms, controls the "value" of money is a careful balance of the supply of money against demand for it.

When Ben "Helicopter" Bernanke bails out huge banks and investment companies with hundreds of billions of dollars, would you say that has a potential of upsetting the "careful balance" of supply and demand for money?


You mean like a legally binding note establishing an agreed upon value that may be used in exchange against any good or service? Congratulations, you've just invented currency and credit, the two things you just got through condemning and claiming were doomed to failure. Except you've further hindered the system because now the value of currency is no longer universal, but rather established on a market by market basis by people who may or may not have any understanding economic theory.

Letting "economists" use bureaucracy to artificially manipulate the value of a monopoly money forced on the population without choice seems to be the problem - they abuse this privilege to their advantage, and our loss. (Hasn't history proven that?) What I'm advocating here is choice. The Fed system is a monopoly on currency creation.

So instead of having a group of college educated people heavily scrutinized, constantly watchdogged, and with decades of experience in dealing with the minutae and the macro of economics, doing nothing all day but trying to figure out whether a change of a fraction of a percentage point will encourage or discourage inflation, you've got Maw and Paw Kettle deciding one day that oranges are going to be worth 50 points, and the next day they're worth 50000 points, depending on their mood or whatever suits their fancy.

Exactly. And if the seller of the orange doesn't like it, he walks down to the street to the next store, offering something more agreeable. This is what free markets are all about. You get what you can get, and so does everybody else, depending on supply and demand. Letting a handful of egomaniacs at the top of a pyramid system decide for everybody else makes the system unnatural and corrupted.


Further, since the entire economic ecosystem you've suggested takes place within a single market, you end up with "company store" syndrome, also known as the "truck system," which is so susceptable to corruption and economic enslavement of the workers that it is illegal in almost every developed nation. In fact, Merle Travis wrote a song about it called "Sixteen Tons" that you have probably heard of before. It's the one that goes "I owe my soul to the company store."


That's not what I'm saying at all. Anyone can open a store, of any size. (Why would it be illegal for a number of people to get together and trade?) And people will gravitate to the store the suits them best. If one store doesn't offer good options, another will. I'm not talking about a monopoly of any sort. There would be MANY stores, all over the place. Further, the store wouldn't be owned by a company, it would be owned by the customers. Last, there couldn't be economic enslavement going on because anyone and everyone can participate to the degree they want to.

In the store you speak of, it's owned by a corporation which pays its employees money, then forces them to shop at a high-priced store by denying them any other options. How is what I'm describing anything like that?????

Farmer's markets already exist. I'm just advocating payment of goods with goods. When "universal money" comes into play, counterfeiters smile with glee.


In this system, you can't counterfeit VALUE. You must create something of value to get something of value.



[edit on 21-4-2008 by ianr5741]

Originally posted by daddyroo45
reply to post by ianr5741

 

That's a great idea.I wonder how this will work for the elderly or the infirm? The only way to keep this barter store working is by trading your labor for goods or services.If you run out of trading goods and you either have no valuable skills or are to old or sick I guess you're out of luck.
Sounds like the start of a welfare system doesn't it?

Sounds to me like the elderly/infirm could work in the stores.
More active people go do stuff...

I take it you've not read too much history on this subject. I suggest you do so. It is precisely because of money-lenders that economies grow, otherwise you have a purely mercantile economy that stagnates, inflates, and eventually results in stagflation (which is far worse than depression). If you look at the wealthiest nations in history, compared to their poorer counterparts, you will see one of two things: they either had access to a resource that no one else did (such as the Nabataeans with Frankincense), or they legalized money-lending (such as the Venetians). In areas where money was not lent, the economy was stuck in the stone-age, such as Pre-Columbian England.

Yes, I do read... spend about 5 hours a day on this subject, and have been doing it solid since November 2006.

The reason for growth in economies with lenders is because those locales exploit debt labor on regions that have borrowed from them. You loan money with interest at a rate that can't be repaid. Bam, you have a debt-slave. They work forever trying to pay the principal down, while you sit back and relax (or find your next victim). It's just a new form of serfdom.

John Perkins, in his book "Confessions of an Economic Hitman" describes this process in horrifying detail.



I'm afraid it's actually how one would ensure that, after an economic collapse, no lasting recovery were remotely possible.



You sound like someone clinging to the established dogma of the current compound-interest fractional-reserve fiat debt money system as if you were a banker yourself.



Your system, however, is actually going backwards several steps.


I'm afraid we're going to be headed backwards anyway, whether we like it or not. Throughout history, every single government which instituted a fiat money system has collapsed. Think ours will be any different?

I'm not saying this is a step forward. I'm saying that this is a crutch that will keep us on our feet when the system could knock us over.


Perhaps the only way to see how useful a system like this will be is to try it. Wouldn't you at least agree that perhaps a town of say 5,000 people could keep their needs met locally even if the entire economic system of the entire country falls into a deep depression?

I'm just offering alternatives here.


The reason I'm saying all of this is because when I first learned about the Great Depression, I was confused as to how so many people could be convinced that they were poor, broke, bankrupt, unemployed, or useless.

It seemed to me that so long as there are resources out there, so long as the sun shines, so long as people have their own bodies... they can put themselves to work to provide for their needs. If some economic system or another has made this difficult, it's time to try something different.

What we need is something that can keep people busy and working to provide for what humanity needs. Mostly I am concerned about food and energy. It frightens me to think that people were being killed in the streets over lumps of coal or loaves of bread. This doesn't have to happen at all...

All the people that are alive, all the people that are educated, motivated, and able to provide should have a means to do so. I believe that only through indoctrination and brainwashing into the belief that the system we live under is "necessary" that we can be duped into massive unemployment, poverty, and desperation.

We do not lose what we do not willingly give up via weak minds, lack of will, or lack of imagination.

What a good idea! And it has such positive energy to it. If somebody does not like it, they do not have to participate... it's that simple. I think this could help out many people who have never had enough money to buy into the whole oppressive money grubbers way of thinking.

Way to go!

This should be a good discussion. I hope I don't/didn't come across as condescending. I do thoroughly disagree with almost all of your points so far, but I'll attempt to do so as respectfully as possible.

Originally posted by ianr5741
Since virtually all money that comes into existence in the United States does so as an interest-bearing loan.

I wouldn't go so far as to say all. Perhaps "much," but keep in mind that new technologies, and thus, new capital, new industries, and new markets are constantly being created. Further, much of the money being generated is value-added. So not all money equals a net zero sum to the goods behind it. Much of that value is floating, and thus, very difficult to measure.

Originally posted by ianr5741
...there is more debt out there than there is money. It would take 4 earths of wealth to pay off all the debts owed to banks. Now, I know this doesn't jive with common sense but this is the result of compound interest.

Not exactly. You're still thinking in terms of Mercantilism. You're imagining "Money" as a finite resource with a definite boundary, like the gold standard. A better word for what you are thinking of is Hard Currency. If all money were Hard Currency, then, yes, it would take far more wealth than actually exists to pay off all the debt.

However, in point of fact, we are a Soft Currency system. And just as money is created when debts are lent, money is destroyed as debt becomes repaid. The why's and wherefores, and how it balloons up to such a monumental amount of floating cash versus real cash is tied up in countless tables as well as speculation, which is the natural state of a free market.

Originally posted by ianr5741
Yes, there are layers and processes in place to obfuscate the fact that the Federal Reserve is creating money. I'm trying to keep it simple.

In "keeping it simple" though, you're keeping it wrong.

It'd be like me crediting the mayor with running our school system. It's two entirely different institutions with different jobs. A lot of people who are only marginally familiar with the process like to bag on the Federal Reserve until they really learn about it. The need for it goes back as far as the Revolutionary War and the Articles of Confederation. Without knowledge of history, and what happened to the country and banks after Jefferson destroyed the first Bank of the United States, and what happened after Jackson destroyed the second Bank of the United States, you don't really have a firm grasp as to what happens when you DON'T have a central banking authority setting minimum standards for currency and lending practices.

I'm not saying the Fed is the end-all be-all, nor am I saying it is without fault. What I am saying is that people who think it needs to be abolished, without a suitable replacement, just don't have a proper grasp of history and economics. All they're doing is cashing in on a general resentment of "The Man", of whom the Fed is easily identified with.

One of the first examples of long-term failure in your system is a lack of recognizable universal standard to prevent fraud and counterfeiting. What's to stop me from selling, say, a single piece of candy, taking the scrip for "1 point" and then going home and, using resourcefulness, turning that scrip into 10 points, or 100 points? What is to prevent me as the merchant from simply writing up thousands of points worth of scrip and then, when people come to collect, I simply deny having ever written it, and accuse the scrip of being counterfeit? Who would arbit such a situation? The Market? Certainly not! Their interests would always be with the merchants, in the mind of the customer. The police? How are they to recognize legit currency from one store to another if there is no universal standard?

Originally posted by ianr5741
When "currency" is created by producers, not banks, then immediately spent, it makes it much more difficult to manipulate the value of the currency itself, because there is little time and no middlemen between the buying and selling process.

This is the second example of the long-term failure of your Barter Market Truck System. You wrongfully assume that everyone wants to spend their currency right away. This is not the case. If I'm a farmer, I live and die by the harvest. If I'm smart, then after I sell all my harvest, I keep enough savings to see me through the winter till next planting season, when I buy the extra workers, seed, equipment, etc, that I will need to do the job. What if I get 50,000 points worth of scrip from a store and hold on to it through the winter only to find that, next season, the store has packed up and left town?

Who will honor my scrip? Since there is no universal standard from store to store, they have no reason to accept my scrip from another store, and in fact, they'd be nuts to accept it.

Originally posted by ianr5741
When Ben "Helicopter" Bernanke bails out huge banks and investment companies with hundreds of billions of dollars, would you say that has a potential of upsetting the "careful balance" of supply and demand for money?

Bernanke may not be Greenspan, but he's also not a complete idiot. His policies are different, and he caves more to Bush than he should, but to be perfectly honest, Chairman of the Fed is one of those jobs the Media doesn't understand, and buzzwords like "Helicopter Bernanke" do little to invoke any reaction from me.

Further, the bailout of Bear Sternes was an absolute necessity, unless you'd rather millions of people suddenly lose everything in their accounts, which would cause hundreds, if not thousands of times more damage to the system than a few billion in assumed debt. I'm not happy about the situation, but I'm not happy about it in the same way I'd not be happy about having to have a lung removed if it was diagnosed with lung cancer. It sucks, but it was the only way to save the rest of the body.

Originally posted by ianr5741
Letting "economists" use bureaucracy to artificially manipulate the value of a monopoly money forced on the population without choice seems to be the problem - they abuse this privilege to their advantage, and our loss. (Hasn't history proven that?) What I'm advocating here is choice. The Fed system is a monopoly on currency creation.

Here we disagree. You somehow, and I believe wrongfully, assume the altruistic motive of the yeoman trader. A Norman Rockwellian world where the kindly apple-merchant trades a fair sum of an apple for a newspaper. This is absolutely not the case. Everyone is out for themselves in the world of trade. If they weren't, they'd be in the business of Charity, not trade.

Originally posted by ianr5741
Exactly. And if the seller of the orange doesn't like it, he walks down to the street to the next store, offering something more agreeable. This is what free markets are all about. You get what you can get, and so does everybody else, depending on supply and demand. Letting a handful of egomaniacs at the top of a pyramid system decide for everybody else makes the system unnatural and corrupted.

Which brings to mind the third failing of your truck system: A lack of coherent universal value to the scrip.

Store A: Deals in Paper Goods (titles, books, diplomas, contracts)

Store B: Deals in Construction (barn raising, house building, repairs)

Store C: Deals in Kitchen Goods (pots, pans, pottery, utensils)

Now, the first problem you run into here is that there's no reason for any of these stores to really interact. The Construction store might occasionally a book, or maybe a jug for some water from the Kitchen store, but overall, none of them really need or want each other's services except on a very occasional basis.

This causes immediate economic stagnantion, as no goods are traded between the stores. Howevever, each store will take just about any good or service in exchange for their store's personal scrip.

Now here's where your bigger problem comes into play. You are a Farmer, with a harvest of Apples. Because Apples are a seasonal item, and there's almost no-long distance commerce, every apple vendor in town is going to be flooding the market with apples. Store A and B only offer you 1 point per bushel of apples, because the market is flooded. Store C might offer you 5 points per bushel, but since thost points are only valid at Store C, unless you need Kitchen Goods, it's pointless to sell to them, when what you really need is a new grain silo to be build by Store B.

Now winter is fast approaching, Store B has more business than they can handle, and are rapidly raising their prices to far more than what you could make by selling apples to them. Now unless Store B accepts the Scrip from Store C, then you are simply out of luck. You either sell all your apples to Store B and hope that not only is Store B around next year, but that you make up enough Apple Sales next year to buy that grain silo, or you sell to Store C, which offers you scrip for stuff you don't want or need.

So let's say B accepts scrip from C. What incentive do they have not to completely screw one another now? After all, they are simply creating currency out of the clear blue air. So if they know you need a grain silo, and don't want anything from their store, but they could use your apples, they might now offer you 100p per apple, and write you a nice fat scrip for the lot. Then you go to Store B, and present them with a scrip for enough to buy that grain silo.

At the end of the day, Store B needs to balance its books, so it goes to Store A to collect the scrip. Store A offers Apples, which it knows Store B won't want. Store B also doesn't want Kitchen goods, but supposes they'll take some of both and sell them as best they can. Except now Store A demands 500p per bushel of apples, and ten times their normal amount for kitchen supplies. Store B now either takes a massive loss on their scrip, all to the benefit of Store A, or they get nothing at all. And to make matters worse, they STILL have to build that grain silo, which is now costing them far more than they got from the scrip for Store A.

THIS is what the Fed prevents. Granted, they are elitist yobs working for their own self-interest, but they are doing so in a way that keeps the economy stable and growing. That's not altruism, that's reality. And that's why things like Bear Stearnes DIDN'T completely destroy our economy, but rather gave it a couple of days news.

Originally posted by ianr5741
Further, the store wouldn't be owned by a company, it would be owned by the customers.

You mean communism then. Let's call an apple an apple. If you aren't talking about private ownership, you're talking about state property. At this point the currency becomes little more than a requisition form. From each according to their means, to each according to their needs. Right? If so, we're having two completely different conversations.

Originally posted by ianr5741
Last, there couldn't be economic enslavement going on because anyone and everyone can participate to the degree they want to.

Hahahahah! Right. You can volunteer to participate in having something to eat. You have have freedom of choice to obtain fresh water. You have liberty to choose to build a house of of building materials. And you have the choice NOT to do any of the above, at the expense of food, water, and shelter. It gets worse from there.

Originally posted by ianr5741
Farmer's markets already exist. I'm just advocating payment of goods with goods. When "universal money" comes into play, counterfeiters smile with glee.

Those two sentances demonstrate a decided lack of understanding about either. I frequent our Farmer's Market constantly. The farmers do not drop off a load of apples to pick up a load of squash. I don't show up with a collection of used books and get a bucket of tomatoes instead. The farmers sell their produce for MONEY. I give the Farmer's Market MONEY for the fruit and veg I want. The FED ensures that the market is stable enough to accomodate all three of us in a somewhat fair and reasonable fashion, even if it is not a utopian one.

Further, counterfeiters do not "smile with glee" at universal money. On the contrary, it is orders of magnitude easier to be a counterfeiter when you are dealing with more than one currency, and it goes up from there. Just ask any bank teller. 90% of the time, the way they catch a counterfeit U.S. dollar from a real one is by the feel, as they handle the same exact money day in and day out. Now imagine if all 50 states had their own money. There's no way you could get that kind of professional feel and knowledge about all 50 currencies that you could to the degree you get with one universal currency.

Still, some counterfeit money gets through, and that's with professionals who do nothing but handle money all day long, and CONSTANT updates and alerts from messaging systems. Now take it to the scale of Maw and Paw kettle, operating a fruit-stand three months out of the year, dealing with 50 kinds of cash, with their calloused hands, old eyes, and lack of any sort of infrastructure to alert them about money updates like new bills, or fraud alerts, like duplicate serial numbers.

And THAT'S only on a state level. You're talking about a community, where EVERYONE has their own currency. Good lord! That's a counterfeiters paradise. No one would ever sell anything, they'd all just sit around writing themselves John Smith scrips and raking in whatever the honest folk got suckered into trading away for their useless scraps of paper.

And if everyone didn't have their own currency, then you are talking about the same multiple-store interaction I mentioned earlier, and once more arises the need for a neutral 3rd party to arbitrate the value of scrip and commodities between stores and customers.

reply to post by thelibra



I cannot put the energy into defending this idea that you are putting into dissecting it.


Methinks thou doth protest too much...




[edit on 21-4-2008 by ianr5741]

Originally posted by thelibra
The FED ensures that the market is stable...

All I have to say is this:

(Have you seen it?)

Google Video Link

Originally posted by ianr5741
I cannot put the energy into defending this idea that you are putting into dissecting it.

Methinks thou doth protest too much...

I can respect that you don't have the time or energy to compose a thought-out rebuttal, but misquoting Shakespeare is no way to justify a flawed economic theory.

The reason I put so much effort and thought into my argument is because economics is a subject of which I'm not ashamed to say I am very well educated in, and have given many years of fascinated study of. If you were instead, posting a thread on, say, taxation, then probably Crakeur would have a heyday in much the same fashion. If you were to post a thread on brain chemistry, then Melonin would probably have a great deal to say on the subject. If you were discussing Cartography, then SnoopyUK would have chimed in. You just happened to pick one of my favorites to think about.

I can't just post a link to some video and say "there, that's what I believe." I can't even point to the Fed and say "they're right." I won't even go so far as to say "read Greenspan, Buffett, and Clason, and you'll know what I think." My views are my own, and I do not agree with any one author or institution 100%. Life has taught me to be well-thought out and ready to defend my arguments, and ATS has honed that necessity on a daily basis.

What I will say, in summation, is that you are either proposing Communism, or a severe mercantile step backwards in economic science, on par with suggesting that our solar system is the center of the galaxy. It's just doesn't work that way, there are too many factors to prove it wrong. Again, though, I stress that ours is not the Utopian system, by any stretch of the imagination. Science is not a series of "discovering the best way to do something," but rather a process of "learning what does not work, and is not true."

That said, I really do not want to discourage you from thinking about and analyzing economics. I'd heavily recommend reading "The Richest Man in Babylon" by Clason. It's probably the fundamental text, and a very easy read, that puts everything in laymans terms, in a series of short allegories. Once you've read that, if you're up for more reading, there's any number of really good books, subjects, and excercises, that help give a progressively broader and broader understanding of money's ecosystem.

At first glance it sounds like you're describing a pawn shop. I can take goods into a pawn shop and instead of exchanging them for currency I can take other goods. I suspect pawn shop owners would be the first to fill the void in the absence of a common currency for those not already in established trade relationships. They already serve this purpose for some people.

You could even trade in your value as a laborer, in certificates vouching for hours worked, to be bought in the store.

That's all money is ultimately. Even when it represents goods, goods represent the labor required to produce them. This is why there will always be some sort of currency. There will always be a need to store and exchange the value of labor. But you are right about one thing. Fiat money always returns to its intrinsic value.

If I were to set up a market like that, I would also give handouts too. Peoples loyalty is worth more than there money. What about parapalegics? or some people who really can't work? I know everybody can do something, but it's really hard for some. I would try to help people as much as possible, if they can't pay the full price for somehing, I'd give it to them at a price they can afford. Helping others I think is the best way to survive.

A change is coming. One way or another, we're going to have to deal with it.

I'm just offering ideas. I figure it's worth a shot on a small-scale trial.

Having flaws in our economic theory hasn't stopped us from trying flawed theories before!

Live & learn...

Originally posted by ianr5741
A change is coming. One way or another, we're going to have to deal with it.

Now that, I can fully agree with. I too feel like we are on the verge of a new economic shift. But it's always hard to tell precisely when it happens, because it's always historians that decide that sort of thing and later, give it a name.