definitions of use value and exchange value

This post was written by Jeroen van Beele

following my previous post i should define the notions of use value and exchange value because they are not immediately clear

1. i define value as an attribute. here i use “to attribute” in the original sense: it is a person that can consider something to be of value (see meaning 2 in http://www.dictionary.com/browse/attribute), value is not an intrinsic property.
2. value can be attributed to a thing, but also to a service or anything that we can talk about, like a policy endorsed by some forum like a government.
3. i distinguish between use value and exchange value:
a. use value is a subjective attribute, it is basically the answer to the question: how much of my effort do i want to spend in order to realise this thing/service/etc?
b. exchange value is an intersubjective attribute, it is basically the answer to the question: how much effort do i want you to spend in order to acquire this thing/service/etc from me?

the point here is that thus exchange value is dependant by definition upon my relationship with you.

now in case i have unity consciousness then we share everything and so your effort is my effort. consequently exchange value is the same as use value.

but in case i lack this consciousness distrust may interfere and hence i may need power to enforce you to spend the amount of effort i envision instead of the amount of effort you are willing to spend.

i haven’t worked this out yet but an interesting thought is:

exchange value – use value = transaction costs

if this were true in some sense or other this underpins my feeling that in the sharing economy transaction costs drop to zero, thus opening space for tremendous growth within the limits of our planet.

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Monday 19 June 2017


today’s money has exchange value, tomorrow’s money has use value

This post was written by Jeroen van Beele

is there something wrong with our money system?

no and yes.

first no: no there is nothing wrong with our money system, there is something wrong with our behaviour: basically many of us still ask: what’s in it for me? some of us are awakening to: what’s in it for us?

so yes: although it is possible to answer the question what’s in it for us? using our current money system, this question can be answered better using a money system defined in terms of use value instead of exchange value.

i explained this idea in depth in http://guts4roses.org/big-data-is-the-money-of-the-future/
also see: http://guts4roses.org/a-vision-for-the-sharing-economy/

the argument in a few lines:

to run an economy you need 2 funxionalities: coordination of tasks (a la mintzberg) and canalisation of trust.

currently we use money to realise both funxionalities, viz: when i know the price of something i can decide to acquire it or not, this is a coordination decision. and when i trade with you i don’t trust you but i trust the (exchange) value of your money. by the way, i guess transaxion costs arise from this collapse of 2 systems into 1.

now i believe that in the new economy these 2 funxionalities will be realised by 2 different constructs. in other words: i believe that our current money system will decompose into 2 systems, a coordination system and a trust system.

in this coordination system we operationalise the notion of use value: the coordination system enables us to calculate the effort needed to achieve a goal when cooperating from the perspective of what’s in it for us. now we can decide whether the goal is worth the effort or not, this is a matter of use value. this is different from trading from the perspective of what’s in it for me because then we measure the effort in terms of exchange value which in turn is determined by the power of the respective parties involved.

the trust system will be a many facetted system on top of the coordination system.

i believe that when you look closely then you can see that this decomposition is already happening, and this is why i look at initiatives like noomap, ceptr and yunity etc. i believe that they are working on this coordination system.

what blurres all of these initiatives is that they want to realise both funxionalities with one construct, just like our current money system does. i believe this is not going to work, the coordination and the trust should be addressed separately (this is a separation of concerns!).

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Saturday 20 May 2017


the flaw in the invisible hand

This post was written by Jeroen van Beele

the original text containing the invisible hand can be found here:

http://www.econlib.org/library/Smith/smWN13.html

An Inquiry into the Nature and Causes of the Wealth of Nations
Book IV, Chapter II
Of Restraints upon the Importation from Foreign Countries of such Goods as can be Produced at Home
section IV.2.9

this is the original text:

But the annual revenue of every society is always precisely equal to the exchangeable value of the whole annual produce of its industry, or rather is precisely the same thing with that exchangeable value. As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.

the flaw in the argument is as follows:

first of all note the context in which smith introduces his invisible hand: Of Restraints upon the Importation from Foreign Countries of such Goods as can be Produced at Home. so the concept of invisible hand arises in the context of what is nowadays called outsourcing.

smith states: every individual necessarily labours to render the annual revenue of the society as great as he can.

here smith implicitely assumes all individuals adhering to the blanc aforism: individual labour maximises the revenue for society, not for the individual himself. the point is that smith assumes the society to work internally according to the blanc aforism whereas the society externally (in this context meaning in international trade) interacts according to the market principle (i do the least and i take the most). the flaw in his argument is that he then assumes (or seems to assume) that the external and internal working coincide.

by the way, towards the end of this section smith states: I have never known much good done by those who affected to trade for the public good.

so according to smith B-corporations are not viable.

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Wednesday 14 December 2016


a vision for the sharing economy

This post was written by Jeroen van Beele

understanding economic processes as consciousness processes

note that the term sharing economy has been taken over by the market thus depriving it from it’s orignal meaning, therefore some people prefer the term unconditional gifting. here we still use the term sharing economy because it’s original meaning precisely captures what we mean.

in this paper we describe our vision for the sharing economy which is emerging as we speak.

we assume the reader to be familiar with the ideas put forward in [uniting], for a more concise description of these ideas please look at [emergence]. from these two posts we recall:

1. we split the question “what does the sharing economy look like?” into two questions:
a. what does (an economic) utopia look like?
b. how to adapt this utopia to humans?

2. what utopia looks like is actually straightforward and can be described as people paying forward, equivalently described by the aforism by louis blanc (1851): i do what i can and i take what i need.

3. we use a framework consisting of three fundamental notions: resources, labour and goals and two derived notions: knowledge and planning.

4. our consciousness is evolving from self consciousness to unity consciousness, hence our behaviour evolves from swapping to sharing. we use the aforementioned framework to deduce from this evolution that our current money system is decomposing into two systems, one for coordination of tasks and one for the canalisation of trust.

so much for the recall.

so suppose we have a group of people all living by the blanc aforism, what does it’s economic process look like? because they only take what they need there is abundance, hence there is space for sharing. they will share resources, labour, goals, knowledge and planning. so they just take what they need and do whatever is necessary to achieve their goals. but what goals to set? what do i really need? answering these questions is a matter of consciousness. by engaging in dialogue with my fellows i become aware of both my needs and my talents. in this way the economic process of the sharing economy is a consciousness process. moreover thus unity consciousness is manifested distributedly by the actions of the members of the sharing economy.

in order to support this process these people share all their data, with both read and write access. note that giving write access to eg your planning means that i can plan the labour that you share with us, in other words i can give you an order. and you will execute that order because you trust that i act from a unity perspective. also note that sharing goals usually is called solidarity.

because of the distributed nature of this sharing economy the data is stored distributedly aswell, much like everybody has his own data in his own handheld and copies of the data of his peers that he cooperates with.

also note that the goal of profit has become obsolete. in fact, how should we define profit in this context? in our current economy we use the notion of exchange value to coordinate and calculate profit. as we shall see later, in utopia we use the notion of use value to coordinate. in it’s wake also work (as in jobs) is no longer a goal, but a means to achieve our goals.

so much for utopia.

next we describe a conceivable construction of the sharing economy.

so we need to adapt the above formulated utopia to humans. we expect that there will always be a group of people that doesn’t want to take it’s responsibility. for this group the current economic system is here to stay, this group will carry on swapping, usually by using money. but the others will inhabit the sharing economy and we expect this to take many forms, all based on the same coordination system, but with different constructions for the trust system geared to what people dare trust of each other.

hence we envision three layers:
1. the first layer is our current swapping economy, using money.
2. the second layer is the coordination layer. this layer contains money as a resource, solely used to interact with the first layer.
3. the third layer is the trust layer. this is where myriads of constructions are possible, all based on CRUD-rights on the second layer (CRUD stands for: create, read, update and delete).

combining the above we propose that people wanting to share start sharing their data in the semantic web linking this data to DEMO (see DEMO.nl). they can do that using their own hardware connecting it to the semantic web through a semantic sharing protocol (SSP). the important thing is to give write access, which is like an executable form of sharing due to the links to DEMO.

we will use specialised social media to support the aformentioned dialogue resulting in both consciousness and a healthy plan. these social media should enable:
– what: the dialogue about and the formulation of goals (in a web of mutually supporting goals)
– how: the planning of goals in executable steps, this should be done algorithmically, but we expect these algorithms to be NP-complete, hence we propose that the social media will interact with the users so that these users can supply the heuristics for the algorithm. moreover the algorithm will learn how to plan based on user input.

some words on the planning process using the social media: in this process many possible plans will be identified. the idea is that all these (executable!) plans can be (use) valuated permitting us to choose between different plans. thus we use use value to coordinate. in this way goals are functions on the space of all possible plans, in technical words the space of goals is dual to the space of plans. one way to implement this function technically is to let the stewards of the goal manually evaluate different plans. this will soon be impossible performancewise but we will use this technique in the mock up.

we propose diaspora as a candidate social medium.

mock up

we will make a mock up of the above, hence we:
1. select a candidate organisation or project to host a pilot
2. publish the pilot’s data into the semantic web and link this data to DEMO
3. the planning tool will be developed in stages, the first stage being completely manual (in guts4roses.org this tool is called search & share)
4. we build the trust layer as we go

in order to describe the economic process in some more detail first we still work from the perspective of people acting according to the blanc aforism.

because everybody shares all his data we have a comprehensive amount of data. all this data is in the semantic web and this data is linked to DEMO which enables tooling to understand the data from an executable perspective. this data in the semantic web is stored locally with redundant copies stored at peers. the social media in diaspora enable users to access and manipulate the data in the semantic web. thus users interact with each other. a typical interaction could look like:

a steward posts his goal: improve education

the tooling envisioned works as follows: as soon as a goal is posted the tooling will start a search in the semantic web for procedures to manifest this goal. if not present (like in the beginning of the tool’s lifespan) the community can add these procedures and the tooling will pick up the new procedures as soon as they get posted, much like a new webpage is indexed by google. once found the tooling will suggest one or more options to alter the existing planning so as to cater for the new goal. each of these options comes with an estimate of the effort needed which can be used for decision making. as procedures are build up out of each other one can start with one goal not yet manifest in the semantic web, add a procedure, depending on existing procedures, that does manifest this goal. the formulation of such a new procedure can be the joint effort of the community.

in our exampe this works as follows: suppose there is no procedure available to improve education. an ad hoc community may emerge that discusses the validity of the goal (this is the awareness process mentioned earlier). such a dialogue may then result in the formulation of more conrete goals for which procedures do exist, eg build and run schools. now producing study material may lack procedures and so we discuss this in it’s turn. until finally one or more planning proposals have been made.

now the steward of the goal can select one of the options. once selected the planning is updated to the new planning just selected by the steward. this will entail the tooling to call DEMO transactions thus supplying jobs to the community members, in other words: setting people to work.

now how to adapt this process to humans? we expect that this questions in reality will see many different answers (basically on top of the tooling introduced above). therefore in the pilot we will make a specific trust layer: we introduce trust circles consisting of members. each circle decides to which extent the members trust each other and how they maintain this trust thus supplying the members with a specific set of CRUD rights.

note that more tooling functionality can work on top of this data, much like the internet offers the possibility to add new funcionality.

[uniting] uniting the sharing economy: guts4roses.org/big-data-is-the-money-of-the-future
[emergence] the theory behind the emergence of the new money system: guts4roses.org/painting-of-the-emergence-of-the-new-money-system

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Friday 9 December 2016


painting of the emergence of the new money system

This post was written by Jeroen van Beele

SAMSUNG CAMERA PICTURES

the emergence of the new money system

i just painted the above painting (in brazil/buzios/local friend), this powerpoint gives a quick overview: explanation of the painting

here is the theory behind the emergence of the new money system:

I believe the fundamental implication chain with regards to our current global crises is:

awareness => behaviour => system

Obviously our current system is depleting our planet. Many people try and revert this depleting with little succes. Yet others build alternatives to our current system but they have not yet reverted our crises either. I believe we should start at the level of awareness. This is where eg former World Bank representative Herman Wijffels (https://en.wikipedia.org/wiki/Herman_Wijffels) has devoted his pension to.

Fortunately awareness is evolving and hence behaviour is changing. Now which system will fit this new behaviour? I believe our consciousness is currently evolving from self consciousness to unity consciousness, see eg Charles Eistenstein (http://charleseisenstein.net) and Ken Wilbur (http://www.kenwilber.com), the latter speaks of integral consiousness.

Under the influence of this evolution of consciousness our behaviour evolves from “What’s in it for me?” to “What’s in it for us?”. In the following we will use a framework to operationalise the notion of economic behaviour and from there deduce that our behaviour evolves from swapping to sharing and moreover our current money system decomposes into two systems, one for coordination (of tasks) and one for (canalisation of) trust. This decomposition process can be observed in the real world as we speak.

In order to operationalise the notion of economic behaviour we introduce the following framework: we consider:
1. the resources of our planet (both in raw and produced form)
2. our labour that we use to transform these resources and
3. the goals that we achieve in doing so.

Using this framework we define economy as the translation of goals into transformations. This translation basically answers two questions:
1. Who does what?
2. Who takes what?

Now we can operationalise the aforementioned behaviours as sets of answers to these two questions, viz:

Self consciousness implies that you answer these two questions from the perspective of your own interest, hence “What’s in it for me?” can be operationalised as the following set of two answers:
1. I do the least
2. I take the most

Unity consciousness implies that you answer these two questions from the perspective of our common interest, hence “What’s in it for us?” can be operationalised as the following set of two answers:
1. I do what we need
2. I take what I need

Note that our planet has enough for everybodies needs (see Gandhi: The world has enough for everyone’s need, but not enough for everyone’s greed). So if everybody does what he can then together we do at least what is needed, hence the latter set of answers is equivalent to:
1. I do what I can
2. I take what I need
This aforism was first formulated by Louis Blanc in 1851 (https://fr.wikipedia.org/wiki/De_chacun_selon_ses_moyens,_%C3%A0_chacun_selon_ses_besoins).

Now if you take as much as you can then scarcity will arise and the notion of ownership will be necessary to distribute goods whereas if you take what you need there will be abundance and such a notion is obsolete. This implies that “What’s in it for me?” evokes swapping whereas “What’s in it for us?” evokes sharing.

Finally we come to the decomposition of our current money system. Now the two questions “Who does what?” and “Who takes what?” can each be broken up into two parts, viz: what is possible to do/take and what do we allow each other to do/take. So to run an economy you need two functionalities: possibilities are fit together through coordination (of tasks) and permissions are organised through (canalisation of) trust.

Now when we swap we actually say that we don’t trust each other: when I give you something I don’t trust that I will ever get something when I need it so I want something in return right now. Usually we use money to accomplish this. In this way our current money system realises both functionalities concurrently: calculations using the (exchange) value of money permits us to take coordination decisions and when we swap money we don’t have to trust each other, instead we trust the (exchange) value of money.

But how would we realise these two functionalities when we act as one? Because we are with more than one person this means that our unity is acting distributedly through it’s members. Each one of us does and takes what (s)he finds to do and take. To organise this distributed behaviour coordination information is needed. But we don’t need to (exchange) valuate the coordinated actions for we trust each other that each of us acts as being part of our unity.

Finally to make this new system work for normal people that don’t trust each other completely (yet) a second layer is needed to mitigate still missing trust.

Once again: in case trust completely fails these two systems collapse into one single system: our current money system. The many alternatives to our current system currently emerging thoughout our world can be seen as manifestations of these two new systems.

Further reading

Addendum

It is pivotal to remark that although the new money system is a real system which people will use much like internet banking nowadays, this system eventually is the expression of our new behaviour. Those that don’t trust their fellow are confined to using the current money system. For those that dare to trust their fellow a whole new world opens. And yes, not everybody is to be trusted, so from this perspective the prison works both ways: it is both me not being able to reach out to you as a human but it is also my security safeguarding me from your seisure. And once again: your seisure is my interpretation of your behaviour.

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Monday 7 November 2016