Monday, September 8, 2014

The Cloud Theory of Economics

The Cloud Theory of Economics

By Matthew P. Holbert

Part 1: A Brief Summary of Economy

What is happening to economy is what is happening to the nations and people of the world; the evolution of economy is such that money is gradually dissolving into a more implied trust. That is to say that the economies and governments of the world are democratizing, and decentralizing in such a way that a new phase in economic concepts is on the verge of emerging on the planetary scale.

Part 2: A New Story of Economics

In order to clarify this theory, an explanation of the process, historically speaking, is necessary. However, recognizing that not everyone is an economist, to make this evolutionary process make more sense to the average reader the use of metaphor has been essential.

Part 3: A Brief History of Economy

Very briefly, the evolution of money has gone from barter, to coin, to gold-backed paper, to fiat, with a little bit of back-and-forth in between.

Barter acted as a kind of medium of exchange using tangible, but nonetheless liquid, assets in its direct trade between individals. At this stage, it could be said that our first economy was in a cloud of confusion and desperation. [We will return to this stage of economy as the theory suggests.]

With little trust between individuals, the use of barter acted as a surefire way to get what you wanted from someone else, and was, in that way, very secure in its medium of exchange, but it lacked convenience and universality. Because exchange was limited to what the other person desired, rather than what you had, the problem of barter necessitated the invention of money with the advent of civilization.

Once civilization came into existence, money became the masterstroke invention of the age, because it allowed the governing body to pay every citizen a wage, rather than provide commodities in the form of ox, grain, or other necessities to each individual, not to mention that it took the people one step out of the self sufficient commons and into the reliance and interdependence of the city. At this stage, money is still very solid, and somewhat a mystery to the general population, who work with, but may have misunderstandings about their currency and how it operates.

Roman law then expanded upon, and set virtually into stone, laws about money—granting money a greater trust between all people, rich and poor. The practices of monetary theory that we see today, particularly with regard to banking, are a result of these roman maxims. With the help of the Medici dynasty, the banking world also got its first experimentations and innovations with regards to lending. Money was on the ascent.

More recently, the invention of government bonds, hedge funds, and the expansion of money into the realm of speculation, have caused the immense confiscation of wealth from the many into the hands of the few. Further, feudal laws and their residual impacts and regulations have resulted in the real confiscation of land from the people into the hands of the state, and further into the hands of the private wealthy elite—all of which have resulted in rampant inequality and injustice ever since. On the other hand however, due in part to its long lasting permanence, money has become a more universal and globally understood medium of exchange, and unit of account.

With the advent of the mercantile philosophy of economy, war became a racket, and one most profitable to the warmongers and their cunning ability to, regardless of the risks involved, make massive profits off the conquests of empires. The Rothschild dynasty, mimicking the success of the Midici family, came out of the battle of waterloo and the following crisis's with immense wealth. The subsequent powers given to that family have resulted in their influence on the gold market to this day. Their contribution to the confidence and expansion of money markets cannot be exaggerated, and it is for this reason that it has been said by Heinrich Heine, “Money is the god of our times, and Rothschild is his prophet.” Further, in 1838 Amschel Mayer Rothschild said, “Let me issue and control a Nations money and I care not who makes its laws.”

Following the charges of inflexibility and injustice of mercantilism, the conception of utilitarianism came into being after the enlightenment, durring the industrial revolution. Believing that economics was to be used for the benefit of the human race, utilitarianism changed the script of economic practices from free market to government intervention (or meddling). This philosophy would be advocated by John Stuart Mill, John Dewey, and Jeremy Bentham. It is here that we will begin telling the new story of economics, based on these trends.

The trends expressed here are being from a cloud of confusion to a more and more liquid state of money, which slowly becomes cooled as the world becomes more and more industrial, and simultaneously more and more dependent on monetary institutions for their needs (both of the capitalist and the laborer). Following the ascent of money, and the resulting centralization, and further utilization and comprehension of its form, the people of the world are beginning to wise up to the inherent injustices and inequalities resulting therefrom. As we shall explain, money is on its decent, and with its decent, the people and their equal and full rights are on the rise, from a cloud of confusion to one of abundance and prosperity for all.

Part 4: From Solid Ice to Intangible Cloud

Imagine a sphere of ice, whole and unitary; it represents a utilitarian model of economics. This view is that cold monetary moneys, machines, and other raw materials represent value when they are of benefit to humanity; this can be clearly understood with a cursory examination of history--the iron and steel used to push us into the great industrial age may be considered the base value of our economy; and after all, however much we produce must be in as close to equal proportion to what we consume (which was still what they believed in the late nineteenth century).
The opposite can be true, that we consume in equal proportion to what we produce, and in fact consumption is the primary function of all economic activity according to most economists. However, this economic premise was eventually scrapped, due to its inflexibility, and incapability to adapt to changing markets, and was melted away to eventually form capitalism, a more globalist world through fiat money and fractional reserve banking.

By 1913, this ice-cold sphere of raw material then breaks up into a more globalist mass through centralized banking. The banks, acting as an engine of economic growth, also acted as a ministry of value, and an industry whose sole function it was to produce value, to create money, and in a sense to unleash the flood gates—by 1929, this flood of credit would drown the lower class, and stands to drown even the middle class in debt today. Consisting of fractional reserve liquidity (with many central banks and their corporations and nation states dictating the general environment of economics, both exteriorly, and interiorly, by way of capital investment and education respectively), this new stage is characterized by a more and more cash and credit based system than the previous utilitarian model. By doing so, this system relies less and less on cold, hard material for its basis of value (gold, silver, industrial capital), and the value of money begins to be more and more based on the arbitrary command of central banks.

As a consequence of uncertainty, due to inflated credit and debased education, the world is heating up--not just literally, but figuratively as well. As industry and information make the world more and more global, the tide of conflicts-- inspired by imperialism and corporate greed-- begin to rise past the water mark. The world is also feeling the birth pangs of a new global economy (one which must be furnished with a world society, more evolved than its current form, capable of handling the demands of democratic systems).

The character of this new economy, which will inevitably replace capitalism as an economic premise, will likely bare characteristics of an intangible cloud. Accordingly, as this evolution of our perception of wealth transpires, it appears to have become less solid, less rigid, and more flexible with its liquidity, but as our technology evolves, so too does our economic perception and therefore potentiality; like ice melting, economy has become far more liquid in recent times, and its abundance and uncertainty has reached a point where the liquid medium of cash has been replaced with more digital currencies, which have even been called cloud currencies. However, by my definition, this is only a vapor currency, as cloud “currency” is implied with citizenship as the reader will discover below.

[To sum up the above: where we started with a sphere of ice, we now have a glob of water. Slowly that waters is turning into a gas, which is the beginnings of a forming cloud. All of this is about perception, a game of manipulative agreement as to what is an appropriate measure or medium of exchange. What we are doing!? We must recognize and understand that to form a new economy, it merely takes thinking outside the box, and taking chances; creating a world where doing what is best for the livelihood of all is what is in your best interest as well.]

Part 4: Cloud Economy

his cloud-like form of economy can only be cashless; and without restrictions such as taxation and the barriers of rent, loans, dividends, interest, banks, and other such methods of control and usury by financial institutions; in the cloud, the means of exchange is intangible, unquantifiable human will—exercised in the form of labor, goods, services, or ecological and human benefit, and not in the form of a liquidity: cash or money. When our work and respect is shared collectively, rather than horded individually, we can live without requiring proof or certification that our needs are worth fulfilling. The medium of exchange, therefore, is citizenship itself.

Within a cloud economy, the process of exchange can be instantaneous between individuals; because, in a democratic, council-based, fractal meritocracy, every contributing member is—by merit of their requested citizenship, and by virtue of their contribution to society—at varying degrees of their contribution, capable of
simply walking into a store, and taking what they need such as food stuffs, simple clothing, and available shelter as an earned right. [However, luxury goods will be limited to a persons contributing value to society as a privilege.]

Depending upon how well renown you are for being a contributing member of society, or how much you are respected by others for being a contributing member of the culture and society, that is what makes up the medium of exchange between individuals. However, the necessities shall be forthcoming via whatever governmental structures people establish for themselves in the coming evolutionary transformations, which are already underway. And in a society and culture that could be considered collaboration-based, a new psychology of action can be cultivated in the less than distant future, where such a system sounds more rational and sane than the coercive capitalist growth model.

Further, the profit motive, by virtue of this new dimensionality to economy, must be reversed into the direction of getting in equal measure to what you give, rather than getting more than you give, which is the commonly understood impetus of the current definition of “profit motive.” The author calls this a reciprocal economy, because of the reciprocal nature of that economic driver, which is the essential foundation of all economy: human will.

Notice however, that a cloud-like economy has elements of both capitalism and socialism, but does have the potential for the top down approach of either; it can and must be a grass roots, bottom up approach, because as water or liquidity evaporates, so too the bonds that have kept the mass of human will together break down from monarchy, to republic, to democracy.

What we are experiencing with this kind of flow from rigid solidity to liquid flexibility to gaseous intangibility is the development of a broader consciousness that is far headier, and more evidently fractal in nature than the previous forms. Also, just as the cloud can more effectively allocate its liquidity to the surface of the earth than a ball of ice, or a glob of water, this new economic structure, transcending and including the previous forms, will have characteristics of holism, human scale economics, and economic self-sufficiency due to its inherent grass roots scale. That is not to say that many of these forms previously exhibited these traits, but that the new form shall exhibit them far more spectacularly. 

Part 5: Wisdom Councils
Bear in mind, however, that this cloud cannot stay in the sky forever, it must be balanced by first condensing into globs, then falling, turning into ice, then globs of water again, and ultimately returning to the earth at semi-regular intervals for the cycle to be completed, and to keep the cycle of wealth and resources recirculating.

The following is an explanation of the process of how this cloud-like economy could function, but it must be understood that this is only a simple projection; because every local area must come up with their own model, I feel it should be left up to future democracies to better develop and organize this method, however, this is the authors considered method :

Starting as a cloud of individual droplets of human will (or the aggregate society or local community), and further condensing those individual droplets into globs of human will in the form of resource councils or test groups, the beginning of this cycle will occur in the form of stakeholder councils or wisdom councils (See Jim Rough) : where products, services, and acts of benefit will be evaluated, and (cold) capital resources will then be administered from that group of randomly selected people—much like product test groups—wherein the purpose of these groups is to evaluate and assign a value to products, goods, services, and certain ecological or human benefit created by a person. The products that fall under certain categories of goods will thereafter be evaluated by licensing corporations as they function today to simply make quality assurance, and finally the people themselves (to determine if they are worth investing in in the next quarter). Such groups will evaluate and expect to administer resources for products that they
unanimously decide are fit for production—much like a product test group, or the trial phase of invention and production—and then after four months these groups will disperse and a new group will be randomly selected.

In the cycle mentioned above, the transfer of energy or currency or capital goes thus: collective society (cloud), differentiated group/wisdom council (glob of water), allocated capital (ice crystal), businesses, jobs, and labor working that capital into production (another glob of water), and once a product reaches consumers it has reached the collective society, and is left up to the collective will of that society, and therefore returns to the flow of the market.

In this way, each time a group is brought together, they are like a small glob of human will out of the cloud, which is the aggregate economy, composed only of the essence of all economic principles: human will. And with every drop of resources allocated, these wisdom councils are keeping the cycle of life, wealth, and the feedback loop between production and consumption in a human scale of economics. These do not have to be government sanctioned necessarily, as long as these councils are composed of citizens, and democratically elected by citizens, for citizens, an already existing council may recognize that council, thereby integrating that council into the network of councils.

It is possible that these groups or councils would become, themselves differentiated, in that they may become specific to a field, such as art, engineering, food, education, entertainment, news media, design, fashion, transportation, science, etc.. And by having people who are specifically interested in a field of evaluation, there is a greater potential for a more meritocratic forms of councils than simply random selection. However, this is a stipulation that can come about organically or by written constitution, what is most important is that the people have control over the value of their goods and services, rather than a Wall Street market that has gotten more and more out of control and more and more uncertain.

If wisdom is defined as “ seeing beyond immediate appearances and acting with a greater understanding to affirm the life and development of all.” as Tom Atlee describes it in the
Tao of Democracy, then perspective offers wisdom. Therefore, communities have greater potential for wisdom than do individuals. “Communities are wise,” He explains further, “to the extent that they use diversity well in cooperative, creative interplay of viewpoints that allows the wisest, most
comprehensive and powerful truths to emerge.

Part 6: An Emerging Paradigm

Using co-intelligence, described by Atlee as “integrating the diverse gifts of all for the benefit of all.”And a technique called Dynamic Facilitation to replace mutual stuckness with common wisdom, described by business consultant Jim Rough, author of Society's Breakthrough! Releasing Essential Wisdom and Virtue in All the People, we might have the tools necessary to evolve the founders revolutionary vision, and step into the twenty-first century with a collaboration-based system, rooted in interdependence and mutual respect. According to Rough, Dynamic Facilitation can provide “a nonjudgmental, heartfelt, energy-driven creative thinking process in which people seek to invent new options that work for everyone. Instead of negotiating agreement on particular points or discussing ideas back and forth, people seek breakthroughs everyone can support.

To quote Quote Bruce H. Lipton Ph.D, in his book Spontaneous Evolution in regards to such councils making governmental decisions and perhaps just as easily resource management decisions: “While such councils have the inferred power of moral authority and could recommend new solutions to the public, they do not possess coercive powers associated with the authority to pass legislation...” and further that, “Regardless of the level of government or community in which they are used, such councils and their evolutionary principles offer society a vision of what a healed body politic might look like...”

While I am sure that most economists reading this will fail to understand the implication, connection, and relevance of the above quotations, and names which I have invoked, seeing as how these men are not economists, and not members of the old boy network, it is for this very reason that these voices are so important, necessary in our time. It was Einstein who said “We cant solve problems by using the same kind of thinking when we created them.”

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