Meconomics: I Want my Needs and Need my Wants to be Satisfied

The economic problem – the corner stone of economic theory – is defined as the satisfaction of unlimited wants and needs in a world with finite/limited physical resources. This implies that not all wants and needs can be satisfied, so the questions economic models attempt to answer are: How is it decided which wants and needs will be satisfied? How is it decided whose wants and needs will be satisfied? In our world today – the answer is: “those who can pay for the satisfaction of their wants and needs will see them satisfied, those who can’t pay for it – well, sorry, we have to draw the line somewhere”.

As I was reading about the economic problem for the first time – I found it fascinating that they used the words ‘wants’ and ‘needs’ in the same way and treated them as one term – like this: ‘wants&needs’ – lol. The difference between wants and needs was briefly explained, but then both words were thrown under the ‘wants&needs’ banner – as though ‘needs’ carry the same characteristics as ‘wants’ and ‘wants’ carry the same characteristics as ‘needs’. When you approach the economic problem by reading the words ‘wants’ and ‘needs’ as ‘wants&needs’ - then the world as it is today might make sense to you – then the economic problem might actually be a justification for the desolation and lack in which millions live. Perhaps that is how economists want us to read the words, so that we won’t hold them accountable for not yet having come up with a better solution.

‘Wants’ and ‘needs’, however, are two very different things. ‘Needs’ are things you NEED – that you cannot go without or you will be physically and emotionally compromised. ‘Wants’ are things you WANT – they go beyond what you ‘need’ – you can go without, but you would like or prefer to experience them or have them in your life. It is true to say that if you tally up all the individual wants of all the people on the planet – you will end up with ‘unlimited wants’. The same is not true for needs, however – there are certain things no human being can go without – say food, water, shelter, social interaction, medical support – where this is the same for every single person by virtue of them being ‘a human’ – and where for some, dependent on personal situations and circumstances, the list is expanded to include a few other things as well.

Considering that needs are limited – we may actually be able to satisfy the needs of all the human beings on the planet – and it is known that we can. So – instead of trying to work with ‘wants&needs’ where the task seems impossible and full of ‘sorry’s, we have to draw the line somewhere’ – we could start with the part that IS possible – satisfying everyone’s needs – and only then design an additional system or model that draws lines for ‘wants’. Our current model is one where some are able to satisfy all their needs and most of their wants, while others are not supported in their basic needs – which, you have to admit, is quite an insane situation. Part of why this is allowed is due to… ‘wants&needs’.

Now – this blog is part of my ‘Meconomics’ series – so you can already guess where I am taking this discussion next… For this situation to be as it is – with so few raising their voice and spurring into action to change the status quo – I started wondering how the same point exists within ourselves. The same point, meaning: do we in fact have a clear understanding of the difference between ‘wants’ and ‘needs’ inside ourselves and do we approach ‘wants’ and ‘needs’ appropriately in our own personal lives?

True story: Earlier as I was writing this blog and came to the section of clarifying the words ‘wants’ and ‘needs’ – I first took the easy route of simply looking up the words in the dictionary and copy/pasting the definitions in my blog. But! I couldn’t use those definitions, because they would have perpetuated the confusion between the words rather than clarifying the difference between them. Have a look:

If the dictionary uses the word ‘want’ to clarify the word ‘need’ and uses the word ‘need’ to clarify the word ‘want’ – we can be sure we’re on to something. Does this mean that wants simply imply needs and that needs imply wants – because the dictionary says so? No. Remember, dictionaries will reflect our own language usage – so if the word ‘want’ has been used over time to indicate a ‘need’ – then it becomes an ‘accepted use of the word’ and is reflected in the dictionary as such. In the same way, the word ‘need’ has been used to describe ‘wants’ – and so it has become ‘normal’. What the dictionary then shows is how we have confused the meanings of the words ‘wants’ and ‘needs’ for ourselves and started using the terms as synonyms.

In my next blog I will continue exploring how the ‘merging’ of the words ‘wants’ and ‘needs’ as ‘wants&needs’ affects and influences us on a personal level so that we can get a better understanding of the world as it exists today within the principle 'as above, so below'.

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Day 251: Living Income Guaranteed and Market Mechanics

This blog is in response to a comment made on Day 250: Economics Nobel Prize reduced to Laughingstock :
“Economics is about, or should be about, how to employ the available means in such a way that no want more urgently felt should remain satisfied because the means suitable for its attainment were employed - wasted - for the attainment of a want less urgently felt. This is what it means to economize: to allocate scarce resources to their most productive/urgent use. "Most urgent use" is determined by supply and demand as established on the free market. I agree with the criticism that empirical economics seem frivolous and misplaced. But I disagree with the conclusion of this article; the only way to make the world more wealthy is by increasing the ratio of capital to people through investment and savings. Wealth redistribution will only succeed in making us all equally poor. Well written piece, though, thank you for a thoughtful opinion.” - Matt Summers

“Economics is about, or should be about, how to employ the available means in such a way that no want more urgently felt should remain satisfied because the means suitable for its attainment were employed - wasted - for the attainment of a want less urgently felt. This is what it means to economize: to allocate scarce resources to their most productive/urgent use. "Most urgent use" is determined by supply and demand as established on the free market.”

The effectiveness of markets in being able to successfully allocate resources to ‘their most productive/urgent use’ is dependent on how effectively the market is able to capture supply and demand signals. Here, we currently have a problem as not everyone has an equal opportunity to access the field of the free market and cast their demand / signal their need. Access to the free market is restricted, and the only way to gain access is by having a ticket – where one’s ‘purchasing power’ is representative of such a ticket that will grant you access.

So long you do not have the money / financial means to back up your demands, your demands will fall on deaf ears and not be catered for. Alternatively, depending on the scope of purchasing power available to you, your demands may only be catered for partially, as you are unable to ‘validate’ or ‘redeem’ all of your needs into demands due to the size and scope of one’s purchasing power – and thus the free market will only pick up one those demands/needs that are backed up by purchasing power, while not registering others.
With not everyone’s demands in effect being picked up by the market, we get a distorted view and picture of what we believe is wanted/needed - and use this distorted picture as a map to allocate scarce resources. To actually be able to direct and allocate resources to their most productive and urgent use, we require a lot more information – information that is missing and not being received simply because not everyone has the capacity to validate their demands through purchasing power.

Whether we like it or not, we currently live in a world with huge levels of income inequality^[1] and thus purchasing power inequality – where there is an inverse relationship existent between the size of purchasing power and the amount of people who have purchasing power.
In terms of the mechanics of Supply and Demand, this structure gets translated into the market receiving a big amount of information about the demands of a few people, while receiving little to no information from the majority of the people who have smaller to no purchasing power.

Within providing a Living Income Guaranteed, the goal is not to ‘equalize’ the entire purchasing power structure – but merely to give those at the bottom / those who do not have access to the market mechanisms -- the chance to be heard and recognized within the market. Providing a Living Income Guaranteed effectively provides everyone with a base amount of purchasing power, so that at a minimum everyone can effectively signal their demands to be able to achieve a dignified living standard.

“Wealth redistribution will only succeed in making us all equally poor.”

Here I will assume that your statement is based on the same logic Nozick follows, where he perceives a problem in redistribution leading to disincentive for the productive members of the economy who would then produce less and less until they cover only their immediate needs and having no ‘surplus’ to redistribute.
In terms of the Living Income Guaranteed proposal, where we want to ensure that those who are unable to sustain themselves financially through providing them with a Living Income – we are not looking at a massive movement of redistribution. In terms of the capital and wealth that is available within the world, it only takes a small fraction^[2] being moved from top to bottom to give the majority of people the necessary ‘bump’ to be able to realize a dignified living standard for themselves.
There will thus still be a wide range of incomes, a wide range of competition and more than enough incentive to be innovative and keep producing.

A more drastic change will rather be seen within the market system within the mechanics of supply and demand being able to capture a lot more information about the needs and wants of people – which will provide society with more effective and accurate guidelines as to where resources should be allocated for their most productive/urgent use. The biggest change will be seen in the living standards of people and the actual realization of having everyone’s fundamental human rights secured.

Here, we can look for instance at the ‘ideal’ many people envisage when looking at the distribution of wealth in society. As you can see from the graph below, it still leaves plenty of incentive for those who are incentive driven to be productive and innovative – while at the same time allowing the bottom two quintiles to have sufficient wealth to live a dignified life (and to have any share of wealth at all for that matter! Since both the first and second quintile barely get registered on the ‘actual’/’current’ graph).

The Nozickian notion that redistribution will ‘leave us all equally poor’, is a very radical and extremist position, which takes on a very rigid and narrow view on human nature and values. It is assumed that we only care about ourselves and within this will go as far as compromising and sabotaging our own living standards just because we don’t want anyone else to reap benefits of ‘our work’ and ‘our effort’. There is no space for relating to one another and helping each other out – even when it comes down to something basic such as having everyone’s fundamental human rights covered. We suggest that humans are not the completely irrationally selfish beings Nozick assumes us to be, and that we are capable of compassion and can realize this compassion in the form of having everyone’s fundamental human rights secured.

“But I disagree with the conclusion of this article; the only way to make the world more wealthy is by increasing the ratio of capital to people through investment and savings.”

This statement is not necessarily true – as it assumes that we are currently experiencing a ‘lack’ in real capital and actual resources to effectively provide everyone with a proper living standard. The capital and the resources are already here – but through the market system operating at an inefficient level (due to our current supply and demand curves not capturing the full extent of demand as explained above), the capital/resources are not moving and not being directed towards those who need it most.

This is how we end up with scenarios of food dumping and having huge amounts of food destroyed and thrown away parallel to having high levels of hunger and starvation in the world. This is simply because our economic system is not sensitive and attuned to human needs and instead being irrationally driven by the profit motive. Economics and the market have become all about non-human elements as profit and numbers which have stopped serving the general human interest. By placing in a Living Income Guaranteed system, we are placing the human element back in the center of economics, allowing economics to be the life supporting instrument that it was destined to be. Economics and money are then here to support ourselves in living our life – and not the other way around where are lives are lived in the service of money and the economy, as how the majority of people’s lives are currently being lived.
It’s time to reverse the roles.
 
[1] See our blog on the World’s Lorenz Curve, which displays almost perfect inequality “Day 143: The Neo-Apartheid Era”
[2] See “World’s 100 richest could end global poverty 4 times over”, which is but one example of ‘how little it takes’ to make a ‘big difference’ for many

Related articles

• What is the Living Income Guaranteed?
• The Pope on Inequality and Unfettered Markets
• Day 251: Living Income Guaranteed and Market Mechanics
• Day 252: The Rich Be Cursed, The Rich Be Blessed
• Day 226: Living Income Guaranteed will Prevent Destruction of Homes

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Day 235: Living Income and Effective Markets

"... and it leads to mediocrity by furthering the emergence of a “mass culture” where the lowest tastes are catered for. Furthermore, it is contrary to human nature with its rich diversity. Why make equal that what was not equal in the first place?"

The above quote was made in relation to the promotion of Equality within society. Within the implementation of a Living Income Guaranteed, we are promoting Equality within placing everyone in a position where one can participate in Life, economically, politically, socially and culturally.

By giving those who are unable or have yet to establish a stable income stream for themselves, a living income – we ensure that everyone is equipped to participate in society. This places everyone on a more ‘equal footing’, as everyone is able to take care of one’s basic needs and contribute to society.

By implementing a living income guaranteed, we will have a more accurate market system. As more demands are being validated through a living income providing everyone with money to ‘back up’ their demands – our demand curves will more accurately show and reflect the populations demand, consequently allowing supply to adjust to the actual demand levels of the consumers (as everyone is now being recognized as a consumer) and catering for that which is actually wanted by society. Previously (or currently), only those demands were recognized which were backed up by one’s purchasing power. This means that there’s an exclusive catering mechanism taking place for those who have money, by those who want even more money. From this, a mass culture emerged in terms of the arts like in the Music Industry, where mainstream music is all about what ‘most of the people who have money’ want to hear – where only the taste of money is being catered for as that which will be ‘most profitable’ – leading to Music Industry ignoring lots of areas of Music to explore as there is ‘no money in it’, which leaves us with a bland, monotonous, mediocre mainstream music industry. By extending economic participation to everyone, more people are able to ‘place their votes’ as their demands of what it is they want / would like to receive – and thus the music industry will receive a larger variety of signals of types of music to be explored and developed.

For more on the Music Industry and Living Income, read the following blog:Living Income and the Music Industry

Promoting equality such as equality in economic participation, does not lead to mediocrity and ‘mass culture’ – that, we already have and is the result of a profit based system, a system of discrimination. By implementing a Living Income Guaranteed, everyone is able to signal their demands to the market effectively. Only when we have a Living Income can our “human nature with its rich diversity” be captured and reflected in our society and economy and can we truly enjoy the variety and creativity that the Human has to offer.

Stand for a Living Income Guaranteed, Stand for a Better and more Effective Market System!

Related articles

• Day 251: Living Income Guaranteed and Market Mechanics
• Day 252: The Rich Be Cursed, The Rich Be Blessed
• Day 226: Living Income Guaranteed will Prevent Destruction of Homes
• Day 265: Do you still have a job?
• Day 350: A Living Income Guaranteed will End Charity - for Real

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Day 196: Market Mechanisms and Equal Money

This blog is in response to a comment made on the ‘Logistcs’ Goal on the EM Homepage:
http://equalmoney.org/goals/15-logistics   http://equalmoney.org/goals/15-logistics

Goal: Logistics

In the Equal Money System, the Banking System Infrastructure will become the Logistical System that manages and Allocates resources and goods to Each Individual in the World on an Equal Basis. And your bank card will become your Life Card, which you will swipe every time you Draw Goods and Services from the Global Life Support System. The Logistical System will make sure that each person receives their just dues and at the same time will prevent abuse and exploitation. Each person will have access to the Global System to review the current Status of Available Resources and to vote on effective distribution and allocation – and to place preference selections and make suggestions.

Comment:

"I do believe this market-absent socialism has already been proven impractical and inefficient. Especially when coupled with a form of direct-democracy type resource management such a system would surely be impossible, if not impossible then at least impractical and doomed to fail. A market mechanism, even a socialist one, is necessary, and will allow for efficiency. Command and Control, especially decentralized command and control, is a doom driven system. You need to include some form of market mechanism in order to make this successful.

Response:

There will still be a Market Mechanism in place within both Equal Money Capitalism and Equal Money. The Market Mechanism in place within Equal Money will merely replace the variables that the drive Supply and Demand in a way that actually benefits Human Life and the Planet as a whole. The Market Mechanism will thus be an holistic / ecological one – where the conditions which require to be in place to ensure a life of Dignity will signal/drive the Demand and in the Economy and whereby Supply will respond accordingly within taking into consideration Earth’s capacity to provide resources. This implies that in terms of resource distribution the priority will be placed on Needs over wants – and once needs are taken care of we look at what else is available to provide for people’s wants within the principle of sustainability and prevention of consequence (eg. where the providing for wants does not come at the expense of another).

It is then not so much a ‘Market-Force’ driving the Economy but a ‘Life-Force’ within placing Life as the principal point to be honoured.

For more information, please read:

Day 171: Life-Force and Expression in Equal Money Capitalism
Day 173: Supply, Demand, Business and Scarcity in Equal Money Capitalism
Day 175: The Economic Problem and Equal Money Capitalism
Day 180: The Word 'Capitalism' in 'Equal Money Capitalism'
Day 184: The Relationship between Ecology and Economics in Equal Money Capitalism

Related articles

• Day 173: Supply, Demand, Business and Scarcity in Equal Money Capitalism
• Day 195: Moneyless Societies and Equal Money Capitalism
• Day 171: Life-Force and Expression in Equal Money Capitalism
• Day 175: The Economic Problem and Equal Money Capitalism
• Day 181: Applied Equality in Equal Money Capitalism

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Day 192: Demand and Flexibility in Equal Money Capitalism

This blog-post is a reply to a comment on the blog Day 172: Retirement and Holidays within Equal Money Capitalism.

What if the products or services of a company won't sell anymore, the demand ends or decreases, when a person is retired? It would affect employees too but they can change jobs.

When a company is unable to cover its cost and pay out its wages, they will receive additional funding from a Fund to which the profits go of companies who make a profit that is larger than required to cover their costs and wages. When such redistribution is required, an intervention takes place where know-how is transferred from effective companies to those who struggle to cover their costs.

When demand simply decreases or ceases to exist, the company can partially or completely re-invent itself in terms of seeing how it can use its experience, expertise and infrastructure towards providing different services and goods in the economy. If such re-direction causes momentary fluctuations in the flow of income, government steps in to provide support for the time being.

Related articles

• Day 163: Equal Money Capitalism - Redefining Profit
• Day 172: Retirement and Holidays within Equal Money Capitalism
• Day 175: The Economic Problem and Equal Money Capitalism
• Day 162: EQUAL MONEY CAPITALISM - The Way Forward
• Day 189: Will your Level of Education Determine your Income in EMC?
• Day 188: Simple Solutions in Equal Money Capitalism
• Day 182: Will we be Feeding the Fat Cats in Equal Money Capitalism?
• Day 173: Supply, Demand, Business and Scarcity in Equal Money Capitalism
• Day 165: Equal Profit Share and Equal Money Capitalism
• Day 190: Fairness in the Work Place and Equal Money Capitalism

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Day 175: The Economic Problem and Equal Money Capitalism

The Problem

The fundamental question which economics is built upon, is how to deal with limited means in conjunction with unlimited wants. It takes on the starting point that we live in a world of scarcity, of of finite resources – but that we also live in a world where humans have unlimited wants and needs, and thus inevitably not all wants and needs will be satisfied.

This is where the Pricing system within Economics comes from, where the price is determined through the interaction of supply and demand. Prices on products and services, are in the end an ‘elimination’ tool. Because we have only so many resources, and not everyone will be able to get them to satisfy their wants and needs – the pricing system works as a distribution system. If a loaf of bread is sold at $1 each – then this implies that everyone who has $1 and is willing to spend that one dollar on bread can do so. This also means that anyone who doesn’t have $1 dollar to spend on bread but wants and NEEDS bread to be able to survive = won’t be able to get bread.

So it seems that the distribution problem of ‘who gets what’ is solved – but this a more than ineffective solution, and is really unacceptable. 

Firstly, the problem starts already in the formulation of ‘the economic problem’. The problem lies in not making a distinction between wants and needs. It’s one thing to say that wants are unlimited and another to say that needs are unlimited. Sure, we can all make up unlimited wants, like wanting a cruise ship, a place, a few villas and a unicorn – but needs are not unlimited and can be clearly defined, such as say food, security, clothing, housing, medical care, participation, leisure, education, etc.

The second problem arises when we look at our current distribution system within the way things are priced. Everything is price based, so even if things are scarce and finite – if you have the money, you can still get your hands on ‘scarce resources’ even though others can’t. This implies that some can exploit the amount of money they have available to use as many resources as they like, while less and less is available for others, and where others may not even have the financial means to acquire what is left.  Our pricing system is then in fact, a system of blatant discrimination. We are no longer looking at how we can support ourselves living life on this Earth – but playing a game of ruthless and unfair competition causing some to live in abundance while others live on the brink of death.

The Solution

The solution is a simple one, we require to re-evaluate the ‘economic problem’ as we have accepted and allowed ourselves to define it. A distinction needs to be made between needs and wants, where needs come prior to wants at all times, as part of being a Basic Human Right.

Instead of having a distribution system based on discrimination, we require a distribution system of inclusion, and this inclusion is that of Life – where the Real Capital that has actual Real Value is recognized as Life.  This is how the Equal Money Capitalistic System will operate.  It’s a biocentric system, and this is reflected within the pricing of Goods and Services. Pricing will reflect the value that has been added through individuals’ contribution as labour. Within this, each participant, each contributor – will receive an Equal Profit-Share of the sale of the product/service.

From Day 163: Equal Money Capitalism - Redefining Profit:

WHAT IS PROFIT-SHARE?
Currently profit is the money a company makes after they have covered their costs, including paying out wages. In an EMC - profit comprises of all the added value that is placed on resources - which is your labour. Therefore - within the price, the percentage share must be included of each one that was part of the creation of the product in such a way that each one ends up with an equal share of the company's profits, so - there will be no need for wages - as the profit becomes your wage.

EQUALIZING WAGES – COOPERATION AMONG CORPORATIONS
If a company at any time makes more money than they need to provide each one with their equal share of the profit as well as covering their costs - those monies will go into a fund that is responsible for assisting companies that are not making sufficient to cover their costs and provide each one with their fair share. That way a balancing effect takes place so that all companies are not only cooperatives in how they cooperate internally - but all cooperate with each other as well.

Equal Money Capitalism will ensure a Dignified Life for everyone, as everyone will be in a position to acquire resources to support themselves to Live their Life, where needs are taken care of while still allowing for wants to be explored.

The Reward

Within Equal Money Capitalism, one will be birthed into a world where one’s life is secure. Currently, the main point of focus that pre-occupies people’s lives is that of money, which turns Life to being a strife, becoming about survival. When you have a child in Equal Money Capitalism, you do not have to worry about your child’s future and how you’re going to fund it with while trying to make ends meet. Your life and your child’s – your entire family’s Life = is guaranteed.

It is in essence a Life where Fear as being part of everyday Life is removed, and where one can truly live and explore – to really find out what it means to live here on Earth in an enjoyable, yet responsible way.

Related articles

• Human Sweatshops will END in Equal Money Capitalism - Day 275
• Day 163: Equal Money Capitalism - Redefining Profit
• Day 171: Life-Force and Expression in Equal Money Capitalism
• Day 166: Corporate Social Responsibility in Equal Money Capitalism
• Day 173: Supply, Demand, Business and Scarcity in Equal Money Capitalism
• Equal Money: We want the Best Life for YOU. Do You?

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Day 173: Supply, Demand, Business and Scarcity in Equal Money Capitalism

Also see the following blogs on more points within EMC:

Day 162: EQUAL MONEY CAPITALISM - The Way Forward
Day 163: Equal Money Capitalism - Redefining Profit
Day 164: Equal Money Capitalism - Preparing the Road for Change
Day 165: Equal Profit Share and Equal Money Capitalism
Day 166: Corporate Social Responsibility in Equal Money Capitalism
Day 167: Harmony and Equilibrium within Equal Money Capitalism
Day 168: The Future of Integrity with Equal Money Capitalism
Day 169: Equal Living within Equal Money Capitalism
Day 170: Companies and Industries in EMC
Day 171: LIfe-Force and Expression in Equal Money Capitalism
Day 172: Retirement and Holidays within Equal Money Capitalism

Supply and Demand

Pricing will not resemble a free market paradigm, so the interaction between supply and demand as it exists now will not determine anything. Supply will be according to your demand, that means your demand will not be based on price, your demand will be based on supplying yourself with a lifestyle that is worth living – so the demand will change. Because the demand will no longer be controlled by price, it will now more be controlled by the fact that you want to live an excellent lifestyle, that you want to change products – it is going to change what goods and services will be available. You’re not going to buy ‘inferior products’ that you buy because it’s cheap and made in China – but it’s not what you would have bought if you had more money.

Business to Business Interaction

Business to Business interaction is basically based on what a product manufactures requires to produce a product. Businesses won’t compete around products per se, because information around products will be shared and made available to be able to produce the best possible product. But some products you’ll be able to produce differently – different products from the perspective of what they look like, which may have an effect on preference – those type of variations will still exist.

Businesses and Communities

The placement and operation of businesses will be far more regional – simply because it’s an effective way to manage things rather than managing things on a national or transnational level.
With regional, we mean that all businesses will in a way be a community service, so it will be based in community environment and provide service for the community..

Scarcity and Pricing

There’s not going to be pricing control in terms of scarce resources, things are going to be available or they are not. It is controlled by its availability. If certain resources become unavailable, which is going to affect the products that are going to be available – then we will just have to take that into consideration. So for instance, if there is not enough fish in the sea, we will simply have to withhold from catching fish -- the supply / option of fish disappears off the menu until the fish supply is re-established.

Scarcity and Non-Renewable Resources

Non-Renewables will automatically be targeted to be reduced, and eventually phased out completely. Society should not be based on an non-renewable resource. We have other ways to do it.

Related articles

• Day 171: Life-Force and Expression in Equal Money Capitalism
• Day 166: Corporate Social Responsibility in Equal Money Capitalism
• Day 162: EQUAL MONEY CAPITALISM - The Way Forward
• Day 172: Retirement and Holidays within Equal Money Capitalism
• Day 165: Equal Profit Share and Equal Money Capitalism

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