"Fifty Island" or "Isla Cincuenta" is a tale of economics by Francisco Ortega Martinez - a small island economy, based on human values and a continuous re-distribution of money. The story, in two parts, tells us about the economic life of the island community and their hypothetical experiment in finding a new way of living together. It is made in the form of a powerpoint presentation, (Chapter I and Chapter II) which can be downloaded either in English or in Spanish from this page:

"Fifty Island", a tale to understand axiological economics.

Axiology, of course, is the philosophical study of value - a study of human values based on aesthetics and ethics. ( Axiology )

The story is an explanation, in simple terms, of a real experiment Francisco Ortega has developed, and for which he wrote a program (in php) that can be installed on a server and made accessible to any group of participants wishing to do the experiment. The program, and some information about it, can also be found on the "Fifty Island" page as linked above.

Both the story and the program are based on a paper by Kenneth E. Boulding titled "The Economics of the Coming Spaceship Earth".

Boulding states that our human economy is part of, and must exist in the context of, the ecology of its surroundings. The ability of those surroundings, the ecosystem in which we live, to provide inputs of material and energy, and to absorb outputs of pollution, is limited by the fact that planet earth is a sphere with finite capacities of regeneration. It is as if - borrowing Buckminster Fuller's concept - we lived on a spaceship and while traveling on our common journey had to make do with the resources that are available on the ship.

According to Boulding, humanity is due to take an evolutionary step away from the "cowboy economy", the free-for-all of production and consumption, towards what he calls the "spaceman" economy, where production and consumption give way to continuous reproduction.

The paper by Boulding, discussing an ecological approach to economics, is an very interesting read, and I found it here on the site of dieoff.org:

THE ECONOMICS OF THE COMING SPACESHIP EARTH

I have brought a copy of that paper here to this blog, to have it available for easy reference and also to correct some of the typos that crept in when the paper was scanned...

Continue reading "The Economics of Spaceship Earth" »

Posted by Sepp at 2:50 PM | Permalink | Comments (4)

David Korten, author of "AGENDA FOR A NEW ECONOMY - From Phantom Wealth to Real Wealth" discusses what's wrong with a Wall Street dominated economy, and how to take back our lives...

"Trying to fix Wall Street is like trying to fix the Mafia so it's not quite so destructive..."

Continue reading "David Korten: Taking Back Our Lives from the Wall Street Mafia" »

Posted by Sepp at 11:43 AM | Permalink

Michel Bauwens of the P2P Foundation recently excerpted an article that argues patents might not be the clear-cut technology promotion tool they are hyped up to be. The article itself, by Boldrin, Levine and Nuvolari makes the case that improvements in steam engine technology during the time between 1772 and 1852 show that the protection afforded by patents is not associated with vigorous technological development. Their article is titled

Do Patents Encourage or Hinder Innovation? The Case of the Steam Engine

and it was published in The Freeman.

Image is of "the green steam engine" found on PESWiki

Excerpting from Boldrin's introduction into the patent controversy:

"Today one of the most controversial issues in economic policy is that of patent law. Is a patent just an extension of property rights to the realm of ideas? Or is it an unwarranted interference by the government into the rights of individuals who have purchased goods and services to use them as they see fit? Should the Western system of patents be extended worldwide? Or should we get rid of patents entirely? Is the patent system responsible for modern miracle drugs? Or is it to blame for the millions dying of HIV in Africa? Do patents lead to greater innovation and economic growth? Or do they kill the goose that lays the golden egg?"

"The issue of whether patents are genuine property rights or unwarranted government interference cannot of course easily be answered by a natural experiment. We will leave that discussion to philosophers. The impact of patents on innovation does have an objective answer. In this case history instead of nature has been kind enough to provide us with a wonderful natural experiment. This experiment took place in the county of Cornwall, England, between 1772 and 1852. It was there, in the extreme southwest of England, in the wet depths of the Cornish copper and tin mines, far removed from the supply of coal in Wales, that the steam engine was pioneered."

I recommend reading the full article and, if you're interested, also the comments which give a diversity of views.

Some of you may know that I have written on the subject of patents a good 20 years ago. The article is available on my 'historical' site www.hasslberger.com and is the first one in the Technology and Patents category. In introducing The Inventor and Society, I wrote "Patents are, at times, a block to technological progress, acting to discourage inventors who have found ways to circumvent the dearly held "natural laws" of thermodynamics and of conservation of energy. Why not use a different system that ensures protection of the inventor but does not require him to provide a theory for his invention to register it."

Continue reading "How patents prevent rather than promote adoption of new technologies" »

Posted by Sepp at 1:39 PM | Permalink | Comments (6)

The March issue of Wired Magazine carries an article titled: The Future of Money: It's Flexible, Frictionless and (Almost) Free.

Illustration from Wired - Aegir Hallmundur; Benjamin Franklin: Corbis

"The banks and credit card companies have spent 50 years building a proprietary, locked-down system that handles roughly $2 trillion in credit card transactions and another $1.3 trillion in debit card transactions every year. Until recently, vendors had little choice but to participate in this system, even though -- like a medieval toll road -- it is long and bumpy and full of intermediaries eager to take their cut. Take the common swipe. When a retailer initiates a transaction, the store's point-of-sale system provider -- the company that leases out the industrial-gray card reader to the merchant for a monthly fee -- registers the sale price and passes the information on to the store's bank. The bank records its fee and passes on the purchase information to the credit card company. The credit card company then takes its share, authorizes all the previous fees, and sends the information to the buyer's bank, which routes the remaining balance back to the store. All in all, it takes between 24 and 72 hours for the vendor to get any money, and along the way up to 3.5 percent of the sale has been siphoned away."

Paypal, which at the time of its founding was intended to introduce an alternative to money, has become a web interface with the world's banking system and the credit card companies, simplifying transactions, but still using the same currencies that are in our wallets and in our bank accounts today.

Third party applications that interface with Paypal like Twitpay, simplify that interface even more, allowing you to send money to someone's Paypal account by a simple tweet.

Jack Dorsey's Square is another one of the payment alternatives discussed in Wired. It is a physical plug-in to smart phones that allows users to accept credit card payments without having to have a merchant account.

Obopay, which runs on Nokia phones, is a mobile payment system that allows transfers from one mobile phone user to another. It interfaces with Mastercard, a few banks and some major mobile phone providers. Zong is another phone based mobile money transfer application, aiming to take a bite out of the credit card business, while GetGiving specializes in micro payments or small donations to charities.

Those systems, as described in the Wired article, all interface with banks and "real" money. They merely seek to find a way around the immobility and clunkiness of the service provided by banks and credit card companies.

For anyone advocating changes to the current monetary system, local currencies or an internet-based alternative to bank-issued money, the article may be a bit of a disappointment, because it is all about how to move money more efficiently and more cheaply than banks and credit card companies, rather than reforming the money system itself.

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Continue reading "The Future of Money" »

Posted by Sepp at 5:02 PM | Permalink

The World Economic Forum is being held in Davos, Switzerland. Until Sunday, 31 January, the economic powers-that-be are meeting in the secluded ski resort town.

The Growing Influence of Social Networks is one of the themes to be discussed in Davos this year. Public input was invited, but the request was somewhat hidden in a brand new Ning group with little more than a hundred members, and it reads as follows:

Given the topic of the workshop it was natural to open it to input from the different social networks. We want to hear from you:

1. "How are social networks changing society?"

2. "What are the most important implications and risks for society?"

3. "What should individuals and institutions do to leverage the power of social networks and improve society?"

Are social media going to change the world?

A big question to be hidden away in a group with very few members. Still, some great comments and suggestions were made. To get the whole conversation, see the posting

The Growing Influence of Social Networks

And indeed, how do social media influence and change society? I tried to answer those questions, and was surprised at my answers. Social media are more important than we might believe. We are having conversations, mostly for fun, and sometimes with the intention of changing things we perceive to be going in the wrong direction. Yet, the implications of what we are doing are profound, indeed world changing....

Continue reading "Davos and the Importance of Social Media" »

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