Dimentio
1st August 2007, 02:01
Here is an article on Energy Accounting (http://en.technocracynet.eu/index.php?option=com_jd-wp&Itemid=93&p=7).
"A short summary of the article and it’s intentions
The subject of this article is energy accounting, and it’s intentions are to offer a comprehensive description of the economic distribution system in the technate, it’s differences from the price system, and the different aspects of the system. Due to a lack of litterature covering the basic parts of technocracy, there was and still is a profound need for articles further investigating energy accounting as well as other aspects of technocratic design.
Scarcity and Abundance
Before we start investigating energy accounting, we must understand it’s premises. The foundation of mainstream economics is five postulates, based around a theory that all resources are finite, or “scarce”, while human will to consume is infinite. This theory is largely unsubstantiated, but without it, it would have been impossible for economists to calculate.
Technocrats, on the other hand, recognises that while it indeed is a profound fact that scarcity could exist and that a price system under such conditions is one type of solution to that problem, there do exist situations where abundance could arise. Of course, our premise is different than that of economists.
Instead of assuming that human want is infinite (one could very well still do it), and thus make scarcity an inevitability, we stress the fact that the human ability to consume is limited to the conditions of her body. Human wants might be infinite, but the human ability to fulfil these wants is very finite. We are not proposing a counter-postulate of “inevitable abundance”, but rather putting forward a more in-depth analysis of scarcity and abundance.
Abundance do arise when an infrastructural system is able to meet the human capacity of consumption while human labor input in the consumption-generating sectors (agriculture, industrial production and so forth) are diminishing. This process is a result of technological progress. The problems with abundance is twofold. Firstly, it makes it harder to calculate prices, and secondly, it leads (under a total free market economy with minimal interventionism) to prices which are diminished to the point where the producers cannot simply uphold their production.
The price system
or
“Exchange Accounting”
The price system could also be called “exchange accounting”, since all systems involving “exchange” of goods and services, from primitive barter systems and gift economics, to the advanced globalised economy which we have today, are based upon prices which are adjusted according to supply and demand.
If we assume two Egyptian subjects 4.000 years ago, we could construct a hypothetical price system not involving monetary exchange units. We say that the first of the peasants, A, desires a good, x, which the other peasant, B, is in possession of. A, in her turn, is in possession of an unspecified number of good y, which B is desiring.
In this hypothesis, the price will be in correlation of the point where each of the persons involved in the exchange finds it suitable to trade. We assume that both wants the good which the other one possess, and that they will exchange to the point where each of them are satisfied. The exchange do not need to be equal, since the deal would be subject to the individual demand of each person involved in the exchange.
More recently, money was started to being used, because it simplified exchange and made it more socially secure to trade, due to the fact that money A) is not a good of sustenance, and B) is permanent in nature. The value represented by money is of course also dependent on it’s relative scarcity in relation to the amount of persons involved in the given market.
The problems with exchange accounting are many. Now we should not discuss barter, since it by all definitions would be impossible to uphold a modern technological system with advanced factories and an advanced, integrated infrastructure through barter. Instead, we should focus on the problems with monetary exchange.
Money is possible to accumulate. That is a function of it’s role as a good which is not used for anything else than exchange. Of course, this is not wholly a problem since it allows capital investments and economic growth, making technological progress a possibility. In the same time, it is encouraging inequalities which have created income disparities where four firths of a given national population in a first-world country has access to 20% of the national resources, while the fifth left would have access to 80% of the resources.
That represents an inefficiency, because the ability to consume is twarted by the bottlenecks known as the specific privilegies in access of the means of production granted to the social groups with most accumulated capital.
Moreover, exchange accounting requires everyone to participate in a process of production, whether as investor or as employee. Under a process of automatisation, a lot of works are disappearing. Historically speaking, new works have often been created. Industry supplemented agriculture when the efficiency of agriculture led to lower employment in that area, and the service sector is today supplementing industry in most developed nations, something which the original technocrats failed to predict. But as automatisation increase, job creation in the future under the price system would take more and more interventionist measures as well as intentional creation of market failures to bolster jobs, including subventions of small companies.
The greatest problem with the modern price system of exchange accounting is that it is based on eternal exponential growth, in order to secure the well-being of the citizens. Hence, environmental foot-prints and over-exploitment of natural habitats become a serious problem which eventually could devastate a lot of the planet’s ecosystems. First when something is made artificially scarce by the use of property rights, or in-real scarce because of exploitment, the price system could react and make it valuable.
One could of course try to impose regulations of the price systems, but problems are seldom solved at the top but rather on the bottom. Moreover, regulations are most often imposed to “solve market imperfections” which means that the state, with subsidies and taxes, are working to make the fruits of the production more scarce that it is. That could hold together the price system, but at the cost of a lower standard of life and more inefficiency than needed.
We technocrats propose an alternative to “exchange accounting”, namely “energy accounting”. So let us look up what energy accounting is.
Energy Accounting
or
“The Distribution System”
To have general energy accounting imposed upon a given economy, three characteristics must be fulfilled. There must be enough resource diversity to support a self-sustaining system without the need for exchanging goods and services with the rest of the world, this system must be technologically developed so it can utilise it’s resources more efficiently than any existing system outside of it, and it would need to have at it’s disposable personnel properly educated in managing the system. Without these three preconditions fulfilled, a technate could not be established. Of course, energy accounting would, in a partial, primitive version be existent in a proto-technate (an expanding network of eco-units run by technocratic principles).
Energy accounting is not based upon the buying or selling of goods and services on a free market. Instead, it is based on interaction between the production system in it’s whole, and the individual consumer. It is not based upon the exchange of property either, since the resources at hand for each individual would not change with transfers of the energy units to the technate.
First, according to the traditional technocratic design, every individual is granted an equal share of access to the production capacity of the technate. This division of access is made according to a very simple equation. The entire production capacity of the technate during a given period (which must be determinable in length), is divided according to the number of users the technate have. Thus, no individual and no groups of individuals would “own” the means of production in themselves, but the fruits of the production capacity would be under usership of the individuals who are users of the technate. These usership rights could neither be sold, bought or compromised except for in cases of emigration.
The usership rights are not correspond to “real resources” but rather to the production of consumer items and services. Hence, cars, computers and other machinery is accounted for as parts of the technate. The cost of using them is corresponding to the electricity in usage.
The usership right is a part of the social contract which is the technate. It is physically manifested through an energy certifikate. The available capacity is divided into energy units, which could also be called energy credits although it might be misleading. Why? Because the units, since they most correspond to the available consumption capacity in the technate during a given time period (minus of course usage during said period), would not be possible to save over that period. Instead, the certifikate will be reloaded with a new share more corresponding to the new total production capacity of the technate.
Energy units could neither be transferred between individuals.
When an individual is using her energy certifikate, the energy units correspondent to the energy cost in production are derived from her certifikate for the remainder of the time period. Yet, after usage, the energy units cease to exist. They are only in function so that the technate should be able to track demand and adapt the production after the desires of the users. It is thus neither a planned economy or a market economy, but an interactive economy. The is the sovereign over her income.
How does energy accounting affect
the socio-economic situation of the individual?
Since the technate is’nt a price system and is self-sustaining, it does not have any profit incentives, or any incentives to tax it’s users. Neither any affiliated democratic bodies, whether in the form of traditional nation-states which are members of the technate, or autonomous direct-democratic communes would have any incentives or opportunities to tax the individual.
In first-world nations, that would represent an increase of real disposable income with 25-50%.
There would be no more debts, since costs are determined for usage and not for the acquirance of property. Hence, young people and couples would never need to be compelled to feel fear for the future because of debts over education and housing.
The technate, being self-sustainable and in abundance, would provide everyone of it’s users with free healthcare, education, elderly-care and travelling.
Last but not least, since the technate would have full overview over it’s resource usage and always manages to adapt production after consumption, it could also compensate the environment a lot better. With higher energy efficiency and better usage of resources, people could always be certain that efficiency increases in environmental sustainability also would increase their standard of life.
Some potential blowbacks
Even if the social contract of the technate states that it’s users, voluntary accepting the “Social contract of the third Millennium”, would work a minimum amount of hours within the technate, thus reducing the overall work-hours, the lack of monetary income could potentially lead to efficiency losses and environmental degradation due to insufficient motivation of the personnel. This could be partially solved by instututing a reward system, make the distribution system semi-flat instead of wholly flat or make all jobs more enjoyable.
Also, if that is not the case, the lack of exclusive property rights could lead to abuse of technology and environment, thus creating a quality of products below sustenance for the users. Some personal responsibility is thus most likely needed.
Transitionary phase
We must remember that energy accounting is a system which have never been empirically tried out within an acceptable context. Therefore, we could today never be certain what effects it would have and how it will affect the socio-economic situation in Europe. As scientists, we must be given opportunity to test out the system and remedy some of the unintentional ills it may put over Europe, before aiming to unleashing it fully. Even if energy accounting in it’s present form would prove to be sufficient, it would still be a hazardous process to implement it before testing it out first.
One arena to test it out might be in the form of a proto-technate, namely a network of inter-changing eco-cooperatives aiming to become both automated and self-sufficient.
We would also need a new form of calculation software as well as an own internal computer network to handle distribution. One could expect that the experimental forms of energy accounting at the beginning only will take care of very simple tasks, before upgrading by experience and natural evolution.
Still, it stands quite clear that we are in desperate need of an alternative to an economic system which today cannot stop it’s own self-suffocation. Energy accounting as a theory is more developed than ParEcon or time-unit accounting, and less based on “human nature”. In fact, people may be as selfish and greedy as possible, and yet, energy accounting would offer a compelling alternative to the current state for them."
"A short summary of the article and it’s intentions
The subject of this article is energy accounting, and it’s intentions are to offer a comprehensive description of the economic distribution system in the technate, it’s differences from the price system, and the different aspects of the system. Due to a lack of litterature covering the basic parts of technocracy, there was and still is a profound need for articles further investigating energy accounting as well as other aspects of technocratic design.
Scarcity and Abundance
Before we start investigating energy accounting, we must understand it’s premises. The foundation of mainstream economics is five postulates, based around a theory that all resources are finite, or “scarce”, while human will to consume is infinite. This theory is largely unsubstantiated, but without it, it would have been impossible for economists to calculate.
Technocrats, on the other hand, recognises that while it indeed is a profound fact that scarcity could exist and that a price system under such conditions is one type of solution to that problem, there do exist situations where abundance could arise. Of course, our premise is different than that of economists.
Instead of assuming that human want is infinite (one could very well still do it), and thus make scarcity an inevitability, we stress the fact that the human ability to consume is limited to the conditions of her body. Human wants might be infinite, but the human ability to fulfil these wants is very finite. We are not proposing a counter-postulate of “inevitable abundance”, but rather putting forward a more in-depth analysis of scarcity and abundance.
Abundance do arise when an infrastructural system is able to meet the human capacity of consumption while human labor input in the consumption-generating sectors (agriculture, industrial production and so forth) are diminishing. This process is a result of technological progress. The problems with abundance is twofold. Firstly, it makes it harder to calculate prices, and secondly, it leads (under a total free market economy with minimal interventionism) to prices which are diminished to the point where the producers cannot simply uphold their production.
The price system
or
“Exchange Accounting”
The price system could also be called “exchange accounting”, since all systems involving “exchange” of goods and services, from primitive barter systems and gift economics, to the advanced globalised economy which we have today, are based upon prices which are adjusted according to supply and demand.
If we assume two Egyptian subjects 4.000 years ago, we could construct a hypothetical price system not involving monetary exchange units. We say that the first of the peasants, A, desires a good, x, which the other peasant, B, is in possession of. A, in her turn, is in possession of an unspecified number of good y, which B is desiring.
In this hypothesis, the price will be in correlation of the point where each of the persons involved in the exchange finds it suitable to trade. We assume that both wants the good which the other one possess, and that they will exchange to the point where each of them are satisfied. The exchange do not need to be equal, since the deal would be subject to the individual demand of each person involved in the exchange.
More recently, money was started to being used, because it simplified exchange and made it more socially secure to trade, due to the fact that money A) is not a good of sustenance, and B) is permanent in nature. The value represented by money is of course also dependent on it’s relative scarcity in relation to the amount of persons involved in the given market.
The problems with exchange accounting are many. Now we should not discuss barter, since it by all definitions would be impossible to uphold a modern technological system with advanced factories and an advanced, integrated infrastructure through barter. Instead, we should focus on the problems with monetary exchange.
Money is possible to accumulate. That is a function of it’s role as a good which is not used for anything else than exchange. Of course, this is not wholly a problem since it allows capital investments and economic growth, making technological progress a possibility. In the same time, it is encouraging inequalities which have created income disparities where four firths of a given national population in a first-world country has access to 20% of the national resources, while the fifth left would have access to 80% of the resources.
That represents an inefficiency, because the ability to consume is twarted by the bottlenecks known as the specific privilegies in access of the means of production granted to the social groups with most accumulated capital.
Moreover, exchange accounting requires everyone to participate in a process of production, whether as investor or as employee. Under a process of automatisation, a lot of works are disappearing. Historically speaking, new works have often been created. Industry supplemented agriculture when the efficiency of agriculture led to lower employment in that area, and the service sector is today supplementing industry in most developed nations, something which the original technocrats failed to predict. But as automatisation increase, job creation in the future under the price system would take more and more interventionist measures as well as intentional creation of market failures to bolster jobs, including subventions of small companies.
The greatest problem with the modern price system of exchange accounting is that it is based on eternal exponential growth, in order to secure the well-being of the citizens. Hence, environmental foot-prints and over-exploitment of natural habitats become a serious problem which eventually could devastate a lot of the planet’s ecosystems. First when something is made artificially scarce by the use of property rights, or in-real scarce because of exploitment, the price system could react and make it valuable.
One could of course try to impose regulations of the price systems, but problems are seldom solved at the top but rather on the bottom. Moreover, regulations are most often imposed to “solve market imperfections” which means that the state, with subsidies and taxes, are working to make the fruits of the production more scarce that it is. That could hold together the price system, but at the cost of a lower standard of life and more inefficiency than needed.
We technocrats propose an alternative to “exchange accounting”, namely “energy accounting”. So let us look up what energy accounting is.
Energy Accounting
or
“The Distribution System”
To have general energy accounting imposed upon a given economy, three characteristics must be fulfilled. There must be enough resource diversity to support a self-sustaining system without the need for exchanging goods and services with the rest of the world, this system must be technologically developed so it can utilise it’s resources more efficiently than any existing system outside of it, and it would need to have at it’s disposable personnel properly educated in managing the system. Without these three preconditions fulfilled, a technate could not be established. Of course, energy accounting would, in a partial, primitive version be existent in a proto-technate (an expanding network of eco-units run by technocratic principles).
Energy accounting is not based upon the buying or selling of goods and services on a free market. Instead, it is based on interaction between the production system in it’s whole, and the individual consumer. It is not based upon the exchange of property either, since the resources at hand for each individual would not change with transfers of the energy units to the technate.
First, according to the traditional technocratic design, every individual is granted an equal share of access to the production capacity of the technate. This division of access is made according to a very simple equation. The entire production capacity of the technate during a given period (which must be determinable in length), is divided according to the number of users the technate have. Thus, no individual and no groups of individuals would “own” the means of production in themselves, but the fruits of the production capacity would be under usership of the individuals who are users of the technate. These usership rights could neither be sold, bought or compromised except for in cases of emigration.
The usership rights are not correspond to “real resources” but rather to the production of consumer items and services. Hence, cars, computers and other machinery is accounted for as parts of the technate. The cost of using them is corresponding to the electricity in usage.
The usership right is a part of the social contract which is the technate. It is physically manifested through an energy certifikate. The available capacity is divided into energy units, which could also be called energy credits although it might be misleading. Why? Because the units, since they most correspond to the available consumption capacity in the technate during a given time period (minus of course usage during said period), would not be possible to save over that period. Instead, the certifikate will be reloaded with a new share more corresponding to the new total production capacity of the technate.
Energy units could neither be transferred between individuals.
When an individual is using her energy certifikate, the energy units correspondent to the energy cost in production are derived from her certifikate for the remainder of the time period. Yet, after usage, the energy units cease to exist. They are only in function so that the technate should be able to track demand and adapt the production after the desires of the users. It is thus neither a planned economy or a market economy, but an interactive economy. The is the sovereign over her income.
How does energy accounting affect
the socio-economic situation of the individual?
Since the technate is’nt a price system and is self-sustaining, it does not have any profit incentives, or any incentives to tax it’s users. Neither any affiliated democratic bodies, whether in the form of traditional nation-states which are members of the technate, or autonomous direct-democratic communes would have any incentives or opportunities to tax the individual.
In first-world nations, that would represent an increase of real disposable income with 25-50%.
There would be no more debts, since costs are determined for usage and not for the acquirance of property. Hence, young people and couples would never need to be compelled to feel fear for the future because of debts over education and housing.
The technate, being self-sustainable and in abundance, would provide everyone of it’s users with free healthcare, education, elderly-care and travelling.
Last but not least, since the technate would have full overview over it’s resource usage and always manages to adapt production after consumption, it could also compensate the environment a lot better. With higher energy efficiency and better usage of resources, people could always be certain that efficiency increases in environmental sustainability also would increase their standard of life.
Some potential blowbacks
Even if the social contract of the technate states that it’s users, voluntary accepting the “Social contract of the third Millennium”, would work a minimum amount of hours within the technate, thus reducing the overall work-hours, the lack of monetary income could potentially lead to efficiency losses and environmental degradation due to insufficient motivation of the personnel. This could be partially solved by instututing a reward system, make the distribution system semi-flat instead of wholly flat or make all jobs more enjoyable.
Also, if that is not the case, the lack of exclusive property rights could lead to abuse of technology and environment, thus creating a quality of products below sustenance for the users. Some personal responsibility is thus most likely needed.
Transitionary phase
We must remember that energy accounting is a system which have never been empirically tried out within an acceptable context. Therefore, we could today never be certain what effects it would have and how it will affect the socio-economic situation in Europe. As scientists, we must be given opportunity to test out the system and remedy some of the unintentional ills it may put over Europe, before aiming to unleashing it fully. Even if energy accounting in it’s present form would prove to be sufficient, it would still be a hazardous process to implement it before testing it out first.
One arena to test it out might be in the form of a proto-technate, namely a network of inter-changing eco-cooperatives aiming to become both automated and self-sufficient.
We would also need a new form of calculation software as well as an own internal computer network to handle distribution. One could expect that the experimental forms of energy accounting at the beginning only will take care of very simple tasks, before upgrading by experience and natural evolution.
Still, it stands quite clear that we are in desperate need of an alternative to an economic system which today cannot stop it’s own self-suffocation. Energy accounting as a theory is more developed than ParEcon or time-unit accounting, and less based on “human nature”. In fact, people may be as selfish and greedy as possible, and yet, energy accounting would offer a compelling alternative to the current state for them."