Dear Mike,

if I take debt of say 100 MU subjected to interest, I take it against some collaeral. But due to mechanism of money creation against that collateral, there always will be available more money in circulation then what is required to pay the debt plus interest. Point is there isn't inevitable only just the process you describe.

Regards,

martin

[edited]

My point is there is always more than just enough money in circulation -- and that this latent amount isn't subjected to interest and can be used, earned to pay that interest.

Also I would like to know where exactly is your proof. I can see only statements you make about your proof.

How do you assert that, when you can only borrow what is collateralized, and not the [additional] interest?

If you want to pick at the proof of inherent failure (which has to be literal for the intentions of these pages), take apart our synopsis, or my reply to William B. Ryan:

http://perfecteconomy.com/pg-synopsis.html
http://perfecteconomy.com/pg-william-b-ryan-ad-hominems-disprove-mpe.html

This of course only refers to the manifestation of inherent failure. In other words, these indeed are statements of how inherent failure exists. But they are not necessarily even relevant to a proof of MPE, which is even a far more cut and dried little factoid:

As to proof of MPE, that is sufficiently stated on many pages. Obviously, if your definitions of inflation and deflation are increases or decreases in circulation per represented wealth, each and both together are only solved by maintaining a circulation which is at all times equal to the represented wealth.

Similarly, even if you deny that practical implementations of interest multiply debt in proportion to the obligated circulation, obviously, the combined/integral solution of inflation and deflation (which involves eradication of interest) has no power to multiply debt, because it maintains a debt equal to the depreciated/remaining value of the related property.

This forum is not for unqualified assertions. The onus is on you, if you make your claim, to show us how, in the process of servicing debt (paying interest and principal out of the general circulation), "there always will be available more money in circulation then what is required to pay the debt plus interest."

In other words, if what you assert were true, it is in all cases *together* possible to pay the interest and principal on a sum of debt which in fact stupendously exceeds the present circulation.

BTW, a proof accounts for all practical aberrations. That means it is an accountable set of arguments — even if it may (purposely) not address issues such as impractical negation of the multiplication of debt by consumption of production by "the financial industry."

Here is my invalidation of Griffin's assertion (which is similar to yours):

http://perfecteconomy.com/pg-invalidation-of-griffin-creature-from-jekyll-island.html

mike,

why not to tray it? If you are able to influence people, why not to settle it in some community?

Given the odds it to be instituted nationalwide, why not start "localwide"? If you influence some poeple, you can trade among each other by any means you find suitable. You may still have to pay taxes in fiat currency, but other than that, way to tray it is open.

Martin,

It's not that I don't want to try it, friend. Of course I do want to try it.

In the first place, effectively we are trying it. That is, we are exercising the very thing except for 2 attributes which, in each and ever case, all subjects of the system can account for incontrovertibly. We each know how much better off we would be if 1) we serviced no interest on our debts (including those of course, such as federal/national debt, which we service directly/indirectly beyond our personal/private debts); and if 2) our schedule of payments were extended over the full lifespan of the related wealth.

We also know well how much more fluid/solvent our industry would be, if there were a non-inflationary circulation equal nonetheless to all existent wealth, and which could not suffer devaluation as a consequence of dedication of ever more of the circulation to servicing a sum of debt, artificially multiplied perpetually in proportion to the obligated circulation.

These issues are quite obvious; and we don't have time to mess around with a few tiny little experiments, which, at the same time, we can and must realize cannot survive or reflect the conditions we seek to prove my the tiny little experiments. Why and why not?

Because our minute experiments will be subject to the multiplication of debt everywhere around them. What will you say when they fail to prove the point they would prove if they were practiced instead on the whole scale? That they failed? They will not fail, for we know well what the potential causes of failure are — and we have eliminated all of those causes in mathematically perfected economy™.

Our little experiments will fail because it is impossible to truly isolate the little experiment, if it must interact at all with usury; the processes of usury will still multiply their inevitably terminal costs on "our experiment."

This of course is the case for all veritable modeling/experimentation: A *valid* experiment *must* replicate the intended conditions — all of them — if it is to be a valid experiment or model.

Now, if you want theoretical models, I produced those almost 30 years ago. Download and run the models I provided the Reagan Administration, inputting zero percent interest. Or (easier still), download our Excel spreadsheets, which model the same phenomena, perhaps less gloriously.

You get the same answer: no collapse/failure, because there is no inherent multiplication of debt in proportion to the obligated circulation.


Twelve thousand homes a day are going into foreclosure. We can do the modeling more validly in the terms I have just answered; and we can do that in an hour. In an hour, if we all did so, and only if we all did so, and only if we were willing to adopt solution on the whole scale of the whole pretended economy, can we save that many people from losing their homes.

I therefore view the idea (so late, now) of petty experimentation — which can only prove something so obvious — as not only an exercise in poor science (because it will not replicate the vital conditions), but a callous waste of very precious time.

In other words, if you will indulge my expression, it is, while we are confronted by obvious escalation of terminal, insoluble debt everywhere around us, to refuse to accept its obvious causes and solution, while we *already* have the models to demonstrate what you ask (and have had them for almost 30 years).

In fact, I cannot still see this model as solving all the problems.

In the most basic thinking, there occurs some natural growth of wealth. It may be said as "if I lend you a cow [for a year], you should return it to me with a calf" (or to say it in jest, if I lend you a woman, you should give me her back with a child). And if I am returned a cow only, I suffered a loss. And I won't be lending to suffer the loss. There would be isolation of subjects in given system. Unless you allow it for "equal" transaction.

Would be words for interest/usury and profits/costs replaced in dictionary of Mathematically Perfect Economy with one related to perfect counting, or will they cease to disturb economy at all?


Regards,

martin

Given how the things are,

there is also another issue about the model.

If you state that you have one and only the solution -- that effectively disqualifies you as a partner to negotiate.

If implications are that one is incompetent, other is corrupted and another is a thief, this renders you inpassable for one and each subjects involved.

There is evidence beyond all doubt in history, that this is the single factor resulting in neglect.

And given that ruling average man adhere to "after us the deluge", there is loss of practicability beyond redemption.

Regards,

martin

It's really simple, Martin:

1. Because inflation and deflation are defined respectively as increases or decreases in circulation per whatever wealth the circulation is intended to represent, there is one and one only solution for inflation and deflation —  that being of course to maintain a circulation which at all times equals the remaining value of all the represented wealth.

Absolutely nothing else solves inflation and deflation.

3. Because interest multiplies debt in proportion to the obligated circulation, there is one and one only solution for multiplication of debt by interest, and that is eradication of interest.

Absolutely nothing else solves multiplication of debt by interest.

2. All the further irregularities of the present systems are imposed by inflation, deflation, and/or the effects of interest — any combination of which comprises systemic manipulation of the cost or value of money or property. Thus, we solve systemic manipulation of the cost or value of money or property only by the integrated solution of inflation, deflation, and multiplication of debt by interest (1 + 3).

Absolutely nothing else or less solves systemic manipulation of the cost or value of money or property.


So it's not a matter of opinion; it's a matter of engineering — and exceedingly elementary, straightforward, and immutable engineering at that.

Why don't we have these things then?

The answer to that question also explains why the founders of the United States created a republic, versus a democracy. People who cannot or will not distinguish solution will quibble, even when provided solution. The founders hoped evidently that higher standards would hold for elected representatives. But when the populace itself so largely degenerates to such a degree that its representatives do not meet that standard, and when the subject people themselves fail furthermore to meet a simple standard of recognizing it is necessary to hold its representatives accountable, you have what you have today.

No system of government can succeed if it cannot or will not even recognize solution (much less engineer them), or if it will only negotiate away whatever immutable solutions are vital to its sustenance. Not even an individual prospers by negotiation after the fact of arriving at solution.

We have before us one of the most oppressive, destructive processes conceivable. It finishes its work eventually, no matter how slowly or immediately, for properties we can readily rectify. Like anything which can serve its purposes perfectly then, to compromise/negotiate its design is to destroy the design, because any such case is a case of negating the very explicit, incontrovertible things which alone comprise the solution.

You cannot and will not solve inflation, deflation, systemic manipulation of the cost or value of money or property, or multiplication of debt by interest, by compromise or negotiation from the singular prescription for mathematically perfected economy™.

So it's not a matter of personal disposition. Veritable principles are never compromised; they are only abandoned.


2 + 2 = 4

No one negotiates the answer, because no other answer is determinable.

Next arguments might be only philosophical...

That concept is at the root of the problem.

I believe wealth is only backed by work and work only.
If you labor to grow a cow (your wealth), you should either sell it,
(and receive an equivalent amount of wealth in payment, for one time only),
or consume it.

It is unnatural to receive someone's else's work (wealth) thru lending, an
indefinite number of times. Being able to do so is only possible by
circumstances.

The usual arguments in defense of interest involve the risk, a supposed
loss of benefit, and the utility served to the borrower. (Bastiat is one of
those exponents).

My view is the following:

#1
Risk:
If you fear losing your wealth, then do not lend. It is your property,
and after all, you are free to keep it. No one is forcing you to part with
it. Again, you should eventually consume it, that's what wealth is for.

#2
Loss of Benefit:
If you are unable or unwilling to use the benefit of your wealth (which is
why you decided to lend in the first place, and this is undisputable), then
you have already given this benefit up, thus you lose nothing.


#3
Utility given to Borrower:
Again, wealth/money is backed by work only, not by the utility it serves
(even Bastiat recognizes this in some of his writings, contradicting his
defense of interest).Things are priced only in the measure of the labor
involved in obtaining them.
The simplest example is something like air, the one thing that gives us the
most utility, yet it is free.
Just like when a doctor saves someones's life, the utility is huge, but he
only demands a one time compensation for his talented labor.
Likewise, if we were to pay for the utility of the inventions made by our
ancestors, no amount of inflated money in the world would be able to cover
it. These great people were justly compensated in a manner proportional to
their talent and labor. After that, the utility has been left for us to
enjoy.
The only conclusion I draw from this is that the utility of a loan itself
has no intrinsic value. Only the labor involved in producing the item lent.
Sell it or consume it I say.


The mentality of living without working, even among so-called conservatives,
is what's got us in this mess. And unbelievably, it makes the exploited the
biggest defenders of the exploiters, since everyone seems to dream of
jumping on the free ride.

I think things will turn around as we extirpate the bug of laziness, and we
make clear the law of life: You must produce what you consume or you shall
perish.


Good discussion guys.

Exactly. That, that exactly, and only that exactly.

This is the core issue and natural law (affordable and intended charity being not an exception, but a further observation of the principle). To re-state your principle in a monetized/tokenized form ("monetary system"), "You must produce the equivalent of what you possess or consume."

If/whenever we suffer any exception, not by assent, but by imposition, that of course is exploitation. When it is a form of exploitation which further multiplies itself even to inevitable termination of the whole system, it is even the greatest crime possible.

The laws of mathematically perfected economy simply observe your principle in solving the categoric faults of 1) inflation and deflation, 2) systemic manipulation of the cost or value of money or property, and 3) inherent multiplication of debt as a vehicle for multiplying unearned "profit" at the cost of most all other subjects of the system.

Cam, Mike,

here is my (counter) argument: greatest progresses in every society is due to elimination of work involved. In another terms, rise of the amount produced in given unit of time and space involved. We as species use our reason to cause forces of nature to work towards our ends.

See Hegel and his cunning of reason: (Marx embodied and based upon on this idea in his work.)

Problem postulated in this way was not effectively solved (in classical political economy) yet.

How to evaluate diamond found on the ground?

If I produce more in lesser amount of time (innovation), is mine production worth less? If some goods are produced inside a family (case of middle-ages), should they be worth more, because more people (work) were involved in producing it?

Amount of goods and services (and information) produced in our society rise exponentially in time and/or space involved in some sectors, should value of these decrease at the same level?

You may find it betrayal of history, but this do not happen this way.

Regards,

martin

Martin,

We all realize that usual, natural progress in industrial technology can and generally does improve output/productivity, or sometimes, even quality. In other cases, quality is compromised.

It matters not. Ten years ago I might have paid $2.50 for an American-made can opener. Today, maybe I can get the same thing made in China for about $2.50 as well.

But are they the same thing?

No. Only superficially. The first of the two might last 50 years. The latter might not work so well, even when it's new. Maybe so, I pick up an old can opener at a flea market. Whatever.

In each case, we have quality of service, potential lifespan... and so forth. Somehow, from whatever we consider and however we consider it, *we* determine price. It matters not what the thing is, or what price we determine as far as mathematically perfected economy™ is concerned: *The* price is the principal, which is paid off at whatever rate of depreciation, over the lifespan of the product.

You might want to see this page regarding market-determined prices:

http://perfecteconomy.com/pg-determining-the-value-of-money-property-and-production.html

Anyway, so if you graph costs out, generation after generation, you'll see that only under mathematically perfected economy™ can generation after generation actually enjoy the benefits of the natural evolution of industrial capacities, whereas of course, under usury/exploitation, multiplication of debt not only denies those benefits to succeeding generations, it ultimately imposes collapse upon them.

Hello guys,

One thing I would do in the first place is to distinguish the
concepts of value and worth/cost as separate things.
I 'm carefult not to use them too losely.
Cost, to me, represents the labor required to obtain something. It may affect
the value that we esteem for something, but not necessarily
(there's plenty of things we highly value, but which took no labor).


Coming back to your example of the diamonds, If you develop a technique,
a tool, or you are simply blessed with better hand-eye coordination, your
Production/Diamonds indeed will be worth less! And you will be the first one to
de-value them in your eyes.
They lose value because it costs less to produce them, and that's what innovation is for.

But, this does not mean your capacity goes un-rewarded.
Let me explain further (I'm open to be corrected):


Let's say you now produce 20 diamonds while your neighbor produces 10.


If there is someone offering something you both value equally (i.e. desire/need),
like a house, you will immediately outbid your neighbor by offering 15 diamonds,
something you couldn't have done before your innovation.

By doing so, you yourself have effectively lowered the cost of your diamonds,
But YOUR WEALTH AND YOUR REWARD IS EXACTLY THIS, HAVING OBTAINED THE HOUSE, WITH CHANGE TO SPARE.

Each of your produced diamonds is now worth 0.06 houses, down from 0.1 houses, but you are the more wealthier.


Likewise, in the case of the family of the middle ages, given no alternatives, their production
is really worth more, exactly in proportion to the additional labor, But they're not more wealthy.

It seems contradictory, but they wouldn't be able to buy as many things
as a more efficient (hypotetical) competitor would.


Like you say, production has risen exponentially in many areas, but if we look closely, an exponential drop in
costs is in fact what happened. For example, 200 years ago, all the money in the world could not buy you
a Ford Pinto, or a phone call, for that matter, but today we pretty much take those things for granted.
The same reverse-exponential cost curve is seen in several industries; the best
example are the microchips.


have to go now, Cheers

cam,

These are good thoughts, but as you yourself state, you are contradicting yourself. In the end, I think you are pointed toward the right answer; but to be clear, if, without any sacrificed quality, and with perhaps even improved quality... one of us produces 10x as much as any other of us, their production may be rightly said and appreciated to be worth 10x as much (in regard to time spent at producing).

The improved productivity does not necessarily predicate reduced value or appreciation at all. After all, if a truly free market establishes the prior worth per unit, all our superior producer has accomplished is better fulfilling the needs of the market.

In then end, whatever even potentially different formulas for determining value may be applied, even on a case by case basis; and still, the governing principle is that improved productivity serves to rewarding degrees, both the producer and consumer — or there will remain no impetus to improve production (to the benefit of all).

These principles still, may only partly decide "value," but still, they must prevail if both producer and consumer are to be rewarded by the natural and usual evolution of industrial processes.

So your logic appears to concur.

As to how the determination of value may be sustained by a monetary system, you may want to see this article:

http://perfecteconomy.com/pg-determining-the-value-of-money-property-and-production.html