Month: November 2020

Civilisational Wealth, Currency, Economy 2.0, Money, Thinking Money

Community Coin – a thought experiment

Steve Kelsey 10 mins read

In this thought experiment let’s speculate on what a civilisational wealth based economy might look like.

Civilisational Wealth is intelligence applied to base matter. Physics doesn’t have a definition of intelligence yet, nor a means of measuring intelligence as a physical quantity, and so we need to use an analogue. Although we can’t measure intelligence as a physical property we can measure energy intelligently applied to base matter. A unit of Civilisational Wealth is X energy intelligently applied to Y matter and is measured in Joules per Kg.

Work is the process of embedding intelligence in base matter. Work produces Civilisational Wealth. read more

Democracy, Politics, Resistance

When Two Tribes go to War

Steve Kelsey 5 mins read

Some years ago I met a Chaplain from the Chicago Police Department. The Chaplain’s job was just as tough as you might imagine. He worked in the 1980’s in the 4th District, the south side of Chicago, which is not a gentle part of town. He wore a uniform, and he carried a badge but no firearm. His job was to pick up the pieces when it all went wrong. It was his job to tell police families someone would not come home that night. It was his job comfort the families of murder victims. It was his job to hold the hand of the officers who were not going to make it. He was in London to share his experiences with a group of company directors read more

Democracy, Democracy 2.0, Politics

P2P Politics

Steve Kelsey 5 mins read

Brexit was a triumph for a new form of politics. This mutant offspring of a love affair between Neo-feudalism and data science points towards a politics where representation is replaced by information and analysis. This bizarre child, bleating jingoism as it stomps all over the British economy, is an unfortunate advertisement for the new politics but there can be little doubt that it represents the future. And that could be a good thing, if we are smart.

Brexit was delivered by data science. Over 50 million Facebook profiles were filleted for data-points that could be mapped to political views allowing propaganda uniquely tailored towards exploiting individuals fears to blitz the accounts of voters on the final day of the Referendum. For data science and propaganda the Referendum result was a triumph. The problem with Brexit was the objective. I don’t mean leaving the E.U., I mean the use of social media and big data techniques to impose the private goals of a few onto the population by manipulating their anxieties. This is a perversion of what could and should happen when big data meets politics. read more

Banks, Economics, Economy 2.0

Chaos Monkeys – Part 2

Steve Kelsey 10 mins read

The financial market is designed to fail.

Looked at as a network design our financial markets are optimised for efficiency. Optimising for efficiency in the financial markets is not optional, it is the inevitable result of competitive pressure. Markets that are fast to react capture the early opportunities and transmit their risks through the network, markets networks that are slow to respond lose out on the best trades and end up with all the risk.

Perversely, the efficiency of the financial market and its various sub-networks, which are designed to transmit risk efficiently across the network, are equally efficient at transmitting failure.  We see this in operation on our news feeds as falling values roll across the world from exchange to exchange, New York to London to Tokyo responding as one. read more

Banks, Economics, Economy 2.0

Chaos Monkeys -Part 1

Steve Kelsey 6 mins read

Why is our economy so unstable? Why do crises overpower our best systems built by our best minds? Or, if you reject the notion of intelligent control in our economic systems, why does a highly evolved system evolve towards chaos rather than stability?

To begin to understand how these instabilities arise let us look at the most recent.

The principle cause of the 2007/8 Global Financial Crisis was deception.

It started with the US Prime market where high-risk low value assets were bundled and re-bundled to obscure their origin and then marketed as low-risk high value assets. That was as crazy as it now sounds post 2007, but there was an underlying principle behind this method that makes a claim for respectability. read more

Democracy, Democracy 2.0, Politics

Politics for a civilised world – Part 0

Steve Kelsey 3 mins read

There can be little doubt that we are seeing a deliberate and very stealthy restructuring of our society. This has been underway from before the Thatcher and Reagan years that saw the first surfacing of the hard-right agenda. This move was accelerated profoundly by the 2016 elections in the USA and the UK. The election of Tump in the USA and Brexit in the UK are just another step on the path that was largely unplanned but, having happened, was seized as an opportunity to accelerate this restructuring.

Their objective it to move society away from democratic norms towards a new hyper-capitalism. This is a very peculiar form of capitalism that promotes monopolies in industry and the concentration of power and money in the hands of a few. This is not at all what you would expect from the dynamics of a free market model. As evidence you only have to look at the US healthcare system where efficiency, choice and cost effectiveness are far from evident. read more

Civilisational Wealth, Economics, Economy 2.0, Thinking Money

Economics for a civilised world – Part 4

Steve Kelsey 2 mins read

The Price Transformer

The price transformer determines how much of the imaginary wealth equates to the concrete value of real wealth. Price is established during a complex process which involves the following elements

  • The real wealth element, intelligence applied to base matter- conventionally defined as the manufacturing cost.
  • Plus the ‘market’ elements
  • The size of the market-  how many people need the product?
  • The perceived need- is the product an essential medicine or a toy?
  • The Supplier premium- is the supply rationed?
  • The Marketing premium- the price premium delivered by various psychological manipulations?
  • The Competitive premium, how dominant is the company manufacturing the real wealth element?
  • The state of the economy.
  • All of the market factors play a dominant part in setting the price to be paid for the wealth ‘on sale’.  They have no direct connection with the real wealth element of the price and some, e.g. the Marketing premium, are purely psychological. 

Today Brand and Marketing often play a controlling role in setting the price to be paid and can be responsible for the significant premiums that can be charged over the real wealth element.

In conventional economics, price is given great significance, defining the value of a product to the consumer. However, price is entirely subjective and breaks any objective link between real wealth and the market. We have seen this systematic mutation of reality before. read more

Civilisational Wealth, Economics, Economy 2.0, Money, Thinking Money

Economics for a civilised world – Part 3

Steve Kelsey 2 mins read

Money = Imaginary Wealth

Money is potential or imaginary wealth (iW). Money is variously described as a credit or an IOU for resources or the labour that converts resources into wealth. Note that the terms ‘resources’ and ‘labour’ are a convention and are colloquial synonyms for matter and energy intelligently directed by the labourer.  

Money is an invention and has no objective reality. it cannot be assigned a value until until it is converted to real wealth. This is counter to the convention where money is believed to denote value, but money has value only in relationship to real wealth. Money was reinvented many times all over the world. Money is a form of virtual wealth that can be traded for the real thing  at a future date. In this sense money is future wealth, but to be realised the virtual wealth has to be accepted by any provider of real wealth. The acceptability is governed by the wealth provider being able to repeat this process with a third party. Elaborate systems have evolved to ensure that virtual wealth maintains its value over time relative to real wealth.  read more

Civilisational Wealth, Economy 2.0, Money

Economics for a civilised world – Part 2

Steve Kelsey 2 mins read

Wealth and Work

Energy over time is work. 

E x t = Wk

The amount of wealth created in an hour depends upon the context the work is done. 

As we have seen, the wealth created by hour of work by a brick plant is less than that of an ICU fabricator because the amount of Applied Energy, our analogy for intelligence, involved in the fabrication of a brick is much lower than the energy required to produce an ICU. 

Productivity

Before industrialisation the amount of intelligence that could be applied to base matter in an hour was limited to the activity of one person. Industrialisation has increased the amount of intelligence that can be applied to base matter many times over. We call this measure productivity. A highly optimised system would seek to maximise the productivity per person to increase the wealth that one person could create. Assuming equitable distribution of wealth, if everyone had a productivity ten times greater than a single person is capable of we would all be ten times wealthier. It is this increase in productivity that has allowed us to enjoy far greater wealth than our ancestors. read more

Civilisational Wealth, Economics, Economy 2.0, Thinking Money

Economics for a civilised world -Part 1

Steve Kelsey 2 mins read

A physics based economic model starts with a physical definition of wealth.

Wealth is the product of applying intelligence to base matter. This process raises base matter to a level of functionality that satisfies a need. Clay becomes brick, bricks build cities. Iron oxide becomes steel, the steel becomes machines. Our civilisation is based on trillions of transformations of this type. 

We cannot measure intelligence as a physical effect, but we can measure the amount of intelligently directed energy employed to embed intelligence in base matter.

We can therefore define wealth in physical terms using read more