Thursday, July 05, 2012

Problems with Mathematically Perfect Economy

Most everyone wants to live in a better world. However, it can be difficult to decide where to begin and what to do to make things better for everyone. When discussing solutions that would make the biggest difference, the top 3 are clear in my mind.

#1 is the Gospel of Jesus Christ. The gospel of Christ is based on virtue which is based on the Golden Rule of "do unto others only what you would want others to do to you".

The reason virtue is important is that when people refuse to take advantage of one another; the virtuous society fosters unity, trust, voluntary cooperation. The degree of trust and voluntary cooperation in a society is called social capital.

#2 is developing an equitable free market economy that provides an equality of opportunity and not an equality of result.

#3 is developing energy technology that provides that individuals can be energy independent and not dependent on government and corporations to provide artificially limited resources.

One idea that has been proposed as a replacement for our current Private Central Bank petro-dollar fractional banking capitalist system is an interest-free system called the Mathematically Perfect Economy.

I hope that you can have an open mind and pick out the useful parts of MPE from the not useful parts. Let me summarize the problems with MPE:

MPE Assumption #1: People trade things that are of equal value. If they trade things that are not equal in value, then one of them is being cheated.

Ignores Marginal Utility: People come away from trades with something of greater value than what they brought to them and that their valuation of things depends on how many of those items they already own.

MPE Assumption #2 (based on #1): Borrowers are trading more money in the future for less money now. It follows from premise #1 that they are being cheated.

Ignores Time Preference of Money: money today is more valuable than money tomorrow.

MPE Assumption #3 (based on #2): Any monetary system subject to interest ultimately terminates itself under insoluble debt. It follows from premise #2 that, because the charging of interest is not currently prohibited, the world economy is destined to collapse.

Ignores Velocity of Money: Money in circulation is used over and over again before debts come due.

MPE Assumption #4 (based on #3): There is class conflict between laborers and usurers as they battle over the unearned gain (surplus value) that is the proletariats’ due. By an argument similar to dialectical materialism, as the world economy collapses (see premise #3), the implementation of Mathematically Perfected Economy™ is inevitable. Montagne writes:

Absolutely prohibiting the collection of interest is a type of Socialism that requires enforcement.

The bigger problem with MPE is that no one owns anything. And since the value of everything determines the money supply, what is to prevent the banks from regulating, dictating or punishing how you use or how much you use your car or house of whatever. Everything you have in MPE is on leased.

http://axiomaticeconomics.com/montagne.php (Victor J. Aguilar)



8 comments:

Ivan PFMPE™ said...

It's called Mathematically Perfected (ED) Economy™, not perfect. And you forgot to stick a ™ in there.

I will comment on each and every one of the points later don't have time now. Have a nice day.

Ivan
PFMPE™

Ivan PFMPE™ said...

MPE Assumption #1: People trade things that are of equal value. If they trade things that are not equal in value, then one of them is being cheated.

No. Under MPE™ you are entitled from the pool of wealth what you’ve contributed to the pool of wealth. We don’t trade things under MPE™.

Ignores Marginal Utility: People come away from trades with something of greater value than what they brought to them and that their valuation of things depends on how many of those items they already own.

You are talking about price and unearned profit here. Price is determined by free market under MPE™ only way to have a truly free market is to have MPE™ because only under MPE™ the system is not subject to the same terminal conditions any other prospective monetary system otherwise would.

OK I see where this is going and it will get even more complicated and confusing.

I suggest that if you truly believe that you’ve discovered some flaws in MPE™ to debate them with Mike, myself or Dave over Skype, Radio or whatever platform you see fit, in order to deny a chance of possible evasion.

David B said...

We can agree to disagree on marginal utility or time preference, but I'd really be interested in you addressing the reality of Velocity (point #3). The major mathematical shortfall of MPE is its failure to account for velocity.

I recommend that you take a look at the Safety Society System. Like MPE money is created on demand, and local administer no-interest, fee-based loans. However, unlike MPE, SSS has a mechanism to account for velocity of circulation to prevent inflation/deflation.

Ivan PFMPE™ said...

MPE™ doesn't deny that money is "used over and over until the debt is due" eventually it's due though right so eventually it will collapse. Plus the circulation is always at a deflationary state unless we all forgive the debts (which is what those Jubilee advocates are trying to propose, which will only preserve the system of exploitation and reset the clock).

Lets discuss this on skype.

So far there haven't been a single individual or group who could demonstrate how their is a flaw in MPE™. They try to assert their is a flaw but that's not a proof. And when we ask them to debate they always evade, get burned in a discussion or admit they were wrong.

I see you are borrowing from Agular's work (to put it lightly). Why don't you mention the source?

We have addressed Agular many times he is just another pretender who doesn't understand the problems, even less so how to solve them and even less what are the consequences of his preposterous imitations.

Ivan PFMPE™ said...

The problem with Mr. Aguilar theory is that it builds on falls assumptions which are no more then misunderstanding of how mathematically perfected economy™ works.

These misunderstanding are much easier to defuse and arrest in a live debate but is very complicated to do in writing due to the lack of interaction, and dynamic feedback between the two sides.

Yourself, Mr. Aguilar, or anyone else for that matter, are more then welcome to have a gentlemanly public debate with PepoleForMPE™ about the purported faults in MPE™. Anytime and any place.

Feel free to get in touch with myself here or on skype.
Skype: Ivan PFMPE

Ivan PFMPE™ said...

So on the velocity issue.

Eventually the debts are due (which is what we see around us). Eventually the amount of debt created by the reflation of the circulation exceeds our remaining capacity to service debt at which point credit rating is destroyed, no more borrowing is possible and the system suffers terminal failure.

There are methods to prolong it even beyond that. But that's like arguing that your busted pipe in the kitchen can keep spraying water all over the place so long as your are able to prevent the entire place from flooding by keep comming up with more intricat mechanisms of catching the leaking water into the buckets. There is no need to live that way when we can just fix the damn pipe and prevent it from leaking again.

As far as the velocity under MPE™ I would like to invite you to explain how the purported velocity of money is a problem under MPE™. Don't just assert it is though, please outline the whole process with a plausible example.

Thanks

Artificial sustention - http://www.perfecteconomy.com/pg-glossary-of-terms.html

australia4mpe said...

Please by all means your welcome take up the debate challenge anytime David B.
If you like maybe Victor & yourself would like to debate mike & myself.

http://australia4mpe.wordpress.com/2012/07/20/pretenders-plagiarists/

Ivan PFMP™ said...

1. MPE Assumption #1: People trade things that are of equal value. If they trade things that are not equal in value, then one of them is being cheated.

Ignores Marginal Utility: a. People come away from trades with something of greater value than what they brought to them, and, b. that their valuation of things depends on how many of those items they already own.

a. Not under MPE™ pay for each others' production with whatever they deem to be an equal measure of their own production.
b. Because we are free to issue our promissory obligations free of intrinsic exploitation and adulteration under MPE™ subject to our credit worthiness, having a large accumulation of things is not the determining factor in value.

As outlined in a. the amount of time and effort and what we deem a reasonable reward commensurable to the effort (or contribution to the pool of wealth) that was put into the thing you are trading, is what determines the value. If you think you can charge less and produce something of equivalent value you are free to compete. That’s the real true free market.

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