The Producism Manifesto
Introduction: The Rigged Game
One conversation has the power to change how you think about everything.
Are you ready to start that conversation?
According to renowned psychologist, Abraham Maslow, the ultimate need for people is to self-actualize, or to reach our full potential.
Self-actualization is just like a seed eventually growing into a flower. However, the majority of the population is at the bottom of the Maslow’s pyramid; which can be seen in the wealth inequality.
For example, by 2010, the top 1% of Americans possessed 35.4% of the national net wealth, while the bottom 95% held 36.9%. (Source)1 There’s many barriers for people to gain the wealth necessary to reach self-actualization, and the main barrier is our current economic system.
What is a System?
A system is a combination of various parts that form a whole in an orderly fashion for a definite purpose. If we look into it, a game is really a living system. Let’s break down what a system is again and compare it to a game.
A system is a combination of various parts that form a whole...
The parts that form a game are the players, game mechanics, game dynamics, and asthetics.
Examples of game mechanics are points, levels, and progress bars; the building blocks of a game - ways to provide feedback to the player.
Examples of game dynamics are tasks or challenges that are rewarded when completed; action-oriented motivations.
Asthetics are the side effects players experience when playing such as expression, discovery, fellowship, and challenge.
...in an orderly fashion...
The game rules (also game mechanics)
...for a definite purpose.
The goal(s) of the game (also game astethics)
Once we’re born, we become players of a game without realizing it. The rules are hidden to most people, but once you’ve become aware of them, the world has a brand new view. Instead of having a viewpoint of a player, you now have one of a game designer. It’s like analyzing an ant farm instead of being one of those ants. You see how the maze is structured, the dead ends, the traps, stores of food, etc. You see how the ants are divided into colonies. You see how they react to rewards. But most of all, you see a system running on its own. The ants aren’t being physically forced to do anything, they voluntarily play their part.
Every ant farm has a designer(s), and they study the behavior of the ants. Essentially, they regulate the ants’ lives through a subtle force which we can call a system (or a game). The ants are so caught up in it that they don’t realize they’re being guided through a journey. I use this analogy because it’s very similar to how humans function in society.
You may be curious on why I believe games are so powerful. I’m going to share a secret with you about that.
A game is the only known force in the universe to get people to take predictable action without force.
The goal of this book is to help you become aware of the problems of the game we’re currently playing and how we can create a new one that removes the barriers to self-actualization. However, in order for this to happen, we’ll need to view society from a designer’s point of view; just like the ant farmer.
What is Capitalism?
Capitalism is an economic system where money buys materials, tools, and/or machines (means of production) and labor power to produce products and services to sell at a profit.
Here’s a formula that demostrates this process created by Brendan Mcooney of Kapitalism101.
M - (MP + LP) - P - C1 - M1
Money ---buys---->Means of Production & Labor Power ---to Produce--->Commodities---to sell for--->Money+1 (Profit)
The Benefits
Capitalism, hands down, has been the most productive economic system society has ever used thus far. The system that was in place before it, Feudalism, only allowed a tiny minority access to a variety of luxuries and financial prosperity. If you were born poor, you died poor. If you were born rich, you died rich. Our economic status in those times were decided by inheritance. Only the rich had access to exotic and premium goods and services.
Capitalism enabled anyone who had capital to organize and create something of value to offer to the public. This empowered someone who was born poor the opportunity to surpass their class status if there was demand for what they produced. This also led to mass production, where lower class people gained access to a variety of goods and services previously only available to the upper classes. Therefore, Capitalism created a better standard of living for more people. This was a new and exciting game for the people to play! Unfortunately, this game became rigged by corporate interests controling two things: government and the currency.
The Side Effects
Corporatism
Access To Funds
Whoever controls the seeds, controls the farms. Whoever controls the farms, controls the stomachs.
Whoever controls the stomachs, controls the hearts and minds.
If we take a look at the formula of Capitalism again, we would see that it starts with money. To play the game, you need money to buy the materials and/or machines and labor power to produce a product or service to sell at a profit. How do we acquire the money to get started? Usually you’ll get it from the gatekeepers such as banks, venture capitalists, angel investors, and various types of funds. However, what if the gatekeepers don’t believe in the potential of your business or what if your business severely removes their control upon a particular industry? It’s highly unlikely that you would get funding to start your business (or play the game). So basically, everyone doesn’t have easy access to funds to start a business. Therefore, money controls labor. If you can’t get the finances to start a business, you’re forced to work for someone else.
In addition to the gatekeepers of money, the majority of national currencies are created through compound interest debt, which I believe is the main cause to the majority of problems we have in society. I will go further in depth with that in the next section “What is Money”.
View of the Self
In addition to the lack of access to capital, there’s other major problems with this system; first, the motivation of the self. According to one of the most well known theorists of Capitalism, Adam Smith, everyone in the marketplace is operating out of their own self-interest. That leads us to ask “What is the self?” Is the self an isolated body, independent of others? Or is the self a united body, interdependent of others?
Smith’s theory of the self breeds a view of the world that is based on ego consciousness, which is a belief system that everything is disconnected and people need to be in constant competition with each other. This belief system is false because there has been numerous studies that show everything in this universe is energy. If everything is made of the same thing, there’s no way everything is separate. If we see each other as a reflection of ourselves, how do you think our interactions with each other will be? Would we be more open to collaborate and cooperate instead of compete? Here’s a quote from a fellow Peer to Peer interest group member, Floris Koot, explaining his theory of the two types of Capitalism.
"Exclusive capitalism: What I got from you, is mine now. There's winners and losers and If you can't pay, you can't play.
Inclusive capitalism: What I got from you is what we have. We all benefit from the exchange. We are members of one codependent system. We all play, and money is but one of the factors to make that happen."
Concentration of Resources
As stated earlier, the top 1% of Americans possessed 35.4% of the national net wealth, while the bottom 95% held 36.9%.This drastic inequality of the control of resources create the majority of the problems we have today. This breeds cut-throat competition which leads to crime, corruption, non-cooperative behavior, and many other negative side effects.
The Design of the Corporation
The traditional corporation that is publicly traded has legal authority to maximize shareholder value over any other purposes. Therefore, putting profit over people and the environment.
This leads to:
- environmental destruction
- wage slavery
- layoffs
- corporate corruption
An example was the sale of Ben & Jerry’s Ice Cream to Unilever. Ben & Jerry’s had a social mission embedded into its enterprise. One of the companies that wanted to buy B & J would have kept their social mission in tact, but offered a lower price than Unilever. However, Unilever wanted to remove the social mission and seek higher profits. Due to corporate law, B&J was forced to take the higher bid at the expense of its social purpose. This example inspired the B Corporation movement, which is a corporate form that has a social mission designed into its articles of incorporation so the board of directors can’t be sued if they stick to their social mission in expense to seeking higher profit.
This leads to business interests only being concerned with efficiency, meaning operations being faster, cheaper, and better, but not concerned with the side effects of their business on humanity and the environment. Fictitious entities’ (corporations) needs become more important than human needs, than the ecosystem’s needs. Will this lead to everything being owned by a tiny minority? Or Is this already in place? Maybe delving into what money is will answer that question.
What is Money?
What we learn in school about money is what it does. However, a lot of us don’t know what money actually is. This is very unfortunate because in today’s society money is linked everything in our lives; thus having a powerful effect on us. Don’t you think something of this importance would be taught to us in more depth in our schools? Let us explore this mysterious phenomenon. I’ll provide 2 examples that explains what money is in one sentence.
Here’s a quote from monetary theorist Bernard Lietaer, who was a co-architect of the Euro:
“Money is an agreement by a community of people to accept a medium of exchange.”
Let’s break down that definition...
Money is an agreement...
“Agreement - an arrangement that is accepted by all parties to a transaction.”
...by a community of people...
“Community - a group of people sharing common interests.”
...to accept a medium of exchange.
"Medium of Exchange - anything generally accepted as representing a standard of value and exchangeable for goods or services."
Here's another quote by David Graeber, Antropoligist and Author of "The First 5000 Years of Debt"
“Money is just a yardstick that measures debt.”
Let's break down that quote as well.
Money...
"Money - an agreement"
….is just a yardstick
"Yardstick - a measuring tool"
…that measures debt.
"Debt - an exchange that has not been brought to completion"
So by using both of these definitions, we can also say that...
Money is an agreement by a community of people that acts as a measuring tool for what they owe each other.
Types of Money
Many people believe that the formation of money happened in this order: Barter, Money, and then Credit. Additionally, the belief is that money was created due to the inefficiency of barter. For example, if you had pigs and I had chickens, and I wanted your pigs but you didn’t want my chickens, then I have to find something you want in order to make the exchange happen. This is called “The Double Coincidence of Wants.”
However, according to anthropologist/author David Graeber, evidence suggests that money started out as an instrument of credit, or virtual money issued by a community of people in small villages in Mesopotamia as a medium of exchange.2 People didn’t carry around little pieces of silver, they put things on their tabs. Merchants used expense accounts; meaning commerce was based on trust.
Coined money was created as a way for the king to pay his military so they can buy things they needed in conquered countries such as food, etc. from the commoners2. The commoners would then pay a tax in the form of the coined money they got from the soldiers, to the king. Essentially, when the king did this, he employed everyone in the newly conquered town to get the soldiers the things they needed. Coined money and taxes were used as ways to create markets. Markets were created as side effects of military operations. Basically, by kings issuing currency to the newly conquered towns, the people essentially pledged their labor to them.
Besides coins, people have used items such as sea shells, salt, tobacco, seeds, and cattle as money. Back in ancient Egypt, people have also used warehouse receipts as money as well. For example, if I harvested a certain amount of wheat and brought it to a warehouse, they gave me a receipt that represents how much wheat I stored. I can now trade that receipt instead of barrels of wheat for the goods or service I needed.
Some of the first known creations of paper money was found in China around 960 A.D.2 Fast forward to 19th and 20th centuries, we had paper money backed by gold and silver. People were able to redeem their money for those precious metals. Then from that type of money, we transitioned into fiat money, which isn’t backed by anything but legal tender laws. I’ll explain more of the transitions of money throughout history in the next section.
Essentially, money is just a more efficient way of bartering. In the U.S., we trade our time/labor for Federal Reserve Notes (a.k.a. U.S. Dollars), and then trade those notes for goods and services in the marketplace.
The Problems With The Current Form of Money: Fiat
Fiat is a latin word that means "let it be done; it shall be." All national currencies are fiat money. Fiat money derives its value from government regulation or law.3 There is nothing backing the currency such as gold or silver, just our faith in government and the ability to pay taxes and government debts with it. So, if people lost faith in their government, then the fiat currency will be worthless. This type of money isn't good or bad per say, it just depends on how it is managed. Currently, banks rob us through lending privileges granted by governments, on money that is not theirs, but also destroys our purchasing power and savings. I'll briefly cover how national currencies are created and managed to show you their inherant problems.
Fractional Reserve Banking
What is Fractional Reserve Banking, and why should I care you may ask? As you will see, this deceptive practice of lending is a scam on everyday people because they don’t understand how it works.
Banks do not loan out their own money, they loan out their account holder’s money. For example, let’s say you set up an account with a bank and deposit $1000. The bank can now loan out up to 9x times the amount of your initial deposit ($9000) to other account holders. Where does the extra $9000 come from? Yup, probably guessed it right; the banks created it out of thin air! The irony of this is if people did this exact process, we will be arrested for counterfeiting!
(Image of Fractional Reserve Banking)
Compound Interest Debt
Now here is where it starts to get even worse. In addition to loaning money (the principle) created out of thin air, banks create another layer out of thin air, compound interest, on top of the original loan. For example, imagine I needed a loan of $10,000 from a bank. They told me I can get the loan if I pay an interest rate of 8% for up to 3 years; which will total the loan to $12,400. Where did that extra $2400 come from? Yup, out of thin air again!
Now let’s say I took the loan and they credited my account with $10,000. How do I pay back the extra $2400 if it never existed? I have 3 options. First, I can take $ from someone else in the economy in the form of "competition." Second, I can take out another loan and go in even more debt. Third, I will lose the collateral I put up for the loan.
Now here's where it gets interesting. Using the $10,000 loan example above, let's say times are tough and I'm late on making my monthly payments. I also have to pay interest on the interest ($2400 from above example), which can lead to my debt increasing exponentially (compounding) if I don't pay it off. I only used a small debt amount for this example. Imagine what the compound interest is like on the U.S. government's debt in the trillions!? 8% of $1 Trillion is $80 Billion!
(Image of Compound Interest)
Essentially, interest is the transfer of wealth from the people that work and produce to those who don’t but have capital to lend. A study by Margaret (Last Name) states that all of the prices in our economy has about 40% capital cost added to it. So, if there wasn't any interest charged, people would enjoy about a 40% savings
Inflation
Fiat money is open to abuse by the banking system printing more money than goods and services are available; thus driving their prices higher - which is inflation. Inflation is created by the banking system through the Fractional Reserve Banking process, and adding compound interest to loans. Guess who are the biggest recipients of those loans? Governments! Governments such as the U.S. have an unlimited credit line with the Federal Reserve.
Here's an analogy I like to use to explain inflation. Imagine Joe the farmer sells milk to a community. He wants to make more money per sale and comes up with an idea to do so. His plan to make more money per sale is to dilute the milk with water. First, he starts out with a formula of 90% milk/10% water. Then, it's 80% milk, 20% water, 70% milk/ 30% water, and continuing on. However, Joe the farmer is selling his quarts of milk as 100% milk! If this isn't fraud, I don't know what is.
Serving Two Masters
National currencies such as the Dollar tries to serve two purposes, being a medium of exchange and a store of value. As stated earlier, a medium of exchange is anything used to facilitate exchanges of goods and services. It can be a piece of paper, sea shells, wooden sticks, or virtual bits of information. Its main goal is to continously circulate within an economy. A store of value is anything that holds a financial worth over time. It can be a financial document such as a stock certificate, gold, art, a house, paper money, and virtual bits of information as well. Its main goal is to be accumulated with hopes of it gaining more value. Its main goal isn't to circulate in an economy (although it can), but to be accumulated and hoarded.
So what's the problem with national currencies trying to serve two masters? When money is constantly circulating (a.k.a. velocity), we have a good economy. When money is hoarded, we have a bad economy. By acting as a store of value, money doesn't have a shelf life, it lives forever. This doesn't give people with a lot of capital incentive to keep it circulating, but to sit still and accumulate interest.
(image comparing blood/circulatory system - money/economy)
If we look at money and the economy the same way we look at blood and the circulatory system, we'll understand why hoarding money is a major problem. Imagine if 93% of our blood only went to our brains, but didn't reach the rest of our body; the other areas of our body would not get nourished and suffer. Well, 20% of the population controls 93% of the financial wealth, while the remaining 80% of the population only controls 7%! We see the side effects of this wealth inequality everyday in the form of crime, distressed social relations, suffering local economies, and more. We need to add a feature to money called demmurage, which will incentivize circulation instead of hoarding. I'll touch on that in Part 2 of the book.
No Local Allegiance
National currencies such as the Dollar have no allegiance to local areas. The main goal for them is to get back to the financial centers of a country. When money is spent at a big chain store, it's more likely to leave the local area where it is doing business. This leaves less money to circulate in that local area to spur more economic activity. However, when money is spent locally, there's a much higher chance of it staying local and benefiting the community.
A study by Civic Economics covering Louisville, Milwaukee, Ogden, Utah, and the Six Corners area of Chicago prove that money spent at independent outlets is more likely to stay local than that spent at a chain. For example, in Louisville, independent businesses recirculated 55.2% of revenues compared to 13.6% for big retailers, and that local restaurants recirculate 67%, while big chains do 30.4%.4
There are various efforts in creating local currencies to keep wealth from leaving the community. I'll also touch on that topic in more detail in Part 2 of the book as well.
Conclusion
- Edward N. Wolff, “The Asset Price Meltdown and the Wealth of the Middle Class,” New York University, August 26, 2012:” ^
- David Graeber, "The First 5000 Years of Debt" a, b, c
- Wikipedia, "http://en.wikipedia.org/wiki/Fiat_money" ^
- Civic Economics, "Ten New Studies of the "Local Economic Premium" - http://www.amiba.net/resources/studies-recommended-reading/local-premium#ixzz2E8DjiVpH ^