Saturday, 13 October 2018 15:54

Energy Accounting, Basic Income, Time Compensation and Validation

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Image Courtesy by The Utopian Idea

Introduction

If you are reading this, it could be prudent to be acquainted with the concept of Energy Accounting. To recap it briefly, Energy Accounting is a model of a post-monetary socio-economic system.

It is composed of an on-going Energy Survey which measures the planet’s renewal capacity and thus establishes a Global Ecological Budget Ceiling, a Technate which is administering all allocation, and Energy Units, the new currency which would work as the medium of allocation.

This article will focus on the aforementioned Energy Units, and especially on different strategies on how they can be distributed to a population. The main issue is to find balance between guaranteeing a good quality of life for all human beings, and preserve incentives in relation to the changed circumstances which we would experience during the transition from the decaying Capitalism of the 21st century into a brand new, hypothetical system. While more tests, research projects and simulations are needed, we can still hypothesise about different methodologies of distributing energy units. By defining different methodologies of distributing energy units, we can outline different futures for a sustainable civilization.

TL;DR Summary

  • Energy units are envisioned as shares of a production capacity pool which would consist the entire ecological budget of the human civilization.
  • In that respect, their functionality must be understood in relation to the three criteria and to the specific nature of a technate economy, and therefore certain functions which money by default has had historically will not be featured in energy units.
  • One major point which historically (pre-2015) caused many arguments within the EOS was the issue of how energy units should be distributed to the citizenry.
  • This point of contention is and has been disarmed, because the position of the current Board has established that these hypothetical models of distribution ought not to be mutually exclusive.
  • While there probably are uncountable different models for Energy Unit distribution, the three forms which mostly have been discussed have been the flat, the semi-flat and the stratified distribution models.
  • The main point of discussion used to be whether the technate should have a basic income basis, or whether that would destroy incentives, or whether incentives really would matter that much in a future which we all agreed upon would be characterised by increased automation.
  • Today, we are rather discussing distribution by basic income, distribution as time compensation, and distribution through validation. There is a dark horse hovering outside the scope of these distribution models, and that is distribution through infrastructure.
  • The consensus within the Board is that 1) all these models simultaneously can operate, and that 2) the relative size of the different income forms is 2.1) a political issue and thus 2.2) one that is best reached through regional democratic consensuses.
  • The consensus within the Board is also that Energy Accounting must be tested in simulations to see what effects it will have on numerous factors regarding human behaviour.

Why Energy Units are neither money, nor energy

Previously, the EOS and its predecessors often supplanted the correct term “energy units” with “energy credits”, which could tend to confuse the listeners or readers, since a credit per definition is a form of debt, and debt is understood in terms of monetary concepts. The term we are currently using – Energy Units – is similarly, but from the opposite perspective, loaded with potential misconceptions. Confusion in regards to this term have generally been that Energy Units in the context of Energy Accounting represents actual, physical energy, and that everyone in the Technate would own their own solar and wind farms and “trade with the energy they produce”. One question we’ve received have actually been whether not “all the transfer of Energy Units would mean a significant waste?”

Yes, it is true that in the area of physics and more specifically thermodynamics, energy units measure actual energy. Energy Units in the context of The Design means something which both is connected to the physical definition, and yet radically different.

The Energy Units could really be called “Exergy Units”, as they are tokens of shares of a global exergy pool – which by itself is a result of the great computing process called “the Energy Survey”. This Survey would weigh our current technological ability with the Earth’s renewal capacity, and thus provide humanity with a global ecological budget ceiling.

While Energy Units most likely would be constituted in the form of an electronic currency, the energy weight of every allocation in its own right would be fully or nearly identical and probably a fraction of the energy of the industrial operations the usage of these units would instigate and track. In this regard, the Energy Units are more reminiscent of money.

How, then, are Energy Units differing from money? There are numerous differences, but we can summarize these differences through a prism of three points, which all (spoiler alert) are negations.

  • Energy units cannot be saved. Following the advent of new Energy Survey periods, all the billions of accounts will be wiped clean and reset with new Energy Units issued for the new Global Budget.
  • Energy units cannot be traded, i.e used for exchange. They cannot be transferred from individual to individual, from individual to institution, from institution to individual or from institution to institution. Only when they are created by the technate and distributed to the billions of citizens and holons.
  • When used, they cease to exist. Whenever an allocation is registered, the Energy units withdrawn from the account are transformed into data which is sent to the responsible holon and also saved in an additional copy for posterity, logging the allocation. If a holon fails to fulfil its end of the obligation, the Technate can reimburse the citizen by creating additional Energy Units.

Some of you may find what differentiates Energy units from money revolting. This flies in the face of not only the predominant cultural-economical paradigm, but makes that paradigm impossible. Wouldn’t this make markets impossible? Some may ask: why can’t we make Energy units which can be saved, exchanged and traded, and yet retain all the unique functions of Energy units?

Upon this, my answer has been, is and will always be: Energy units are designed for a specific purpose. If they would work as money, they would not be able to fulfil that purpose.

What, then, is that purpose?

The answer is: Tracking Demand.

Tracking Demand

When the citizens of a Technate are using their Energy units, they are in short telling the infrastructure and its actors what the aggregated demand is, divided down to what literally is the basis for demand – individual user choices. Thus, the supply of products and services would more closely match user demand, with less waste (and less need to artificially create demand through advertising).

If you reread the three points about what differentiates Energy units from money, and be asked what the common denominator between these points is, the answer would be clear. The areas where the differentiation is the starkest and where Energy units are constricted in the manner they are usable in comparison with money are the functions related to savings, accumulation and exchange. While these mechanisms, unlike interest, are not in themselves putting an economy on collision course with Mother Earth’s constraints, they would – under the regime of a global ecological budget ceiling mind you – cause a deflationary effect which would in the end abolish the market.

We have experienced such economies before. During the ages when metal coinage was predominantly used, money tended to flow from urban markets and labourers into large landed estates which supplied urban centres with food but otherwise largely were self-sufficient. Thus, money was inherently deflationary, with fewer coins chasing more goods, creating incentives to hoard instead of investing.

With fractional reserve banking abolished, interest curtailed and a global ecological budget ceiling installed, an unregulated monetary regime would soon see a rise of inequality, where the fortune of some would turn into the misfortune of others (instead of the game of exponential growth we’re playing under neoliberalism, where the wealthy are winning a lot and the impoverished slightly improving their lot and the Earth pays the bill until it cannot), turning everything into a virtual zero-sum game. Since the total amount of money under such a hypothetical system would have to correspond in some way to the ecological budget constraints. To prevent rising inequality from delegitimizing the system, regulations would have to be instituted to prevent the amassing of wealth, and thus a ruthless class struggle would be built into the very sutures of the system. Instead of moving forward into the daylight, we would tumble back into the cellar.

Energy units do not need to be taxed, regulated or monitored post-facto.

  • As they cannot be saved, they cannot be hoarded or accumulated over accounting periods.
  • Neither can they be garnered by selling products, services or access to scarce resources such as land, because usage entail their destruction, not their transference.
  • Thus, they are not susceptible to be used as interest.
  • Neither can there be speculation, and their value will not fluctuate in relation to the markets, because their value is the accumulated usable energy value of the exergy pool – which for all ends and purposes under the Technate is the market, and they are created as mere shares of the same exergy pool at the moment they are distributed to the public.

The reason why Energy units are disappearing after their usage is not primarily to curb the prospects of rising inequality. If the system works as intended, that would indeed be one of the effects. No, the true reason is that the Energy units collectively are the exergy pool of the Technate, and the exergy pool will for all objects and purposes be the economic allowance for the human civilization. When available energy is used, it is usually converted into a baser, less usable form. When a holon is using energy amount X to produce sixty pairs of sneakers and compensate for injuries to the environment, that exactly very same energy can under no conceivable physical law today be used to produce another sixty pairs of sneakers, since that would violate the Laws of Thermodynamics.

Thus, if Energy units would be saveable or exchangeable, it would defeat the very purpose of Energy Accounting and either destroy the function of the ecological budget ceiling or demand that we impose draconian regulation regimes which would strive to achieve a modicum of what Energy Accounting as the model currently is envisioned fulfils.

Courtesy: DevilDalek, DeviantArt 

 

Why the Design can work as a (form of) market system

An economy without exchange, without public and private savings, without debt and credit, is a virtually moneyless system. Therefore, it would be logical to assume that what we have in mind would be a form of command economy, where Energy units would show the planners where there would be need for additional resources.

That is not necessarily the case however.

When the exergy pool is delineated and its shares divided, a portion of the shares will be distributed to the holons tasked with maintaining and constructing infrastructure and vital societal operations like education, healthcare, security, water management, electricity and so on. The rest of the budget will be distributed to the citizens as individuals.

The size of these shares – by which we refer to the one allotted the public sector and the one distributed to the citizenry – can actually vary, and could be viewed as a two-dimensional spectrum with an adjustable meter, rather than as a point fixed in time. We are not utopians, and our goal has never been to discuss the Design within the narrative that it just must conform to strict dogmatic precision.

Thus, one can easily imagine two extreme applications of the Design.

The first one could be called a Stalinist model, where 100% of the budget is distributed to the holons managing the public sector and infrastructure, and the public itself is left without any disposable income at all. In this system, planners – if they are human or cybernated is not relevant – would be tasked with the arduous labour of predicting user demand and ensure that all citizens have access to the products, services and resources they need. This model is indeed within the realm of the possible, though it will certainly be plagued by many of the problems associated with centrally planned economies. That sort of model would very well conform to what hypothetical detractors of the Design would warn for.

The second extreme variation, which would exist on the opposite end of that spectrum, could perhaps be called Libertarian-Anarchist in its modes of operations and characteristics. This model would see no Energy units transferred to any kind of public sector or infrastructure maintenance. Rather, the philosophical assumption would be that the citizens together possess the wisdom to organically structure the community in such a way which would be optimal for everyone. This system would allow the citizens a liberty to manage the human civilization with near total impunity, bestowing them to act as they please – with the only constraints being those based on the planetary renewal capacity.

That system would not be a planned economy. It would be a market. A market without the need for advertisement, debt, bankers and stock brokers. A market without money as understood in a second millennium context. But a market nevertheless.

Even if a third of the exergy pool is distributed for public sector and infrastructure needs, and two thirds are distributed to the citizens, it would be market. The reason why it is so, is that individual holons and clusters of holons (outside of the public sector) would be based on voluntaryism and address the need of users, while the users would allocate their Energy units to the production of what they need.

Apart from the absence of the design features of money which promulgate some of the most inherent characteristics of Capitalism, there would be some other aspects gone amiss, not because of the manner in which Energy units operate, but because of the wider structure of Energy Accounting as envisioned by the EOS. There would for example be very limited incentives by holons to try maximising their production. There would also be less incentives to make environmentally hazardous products or to treat co-workers as disposable material. All distribution of Energy units is taken care through the Technate, and thus there would be no incentive for holons to mistreat their team members.

But, wait. If there is little incentive for holons to economise, wouldn’t they risk turning into basket cases, providing subpar quality services reminiscent of old Eastern Bloc cooperatives? That will be addressed through our next segment.  

Distribution methodologies

Of course, we can just randomly distribute Energy units to the citizens and then let it stay at that. It would be a bad idea, and probably have some detrimental effects, but it is a possible idea. Or, maybe we can discuss distribution methodologies?

This is an area where ideology and values play a significant part, as the way distribution is structured is dependent on cultural, civilizational and philosophical foundations. The rules of distribution should be 1) legitimate in the eyes of the citizenry and 2) based on consistent rules. The second part is essential, since arbitrary rules would quicker than anything else serve to delegitimize the system.

EOS as a movement is 1) Universalist and 2) basing its values on the Ideology of the Third Millennium. That our values are Universalist means that there must be Universal standards according to which all human beings should be measured. No one should be discriminated because of factors which they do not control, like for example origin, sex or orientation. In this regard, our position is not much different from mainstream Western thinking. Rights are not bestowed through mercy or as a reward (then they would be conditional privileges), but are inherent in the values we choose to profess as a culture. We believe that rights belong to individuals primarily, because everyone experiences the world through their own individual experiences.

Everyone should be treated in an equal standard.

The question, however is, to what equal standard. And there are numerous potential answers, though we will focus on three, which will be:

  • Everyone should receive equal the amount.
  • Everyone should be compensated according to the time they are working within holons or infrastructure.
  • People should be compensated through success – there should be a relationship between the quality of a product or service, and the future Energy unit income.

Let us now examine these three methodologies in closer detail.

Universal Basic Distribution: This methodology simply divides the share of Energy units issued to the citizens equally, no questions asked. Everyone would get a basic share, giving them the opportunity of taking part in harvesting the numerous different resources offered within the global ecological budget. No person would need to fear exclusion from the resource pool, and when each accounting period begins, every person’s Energy unit account will be reset on an equal basis, a division of the exergy pool based on the data for the new period.

The main objection to this type of distribution would be that no matter how much a citizen contributes their time or creativity to contribute to society or make innovation possible, the “reward” would be exactly the same. This, proponents of Universal Basic Income in the context of the Design are stating, would not be a problem, since the introduction of a Technate would create a civilization of abundance, and that automation would undoubtedly eliminate a lot of human input in work. Many of these proponents have migrated to the EOS from various RBE environments it should be added. Of these claims, we can neither verify or reject outright, because what determines whether a state of “abundance” can be achieved is our technological ability to use our global ecological budget in an efficient manner.

Compensation-based Distribution: This model is similar to the dominant wage model today, the main differences are a slight postponement of compensation, and that the holons (where most people with employment would work) would not be the ones distributing the Energy units, but the Technate. This model would factor in the time citizens commit to tasks, as well as the skills needed to acquire certain tasks, and would thus be another form of wage system. Ostensibly, it would avoid the moral hazard and the optics of rewarding idleness. The problem with this model is that it may miss the effects of innovation, especially as capital doesn’t exist and Energy units cannot be used for trading. Thus, enter our final hypothetical distribution model.

Validation-based Distribution: This model is interesting, since it mimics some of the positive aspects of market economics, namely that the preferences of the users should have an impact on future distribution of Energy Units. It is slightly more complex than the two previous models, and relies on participation in cooperative holons. If holons supply the public sector or the users/citizens with products and services, there would be a certain monitoring of resource flows, which can be used to determine what providers and content creators are bringing the most popular services. Then, this can be factored on the team members, who all – under this model – would receive a higher distribution share during the subsequent distribution period. Validation could additionally be provided through user reviews. The benefits of this model would be two-fold. Firstly it will provide an incentive to establish quality standards within holons providing products or services. Secondly, it could help weeding out holons which are dysfunctional and thus reduce resource waste (it should be noted that people can freely switch between holons). This model would most closely resemble the market.

Composite Distribution Models: Finally, there is absolutely no reason why the Energy Units Distribution cannot be portioned out into three different shares per individual, one basic income share, one work-time share and one validation share. This composite model would both recognise the validity of all three models, and eliminate the objectionable traits of each and every one of them.

First, in a world where we can provide for each human being, we must make space to provide that no one ought to be starving, homeless or dying because of poverty. Discrimination is unacceptable I hope most of us could agree on. Equally well, people should not be penalised by homelessness for being ill or for having lower than median intelligence. Social Darwinism, where people are judged according to two-dimensional analysis and valued after their contributions to society, is inherently a worldview which sees the individual as a means to an end, and not the end to which means flow. Thus, each human being should be entitled a basic income which should provide for food, shelter, clothing, hygiene and the ability to move freely. That is what is usually called a “no-brainer” for us. Each human being alive on Earth has a right to life, and a right to take share in the fruits of the Earth. Thus, a threshold below which no one should need to fall is absolutely essential. Especially as automation in the latter half of this century would continue marching on and continue reducing labour time.

Thus, let us say that a significant share of the Energy units distributed through the citizens is distributed through a basic threshold.

The rest can be divided into one or two additional shares, providing distribution through clocked time invested into holons, or through the validation of quality of services provided. These methods of distribution will incentivise work and innovation, and thus mimic the dynamic and positive aspects of market economics.

The fourth method, distribution through public utilities: Human beings are not born equal, as in not born with exactly the same traits. Some are impaired by handicaps which would restrict their ability to take part in the community. One could think it might be a prudent idea that instead of funding utilities such as wheelchairs, glasses, earing aid or prosthetic limbs through the distribution allotted to the individual, to let these applications be supplied by the share of Energy units distributed to the public sector, since it otherwise would penalise individuals for conditions which they cannot control.

Another potential opportunity

I shouldn’t omit that humanity is a species characterised by ingenuity. If we would find more effective ways of harnessing energy and utilising resources, the technate would experience something resembling economic growth – but it would be a type of economic growth which finally would not initialise Jevons’ paradox, since the Global Ecological Budget Ceiling would put a definite end to uncontrolled, unconstrained exploitation of planetary surface.

Thus, holons which actively work to innovate and improve the efficiency of our technological infrastructure may actually create new Energy units through an expansion of the global exergy pool/global ecological budget. That would be something to celebrate and not fear, and there must be mechanisms in line to incentivise these kinds of initiatives.

This would especially affect holons working with raw materials, energy production, energy waste, transport and production. If more effective, less wasteful methods are discovered, the budget will be expanded and thus the amount of Energy units, thus making all of humanity wealthier.

Courtesy: EmilisB, DeviantArt

Localism and regional variations

The ways Energy units are distributed to citizens do not need to be identical between regions. Ideally, from our point of view, would be if every region at least recognised that no human being should be without shares in the planet’s future, as well as that the shares should be individual and not for example distributed to clans or tribes. Also, the Energy units themselves, as shares of the planet’s production capacity, may not be used as if they were money.

Otherwise, the way and size of the distribution shares must be an issue of negotiation, compromise and dialogue between the Technate and regional democratically empowered authorities. This would allow for a huge diversity between regions in terms of how they structure their distribution of Energy units. Of course, the way different regions decide to effect the distribution would not be static in time either, but changed through technological development and democratic decision-making.

This would mean that even after instituted, Energy Accounting will continue to be an ever-evolving, transformative system. The difference in regional implementation may reflect the will of the people, but will also recognise that different regions may have different needs in terms of climate, infrastructure, environmental and social factors. It would also provide an opportunity for regions to compare themselves with one another and thus achieve a greater deal of efficiency in managing the system designed to fulfil the Three Criteria.

Summary

Energy Accounting, why would we need such a radical transformation? Why would we abolish the concept of exchange, of savings, of debt and interest?

The answer is: We don’t know whether Energy Accounting is the best answer, but it is specifically designed to address the problems caused by a system dependent on exponential growth which – through Jevons’ paradox – is bond to incentivise the destruction of the planet’s biosphere. What we want is merely the opportunity to test this model through simulations and field experiments, and see how it would affect the behavioural modes of people and whether there are factors still unknown.

Energy Accounting as a part of the Design would:

  • Make ecological products and services cheaper by default than wasteful practices, since the cost of operations are derived from accounting restoration costs as well.
  • Institute a global ecological budget which would be the allowance humanity is allowed to draw from the planet.
  • Secure that no one is excluded from taking part in this ecological budget.

One thing which remains unaddressed in this article until now is that the existence of an income floor would necessitate the existence of an income ceiling. That is true, but it is largely accomplished by default, since operations under the Technate, in the form of holons, would be distributed processes which are decentralised, ensuring that wealth is not concentrated but distributed within the nodes.

Maybe some people will find it hard to forgive that in the future no one individual may own the equivalent of a Belgium or Italy, and equivocate that with the worst types of oppression. Our position is that if we are living on a limited planet, with an ecological budget ceiling, the usage of resources can never be a process analysed through solipsistic wants but must be conditioned upon a compromise between the individual and the community. Everyone would need to sacrifice something, or else the system would not be legitimate.

Of course, if someone invents replicators or find ways to make current or future models of capitalism work sustainably, that would remove the need for our research. As it is now, however, we believe that we have a duty to provide humanity with alternative models to the current status quo. A status quo which is murdering our future to provide us ever shrinking percentages of growth.

Read 1140 times Last modified on Saturday, 13 October 2018 16:33