I am an engineer however I am inspired by the ideas of Noam Chomsky, Milton Friedman, Rosa Luxemburg and of course Marx and I came up with a socioeconomic model based on minimising the entropy of the system by defining different metrics for the creation of value based on reducing the inefficiencies or entropy in the economy. Therefore, I decided to share it with you here. I appreciate your input if you find it worthy of your time.
The following is my ideas for an etropic model based on my understanding of economy as an engineer:
The force behind the economic activity is each individual’s needs or demands such as food, shelter, health care, education, transportation, etc. A society collectively creates the Aggregate Demand (AD), and to address the AD, each individual in the society works to create value as goods or services which collectively creates the Aggregate Supply (AS). The price finding is the agreed value of a product or service based on supply and demand for a product/service which is the principle of free market capitalism to allocate resources such as labor, material and energy to demand. However, there is another element which is the non-value-creating population by using exploitative methods. There are different mechanisms of exploitation such as money printing by the governments, interest collection, rent, profit for shareholders, etc. As a result, it creates several issues. The spending power of the ones who create value shrinks, therefore, the AD is reduced which causes economic recession, the participation of labor is reduced, so, the prices of the goods and services increases, and when the government tries to fix the problem, they usually print money or increase taxes that mostly goes to the big pockets, and the salaries of working class is always left behind the inflation that it creates.
Therefore, I would like to propose a model which by using the principles of Anarcho-Syndicalism, it avoids exploitation, increases the wealth collectively and promotes innovation and most importantly the democracy. I believe such a model should have:
1- A distributed banking mechanism in form of a block-chain currency.
2- A trading platform to exchange products and services as well as a place to offer the labor skills.
3- A knowledge centre which maintains the training and skills for the community indiscriminately.
A distributed bank can bring the possibility of lower interest rate due to its nonprofit nature for the community to start businesses. It can also act as a currency barrier between the block-chain currency of the community and the other currencies to create an isolated economic zone. This economic zone is the protected from exploitation, and therefore it can provide the possibility for cheaper goods and services. The currency starts at zero for each member, however it can go to negative value up to a limit which is agreed collectively. The name for this currency could be “Bound” as a reminder of how a society can unite economically. Bound is assigned to each individual separately, and at any time the summation of the total Bound in the system is equal to zero. However, the total created value, or the real GDP in the society would the sums of positive increments of each individual’s Bound transactions in the network.
The trading platform is the backbone of the system. It allows the aggregate demand to meet the aggregate supply. Each member is a sole-trader, but they can group together to form a syndicate and agree on the offered price for their goods and services, at the same time each member has the possibility to do their purchases online. This network maps the entire supply chain ideally, and also a record of best practices of how to perform the jobs is kept online. In case of creative work such as innovation, the innovation record could be added to the blockchain, and based on the improved value for each process a 50/50 profit share would be distributed between the entrepreneurs who implemented the invention and the inventor to encourage creativity and technological improvement. Regarding the social issues, or issues related to the security or nature the community can decide through direct democracy with a minimum vote of at least 50% of the members.
To make the labor market efficient, an online training center is needed to help the trainees to adjust their skills to the areas of skill shortages which could cause higher prices for certain goods and services and market inefficiency. Ideally, each syndicate can take part as a place for technical training too. The aim is to provide equal opportunities for the members to distribute across the labor market as efficiently as possible and promote competition, in such a way that each individual could have the possibility to reach to their full potential.
I think if we look at the recent developments such as Internet and crypto currencies, and the big techs such as online banking companies, Google, online courses on YouTube, Amazon, Upwork, Workday, Sales force, etc. They all point to this form of Anarcho-Syndicalism, and the main reason they could succeed is because they reduce exploitation in one way or another in the economy. However, what they struggle with is to maintain the monopoly and ownership of the network of people that they benefit from. However, the most efficient way for the system to work would be in such a way that personal incentives helps redistribution of resources and maximisation of productivity in a most efficient manner.
The potential incentives for individuals to join this socioeconomic model:
1- Access to cheaper interest payment for the security backed loans
2- The goods and services purchased from the community are expected to be cheaper than the rest of economy
3- The unemployment could be avoided
4- Reduced corruption due to direct democracy and blockchain transparency
5- Better mobilisation in case of war or natural disaster