Day 245: Living Income Guaranteed and Equal Currency

The ideal of free market in terms of globalization in being able to buy from anyone and sell to anyone - is based within the idea that: one should be able to get access to the best products and services - and if that means people keep buying cars from Germany, then it means car companies in other countries have to step up their performance if they want to compete - and so - creating a worldwide stimulating environment for excellence in service and quality-price ratio.

Though, one of the major influential factors determining whether people buy their stuff in their own country or in a foreign country - is the exchange rate between currencies. The exchange rate is in fact the price you pay for a currency in terms of another currency. So - if in the US the price of the car you want is 40 000 dollars and in Germany a very similar car would cost you 40 000 euros and say that both cars meet your requirements and you have no preference between the two - then there is still a difference in cost. Say that you are located in South Africa and that the price for 1 dollar is 7 Rand and the price for 1 euro is 10 rand - then the car in the US is 'cheaper', but only because the American dollar is cheaper than the Euro. One would have to pay 280 000 Rand for the American car and 400 000 Rand for the German car. With no preference between both cars, the choice is easily made, and the American car is bought.

To understand what determines the exchange rate between two currencies - read: 'What are Currency Exchange Rates and Why do they Keep on Changing?'

From there - you can see that the exchange rate is a result of the performance of an economy as a whole in relation to the performance of other economies - and, in turn, the exchange rate affects the economy deeply. You can also see that within currency exchange rates there are always winners and losers. Say - if the euro is 'strong' in relation to the dollar, then Americans will buy less from Europe and more locally, and Europeans will buy more from America and less locally. That would mean that European exporters are worse off, but American exporters are better off. At the same time, America importers are worse off and European importers are better off. So - the exchange rate is one of those things that has a deep impact on the individual lives of people, that does not stand in relation to their particular merit. So, the whole global free market is skewed, because it's not only the quality of goods and services that determines in which country you buy your products - much is determined by the exchange rate, over which one, as an individual, can exert no influence. So, here is another example of how the free market theory as yielding the best result is not being applied and lived.

So - why do we propose equal currencies with Living Income Guaranteed?

Because the Living Income Guaranteed system ensures that one's economy is stable and effective from the perspective that each one will have an income with which to purchase the required goods to live a dignified life and in turn this income that was spent becomes the income of the labor force, that now can afford a more luxurious lifestyle - as such Human Rights are ensured and the principle of those who work harder earn more money is still in place as well. However - if we now have currencies with different values - the whole point can collapse - because instead of buying the products locally, one can buy the exact same products abroad for a 'cheaper' price, just because of a favorable exchange rate - as such, money drains out of the economy and the cycle is disrupted. Unequal currencies distort the values of goods and services across the globe. With equal currencies - if one goes and buys products abroad, its not because of a distortion - it's because the goods and services are actually better or are produced more cost-efficiently. Therefore, when in a particular country it is noticed that one's company is suffering due to people buying abroad, it is an actual indication that one requires to change the quality of one's goods and services or become more cost-efficient - such indications are valid and stimulate the economy in the way it is supposed to.

If one has a look at the entire Living Income Guaranteed proposal, one will notice one thing: Central to this entire economic system stands one point: Real Value. The Real Value of Life, the Real Value of Labor, the Real Value of effort and merit, the Real Value of goods and services - to be done with the charade of survival on the one hand and outrageously extravagant entertainment on the other - neither have Real Value - to get back to what matters, to give back to ourselves and each other that which we have lost: Dignity, Respect, Consideration, Support, Acknowledgement, Integrity, Gratitude.

Living Income Guaranteed is an effective, clear-cut way to make an end to all and everything that has been diminishing Life over the centuries, of which we see it is unacceptable, but for which we haven't been able to formulate a solution before - and to bring back all that we have always wanted and searched for - not just for the rich and famous - but for every single human being.

For more information:
http://basicincome.me
http://basicincomeguaranteed.wordpress.com

Day 90: The Foreign Sector

So far in our discussion of the various economic topics, we've been discussing points in relation to a particular economy, of a particular country. Today, however, economies do not stand by themselves. Countries trade with each other - where goods and services are purchased in different countries instead of in the local economy.

Therefore, to have a more complete understanding of economics, we now include the foreign sector in our discussion - opening up the subject of economics to the entire world.

Why Countries Trade

The logic goes that it is best for each country to specialise in producing the goods and services that it is 'best' at producing, instead of trying to produce all goods and services that are locally consumed. The portion of the goods and services the country produces that is not sold domestically (the surplus) can then be sold to other countries. The goods and services that are not produced domestically can then be imported from countries who specialise in those goods and services.

Taking a moment to clarify two words:
Exports are goods that are produced within the country that are sold to the rest of the world.
Imports are goods that produced in the rest of the world but purchased for use in the domestic economy.

Another reason for interntaional trade is that not all countries have access to all the natural resources to be able to produce all required goods and services. For instance, South Africa has a lot of platinum, but no crude oil. Therefore, South Africa will export platinum and import oil.

How is it decided what goods a country will import or export?

Absolute advantage

To clarify the concept of absolute advantage, we take two countries as an example: Belgium and China.
Let's say a worker in Belgium can produce 100kg of chocolate or 5 TVs per week. A worker in China, however, can produce 50kg of chocolate or 10TVs per week.

We say that Belgium as an absolute advantage in the production of chocolate (100kg > 50kg).
China, on the other hand as an absolute advantage in the production of TV's (10 TVs > 5 TVs).

It is argued then that Belgium should specialise in producing chocolate (100kg per worker per week) and China should specialise in producing TVs (10 TVs per worker per week). Belgium, however, also wants TVs and China also wants chocolate. Therefore, Belgium will exchange some of its chocolate for TVs from China. Let's say that it is agreed that Belgium will trade 50kg of its chocolate for 5 TVs from China. After the trade, both Belgium and China are each able to consume 50kg of chocolate and 5 TVs.

Comparative advantage

Absolute advantage is, however, not a necessity for international trade. It is sufficient for a country to have a comparative or relative advantage over another country.
We use a fictional example of German and India to illustrate the concept of comparative advantage. Let's say a worker in Germany can produce 2 cars and 8 barrels of wine per week and that a worker in India can produce 1 car and 6 barrels of wine per week.

Germany has an absolute advantage in the production of cars (2 > 1) and wine (8 > 6). So - we could expect that Germany has no interest in trading with India. However, we must consider an additional point, which is: opportunity cost.

For Germany, the opportunity cost (what Germany has to forego) for producing 2 cars is 8 barrels of wine. So, the opportunity cost of producing one car is 4 barrels of wine.
For India, the opportunity cost for producing 1 car is 6 barrels of wine.
Because 4 barrels of wine is less than 6 barrels of wine - we say that Germany has a relative or comparative advantage over India in the production of cars.

However -
for Germany, the opportunity cost for producing 8 barrels of wine is 2 cars. So, the opportunity cost of producing 1 barrel of wine is 1/4 of a car.
For India, the opportunity cost for producing 6 barrels of wine is 1 car. So, the opportunity cost of producing 1 barrel of wine is 1/6 of a car.
Because 1/6 of a car is less of a cost than 1/4 of a car - we say that India has a relative or comparative advantage over Germany in the production of wine.

The rule is that a comparative advantage in the production of a particular good is a sufficient condition for exporting that good.

Day 76: The Demand for Money - Part 2

I forgive myself that I have accepted and allowed myself to create an economic system which only cares about the small segment of the population that has wealth of receives an income

I forgive myself that I have accepted and allowed myself to have created an economic theory which will only explore mechanisms and dynamics within the realm of those with money -- while leaving half the population out of the game just because they don't have money and are now apparently 'not good enough' to be considered within the economy game

I forgive myself that I have accepted and allowed myself to have created an elitist economic system, which only cares about those who have money and the choices they make -- whilst leaving everyone else in the cold

I forgive myself that I have accepted and allowed myself to have created an economic system and discipline which will only work with a fraction of the population -- while at the same time making it a 'global system' which affects EVERYONE -- without every seeing or realising how arrogant that is

I forgive myself that I haven't accepted and allowed myself to see and realise, that if I am going to be working with a Global economic system, that this economic system should encompass everyone on the globe -- not because they have money, but because they are here and just because of that they should be treated as equally valuable participants

I forgive myself that I haven't accepted and allowed myself to see and realise that imposing a system globally unto everyone's lives while not allowing everyone to participate equally is very, very nasty

I forgive myself that I have accepted and allowed myself to preoccupy myself with theories about how the demand for money changes based upon the values of those who have money -- while not everyone has money and so not everyone can survive in this world -- which really makes my theory a stupid joke as it is incomplete, as not everyone has been considered

I forgive myself that I haven't accepted and allowed myself to see and realise that any economic system which fails to provide for everyone is a complete failure and should not be taught as it is completely inadequate and not worthy of being taught to our children -- as they will believe that this is the best we can do while we can do so much

Related articles

• Day 75: The Demand for Money - Part 1
• Day 118: #TRUEACTIVIST - Part 2
• Day 51: Resource Distribution - Part 3
• How Illusion became Reality
• I Finally Understand…
• Individual and Collective Global Responsibility

Day 9: Criminal Minds

“The private wealth of the Walton (Wal-Mart) family ($85 billion) is over twice the GDP Bangladesh with 127 million people and per capita income of $260.” – Michel Chossudovsky, in The Globalization of Poverty


I forgive myself that I have accepted and allowed myself to have created a world where six people possess more than twice the wealth of 127 million people together

I forgive myself that I have accepted and allowed myself to not question the extensive disproportionate distribution of wealth within the world

I forgive myself that I have accepted and allowed myself to not see it as abnormal that a few people have access to more resources than they will ever need in a lifetime while millions starve

I forgive myself that I have accepted and allowed myself to have created a world economic system with an equation favouring the flow of money to those who already have money

I forgive myself that I have accepted and allowed myself to see and realise that any form of poverty is unjustifiable when a few have more than they can ever spend

I forgive myself that I haven’t accepted and allowed myself to see and realise that it is in fact criminal that a few can live in abundance while others live on the brink of death

I forgive myself that I haven’t accepted and allowed myself to say to not speak out to such an extensive manifestation of inequality because of the hope of one day being in a position of having more than I need

I forgive myself that I have accepted and allowed myself to not protest such out of proportion distribution of resources as I realise that the ownership of wealth at a level of being rich can only exist when others are poor

I forgive myself that I have accepted and allowed myself to not question the elite within the hope of one day being in the same position and within the fear of ending up like the poor

I forgive myself that I have accepted and allowed myself to protect the elite through protecting the current world system and thus in fact support the existence of a majority living in despair and misery – in the hope of one day being rich

I forgive myself that I haven’t accepted and allowed myself to see and realise that I would not want to be at the other end of the equation

I forgive myself that I haven’t accepted and allowed myself to see and realise that any attempt at changing the world and improving the living conditions of the poor is completely useless as long as I allow for the existence of disproportionate richness

I forgive myself that I haven’t accepted and allowed myself to see and realise that the money system works in terms of polarity and that the rich has to be balanced out by the poor

I forgive myself that I haven’t accepted and allowed myself to see and realise that if I am not willing to live the life of the person on the other end of the equation – I have no right to want what I want

I forgive myself that I have accepted and allowed myself to believe that the wealth of the few is justified on
the belief that they worked hard for it and deserve this wealth as a reward for their efforts

I forgive myself that I have accepted and allowed myself to believe that the poverty of the majority is justified on the belief that they are lazy and that they deserve the situation they’re in 

I forgive myself that I haven’t accepted and allowed myself to see and realise that this belief is absolute bull shit when one out of ten children die before the age of five in poor countries – did they die because they did not work hard enough?

I forgive myself that I haven’t accepted and allowed myself to see and realise that whether you are rich or poor is decided by chance as where you are born and how your environment allows you to have access to resources

I forgive myself that I haven’t accepted and allowed myself to see and realise that the current world system is based on making money from money and that thus currently no viable solution exists for the poor as they have nothing to make money from

I commit myself to expose the level of inequality existent in the world today which can be in no way justifiable when investigating the numbers

I commit myself to expose that those who protect the current world system are the ones with money as the same system support them

I commit myself to expose the criminal activities happening right in front of our eyes which we have normalized to the extent that we are blind to see it as what it really is

I commit myself to change the current world system to a World Economic System where ALL are taken care off instead of a few living in abundance at the expense of the majority

I commit myself to show that the current money system only works for those who already have money and that no apparent “solution” will work as long as the very system is changed in its entirety

I commit myself to show that no help, charity or aid will make a difference as long as the money flow favours the ones with money

I commit myself to expose the nonsensical beliefs around poverty so that we may see and recognize the evil that exists through our acceptance and allowances and that yes we are evil, and yes we should stop being evil and start taking care of everyone equally

I commit myself to the establishment of an Equal Money System where all are entitled to have access to resources on the premise of Life and not on the amount of money one has in their pocket

I commit myself to expose what dreams and hopes of richness in fact create in this world and that through holding on to these dreams and hopes which will only happen for  a few – we are creating hell for the majority of people