Economies of Scale - Capital Goods

[Teddie Goldenberg]

The question was:

How do you have economies of scale with OFCS? How are capital goods financed?

The answer lies in the ability of OFCS to dynamically adjust the price (that is, the "negative credit) of a good, in any stage of ownership. That means the owner of a machine that needs repairs will fix the machine, and the time, energy, and parts they expended to fix it will cancel out the credits they earn for fixing it. That means that the net effect of depreciation (at least, for the individual) is 0 or negative (if they have to purchase parts).

This scenario begs the question: why would anyone want to be the sole propietor of a business, then? Indeed, OFCS creates the incentive to share ownership of capital goods. If more people own the factory, the personal drain of depreciation becomes less and less. This sets the stage for syndicalism (worker-owned means of production) but it also enables public financing of large projects, like spaceflight.

Keep in mind that current economies of scale produce goods that are cheap in terms of dollars, but a LOT of their true cost is externalized; GHG emissions and other pollutants, the health cost to foreign laborers, and irreplacable natural resources, for instance. True life-cycle accounting creates the incentive for producers to not only be efficient, safe, and eco-friendly, but to design the system systainably.

If shareholders of the venture become disenchanted, they could always divest themselves, increasing the debt-burden of remaining shareholders. Because large ventures require substantial overhead to keep running, there will come a point where depreciation and overhead costs will become burdensome to those not gaining credit for overhead work, giving them incentive to divest.

Rules governing divestment, investment, and other details should be left to the particular credit system.

Or should they???


-Teddie

[Teddie Goldenberg]

It also occurred to me that this is a way to save the newspaper industry - people who "subscribe" to the newspaper would actually be syndics, and have some say in that newspaper's decision-making process (however it would be set up). The debt incurred on their accounts pays for the capital expenditures of the newspapers.

 

It opens up the possibility that newspapers could do away entirely with their print versions (or do local, on-demand printing), give away their stories for free, and still have all their financing needed to do in-depth reporting, minus the advertisements.

This is all contingent on the calculation of overall productivity vs. consumption within the credit system, of course. Anyone have some ideas on how we might evaluate that?

 

-Teddie

[Edward Miller]

This sounds a lot like Patrick Anderson's idea, only perhaps less
stupid ;-)

I'll forward it to him