Articles

In Finance: Building an Economy Chapter 5

Oh spring is such a wonderful time. The annual rebirth of nature brings such warmth to everything. Spring is welcomed in our little village with a gathering of everyone in the town square. They work for a few days to get the common areas ready. Cleaning, repairing, planting, improving, and having a wonderful time together. The time together helps renew their friendships and consider what's in store for the village in the coming year.

They talked about how little work there was during the winter. The introduction of the dollar helped them see it as never before. James talked about how used the extra time to finished the house he was building. Now all he needed was someone to buy it from him. Mary made some improvements in the server software which increased the speed for everyone's internet connections. Patricia worked a bit on maintenance on her equipment, but mostly relaxed and read books. John spent a lot of time on the internet.

Once everyone was happy with the improvements the had their traditional spring party. As was typical, quite a bit of the party was spent talking about the projects everyone had for their personal and business lives. While this seemed a very informal social party, our folks didn't realize that the friendly discussions were the kick-off to each person's big business season. Each project discussed had impact on the others. If someone purchased James' house then Partricia might have an opportunity to get the job moving people in. Mary would get a new customer, and people always needed a lot of little things from John when they moved in.

Mary's plan to replace an old cable to the next village meant Mary would be getting a large wire shipment in. John would need to make some connectors and junction boxes, James might have a chance build a small shed for the server equipment.

The village is a small place, just about everyone's project means opportunity for the others. During the party people didn't think they were selling things to each other, but they were unconsciously making mental notes about the upcoming work opportunities.

John was worried. Most of the projects he heard about wouldn't start for a month or so. Most likely his pile of dollars would be exhausted before the jobs were ready. Before the party John asked Mary if she had any work for him in the next few weeks, perhaps he could get a jump-start on some of the items she'd need for the new cable installation. She said she wasn't ready to start putting things together, but he suggested that he could provide them sooner for a bit of a discount on the price. She considered the option and, after a bit of sales work on John's part, agreed.

The party also represented an informal meeting of the community where the talked about what improvements and changes might be needed in the village. If another person moved into John's house there were a few things in the village that might be needing upgrades. There was a discussion about how to interest someone from the next village to move in, and how it would impact their little community. Everyone was awash with ideas for an expanded community... as well a bit fearful of what changes would result.

And so the season started... with big plans, happy people, and a bright future. No one was aware that on that day their village experience a fundamental change in their basic economic model. The change wasn't necessarily good or bad, but it was a very, very large shift... and happened with barely a thought, without a vote... the changed passed silently without note.

Posted by Paul Gernhardt on Nov 04, 2008

In Life: Uniting People

Human beings find it far easier to generate emotional energy by being against something rather then being for something. Populist leaders find it far easiest to manufacture a common enemy as a basis for uniting people towards achieving the desired goal (which is most often to gain position/power). Once the common enemy is defeated (or having served their purpose, conveniently forgotten) the bases for the new-found unity ceases to exist.

We must always be aware of what is to remain as a basis of leadership once the common enemy is no longer in play.

Posted by Paul Gernhardt on Nov 02, 2008

In Finance: Building an Economy Chapter 4

As we head into winter our villagers settle in for the brief period of cold weather. As it typical for this time a year not much really happens. The group doesn't build many buildings,have many things made, or move them very far. Internet, phone, and TV use is up, as can be expected, but two month ago Mary moved to a flat-rate monthly fee so her income is stable and the expense more predictable for the others.

Even with the slow-down things break and get fixed, folks need to move things, and little things here and there do need to be made. Overall, however, people are not working as much as usual.

Mary made $640 during the winter, spent about $300, and ended up with about $5,000 in her pile.

Patricia earned $400 during the winter and spent $400 so her pile ended up at $2,500. She went without a few things she wanted in order to help keep the pile at a good "safe" $2,500.

James did well. During the winter he only made $400 and spent $500, but ended up with just over $2,000, largely because the funds from building John's workshop last fall. D

John had a lean winter. He did make $300, but spent about $540 from his pile. He ended the winter with only $500 left in the corner. He was feeling a little worried. He never worried before, but the pile seemed so much smaller than when he started.

Everyone was pretty happy though, the village is a pleasant enough place to live with much stress. The dollar thing was working out, even if people were a little more fixated on what they had than they had before the dollars came around.

So the total winter income for all the village was $1,740 (Mary's 640 + Patricia's 400 + John's 400 + plus John's 300). Total spending in the village was $1,740. Those number are equal because no one borrowed any money and there is no trading with other villages.

Even though the spending and earning numbers were the same we can see that the amounts were different for everyone. Some came out ahead, others a little behind while Patricia, as always, came out the same.

Posted by Paul Gernhardt on Nov 01, 2008

In Politics: What is Government

A government always reflects the people it governs -- an odd combination of their ethos and their apathy.

Laws are simply a complex way to codify the culture's collective moral values.

Posted by Paul Gernhardt on Nov 01, 2008

In Life: Motives

Humans seem to have an unlimited ability to deceive themselves. Am I supporting my decisions with logical reason and deduction or are all my supporting arguments simply delusional rationalization of what I simply want. It is often very difficult to tell.

If I can master the art of determining my real motives, and identifying when I am simply rationalizing, I'll be way ahead. I don't have to negate my decision just because I find I'm rationalizing, but knowing the truth behind my decisions give me more power over myself and puts me ahead in the game.

Posted by Paul Gernhardt on Oct 30, 2008