December 13th, 2001

A Method of Exchange is NOT a Method of Distribution 

L.W. Nicholson      

Throughout human history, since the “Barter System” was devised, mankind has used some form of a medium of exchange, often called “MONEY.”  At different times different things have been used as money, from stones and sea shells to women and cattle. In recent centuries gold has provided this function until the amount of money in use exceeded the amount of gold in existence.  In the U.S. the gold standard was abandoned in the 1930s.

Never before in history has mankind designed and used a medium of distribution.  There is a great difference between a medium of exchange and a medium of distribution.  The exchange process is just that, it allows humans to effect a rather ineffective form of distribution by  the exchange of goods for goods, or goods or labor for goods.  This is “accomplished” by a system of trade, or commerce, based on commodity valuation. The value of the things to trade is determined by a comparison of their relative scarcity and desirability.  If the commodity is scarce, like gold or diamonds, and is desirable like gold or diamonds, it can demand a high value, or price.  If the commodity is abundant, like the air we breath, even though it is highly desirable, it can command little or no value or price.  With this method, one does not enjoy a living standard in accordance with the societies ability to produce, but according to ones ability to pay.  Generally, ones ability to pay is determined by the “value” of his man-hours of labor, if there are few people who can do the work the labor may sell for a high price, if the amount of labor available to do this type of work is abundant, then this labor is comparatively cheap and sells for a lower price. There is, therefore, no synchronization between the ability to produce and the ability to consume and no accurate method to balance production with consumption. Further, with increasing efficiency in technological progress in recent years in the U.S. the ability to produce has advanced so far beyond the ability to provide employment at 40 hours per week that it has been necessary to provide extra incomes by unemployment insurance, welfare programs, part time work, a greatly increased “defense” program, and war. If this seems complicated, one should realize that its origin before recorded history and its additions and haphazard growth since has made it almost beyond understanding and ever further from the physical realities of life on this little earth. It has also made a mess of human culture since one who is honest can’t compete with those who don’t get caught grabbing more than their fair share.  Then there is the shoddy goods racket, products that are deliberately made to wear out or break, to become obsolete, to increase sales and profits, and increase the need for employment.  As a result of all these artificial programs, the earth’s resources are used at a much more rapid rate, energy sources are becoming depleted, and we are beginning to realize that we are facing an ecological collapse.

This “exchange” racket has become obsolete and in sore need of being replaced with an efficient method of distribution.  The problems resulting from this ancient method of exchange are becoming a grave danger to human survival.

Since we have never had a method designed and operated for the purpose of distributing goods and services in a fair and equable manner, and since we should, after all these centuries, realize that a system of exchange is never fair or equitable,  we should, at long last, be able to realize the need for it, and somehow manage to provide ourselves with a far better way of operating our society.  An efficient method for the distribution of the goods and services we can provide with our technology can, and must, be the chief concern for all who can demonstrate the ability to think without the aid of the chief beneficiaries of a collapsing economic method.  It is a medium of distribution which is needed to replace this antiquated medium of exchange.

The first requirement of a medium of distribution is to distribute the requirements of life to every member of society. The second requirement is to eliminate the ability of the cheaters to interfere with that distribution. Therefore our medium of distribution must be effective only to those to whom it is issued.  Unlike money, it can’t be stolen, lost, or given away. It can only be used by the person who’s ID is present on it.  The bookkeeping required to keep track of the amount produced and the amount and place of consumption so that production can be balanced and replaced  at the place of consumption is an important requirement of our medium of distribution, important but not too difficult. with modern equipment.

To make a simple comparison for the sake of easy understanding, consider that several million Americans now volunteer their services for one cause or another. They work in hospitals, some for charity organizations and some, like myself, research and write these articles, for no pay in money. We do these things in an attempt to help our country and make things better for our fellow humans.  Now, just suppose that some 90 percent of all Americans decided that, rather than continue to support a failing Price System, they will do their share of the work for no pay in money.  Now don’t give up at this point, really consider what would happen as a result.  We could produce everything we now produce, we could do it with as little manpower as possible with no decrease in living standards, we could distribute what we produce without price to all citizens of our country, we could provide a university education to every young person, we would have no poverty, and, we could give all the money now existing to  those who are so  eager for it and say use it in your bathroom.

Of course this short article can’t answer all the questions that may arise,  however, with some time and intelligence one can begin answering his own questions after due consideration of the outline provided above.  More people are beginning to become interested in the direction our society is traveling and are realizing, in increasing numbers, that something must give. Many have pet theories that they are reluctant to give up.  However, it is this system of price that is in process of failing and it is this system of price that must be replaced and no pet theory will work that doesn’t provide a replacement for this system.  It is this system of price that provides the incentive for 95 percent of all crime and that includes the wastage of this little earth’s natural resources. There is no replacement for this Price System which continues to use a system of price.  The only replacement for a Price System is a NON- Price System.

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