Resource-based Economics

Resource based Economics is an entirely new Economic system. The basis of this new economic system is a rejection of the monetary system as a model for distribution of resources. The Theory behind this model is that resources that were once scarce (food, shelter, clothing, water) have been made plentiful by the use of technology. As such, a model of distribution based on scarcity, such as the monetary system, has become redundant. Furthermore, since scarcity based models promote concentration of scarce resources through competition the monetary system actually creates scarcity as a means of self preservation. According to this model the only path to equitable and universal allocation of resources is the end of the monetary system.
The Monetary system is based on several theories which have evolved around the issuance and valuation of currency. Originally, currency was always representative of an item of intrinsic value such as precious metals or other scarce resources. Scarcity is traditionally held up as a store of value in any item whether natural or man made. The relative scarcity of the item is directly proportional to its value. For example, the value in the "Mona Lisa" is in its unique use of the materials, not the materials themselves (which are relatively useless). Therefore, currency was acceptable as barter mainly on the grounds of it "representative value" for something of real value which it could be exchanged for.
Currency, in a modern context, no longer represents anything specific of value. With the implementation of fractional reserve banking and the end of the Gold standard, modern currency represents nothing more than a promise to be accepted as, well money for exchange. This fundamental change is key. As our ability to produce items using technology increased substantially in the 19th and 20th century, the scarcity of basic necessities was significantly diminished for the majority of the population. Currency, which had represented scarce resources could not keep up with the massive expansion, and had to be disconnected from the underlying value which it represented.Today, it is money that has become scarce, since the items it once represented are increasingly plentiful (Food/Clothing/Shelter) or irrelevant (Gold/Silver/Diamonds). The irony of this statement is fundamental to this economic theory.
Today we have entered a unique phase in our Economic system. Our productive capacity to produce goods has expanded through technology so that fewer and fewer of us are involved in the actual "production" of goods. Increasingly, the vast majority of the population in technologically advanced countries are involved in economic activity that is irrelevant or destructive to the actual production of goods. Accountants, Bankers, Lawyers, Salespeople, etc. All of this economic activity actually impedes the production of goods, since it takes away resources from production and research into technology which will further improve the efficiency of production. The main purpose of these ancillary service industries is the management, collection and distribution of money. Since we have already postulated that money has never been anything more than a "representation" of value, such as a necessary and scarce good or resource, the theory holds that these resources are actually wasted.
As J. Rifkin postulates in his Book "the End of Work", our civilization is rapidly approaching the critical period where virtually no one in our society will "need" to work to produce goods needed to survive. Production, either through globalization or automation, of goods will require less than 5% of then population. This leaves most of us who have been made redundant. The challenge is how we, as a society, respond to this fundamental change in how we structure both the economy and society. The current movement is actually counter intuitive, since we are working more hours than ever before, undertaking more debt, and creating more reliance on wages to service this lifestyle.
The solution to this problem may be the Resource Based Economic Theory. With the end of the monetary system, goods are produced and distributed as needed. The real or created scarcities of the monetary system for goods are eliminated through technology. Since goods are no longer scarce, there is no need for money. Food, clothing, shelter, etc. are available as needed. Work is related to improving society and personal development not wages and creation of wealth. There are no banks, lawyers, politicians, accountants or salespeople because they have become redundant.
The main criticisms of this economic system revolve around control of the allocation of resources. Under our existing system, resources are allocated through money. Money can either be earned or borrowed. Therefore, we are compelled to earn more money to increase our share of the resources. Resources are concentrated in the hands of the wealthy, since they are, historically, the best allocators of resources. Scarcity of money creates the incentive to innovate, take risks, and presumably, grow the Economy as a whole. Without these incentives, people will naturally seek not to innovate, risk or produce. The system will decline as no one wants to support it.
Further to this point is that the unmitigated allocation of resources to everyone will result in several problems. First of all, during the transition to this system, hoarding of resources will be common, leading to shortages and doubts about the validity of the model. Secondly, logistics and delivery of the resources, particularly items which are not indigenous, will cause a major strain on the system. Finally, population growth, unfettered by scarcity in staples, will destroy the earth as more and more resources are used to feed, house and cloth the rising population.
Some of these criticisms are well founded. Particularly those relating to the transition between the existing system and any new system. However, the basis of much of this criticism relates to the necessary paradigm shift away form the monetary society. The transition would require a huge education component and commitment from the society at large to be successfully implemented. The benefits of the resource based economy are undeniable. No unemployment, No poverty, No crime, improved health and wellness. Commitment to technology such as alternative energy based on on potential for profit, but on benefits for the society as a whole. Life long Education, development of the arts and sports through involvement.
"A Resource-Based Economy is a system in which all goods and services are available without the use of money, credits, barter or any other system of debt or servitude. All resources become the common heritage of all of the inhabitants, not just a select few. The premise upon which this system is based is that the Earth is abundant with plentiful resource; our practice of rationing resources through monetary methods is irrelevant and counter productive to our survival ... The measure of success would be based on the fulfillment of one's individual pursuits rather than the acquisition of wealth, property and power.
At present, we have enough material resources to provide a very high standard of living for all of Earth's inhabitants. Only when population exceeds the carrying capacity of the land do many problems such as greed, crime and violence emerge. By overcoming scarcity, most of the crimes and even the prisons of today's society would no longer be necessary ... As we outgrow the need for professions based on the monetary system, for instance lawyers, bankers, insurance agents, marketing and advertising personnel, salespersons, and stockbrokers, a considerable amount of waste will be eliminated ... With the elimination of debt, the fear of losing one's job will no longer be a threat. This assurance, combined with education on how to relate to one another in a much more meaningful way, could considerably reduce both mental and physical stress and leave us free to explore and develop our abilities ... Money is only important in a society when certain resources for survival must be rationed and the people accept money as an exchange medium for the scarce resources. Money is a social convention, an agreement if you will. It is neither a natural resource nor does it represent one. It is not necessary for survival unless we have been conditioned to accept it as such."

Main Menu

See Also

Main Menu