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Journal of a Wayward Philosopher
The Future of Commerce
April 20, 2016
Hot Springs, VA
"Commerce, by its very nature, is born free. And more than this, it forever fights to remain free. At almost every time and place, commerce evades regulations and controls; it serves its own will, not the wills of rulers. Markets spontaneously emerge at every opportunity, even when they are outlawed and punished. Commerce seems to have an existence of its own, like an independent organism." - Paul Rosenberg
The S&P closed out Tuesday at $2,100. Gold closed at $1,252 per ounce. Crude Oil closed at $42.46 per barrel, and the 10-year Treasury rate closed at 1.78%. Bitcoin is trading around $437 per BTC today.
The institutional foundation of the Industrial world is crumbling all around us. Governments are broke. Social welfare programs are severely underfunded. Unions are broke. Pension plans are underfunded. National currencies have been trashed. Blue-collar jobs in the developed world have been lost to low-wage countries. Low-wage jobs have been lost to robotics and automation. Many of the jobs just disappeared entirely. Everyone's retirement account is propped up by the constant creation of money out of thin air required to keep the financial markets afloat.
Welcome to the Information Age!
In truth, these are all great things. The seeds of a second Renaissance for human civilization have already been sown. These seeds will blossom as civilization continues to move away from the Industrial Age model and its dominant/submissive paradigm.
Think about it this way: technology is conquering scarcity and reducing the need for centralization.
It required 40% of the U.S. population to work in agriculture in order to produce enough food to meet demand in the year 1900. Today that number is around 2% and food is more available than ever before. You can find milk, eggs, fresh fruits, vegetables, and all kinds of other food items at your local grocery store year-round.
Also, thanks to technological development, oil and gas are now more abundant and cheaper than ever. This has reduced the costs of production and distribution significantly, and it has created competition for the oil cartels and monopolies that have had a strangle-hold on the industry for decades.
As a result of this drastic reduction in scarcity, the average person today is far wealthier in standard of living terms than the wealthiest people alive one hundred years ago. Take a few minutes to walk around your house and catalogue your furniture, appliances, electronics, gadgets, widgets, and stuff. Most of what you take for granted every single day was not available to your forefathers a short one hundred years ago.
Here's the point: the world is not going to hell in a hand basket; the institutionalized industrial model is.
Those jobs that were lost? They simply are not needed. The developed world has more than enough water, food, energy, tools, and trinkets to live comfortably without those jobs. We also have the capacity to get this surplus water, food, energy, tools, and trinkets to the undeveloped world, but this will require the dissolution of corrupt governments and adoption of a market-based system.
You see, the problem is not the loss of the jobs, the problem is that jobs have been converted into an industrial panacea. The job gave everyone a regimented schedule and a sense of purpose. The job provided a paycheck, a retirement plan, health insurance, life insurance, dental insurance, and numerous other perks in some cases.
Your job made you eligible for your national social insurance program, and the gamut of other welfare programs. If you lost your job then government unemployment benefits would take care of you. If you got hurt and couldn't work then government disability benefits would take care of you. When you finally retired then government old-age programs would take care of you.
The job was made to be central to everyone's life.
We don't need more jobs, we need more understanding. If you solve this centralized job problem then you solve many of the economic problems currently plaguing western civilization.
Speaking of problems: all of the world's governments are going broke at the same time... do you know what that means? They are obsolete!
Centralized government is not needed for the world that is being created. Decentralized governance will rout out cronyism and place an unbelievably large amount of capital back into the global economy. Centralized governments have been skimming at least 50% of production right off the top for quite some time now. Let the people who earned it keep that money and the global economy will boom like it has never boomed before.
This would eliminate the need for mandatory social welfare programs because people will have the resources to handle mutual aid themselves.
Don't believe me? I recently participated in a GoFundMe.com mutual aid campaign for a young teenager who was tragically paralyzed. I didn't know the kid or his family, but the story found me on the Internet and I was touched by it. So I kicked in one hundred bucks and wrote a nice note.
Do you know how much money this campaign raised for medical expenses? Over $17,000 - mostly in little 2-to-3-digit contributions from people who somehow came across the story online. I believe this $17,000 was matched by a private enterprise with ties to the family as well.
By the way, this money was to cover deductibles and co-pays in addition to the catastrophic insurance coverage.
What's government's disability check? 900 bucks a month? I'll take mutual aid any day.
The purpose of this journal entry is not to solve the world's problems, however. Instead, let's dust off our crystal ball and gaze into the future of commerce...
Did you know that people - individuals - are making $10,000 a month as we speak by selling physical products online that they never lay a hand on?
Here's how they do it: they buy the product in bulk very very cheaply from Chinese manufacturers, and they have those manufacturers ship the product to one of Amazon's fulfillment warehouses. Amazon takes customer orders, ships the product, and handles customer service functions. The only thing these clever individuals do is negotiate with the manufacturers, brand the products, and create the online listings. Then they collect a check from Amazon at the end of the month.
How cool is that?
Now I know there are some people who will take the mercantilist position and say it's wrong to buy foreign products from cheap labor markets. "Only support your domestic manufacturers!”, they say.
The first thing I would ask those people to do is to gather all of the items they own that say 'Made in China' or 'Made in Vietnam' and immediately return them to the country of origination. The second thing I would ask those people to do is to find some new hobbies very quickly because they no longer have any televisions, computers, or tablets in their home.
Please don't get caught up with the mercantilist mania. When Adam Smith wrote The Wealth of Nations, he was specifically arguing against mercantilist policies. Free market capitalism does the most good for the most folks, he said.
If those Chinese and Vietnamese manufacturing plants did not exist then those laborers would be out in the fields earning far less than they do now. And the rest of the world would be paying much higher prices for the same goods. That is a lose-lose model. Let's stick with the model where everybody wins.
Don't worry, working conditions in cheap labor markets will continue to gradually improve as standards of living rise. Then one day robotics and automation will replace those cheap laborers in Asia entirely. Let's allow commerce to lift them out of poverty so they are free to pursue more advanced endeavors when the robots eventually swoop in.
Here's another fun story: there's a homeschooled teenager in New Hampshire who used his time not stuck in a classroom to take up Blacksmithing. The kid now earns an annual income that is greater than most starting salaries by selling the fruits of his labor on Etsy. He's not even 18 years old yet.
There are countless other success stories about people using Amazon, Overstock, Ebay, Etsy, Craig's List, or even their own ecommerce sites to make a living. The central theme is decentralization. Wait... is that an oxymoron?
Simply put, the standard "go to school, get good grades, go to college, get a good job" advice is quickly becoming obsolete for many people. Now there will always be a need for advanced education in the highly-specialized fields, but the centralized model of education may actually be holding many kids back.
Commerce can be traced back to the very beginnings of human civilization. In fact, the current job-based model is more or less an anathema from the historical perspective. Originally "working a job" meant that you had a very specific function to perform in exchange for money. Once your function was completed, your job was done. Then you went to the tavern for some mead and more job leads.
It was the modern industrial model that centralized jobs, tied them to a single employer, and made them semi-permanent. I do not think this model will survive in the Information Age.
We can't conclude a discussion on the future of commerce without talking about the first completely distributed, decentralized marketplace: Open Bazaar.
Open Bazaar is like Amazon, Overstock, Ebay, Etsy, and Craig's List in that it connects buyers and sellers, but the difference is Open Bazaar takes the middle-man out of the picture entirely.
Open Bazaar is not a company; it is a network. The aforementioned web sites are housed on centralized servers and managed by the respective company. All information touching those marketplaces is stored on centralized servers. Though not common, this exposes users’ personal information to risk.
Also, there are certain restrictions on trade and payment with those centralized sites, and the companies charge a fee - up to 10% in some cases - on each transaction for their involvement.
Guess what? Open Bazaar doesn't do any of that. Instead of a centralized server, the Open Bazaar platform is run on individual nodes in the network. In other words, traders connect to the network by running the software on their computer, and this connects them directly to everyone else operating in the Open Bazaar marketplace. Information travels directly from buyer to seller, never touching a centralized server.
All transactions are settled with Bitcoin so traders reveal only the personal information they choose. Traders are disconnected from the network when they close the software.
This is the nature of a distributed system; it is 100% decentralized which makes for an extremely resilient model.
The Open Bazaar marketplace just opened for business in April of 2016, so it is very much in its infancy as I pen this entry. The potential is absolutely amazing, however.
Imagine a network of millions of traders buying and selling physical goods, information products, and digital services directly from one another using market-based cryptocurrency. The peer-to-peer nature of both the marketplace and the currency wipes out fees, identity theft, censorship, and political risk.
We are talking about a modern Hanseatic League!
People who live in the developed world where the rule of law is upheld at least to some degree may discount the need to circumvent censorship and political risk, but commerce and free trade are what move poor nations up the economic ladder. The power to control and restrict commerce is the power to subjugate entire populations.
Decentralized money and marketplaces are the bane of politics. They cannot be shut down because there is no CEO to shake down, no building to raid, no company to sue, and no centralized server to shutter.
Individuals can pop onto the marketplace at anytime, and then they can disappear entirely by closing the platform. That platform is not centrally located - it exists on each individual computer running the software. So unless you can shut down millions of individual computers all over the world, you cannot get rid of the commercial platform.
Traders can store their bitcoins on flash drives or on hard drives disconnected from the Internet so their money can enter the marketplace and then disappear instantly in a secure fashion as well. This can be especially effective if they employ some of the privacy tips and tricks we cover in the Zenconomics Guide to the Information Age.
Corrupt governments seeking to restrict commerce will be stuck chasing ghosts. This opens up parts of the world to free trade that have been dark for decades. That in-and-of-itself is a boon for human civilization.
Go to openbazaar.org/ to see first-hand what Open Bazaar is all about!
More to come,
We have just released the Zenconomics Guide to the Information Age to members of the Zenconomics Report email list. This guide is 28 pages in length, and it discusses: money, commerce, jobs, Bitcoin wallets, peer-to-peer lending, Open Bazaar, freelancing, educational resources, mutual aid societies, the Infinite Banking Concept, peer-to-peer travel, Internet privacy, and numerous other Information Age tips and tricks with an eye on the future. We are offering a free copy to all new mailing list subscribers at this link: http://eepurl.com/bXyrQ1.