I watched an episode of the series 'Elementary" last night and saw a very interesting business transaction… A chemist who is specialising in "Magic" mushrooms had a strong feeling for revenge, on her ex-husband. The ex-husband (a university professor specialising in the human brain and emotions) wrote a book on the psychedelic effects that "Magic Mushrooms" has on the human brain. In order for him to gather the knowledge of these effects, he had to experience the effects himself.
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This is also how he met his wife, by the way, as she was a chemist specializing in cultivating these mushrooms. The ex-husband did not enjoy the feelings experienced whilst being on the "drug", to the extend, that he actually withdrew all the copies of the books from the shelves, and destroyed them as he did not want to be part, to in any way promote the use of any type of drugs and he did not want to endorse this in any way.
So the wife re-married, -another chemist and they had a backyard pharmaceutical lab where they started to illegally manufacture medicine. They could do thusthis as the major pharmaceutical corporate organisations was charging around $55 per tablet, they could sell for around $5 per tablet and still make a decent profit. This was however not the business transaction that I as referring to. Their problem was, in order to make real money, they had to sell on a large scale, so what they did was to go to a pharmacy group or chain, which were comfortable to purchase the illegally manufactured tablets… And more importantly they needed to keep the financial transaction of the books.
So how did they do that?
The owner of the pharmacy chain bought property into a registered business, and the sole beneficiary was the wife :) I don't want to go into the detail of the actual crime and murder plot etc. As this is not the actual point of my observation.
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So why am I telling you this.
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I mentioned the book Foundations of a Free Society written by Eamonn Buttler in an earlier post. I want to reference his book again.
A free society gives people freedom to make their own economic
choices, just as it leaves them free to make their own social and
personal choices. People in a free society create value through
voluntary exchange. Free exchange makes both sides better off:
they would not do it otherwise.
Individuals prosper by cooperating with others and supplying
the products they want – and getting something that they want in
return. The prospect of gain encourages entrepreneurs to seek out
what others want and to supply it. Prices communicate information
about shortages and surpluses, telling everyone what needs
to be produced and what needs to be conserved. In this way, time,
skill, effort, capital and other resources are drawn automatically
to where demand is urgent and steered away from less important
uses. It does not need government to tell people what to do.
To function, a free economy needs only an accepted framework
of rules about how people cooperate together. These include
rules about the ownership and transfer of property, and rules of
contract under which agreements are honoured. Private property
is necessary if people are to build up businesses and exchange
goods. But it is also essential if other freedoms are to be respected.
If the authorities control all property, political action and open
debate become impossible.
My sentiment from my previous post, Free Society - How strong is the Case?, still remains same, in the fact that I believe that it will be VERY difficult to get everybody to agree to the rules in a Free Society as who will decide on these rules.
I am however more convinced that economic transactions might not be too far-fetched. I know that it is only a fictional story, actually about solving a murder, but if we take the crime out of the equation, it might just work in a real life economical world.
A chemist produced medical tablets, at the same standard as any of the large pharmaceutical corporate companies. She had to find a market in a chain of pharmacies , which required her services for cheaper medical tablets. She could easily undercut the large corporate due to their massive overheads. So she traded her tablets, which she sold on a large scale, for industrial property. For me this is exactly what the above paragraph from the book explains :) One person value for other value …
What are we doing on this platform? We are providing our time and intellectual property (which has a lot of value), in order to write articles, which we sell for a crypto-currency (which has value), which can be traded on a digital exchange (and some more value)
We are already trading our intellectual property and time as if we are in a free society. In the above scenario, we did however have a reference to how much the tablets were worth and how much a property was worth. Easy exchange, based on market value.
The problem however comes in, when one individual believes his / her value is more than the other individual or organisations value. I think it can be negotiated, but it will be more difficult to negotiate.
Fiat cross border transactions
Let's take a real life example to highlight the difficulty and complexities of negotiating a transaction using the current fiat currencies:
I am going to use the example with @kyriacos as a role player - (Hope you do not mind @kyriacos). @kyriacos is an excellent artist, poet and web designer he is also now the Creative Director of the Robin Hood Whale initiative, which I believe benefit the community tremendously in achieving many goals. One of these achievements might be in assisting to create a middle class as suggested in my previous post How do we create a middle class, which you can still vote for by the way…even if it is past it's deadline of 24 hours. It pays out again in 30 Days :) … Apologies, I am going a bit of the point here :)
If I hypothetically ask @kyriacos to develop a website for my new company, which specialises in software development for blockchain solutions. How do we measure the value of the transaction. I live in South Africa, which operates in South African rand. So internationally business transactions is normally negotiated in US Dollar, which is 15 times stronger than the South African Rand. The problem will be that although the rate which @kyriacos are used to in his native country, is usually not in line with the rates which we are used to in South Africa. He will probably be just too expensive for me to afford just because of the exchange rate. This is one of many problems, as there a currency control, tax implications and many other obstacles which we have to cross to make the transaction happen.
Now if @kyriacos lived in South Africa, I could pay him at the normal rate, based on his value for the specific role as we measure it in South African value terms.
If we were in a Free Society, I could trade with @kyriacos, the value he provides in exactly what he believes will provide him value. We can negotiate the transaction as we please. So @kyriacos, do you want to build me a website ? :)
Final Thought
After looking at various aspects, I believe that a free economy might just work, especially if we have projects and platform like STEEM. I believe it will become easier to transact over borders. The problem will be that we will struggle to understand how to measure the value provided by each of the parties involved. We have been brainwashed to believe the South African rand is weaker than the US dollar. How on earth is this possible? When one of the larger countries goes to war they just print more money to by war stuff :) In theory this should make the South African rand stronger in comparison to the US Dollar as there is now more currency than there should be. In reality it doesn't become stronger, because somebody decide to print more money without anybody knowing. Convenient to forget to mention, isn’t it?
Your comments would be appreciated.
Happy Steeming
@jacor
Thank you for using me as an example. I believe the free market at the end of the day can solve any problem. People interact with each other in chaotic ways but at the end, through the cumulative interactions people have, the economic scene is stablilised.
People might complain about drugs or guns around them but really the freedom to have any, without any goverment restrictions will make them more safe. In much the same way most things that are banned are rather more "sweet" but when they are free nobody really pays so much attention to them.
I'm all for a free market. I'm also prepared for the initial fallout that would occur if this were to happen. The bottom line is determining fair value in a free market is essentially a negotiation between to parties.
Those who are uninformed or passive will get taken advantage off to the Nth degree. The weakest in the chain will eventually be eliminated. Heck, it could actually make for a stronger human race. Survival of the fittest.
That is the thing @scaredycatguide ... It is going to be an interesting negotiation should it get to that point :)
This paragraph :
Makes me wonder how copyrights/patents would be controlled in a free market. Personally, I think that they are currently too extreme, but where to draw the line?
Assume the Pharma company spent 1000 man hours developing the medicinal tablets. Whereas, the chemist was able to reverse engineer the tablet in 20 minutes. She can sell for 10% of the Pharma, and she was able to "develop" the tablet for 0.03% of the expense that Pharma spent to figure it out.
I would argue that the free market would enjoy the less expensive tablets. I don't think it would be fair to Pharma that they will never see a return on investment. However, I also don't think it would be fair for them to hold the exclusive rights to a tablet, just so they can maintain their high price, even after the return on investment has been achieved.
I guess a similar argument would be if a whale were to post this article as if it were there own without getting permission from @jacor.
No need to intrude into the transactions of others. If I sell you a Donald Duck baseball cap, claiming or implying that he's my original creation, I have defrauded you.
If, however, you want to buy one of my Donald Duck baseball caps, knowing full well that its a "counterfeit" copy made without permission of the original inventor/creator, then nobody should be interfering in our voluntary transaction.
Those who value inventiveness and creativity can buy solely from the product's originator, chasing for fraud anyone who falsely claims the title, and those who don't care don't have to.
Thank you for the comment @mattclarke . You used a very good example with the counterfeit products. Free society and a free economy is all about accountability and responsibility.
The way I understand the Free Society is that it should not be necessary to manage the patents, as it will be owned by the community and not by 1 person or company. I might be wrong. The theory is that we as a society will not want to steal patents to make money of it, hence no reason to manage it. You provide your services / value to the community from the talents that you have, and everybody returns value to you through their talents. I might be totally wrong, but this is how I currently understand it.
The free market will always provide the best system for the people. It's the democracy thing you need to watch out for.
Hi @johnnyyash, I have been researching various aspects of the Free Society concept. The free economy is something that I believe might work, but I am not sure if we as a human race, have it in us to implement. I believe that democracy is only as good as the leaders in the system For us here in South Africa, the democracy system is not working as well as it could., due to the fact that our leaders are not here to serve the people. THey are here to line their pockets.
"We have been brainwashed to believe the South African rand is weaker than the US dollar. "
Actually, the value of one currency relative to another is dictated by the same mechanisms that dictate the price of any other commodity. The Rand is weak because people who trade in currency only want it at a low price, compared to the dollar. Demand is low, therefore value is low.
Attitudes and beliefs have a strong influence but so do current events (natural disasters, war, politics, economic numbers). The term brain washing seems to gloss over all that complexity.
Thanks @irvingprime, I know :) It is just a bit frustrating to be the weaker of the two and I definitely used the incorrect wording. I spent a lot of time in Europe in an earlier life stage, where I earned British Sterling. It was amazing for many reasons, but for me mostly at the lifestage where I were I enjoyed the ability to travel frequently, as the currency was stronger every where you went. The currency difference has a huge limiting impact on countries like ours.
Interesting article. Thank you!
Great article. I like the interesting examples you used (selling mushrooms). I find it very interesting that the woman married another chemist. I like the fact that she didn't undercut or price gouge. The idea of a Free Society appeals to me very much, as long as it doesn't hurt anyone else.
Thanks @kyriacos, the funny thing is that if you asked me the question about a free economy two months ago, I would've told you that you were nuts :) I am still very new to this way of thinking, but one thing that I always do is to learn, research and then make up my own opinion. This platform gives me more things to learn about :)