Saturday, June 8, 2013

#34 Labour is Value

[Before the main focus of this post, some explanation about this picture. It's by David Dees, who has come up with some amazing political art over the last few years. This scene is of people running over a precipice from a crumbling dollar world to one of gold and silver coins that they hope will be safer. Between the two worlds, the crocodiles are ready to get them. Well, the truth of it is, and Dees probably doesn't know this yet, but let's hope that he will, the crocodiles are those behind both the dollar system and the gold and silver coin system. However, and perhaps Dees would consider doing this as he finds out more about our proposal, he may expand his picture to represent Valun exchange notes beyond the gold and silver coins, oh yes leaving those gold and silver coins in the picture. This picture graphically illustrates the position people are in these days, just trying to keep from being devoured by the crocodiles. It is the position of this blog to offer a means to transition away from them and to build something else that will survive and thrive.]

We've often heard the expression “time is money.” This no doubt got some people to thinking that one could, would or should build a monetary system based on time as a unit of value, an hour for $10 as the usual preferred choice. But what happens when inflation makes that $10 worth only $5 in purchasing power? Your measuring stick just got shorter by half. What happened to your $10 hour had nothing to do with you, it had to do with some government, somewhere far away, spending money. The inevitable result is that your $10 hour has just been reduced in value to a $5 hour that had nothing to do with anything different you were doing at your job earning what you thought was going to be a $10 hour. Even though the present usual forms of complementary community currency do have the object of creating more conduits for exchange of value, their basis on the dollar, or euro, yen, yuan, etc. (it would make no difference) makes these complementary currencies just as prone to price inflation, even though their basis as credit clearing monetary instruments is sound.

The solution must be an independent international standard Value Unit, just as E. C. Riegel realized. He tried to suggest one based on the 1939 dollar, then later on a 1946 dollar, all the while hoping to outrun inflation. These would have been the Figure 1 starting positions for these Value Units and one can imagine how low prices would be in them now with 2013 dollars out there. For a Figure 1 this time, by popular demand, instead of dollars, or any other public currency, we chose gold (and silver).

We have suggested a Value Unit based on the chosen closing price of gold on the 2nd of November, 2011. That's 2 11 2011. It's easy to remember. At inception a chosen bid limit for actual possession of gold bullion was at or near $2,160 and that number was also chosen because that number too is unique as it represents the supposed number of years in an historical age. So that's easy to remember too. We chose the option of a stack of 1,000 Value Units = 1 oz. of gold. Therefore, 1 Value Unit = 1/1000 (0.001) of 1 oz of gold at inception: 1 Value Unit = $2.16 at inception.

When the dollar etc. price of gold or silver falls, the current prices of troy ounces in bullion is lower than it was at the Value Unit's inception. You may be able to buy more gold at lower prices in dollars, but to trade openly for Value Units, you would have to pay more dollars because their value has not been changed by the lower price of gold (or silver), it remained right where it was back at 2 November, 2011. There have been times since inception, occasional, but they have occurred, when the price of gold was higher than at inception, during which times Value Units would have traded at a discount to dollars. The deepest discount days saw 1 Value Unit = $2.08. But this little problem is met by a decision of the independent exchanges to accept a new inception price that must always be higher than the previous one, never lower. This promotes “hardness” of the monetary unit over time.

At inception (2 11, 2011), the initial bid limit for silver was $33.79, or 19.55 Value Units. There were times when the dollar price of silver was above inception, placing the Value Unit at a discount to dollars. In fact the most an oz of silver would have bought was 20.49 Value Units shortly after inception. But since then and for the most part, silver has been below its inception price in dollars. An oz of silver would trade for only 13.14 Value Units today [7-June-13]. You see, the Value Unit didn't change, dollars and precious metals did.

It was observed of course that another reason to choose precious metals prices for our Figure 1 was that these trades are standard in all the relevant currencies on earth, therefore it is possible to represent comparable tables of computation (a simple spreadsheet will do) for any currency you please. You could have chosen British Pounds Sterling or Euros or Yen or Yuan and you'd still come up with comparable equivalent fair trade exchanges for any day the markets are open, from the Value Unit's inception to the present time.

This was a round about way of saying that it makes far more sense to settle on the basis for payment for all labour based on a yardstick of money value that does not change, that is not a commodity, that only uses commodities to satisfy exchanges between itself and all other public money since, let's face it folks, E. C. Riegel himself considered only commercial bank loan money as legitimate and government spending above taxation as illegitimate, the “watering down” of a currency. Riegel said that nobody could tell the difference between these two streams of money as they were all dollars, pounds, euros, etc.

Then we have the recent issuance of public laws in support of government's creditors, giving them incredible powers, get this folks, rights over their dollars as their property in your businesses! Not your money, their money, as we have been saying all along. It's all related to intellectual property rights too, that curse from the French revolution. Copyrights, as it turns out, do not require explicit registration (that's mostly only for those who buy the copyright), but are valid from date and as posted. Therefore the words “Federal Reserve Note” or any reference to any Bank on any note, indicates who really owns that note. Therefore we do not even want to be holding any of their money. Despite the fact that they also own the gold and silver markets and probably hold more bullion than anyone else, we'd rather be holding silver and gold as a means of exchange with their money than to be holding any more of their money than is absolutely required to “pay unto Caesar that which is Caesar's.”

Besides, as we should all be knowing by now, all their money is illegitimate, since it is issued by states, therefore usurping the inalienable rights of every human being on earth. But no government anywhere is really doing anything by well reasoned intention as they are merely by great ignorance sustained by tradition and the lusts for power of those government naturally attracts ... and of course others who may be even worse behind the curtains. That's what's wrong with the whole effort to eliminate the central bank, while retaining issuance of money by the state, “in the public interest,” for which they cannot possibly be responsible. We aren't the slightest bit interested in any reprisals for all that was stolen from us, from our parents, grandparents, etc. as well as all the millions who were cajoled into committing fratricide in two gigantic 20th century wars and a score of smaller wars before and since, all for someone else's tremendous profit, while countless millions died.

No. Our message is consistent, “come out of her, my people” and the solution, which does not belong to me, or to anyone, as it is offered here copyright free and for nothing (unlike those of others parading themselves as experts), is the acceptance of a new basis for value upon which all trade will naturally gravitate as the utility of a fixed frame of reference for all values is recognized as an international standard for such measurement.

Money is that which measures value as a clock measures time. The value of time, hitting the clock, is determined by the requirements of the tasks involved and is determined by those buying that time from someone; their labour, usually paid by the hour, or stated in equivalents by the week, month or year. Riegel's mathematics of value determines what the remuneration will be.

When you look around you, in any civilized part of the world, or unless you are out in some natural wilderness, you will notice that everything you see around you was the result of human labour, or the lack thereof, to make better use of certain situations. At the bottom of it all is the ground, the property of the earth, someone's property. Where that ground is able to provide the means to trade for a living, it is put to use. Ground that is put to use to provide a return on the labour involved in whatever it took to produce or grow whatever it was that could be the end product, was the earliest basis for wealth. Wealth is that capable of providing an income. This explains why chunks of precious metals are not wealth, because they do not produce anything that could be said to be income. Precious metals have been used from ancient times to provide the basis for the fractional reserve banking fraud, and as the heads of state that appear on these coins indicate, gold and silver were imposed on people to use for payment of taxes. Thus have the chains of slavery been woven.

Labour contracts under the rules of the VEN are so simple that they can typically be summarized on a single piece of paper. Identity of the employer and employee, both members of the VEN, the first day of work, the length of time for the contract, usually in months, less likely in days, weeks or years, whether the contract is renewable upon completion, the day chosen ahead of schedule for renewal of the contract, remuneration in Value Units payable to the employee with all pay dates stated, the total value of the contract in terms of Value Units changing hands and the signatures of both parties, is about all that would be required. Notice we said nothing about assigned duties or the nature of the work involved as that's none of the IE's business. This is a private organization relying on the mutual respect and trust of its members and privacy is recognized as a natural right. There are three copies of every accepted contract, one for each the employer and employee and one for the local IE that will be carrying out the transactions.

The Value of the Contract is the total amount of Value Units that will be paid over to the employee by the employer over the term of the contract. All contracts begin on the first day of work, and why that's important is that on that day, the Value Units for the entire contract are placed at the disposal of the employer, who has the float on them, but who will be paying them down and back to the employee on each pay day until all of it is paid back by the end of the contract. Contracts are void by any number of circumstances that can be enumerated on the reverse side of each standard contract page. All contracts that would fall void on or before a pay day would cause all transactions that would have occurred to cease and whatever is left of the contract is returned by the next pay day on the contract. There are only a few statistics that are kept around for other VEN members to see. They get to see an A member's number of completed and voided contracts, they get to see the past remunerations for each contract (the Social Security administrations in all major countries get to see that much already), they get to see a satisfaction ranking given by past employers and that's about it.

These labour contracts may begin alongside other remunerations in public money; each employee receiving each month both dollars and Value Units. He might get a check for dollars from his employer, he'll get his Value Units on pay day added to his exchange account.

There is essentially three kinds of work that every IE will do for its members

1. Clearing ordinary transactions
2. Satisfying the terms of Labour Contracts
3. Satisfying the terms of Credit Contracts

In the subject under discussion, the terms of labour contracts involve money transfers between the A member (employee) and the A or B member (employer) accounts. The first transaction on the first official day of work is to transfer the total value of the contract into the employer's account to be used by the employer until it is required to be paid to the employee. The employee is literally buying himself a job, in agreement with the employer's buying himself the employee's time and effort, settled in Value Units. The employer gets the float on the up front Value Units into the bargain.

The day chosen ahead of schedule for renewal of the contract is important in that it provides any employee with his “two weeks' notice” automatically. This date would normally fall two weeks prior to the last pay day on the contract. This date also trips a flag in other IE applications that lets the VEN world know of the availability of this member for employment by another member (A member) or member business (B member). There would be no wavering or delay about it; a contract that is not renewed on that date comes to an end normally in two weeks' time and frees the employee to seek opportunities elsewhere.

In all probability, most labour contracts will be initially established for six months and probably not longer than eighteen months. We want to build some experience into our operations before we take on much longer contracts. There is also the benefit that one is building into his own viewable reputation among his peers in the VEN, something other than money; what some have called good will. Good will is established by every completed contract, which includes a satisfaction ranking given by the employer. Eventually as time passes and more and more contracts are completed, a satisfaction ranking record is built; one's reputation is made among one's peers.

This labour contract coverage is part of the essential work of each and every independent exchange (IE). Fulfillment and completion of each of these contracts constitutes the building blocks of the world of the future for any who would grasp it, and behind it lies the hope of freedom and usefulness (which go hand in hand) to literally billions of human beings who are making the transition from the crumbling world of the Bilderbergs and others, likewise the world controlled by gold and silver brokers in far off cities, to a world of their own making. We offer the only genuine means to that end.

David Burton

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