Building Living Economies
This article outlines how a community can build an economy called Pre Power to produce and consume electricity. Economies are made of many smaller parts. The buying and selling of electricity is an economy that is one part of the larger economy.
Pre Power coexists with existing economies and integrates seamlessly with them. It is an economy because it transfers value between people in the form of electricity. Pre Power uses money to transfer the value between investors in the production of electricity and the customers who buy the electricity.
However, Pre Power is a different type of economy from a regular economy. It is a single entity made up of many households that adjusts itself to the economic environment in which it finds itself. It replicates itself and can spread to other groups of households who can have a separate Pre Power community. The economic object is a community of humans who transfer value as money for a specific purpose. It is first and foremost a human communications system where humans communicate the value of a goods or service with money.
It is a virtual organism that is alive. It has a purpose of producing the most electricity it can at the least cost for the members of its community. The least cost is the amount of money it has to transfer out of the economic entity. It has other constraints, and it acts intelligently to meet those constraints using the intelligence of the participating humans. The humans give purpose to the organism and guide its integration with other economies. For example, for electricity, a constraint could be to generate energy without emitting greenhouse gases.
Other economies will copy its approach, and they too will be alive. They will do this as it is the least cost economic system for the provision of goods and services while acting under the constraints imposed by the community of humans in the economic entity.
Low-Cost Economic Organisms
Pre Power is low cost because the economic entity takes in money from the economic environment and returns the same amount of money. Pre Power does not generate or create extra money. Investor members put in money; customers bring in money to pay for electricity, but the amount of money returned to the economic environment balances. No more and no less.
If we consider any other arrangement of producers and consumers of electric power then the money to invested in production facilities creates more money as interest on loans or dividends to producers or capital gains to the owners of production.
With Pre Power, no extra money is created in operating the Pre Power community. It means it is highly likely to be a lower-cost to produce electricity than produced by other communities using a different economy where producers and consumers are in separate communities.
Producers and consumers share the savings, and they are considerable. For example, if producers use $10,000 of borrowed money at a 5% interest to pay for the means of production and repay the money over 30 years, they will pay $19,515 or an extra $9,515. Instead of paying this to external funding entities the producers and consumers can share the $9,515 with lower costs for consumers and higher prices for producers.
For this to occur there has to be an entity to organise the producers and consumers to act as a coherent community group.
Pingala Co-op Pre Power Economic Organisms
Pingala Co-op Pre Power systems sell Pre Power Systems to local Co-ops. For a fee on the internal money transfers in the Co-ops, Pingala co-ordinates the Co-ops to source suppliers of IT services, installation of equipment, maintenance and replacement of equipment, purchase of panels, batteries, inverters, and meters, integrate with existing suppliers of electricity and with other Pre Power Co-ops.
Pingala shares its profits with its Co-op customers and in doing so creates a super entity of all Co-ops and removes the cost of money from that entity.
White Label Personal Clouds, a software supplier, shares its profits with its customers including the Co-ops and so removes the cost of money from that entity.
Pre Power Co-op members pay for electricity at a lower price than the cost of fossil fuel power in their area. Member investors receive a competitive inflation-adjusted return on investment. The Pre Power Co-ops will make a profit on the money transferred internally. The Co-ops control the profit margin by altering the price to consumers and the returns to investors.
In working together the Co-ops remove the cost of money and they also reduce costs by the community together overcoming difficulties that inevitably arise with the passing of time. With the passing of time the economic environment changes. There will be lower prices for panels; there may be higher taxes, there may be extra costs from increasing temperatures; a fire may destroy a member’s home. The Pre Power Co-ops can adjust their internal operations to cope with these and many other external changes.
The Pre Power Co-ops bring economies of scale and the Pingala Co-op and White Label Personal Clouds Co-op bring economies of scale to their services.
Extending Living Economies
Living Economies reduce the cost of providing any goods and service. Living Economies scale as economic entities can work together to create larger economic entities.
Governments can use the same approach and can fund its operations through Pre Payments of taxation. Instead of a hodgepodge of taxes, there can be a single universal approach. Each time there is a transfer of money between entities a percentage of the funds transferred can be moved directly to the government for it to provide its services. The total of a small charges (tax) on each transfer could be made to cover all government expenditure. People could purchase Pre Tax Credits and get a return on their savings for government infrastructure spending. All levels of government could institute the same systems, and all areas could become self-sufficient in tax.
Economic entities where there is little economic activity could get tax transfers to compensate them. Communities with custody of natural resources, like rivers, lakes, Ocean Parks, Barrier Reefs could turn them into Living Economies and obtain funds to preserve and maintain them.