The following examples are simplified for the purposes of testing out the new economic model. I have made little attempt to check quantities and other values against reality; my objective at this time being to see how the formulas work and to adjust them to become more effective.
The objective of this entire model and testing is to establish a system of measurement based on QofL that:
The activity here would be a state of being, e.g., drinking. Simply by existing, we all need fresh water.
Assume a population of 2,000,000 individuals in the group/area (see image).
Assuming a single system of supply already in place that supplies 10 liters of 80% pure water per individual per day and that we've polled the opinions of each person, the average/individual needs could be:
The quality of life (QofL) score can be determined by:
To start things off, plan a series of activities that completely meet all needs:
| Activity | Needs modified (ANG) |
Needs created (ANG) |
AANG (ave over ALL needs, not just those in this project) |
QofL | ||||
| Nourish | Wash | Other | N3 | N4 | Nx | |||
| At start of project | 1.75 | 2 | 1.5 | n/a | n/a | ... | 1.75 | 3.25 |
| Ability of activity to reduce the needs score | d(needs score) | d(QofL score) | ||||||
| 1. Transport to purification facility | 0 | 0 | 0 | n/a | n/a | ... | 0 | 0 |
| 2. Purify | -1 | -1 | -1.25 | n/a | n/a | ... | -1.08 | +1.08 |
| 3. Transport to individuals | -0.75 | -1 | -0.25 | n/a | n/a | ... | -0.67 | +0.67 |
| At end of project | 0 | 0 | 0 | n/a | n/a | ... | 0 | 5 |
| Needs index (= change in AANG due to this project) | -1.75 | - | ||||||
| QofL index for project (ability of project to improve QofL) | 1.75 | |||||||
Although the basic needs seem to have been met through the activities proposed above, these activities reduce the water resources and can pollute the air and soil. As a result, now there are additional needs those activities have created:
Refine the series of activities to completely meet all needs:
| Activity | Needs created (ANG) | AANG (ave over ALL 8 needs) |
QofL | ||||
| Water Remove | Water Renew1 | Water Renew2 | Air | Soil | |||
| At start of project | 0 | 0 | 0 | 0 | 0 | 0.66 | 4.34 |
| Ability of activity to reduce the needs score | d(needs score) | d(QofL score) | |||||
| 1. Transport to purification facility | 0 | +4.5 | 0 | 0 | 0 | +0.56 | -0.56 |
| 2. Purify | 0 | 0 | 0 | 0 | +0.5 | -0.34 | +0.34 |
| 3. Transport to individuals | +2.25 | 0 | 0 | 0 | 0 | +0.03 | -0.03 |
| 4. Transport from individuals | -2.25 | 0 | +2.25 | 0 | 0 | 0 | 0 |
| 5. Filter | 0 | 0 | -2.25 | 0 | +2 | -0.03 | +0.03 |
| 6. Sell fertilizer | 0 | 0 | 0 | 0 | -2.5 | -0.31 | +0.31 |
| 7. Dispose | 0 | -4.5 | 0 | 0 | 0 | -0.56 | +0.56 |
| At end of project | 0 | 0 | 0 | 0 | 0 | 0 | 5 |
| Needs index (= change in AANG due to this project) | -0.66 | - | |||||
| QofL index for project (ability of project to improve QofL) | 0.66 | ||||||
Resources that these activities may require are:
| Activity | Resources required (IRA) |
Res. created | Ave /activity (ARA) |
|||||
| Water | Transp | Purify | Filter | People | Money | Fertilizer | ||
| 1. Transport to purification facility | 3.33 | 5 | 0 | 0 | 5 | 5 | 0 | 2.62 |
| 2. Purify | 0 | 0 | 5 | 0 | 5 | 5 | 0 | 2.14 |
| 3. Transport to individuals | 0 | 5 | 0 | 0 | 5 | 5 | 0 | 2.14 |
| 4. Transport from individuals | 0 | 5 | 0 | 0 | 5 | 5 | 0 | 2.14 |
| 5. Filter | 0 | 0 | 0 | 3.01 | 5 | 5 | 5 | 2.57 |
| 6. Dispose | 0 | 5 | 0 | 0 | 5 | 5 | 0 | 2.14 |
| Resource requirements score for project | ||||||||
| Ave/resource (IRP) | 0.56 | 3.33 | 0.83 | 0.50 | 5 | 5 | 0.83 | 2.29 |
The amount and value of the monetary unit chosen by the area governance depends on:
It is on this promised ability, expressed on the overall QofL score for all planned projects, that the amount of monetary units are determined for the fiscal period (usually a year) and assumes that the planning takes place at the beginning of the fiscal period.
The value of the monetary unit determines (or is) its ability to buy things and services. This ability depends on how people understand and accept its value. For such understanding to exist, the value must have some history and stability.
At the beginning of each fiscal period (year), the governance body determines the degree to which the QofL score will (possibly) change over the coming fiscal year (based on the planned and ongoing projects):
The overall QofL score for this project (sequence of activities), placed in order along with all other project activities will determine how much of the overall budget this project will be assigned from the whole budget. In this case, because this is the only project being planned, it gets the whole budget.
Q. What is the difference between how this new model and the existing model we're following motivates societies to adjust for mutual benefit; for example now if a local store closes (thus raising local needs), then another business will be attracted by the willingness of local people to pay more for their needs.
This new model is more proactive in that it measures the ability of an activity to meet needs before the activity occurs. Therefore people do not have to suffer through and learn from a negative experience.
The new model has the potential of avoiding using up resources for an activity that reduces our quality of life; i.e., closing a store that then forces local individuals to buy a car and shop elsewhere farther away. In the meantime (with the existing model permitting a negative activity to occur), the infrastructure for the local store degrades or disappears and it becomes more expensive to re-establish that infrastructure - the re-creation of the local store forces that store to supply the same goods at a higher price than before; some local people have already bought cars and it takes a while to reestablish the cost-benefit balance of local shopping; some local people may have moved away and therefore the client base for the reestablished store has shrunk.
This new model prepares marketing studies before any activities are proposed; therefore setting the stage for more QofL activities to be planned.
The new model also measures needs on a much wider basis. The needs and QofL index is not measured just on a local sampling to show the benefits to only a limited group of people.
A most important factor in quality of life is food. Not only the food we have, but our ability to produce enough food to feed our future. Blending just this one item into our new economic model will go a long way to improving our quality of life.
If we use just this one aspect of food as a basis for our new economic model, the ability of our society to produce enough food into the future, say 5 and 10 years into the future, then the model will now become a strong tool to ensure we never starve, or at least to measure – in the present – just how successful we will be in avoiding starvation in the future. Without food, including water, we die. We may be uncomfortable without the other things, but we can survive.
Our focus on food will lead us to consider population, resources in terms of land and soil and water, and air. The model will need to consider and allow us to minimize negative forces like pollution and social unrest. For example, we’ll have to bring the concept of social unrest into our economic equation and measurements. We in the West may survive quite well as poorer countries, such as in Africa and Asia overpopulate and starve. However, we will be affected increasingly by our conscience, by having to send our people over there to fight both literally and figuratively, by trying to produce more than we need and giving it to others. As external social unrest happens, we will need to accommodate legal and illegal humanity (as determined by our own laws) and by all the emotional baggage such refugee migrants may bring with them, including lack of understanding of our social practices that we’ve evolved in order to maintain our own social stabilities. Finally, we will need to consider our own resources of all kinds because they all will have an impact on our own abilities to ensure a steady food supply. We may need to also incorporate the kinds of foods rather than just the concept of food alone.
So measuring our ability to generate food and water must be part of our economic model and, in becoming part of the model, will enable us to also measure and deal with a number of other quality of life issues.
Also, in order to be truly successful, the fringes of our economic model must include global issues. We cannot be an island, or at least not for too long a time.
The scary thing about this model is that one’s wealth can change. You can have $1,000,000 in the bank today and, because the overall quality of life units for the country change with time, by next week you could conceivably have only $500,000. Or, your $1,000,000 could now be worth twice as much. In fact, this model actually encourages people to undermine the quality of life in order to increase the value of the amount of money that they have. I mean, if you can impoverish and/or demoralize a large group of people, removed from your own area in some way, then that would reduce the overall quality of life indicators for the whole country, and the money you have will be able to buy that much more than before. Let’s say, discriminate against a minority group or some such human rights violation.
To start small, we can assume only one q of l indicator: quality of air. For argument’s sake, measure the air quality in terms of what should not be there (dust, carbon particles, sulphur, …) divided by what should be there (proper balance of nitrogen/oxygen/CO2/trace/water), expressed as a percentage and averaged over the entire country: percent air purity = quality of life units. Each q of l unit equals $1,000,000.
If your country’s air quality is 75 percent, then your country has $75,000,000 to play with.
If what your subjects do increases the air quality to 90 percent, then the government can add another $15,000,000 to its kitty.
Or, if you base the number of dollars on the number of people, giving each person In the country $10,000. The birth of another new person, means printing another $10,000 to use. Then, if your total population is 1,000 people, you have $10,000,000 in the national kitty.
Internationally, your wealth is determined as $10,000,000/80 (q of l units) = 125,000.
Another country, with a currency in crowns and with a population of 10,000 people, with a total of $15,000 crowns per person and a quality of life index (60 percent for air) would enter the international economic stage at 2,500,000.
The unit of exchange, crowns vs $ would be …
Wait. The above discussion has pulled in the number of people in the nation, as a 3rd entity. We should only have 2 sides to an equation. So, we need to base the $s on both the air quality and on something to do with the population, at least before we bring the population in to influence the $s in the example.
Standardize an a single total number of $s for the entire country? Let’s try that.
$10,000,000 for the whole country, no more no less. $1 will buy you a loaf of bread.
You have $1000 of this money. The quality of air today is 75, tomorrow 80. The value of $1000 today is 1000/75 = 13.33; tomorrow 12.5. Or the reverse: the value today is 75,000; tomorrow 80,000. Or use the previous values to divide into the $1 per loaf as cost of loaf $1.33 today and $1.25 tomorrow. We may be getting there.
The number of people in the society will have a great impact on the economy, on the $s available. If you only have a given number of dollars per society, then the more people you have, the poorer they will all be. Maybe we can establish quality of life units that incorporate quantity of people: simplifying to one parameter for the moment – personal happiness indicator 0-100 percent.
We seem to be stuck on how to establish the initial amount of $s, and how to change that amount as the population and other attributes change.
Number of $s.
Value of the $.
If you increase the q of l, then the quantity of $s available to all changes? The value of each $ changes? How is value measured?
The value of each $ is based on the units of the q of l.
When does the number of $s the country has to work with, change? Based on what?
You need to establish an economic bloc of countries, each bloc being defined as countries that share in the way in which they determine q of l units. You can agree on some q of l standard world-wide, and then fragment the world into smaller economic blocs that each have a more complex set of q and l standards appropriate to their own bloc of nations.
What is the function of creating $s? To enable the acquisition and exchange of things we need. What is the purpose of an economic model? To motivate us to improve our q of l. To enable us to maintain our q of l. If we don’t eat, our q of l decreases. If we eat well, that increases our q of l. If we learn to appreciate healthy food (gourmet?), then that increases our q of l. If we teach others to do things that improve the q of l, then that increases our q of l. Etc.
So $s equals “units of value” (A; interchangeable) vs “units of quality of life” (B; facts).
The goal of the equation is:
“Increase in q of l units” increases the “ability of the units of value to interchange”. The higher the B, the higher the A. Mathematically, A=f(B). Note that A is not $s; A is the interchangeability of the $. Where will the $ come from?
Issuing a fixed amount per nation?
Issuing a fixed amount per person?
Issuing a fixed amount per aspiration?
Issuing a fixed amount based on fact on the ground (area, volume of items, resources, internationally recognized assets (such as resources)…). Fixed amount changes then, if these FOTGs change. Ability of a country to provide the basics needed by each human being: the more people, the lower this ability?
If a person has accumulated $1000 in the bank, based on an index of 60, the cost of bread at that time was $1.67.
As the index rises, the value increases; the interchangeability increases. A month later, if the index is 75, then the cost of bread decreases to $1.33. Cost of living decreases as the q of l index increases.
That, though, decreases the revenue to bakers.
Forget about using the quality of life to determine the value of our money, and hoping that we will be sensitive enough to the value to change our habits to do things that will improve our quality of life.
Instead, divide the economic model into two areas: the home model, and the international model.
In the home model, attach a q of l index to any product that is created or marketed.
If the product creation and life cycle increases the q of l, then the government (i.e., the people) subsidize its process and purchase to a value based on the q of l index. For example, if you design and develop a widget, and you have a positive q of l index for the process of design/development, you can get the government to subsidize the design/development process.
If the product creation and life cycle decreases the q of l, then the government taxes the process and sale (parts of the life cycle), based on the q of l index for each part. For example, disposing of hazardous waste could be a costly process.
If you benefit/lose money at time of registration of the process, then, when the q of l index evolves and that evolution modifies the original q of l index applied to the process/product, then having the product in your possession could be considered an investment or a liability.
If you decide to trade goods instead of selling or purchasing them for money, then you have the choice of registering the good and obtaining an official q of l index for that good. Then, you can compare the goods being traded and one side of the trade can benefit from a government donation or tax benefit. Offering a good that includes a monetary gain of this nature can sweeten the deal.
If you decide to change the appearance of your house, for example, and that change improves the q of l of the neighbourhood, then you can apply for a government grant or property tax reduction/exemption.
When comparing various currencies, each currency could be measured against the q of l of the host nation, and the exchange rate based on that measurement.
If one nation (A) has a higher q of l than another (B), then value of A’s money unit would rise higher relative to B’s, increasing the value of A’s money. A could then invest more easily in B, and buy more goods from B.
The formula for determining the exchange rate could be: $A x QLofA = $B of QLofB. Trying this out, .75A = .62B means $A = .83$B. If QLofA increases to .80, then $A = .76$B.
Measure the success of the endeavor (state of being) over time:
For example:
Looking at the establishment of a monetary standard as an activity gives us the chance to use it as an example of how this proposed new economic model could work.
We need a system and symbolism that motivates us to engage in activities that reduces our needs and thus improves our QofL.
Each activity, or state of being, will involve certain needs and resources. The ability of that activity to secure or increase our quality of life, once mesaured, will establish our economic standard on which we can base our dollar.
The concept of money is a useful tool. It is a single standard that:
For each activity, there is the:
One key change will be to include person-resources both in resources used and in resources generated. If you increase the usefulness of that person in other activities, then that will be a generated resource (better home life, better health, etc.).
If we can measure what we need and give a certain number of units to that particular need, and then associate dollars per need unit.
This is the equation, simplified into x dollars = y quality of life units, that is to form the new economic model.
Notice that this equation is not much different from past economic models. For example, the model we are now following is x dollars = quality of life in that the quality of life units are vague at best. The units we use to measure quality of life are determined and defined individually or by micro-societies within the larger bloc – frequently in overlapping, conflicting, and hard-to-measure ways. In our present model, dollars are based on our perception of quality of life that conflicts from person to person, and from time period to time period.
Then we come up with an equation that related dollars to q of l units and voila, we have a new economic model.
This page, and the other 4 associated pages contain graphics that have been taken directly from pictures posted on the Internet. I thank those who have originated the pictures and assure them that as soon as I am able, I will drawn my own images and remove theirs from my site.
This page is written by myself, Peter Vasdi; this page first published and posted on the Internet on Sunday 25 October 2011.