Just Another Day in…

Dawn had dragged itself into morning, and morning struggled to make it day. The long night had been peppered with squals and storms. A moderate wind now danced in the leaves of the trees, and the sky malingered, patchy with clouds: ambivalent about whether they wished to be white or grey. For all intents and purposes, just another unremarkable day. 

I, your correspondent, recently returned from the cosmopolitan chaos that was Shanghai in all its commercial glory, finds himself now on the West Coast of an Island, hidden in the lee of a larger land mass, in the belly of the Baltic Sea. A small, and unremarkable place called, Suhrendorf.

Since mediaeval times and the rise and fall of the Hanseatic League, the Baltic has always been a competitive scene for international trade: from the eastern realms of the mythical Rus, to the north sea fiefdoms that lie in dyke protected lands that lie below sea level, where competition, war and enterprise has always walked hand in  hand.

But what brings me here, dear reader? What has diverted the weary feet of this, your dedicated servant towards this now secluded and featureless region of the world? 

Debt! Dear reader, a personal debt of gratitude, born from a recent Tea Duel against the formidable Cafe owner and Restauranteur, “Sturdy Baker.” He, and his equally impressive friend, the Lightning Harvester, “Starry Buzzin. ” On the Isle of Borkum it was, they had brought Ostfriesentee to the table, along with haferkeckse to tea duel with… needless to say, after extensive dunking, your humble correspondent, prevailed. With it the spoils: a week of respite and rest on the Island of Ummanz, in the windswept hinterland of Suhrendorf – the one time home port of Starry Buzzin and his crew.

While this is the kind of debt that brings joy, there is another that concerns all my faculties  and reflection: the growing levels of private debt in what appears to be a bergeoning and newly emerging global economic crisis. Steam! They say, makes the world turn. Yet, steam is just a mechanism for transferring energy from one form to another. In much the same way that airships ply their trade in teas, lightning, fish, and beer, from that sultry port of Cuxhaven, sentinel of the Elbe’s Mouth, to the bustling harbour of Rotten Dam.

Now, even before we can have steam, we must have infrastructure, and infrastructure requires finance, investment, and dare I say it, extensive, speculative, private debt. Ever as I dwell such thoughts, a sadness that cannot be shaken grips my thoughts. It dawns on me, in much the same way as this fickle morning evolves, that the growing private debt in our economy, is the true demon that drives all financial crises. How can I say this with such certainty? I cannot, and yet, I cannot shake my faith in this observation.

In 2006, I was entrenched in the wonderous city of Hohhot, a marvellous and melodious capital, a jewel of wonder resting ever so lightly on a land in a sea of swaying grasses, situated deep in the, “Back of the Chicken…”The very steppes from which Genghis Khan had arose, followed by his family who over generations raised half the known world towards unified civilisation. 

It was here in these flat, grasslands ensconced in a felt covered yurt, that a global financial crisis reached out its skeletal hand and took hold of all the wealth I had. Like a puff of smoke that arises after the spilling of water to cool the fire’s dying embers, that wealth vanished – even with the willing intervention of the governments of the day, and their heroic efforts to bailout the banks — they could not stop the loss.

And yet, there was an Antipodean man, whom years before, had called out warning after warning that such disaster was coming. What did we do? We smiled, treated him like Chicken Little saying, “the sky is falling,” and worse still, told him to go back and sit on the village wall from whence he’d started his befuddled wailing. No one paid heed to his words, no one paid attention. So, to our chagrin, we were found wanting and he? Begrudgingly confirmed – “Beginners luck!” the Mainstream muttered, “Even a broken watch is right twice a day,” they continued unimpressed or unconvinced by Professor Steam Keen’s heretical insight.

Today we face, once again, a similar threat and still… no one is listening. So, I caution you dear reader, look back on the past, consider what has not been considered and make up your own minds. Steam does turn the world, but it is the cogs and machinations of the economy and its finance, both public and private, that gives birth to the winds that fill the sails of all corporate trade that ebbs and flows on the global economic sea.

Until next time dear reader, as tea is my solace in the face of each new day’s uncertain glow.

Respectfully, your servant,

Maelstrom Fairweather.

Greetings and Salutations.

It has been far too long since my last cordial communique. For that I beg your patience and entreat you, indulge me for but a moment. Over these past several years, it seems like an age has past and with it’s passing the onset of war, chaos, and economic terrorism writ large on the international stage. Authoritarianism in the guise of public safety has seen you, and me, dear reader under enforced, and penalisable house arrest for nothing more than a sniffle, for most. An authoritarianism based on a premise that the minority should not only dictate to the majority what ought be done, but enforce their will accordingly and subsequently capsizing the world’s finer sensibilities. Amid this turmoil I found myself, in spite of my impeded travels, ensconced in a sabbatical — not entirely unwelcome, I confess — which diverted me from my duties to you, dear reader.

I sought daily to reach out to you, but such were my constraints that I simply did not have access to the keys to this kingdom, sadly and indeed true. However, this time was not spent in idleness. I had the singular privilege of connecting with the eminent Professor “Steam” Keen, a towering luminary in Heterodox Economic circles whose mind whirs like well-oiled gears of immense precision and power. Through a marvel of technology, video-porting —powered by the hiss and hum of steam, while sending moving pictures dancing across the ether in real time — bridging the vast distances between us, Keen and I, and others together traded thoughts on the world’s fiscal follies, Keen’s insights into Economic Theory, all the while stoking the fires of my own curiosity, despite the leagues or ether that separate us all.

Our world is still in a dark place, and as nation states struggle erstwhile for some semblance of a democratic voice, and others engage in swinging the pendulum of their economic credentials against each other in pointless trade war, yet others strive to deal with the collateral damage of inflationary consequences on a global scale. Yet fear not dear reader, I AM back! Returning to regale you with glorious tales — of travels, of insights, of lessons, of revelations and wisdom gleaned since last we met — and I vow to share them, anon.

Respectfully, your servant,

Maelstrom Fairweather.

The Waters of Life

In the midwest of China, where the land beats itself against the heels of the Qomolungma range, I discovered a very curious archeological dig exploring the refuse of an unknown people already 6000 years old. These people were unusually gifted in the art of bronze casting and the excavation is currently known as Sanxingdui. It is nestled near a network of dry river beds, like many such civilisations and seems to have flourished well, at least until the rivers changed their paths, so it would seem.

Thus, dear reader, we come to a crucial point, one that is life and death to all civilisations both great and small, one that is at the very heart of our great, industrious, society, one that goes to the very whole of our being, that of water. This marvelous bed of creation that gives birth to life throughout is a water planet. We know of no other such marvel in the universe.

We are bodily made of flesh and bone that is predicated and made animate by the presence of water. It is said we are 80-95% water, depending on which of the four phases that water might exist inside of us. And, our industry is powered by harnessing to the wheel, the changes in the phases of water giving us unrivalled power to work, create, and move through out this world, for we have conquered steam.

Yet, all the while, wile we know and intuit this fact, the stand idly by and allow our governing bodies to take ill gotten gains from a criminal monopol, a monopol that should not be named, a Monopol that must not be named, in return for claiming sole ownership over the life blood of this world, sole ownership over water. All water, and in so doing, the eventual ownership of each and every one of us for we too are mostly, water.

Economically speaking, a monopoly is control of specific resources in such a manner that no other can control those resources or effectively compete in the provision of said resources. In one regard, we could consider the monopolist to be the winner in the game of economic competition, autem we could also consider the monopolist as that child at every party that stuffs their face full of all the goodies before anyone else can get some, even to the extent of fending off all comers, so as to grubbily grab as much as they can.

Unfortunately,  far too often, monopoly is an act of gut churning, insatiable, unfulfilled irrational desire and greed, rather than the natural outcome of exemplary competition. With the advent of monopolistic circumstances, there is no longer any market competition and, as mentioned in a previous missive, whomsoever holds the monopolistic position holds all the power when it comes to establishing the value of the trade. Thus, be that widgets or water, monopoly undermines true market activity. It is the ultimate expression or irrationality in the marketplace, an ugly and unscrupulous extreme.

Water, dear reader, is the lifeblood of our planet, our industries and of us. Like the air we breath, is is a fundamental element of life that belongs to the planet and to all who dwell on this planet, it is not something that any single fleshy bag of water can lay claim to as their’s alone to own, or any entity, legal or otherwise, created to do the same. one may lay claim to the industrious activity put into extracting water from aquifers, bottling it and shipping it to other locations, but one cannot lay claim to sole ownership of the aquifer.

The extraction of ground water impacts not only the humans living in the region, but the land, and all the plants that grow in the soil, as well as the very water cycle that sees water transported by Mother Nature all around and over this world. A monopoly cannot stop in its desire for more of a resource, for it is driven by insatiable selfish personal interest, an unfulfillable desire for more of whatever… with water, and this Monopol that must not be named, control of all groundwater is not the end game, it is the start. For after that comes, control of that which falls from the sky, all the reservoirs, lakes, seas and oceans, and lastly, every living creature and industry that consumes, uses, or is composed of water.

We are, and this world is, composed mostly of water and no individual, or entity created by any individual, or group of individuals, has the right, or justification to lay claim to the very essence of life on this planet. No way, no how.

Respectfully, your servant,

Maelstrom Fairweather.

Selfish Personal Interest

It is a constant source of amusement to me, dear reader, that so many economists believe that people are not selfish. That they point to common curtesy and the observance of social etiquette as proof of this, citing that if people were selfish, they would neither care about or attend to such behaviours. Nothing, I assure you could be further from the truth.

The grand misunderstanding of “selfish personal interest” is the misrepresentation, based on the false assumption that observing social norms and selfishness cannot coincide. This faithful reader, is patent nonsense. The almighty dollar is not the only game in town, especially from an individual’s economic perspective.

We have previously elucidated that whilst not rational, human behaviour IS habitual and it is informed by success feedback. If a particular act satisfied one’s personal interest, id est, it is successful, then that act is more likely to be repeated and habituated into a behaviour over and above other alternatives. Thus success feedback reinforces, habituates, a behaviour.

Failure, however results in a reset and reevaluation of the problem to be overcome. The problem being the failure to satisfy one’s personal interest with a particular given strategem or act. This results in behavioural modification until a new strategy, act, or combinations of actions results in success.

To juxtapose acts of kindness, or the observance of social norms, against selfishness implies they are mutually exclusive and implicitly equates selfishness with anarchistic tendencies and planned malevolence. Machiavelli demonstrated well that malevolent manipulation works, if and only if, it is successful.

Thus, in most cases, it pays to be nice to people; to say hello, to observe social norms, because it stops people from getting up close and, “in your face,” and interfering with one attaining satisfaction of one’s own selfish personal interest. Acts of social maintenance are preventative measures that support and assist one to fulfil one’s aims.

As with cause and effect, pursuing one’s own selfish personal interest does not occur in the vacuum that exists between the ears of many an economist: contemplating the inner nature of their own fundamental orifice with their very own eyes; it takes place within a community of motivated individuals in an holistic interchange of actions, beliefs, ideas, and strategies, exposed to random and chaotic testing in the marketplace against success and failure, to rest somewhere on the real life continuum that exists in between.

It can be a highly selfish act to observe, maintain and comply with social norms, etiquette, ethics and morals. It can also be highly selfish to disregard them altogether. Ultimately what determines one’s behaviour one way or the other, is how successful pursuing such actions satisfies one’s own selfish personal interest.

Respectfully, your servant,

Maelstrom Fairweather.

Of Goods and Services

I have been blessed in my many travels throughout this wondrous world, and it would not have been possible without being able to board an Airship in Australis for the grand expanses of the Far East, South-east Asien, the frozen expanses of northern Germania, central Europea, or the bright sunny spaces of Londin. Be that as it may, dear reader, today’s missive is a reflection, brought about in part, by a recollection of my visit to the fish markets of the, ‘jewel in the crown of the Pearl River Delta,’ Zhu-Hai.

Whilst exploring the vibrant activity of the, too’s and fro’s of, trade from fishing vessel to dock, I couldn’t help but linger on a particular musing relating to the nature of goods and services.  It was my friend  and guide, a Frenchman, equally famous for his eloquence in speech, and for his photographic documentary of the people’s of the region, Roman Saulson, who posed the curious inquiry, “What exactly is, a Good, and what constitutes, a Service?”

In essence, today we take a Good to mean any physical item, either grown, harvested, created,  or constructed that is available for trade. Consider, whilst a temple painting is indeed a physical item, it is obviously not something that is available for normal, economic exchange. Similarly, in some nations, anything a holdover from antiquity, may not be freely available for free and unfettered trade, may be highly regulated, or even, banned from any and all exchange across regional borders.

Thus the definition of a Good, from the humble opinion of this Steampunkenomist, is: any physical item, either grown, harvested, created, or constructed, that is legally and freely available, for fair and open exchange, within a legal and nominally regulated market space.

Let us return to the fish, and this idea of, ‘nominally regulated.’ It is, without a doubt, that traditional fishermen have and claim right based on heritage and tradition, to fish certain waters, and so it should be. Nominal regulation dictates that, regardless of this right, which will not be interfered with or restricted, fishermen in active trade with the market place, should be licensed and registered, and that  a traditional fishermen, when such a claim is made, should have priority, for licensing and registration, over any new entrant into the market.

Contrast this, with an earlier missive about our fictional farmer and pig herder. In that case there was no need for nominal regulation, as there was essentially no scope for new players desiring market entry, or change in the market dynamics. Thus nominal regulation, if any at all, would be restricted to ensuring consumer safety, stability of supply, and issues environmental impact, should such regulation be either internally or externally imposed.

To some extent both the farmer’s and the Fish markets regulate themselves, on a cursory, surface examination. Exampli gratia, in times of scarcity, undersupply  is dealt with by the market eliminating overextended producers; this is the optimistic side of free market economics. However, in times of abundance, which one would expect, drives market prices downward… rather than allowing attrition to eliminate the less efficient producer, selfish personal interest intervenes and encourages collusive activity between producers  in order to artificially maintain higher market prices.

Whilst such collusion is indeed a rational act, it in end effect, results in an irrational market space. However, collusion is not only restricted to producers, by no means, buyers can and have also colluded to form buying guilds that negotiate bulk prices in an attempt to gain better, lower prices for goods for their members.

The problems with collusion however, is that anyone outside the colluding producers or buyers groups are subjected to a loss of market power, and their ability to influence trade to their advantage is diminished. Today, when we look at the market place we see these institutional buyers, smaller buyer groups, individual buyers, allied or associated producers, large producers, and independent producers all competing to interact in an increasingly irrational and schizophrenic marketplace. Market dynamics, whilst habitually predictable, are not driven by rational behaviours but by the interplay of competing institutional and individual selfish personal interests and power to enforce those interests… But, as usual, patient and forgiving reader, I digress…

One of the marvellous specialties to enjoy, after tarrying at length amongst the dockside markets of Zhu-hai, that I had several opportunities in which to partake, was a foot bath. This delightful activity involved, soaking one’s tired and weary feet in a wooden bowl containing warm water, scented and coloured with teas and herbs, and the petals of flowers. After which a masseuse would dry one’s feet, and rub emollient all over them and proceed to massage the toes, soles, heals and calves of the legs. This Service took usually around 30-40 minutes and was very reasonably priced.

Unlike Goods, Services are an exchange of physical activity, by one person for or on behalf of another.  In other words, it is the fruit of one’s personal endeavour, resulting in an intangible but quantifiable act that serves, the requirements or needs of the recipient. Yet, for economic purposes, the labour in and of itself does not constitute the Service, rather it is the resultant benefit derived by the recipient for which labour has been expended that is the Service.

All Services require the expenditure of physical labour, mental attention, and the offering of biological energy. This may seem a little esoteric, but look into any Service, and it will readily become apparent that this is so. Yet, when we look at the relative value of Services, the degree of difficulty in rendering that Service, training, experience, knowledge, ability to analyse and problem solve, and a myriad of other intangible but calculable inputs must be managed with varying degrees of physical or mental labour, and expenditure of personal biological energy and creative intelligence. Such factors, often overlooked or diminished, cannot be valued, simply by the labour component alone, for how does one distinguish the physical labour of a farmer to the physical labour of a masseuse, or the physical labour of a fisherman? If all are equal in the eyes of the Almighty, is not the value of their physical labour also same?

Such questions, non sequitur, distract us from the reality, that physical labour is predicated on the physical ability of the person exerting that labour, thus making ability to render a service part and parcel to any such evaluation of the worth of physical labour. It follows then that one’s ability to evaluate, ability in others, becomes a critical factor in selecting one Service Provider from another, competing for the provision of equivalent services. However, it is the other factors, previously outlined that truly distinguish one service provider from another and the subsequent value of the service they can render.

From the fish markets of Zhu-Hai, to the temples, flesh pits and gambling dens of Macau, from farm produce, to foot massage, Goods and Services are traded daily, (and nightly) in an exchange of Good or Service for an agreed value. While market forces may impact on the rationality, or irrationality, of the market for goods, Services are traded on a wholly different mechanism that takes into account perceptions, both revealed and surmised, calculated and weighed, all for some subjective value, making them truly an irrationally traded commodity.

Finally I will surmise, as a concluding observation that: the market is dominated by individuals, motivated by selfish personal interest, that habitually need to satisfy those interests on a daily basis. The very nature of the goods and services traded in the market place and the establishment of their market value, is not subject to pure, existential market forces, but the dynamic daily interplay of selfish personal interest, either individually pursued, or institutionally manipulated. Furthermore, Goods and Services are neither traded nor appraised equally. Tangible value is easy to establish, whereas intangible benefit from the exertion of someone else’s physical, mental and biological energy, is far more difficult to appraise. Henceforth, a Good is something physical, tangibly and freely traded; whereas, a Service is an intangible benefit derived only after someone has exerted effort towards producing that benefit.

With that note, dear reader I leave you to contemplate the inconsequentialities and trivialities that such a trite mussing, as this missive might consequentially be, and may such contemplations be pursued existentially in the plumes of occasionally, swirling, outbursts of steam, (or some other forms of fog, or mist…)

Respectfully, your servant,

Maelstrom Fairweather.

The Numbers Always Lie

Deep in the gambling dens and flesh pits of Macau, I came across a small temple with austere and devout believers, an isolated island of morality surrounded by a sea of loose ethics and unbridled desires for money. A market place trading desire, lust, and greed, flourishing and undocumented, driven by whim and selfish personal interest, and the rules of chance. Completely irrational in every way, habitual, predictable, but entirely irrational. Such markets, dear reader, are not included in the analysis of the performance of an economy, for it is not rational.

To most economists, the rational man, in the rational marketplace, buying rational items for rational purposes, observed by rational economists and bureaucrats, who impartially and rationally analyse this market data, to produce perfectly rational, statistical information about the performance, function and health of this rational market economy, is how the markets work, based on which, they then release to governments, saying, “The numbers do not lie.”

But this is nothing more than, shadows cast on the sides of the battlements of a hilltop fort… and a long way off from the actual truth.

Numbers are numbers. They can no more tell the truth than they can lie. However, people do lie. Rational or otherwise, people lie, cheat, steal, take advantage, deceive and pursue any number of activities that might preserve their bargaining position, or selfish personal interest. As such their own particular, “rational” view of the world and on how it does, should, or ought, to operate influences their perspective, and by extrapolation, what numbers belong in their models, and what do not.

To explore this thesis, let us examine a common enough, well publicised statistic. Let us take Gross Domestic Product (GDP). On the surface,  GDP apparently takes into account an average basket of domestically traded goods (and does not include goods, or services, such as those traded daily, or nightly, on the island of Macau) and compares the change in total basket value, season to season, year to year. At face value its as reasonable a statistic for modelling market performance as any other. With this subsequent, “informative” statistic, regions, states, and nations compare the relative performance of their own markets against other markets, and essentially, benchmark their performance.

But dear, loyal and valued, reader – Statistics are like bikinis. What they reveal is suggestive, but what they hide, is vital. (Aaron Levenstein)

The trouble with GDP is that it is not an equivalent measure of domestic market performance across regions, states and nations because the very nature of what is included in an average basket of domestic goods is not the same in every market. Thus it is that, as a statistic it is fundamentally unreliable, useless even… GDP is a statistic is based on an implicitly false premiss, that the average basket of goods traded is the same in all regions, states, or nations, and thus can serve as a reliable, dependable, ration comparative for benchmarking the performance of markets and economies. It is a feint, a deliberate lie, sold to decision makers, who then delude themselves in its use to, on-sell their management and governance of the economy, to the people.

Even worse, what constitutes an average basket of good traded changes with the times, and generationally, even within a single market place, which makes GDP an equally unreliable mechanism for judging the long term and cyclical performance of a specific market place. These are, also, the very market factors and changes in consumer demands, that make GDP an unreliable statistic.

It has also been shown by others, more intuitive than myself, that in difficult times, those in positions of power when faced with undesirable economic news that does not support their own selfish personal interest, that the contents of the so called average basket of goods traded is massaged in such a way as to include and/or exclude items that shift the numbers in a more desirable direction. id est, the whole idea of “average goods” has no meaning, it is unreliable and anything but rational. It is subjective, and subject to the prevailing dominant school of economic whim, and political machinations of governing individuals dominating the positions of power and persuasion of the day. Thus to paraphrase a great sage and observer of the human condition, “GDP? A statistical measure of rational market performance, is it not… Completely irrational, it is.“

Just like the ethereal ingenues that ply their trade, drifting from street corner to doorway in the night, or the gaming tables that populate the gambling dens  that tower over every cobbled, Macanese street…

The Numbers Always Lie!

Respectfully, your servant,

Maelstrom Fairweather.

Oil of Hypochondria, 100% Pure*

*Warning. May contain trace amounts of placebo effects.

In my many travels throughout the fabled, mystic East I hd the great fortune to come across a very rare form of traditional medicine. It was very, very expensive, but in hindsight, I have found it to be worth every single penny I traded for it.

This rare and precious medicine was called, “Oil of Hypochondria” and was guaranteed to be 100% pure, or so the Tibetan Shaman Mystic I procured it from, contended. I must confess to having found it highly effective for:

• dabbing on any body part one thinks should be painful – for which it is instantaneously effective;
• liberal use in a bath for whole body effect;
• communal use in pools or spas especially efficacious when throwing pity parties;
• judicious application as an antidote for Viagra – rub into the scalp or massage onto the abdomen of the non-afflicted partner for instant curative results: for maximum effect repeat periodically until all symptoms of viagra stimulus has subsided;
• online use: dampen a cloth and wipe keyboard, mouse and screen then proceed as usual to notate forum comments;
• cleaning rose coloured glasses; Warning: may change perspective from pastel petals to dead-headed stems.

The Mystic, on giving me the small phial of this wondrous liquid, issued a grave and stern warning. “External use only! Do Not Use (or recycle for use) as a douche, enema, or gargle.” To which, to my forgetful chagrin, I must attest: especially in that order.

Respectfully, your servant,

Maelstrom Fairweather.

A Tale of Fairness in Trade

Some time ago I had the inestimable pleasure of spending some time with the Dawenzi Khazaks, a semi-nomadic people that spent much of their non-Wintering time along the shores of Heaven Lake, nestled in the comforting arms of the Tianshan Mountain range, and carefully watched over, at a distance, by Bogda Shan.

It was a fine mid-autumn day and we were joined by a curious, scholarly fellow known by many far and wide, as Afanti. We decided to spend a few days exploring the Horse Toothed Mountain, Mayashan, with the aim to sample a rare and fabled delicacy, fermented mare’s milk, or Kymis as it is called by the Khazaks of this region.

After riding most of the day on strong brown ponies, in the Khazak way, perched atop a wooden saddle covered in leathers and furs, we reached a high, gently sloped meadow where only one tent from the horse breeders remained, the others having moved on to other pastures. However, our luck was in, the lady of this tent, much to our anticipated delight, still had some Kymis left.

We sat down inside and she poured some milk into drinking bowls, a salutation to Heaven and the Earth was made and we tried the milk. I was slightly sour or tart in a lactic kind of way, and had a fine spritz to it, both interesting and refreshing. It was at this juncture, after the lady had explained the mysteries of its making, that Afanti recounted a recent happenstance, that I hope dear reader, you will find equally enlightening.

Afanti began that he happened upon a commotion at one of the restaurants further down the mountain, whilst on his way to the Khazak camp. A young man, poor, and ragged in clothing, had been sitting by a soup stand watching and listening to the diners as he himself wanted for some little company but was unable to buy any soup.

As he rose from the stool to leave, the owner of the restaurant roughly caught him by the collar and demanded payment from the poor fellow. A scuffle ensued and calls were sent out from someone to mediate a solution, and Afanti was invited in. Many knew him to be fair and honest and all agreed that he was indeed qualified and suitable for resolving this matter.

Afanti questioned the poor man and asked if he had indeed sat, “in” the restaurant but the man insisted that he had sat, “near” the restaurant. Afanti then asked the owner on what grounds did he demand payment from the poor man to which the owner replied that the man had sat and enjoyed the delicious smell of his food therefore he owes payment for that enjoyment. To this, Afanti concurred, indeed the poor man had got to smell the food, and the owner had indeed exerted effort to make it, and said to the poor man not to worry, that Afanti would make payment on his behalf.

Afanti then asked the owner, how much did a bowl of his soup cost to which the owner replied Yi Jiao Wu Fen, that’s 1.5 Jiao. Afanti paused, looked at the owner, then at the poor man, and finally at those who stood as witness. He then reached for his purse and took out the amount and contemplated it in his hand. Just as the owner reached to take the money, Afanti closed his hand, cupping it, and shook it near the ear of the owner, then put the money back in his purse.

Shocked, astounded at this audacity, confused, and angered the owner demanded of Afanti the meaning of this, why had he not given the money to the owner? Afanti responded in a clear and measured way, as was his nature, “…for this man? The aroma of the food… for you? The sound of payment.”

So, good reader it is I leave you with this story to think upon the idea we have together explored, the nature of fair trade, and equitable or equivalent value.

Respectfully, your servant,

Maelstrom Fairweather.

Money, and Tokens of Equivalent Value

I was walking one day, across a buttress that looked out over the Gobi Desert to the northwest, where Outer Mongolia joins hands with Gangsu Province and the Xinjiang Autonomous Prefecture.

I was there on this particularly, bright and sunny day with several companions, searching for fabled Shangmaya, neolithic petroglyphs, much to the disconcertment of the local constabulary, but the local captain agreed to escorting us, personally, and to being our guide for an hour, after which we had to leave.

Several days later, after returning to our lodgings in Hami: formerly famed as the town of Kumul and capitial of Kumul Prefecture, known to all who have read Polo’s work, (no, the custom did not survive into present day…) I carried out extensive searches for these petroglyphs in current literature, but interestingly fond no mention of them, or so I thought at the time. Thus it was, I believed that our verbal exchange, the deal we made with the captain, had returned, for me, something of much greater value than originally thought. A rare, and unique, experience and chance to document the existence of these petroglyphs. In hindsight now, the rare gift I received was of a service not normally offered or available to the foreign traveller and explorer. 

This story, dear reader, is perhaps by long winded way, an introduction to the topic of Equivalent Value. How is it that we chose as human beings to use tokens to represent value, and subsequently, equivalent value? In this day and age we use fiat currency: foisted upon us by cursed and diseased zombie banks that gnaw away at the economic steam-engine of our society leaving us with the equivalence of a cadaverous marketplace with its heart, and brains, torn out; but it was not always so.

In recent times, much archeological work has been done, translating Sumerian clay tables, and it seems that equivalent value may have been pushed upon us by the gods, in order to assist in placing value on the result of physical work. It is said, that the gods valued gold so highly, that they made us humans and guided us in fruitful endeavour to procure gold, sustenance, and social accord. In order to account for this endeavour, it is claimed that a method of reckoning, and tokens of equivalent value, where developed by the Sumerians, to assist in matters of trade both between each other, and with the gods.

So, Equivalent Value, in essentia, implies that each party involved in trade, uses a token of agreed value and mutually perceived worth, in oder to make deals, or transactions. By having tokens, money of agreed value, it becomes to exchange goods, services and/or the capacity to pay in lieu of not having a specific good or service to exchange. Thus, money is a token that represents that capacity to exchange something of Equivalent Value even when you have nothing else of perceived value to offer up in exchange.

This is of breakthrough importance.Recall, dear reader, a previous mention of the exchange of a Winter’s worth of corn for a suckling pig, and the the deal was always the same, the deal never changes; implying a fixed rate of exchange and a closed yet stable and predictable market, then we closed out then statement by drawing attention to this perception of predictability.

This is an example of irrational thought steering the market. Allow me to explain: in agriculture, producers are subject to the vagaries of seasonality. Some seasons produce a surplus, others produce a scarcity. Similarly, a scarcity in corn production does not necessarily result in a scarcity of suckling pigs and vice versa. One is not directly dependent on the other, thus in times of scarcity, where one trader’s needs may loom more largely in the mind than the other, the basis for trade is not of equivalent value.

The wheat farmer may not be able to provide a winter’s worth of corn no matter how many suckling pigs might be available. Similarly, the farmer may have a winter’s worth of corn on hand, but the pig farmer may not have any piglets to trade. Whereas, consider the possibility where each farmer may have an alternative form of equivalent value, a token of stored wealth, they could either agree to use this token for exchange, or, if we consider the pig farmer, s/he could purchase a suckling pig from someone else and then trade it to the wheat farmer.

Money, tokens of Equivalent Value, especially when fashioned out of a non-perishable material, then becomes a storable form of long term wealth and a stable means of extending the opportunity to trade when seasonal variability may otherwise make it less possible. However, such tokens cannot be eaten, thus when there are no suckling pigs, or corn to trade, this stored wealth needs to be converted back to something that can. Thus it is, the deal is never always the same, the deal must always change.

Respectfully, your servant,

Maelstrom Fairweather.

What is Trade?

It is morning, and I sit here, dear reader, in my kitchen looking out over the garden. Snow lies over the ground and even though the sun shines brightly, and cheekily in the sky, the temperature is a beastly four degrees below zero. A freshly brewed pot of Assam Tea awaits it’s preordained pouring whilst I contemplate the origins and nature of Trade, between distracted bites at a single slice of toast, topped with grilled Tilsiter Cheese, and Turkey Salami.

What is Trade? Why is this human activity of so much importance to us and to our society as a whole? How has it come to pass that this one activity has become the basis of what we now know as Economics, and is yet both beneficial and baneful to our continued existence?

It is a curious word, “Trade” as it is both noun and verb all at the same time. In essentia, it refers to the exchange of goods or services for other goods or services, as well as all the acts and activity associated with such exchange. Originating from Middle German it has evolved as a term over time to its present day usage, and while not entirely the same as its origins, the meaning and usage, magis vel minus, is.

The study of economics is pivoted on this word, and sea-sawed about in all directions by  various pre-conceptions, precepts, based on nothing but belief, making it act of pseudo-religious flim-flamery. Steampunkenomics seeks to rectify this by first and foremostly recognizing that:

• humans are irrational yet habitual, and
• humans are motivated by selfish personal interest.

It is due to this habitual behaviour that market activity can be, at best by current practices, predicted with modest accuracy, rather than to any currently established and trumpeted delusional belief in the, “Rationality of Man.”

All trade, starts with the comparison of separate goods or services that are available to the parties involved. After comparison, and estimating the parties needs and/or wants an agreement is reached. This agreement is called a deal, exempli gratia, I will trade you a winter’s worth of corn, if you will trade me that suckling pig.

Now, say the parties involved, repeat the same transaction the following year, and the year after, we have in essence established a rate of exchange, an equivalence of fixed value, id est, the deal is the same, the deal never changes.

Next, if these parties only engage with each other, and no one else, we can say that this is a closed market, one subject to protected and restricted trade. Therein there is no room for renegotiating the value of the exchange, and there is no opportunity for anyone else to enter the market or offer an alternative. The market, exists of only this exchange, and the value of the trade that takes place in this market is fixed, and predictable… or is it?

We will explore further, this issue of equivalent value at some other juncture, for now, let us consider that there are many such trades like this one, of all sorts of agricultural, and handcrafted items. The diversity, amount, and number of deals being made in a particular area, constitute a marketplace. The greater and more diverse the marketplace is, one could say, the more abundant and prosperous the region is. That is, it affords the people of the region to obtain all that they need or desire for the comfort of their own living.

As the abundance and prosperity of a region grows, and proves itself, it attracts more people with a need to trade, this is why trade is so important to human endeavour. Trade allows one to pass on any surplus they may have in one resource in exchange of other resources that they have an unsatisfied need for. This desire to redress an unsatisfied need is the basis of selfish personal interest, and fuels all market activity.

Need precedes desire, which precedes comparison, which precedes negotiation, which precedes exchange. This cascade of cause and effect, starts out with an irrational selfish personal interest, and then precedes, informed by past experience and previous successful exchanges, towards a habitual, potentially rational, exchange.

When the exchange occurs and results in a mutually agreeable outcome, then we refer to this as fair, or beneficial trade. When one party or the other, does not benefit, or loses out in the exchange this is referred to as predatory trade. The difference between fair and predatory trade is one of outcome, as well as initial intent. Initial intent is predicated on past success strategies, strategies that have habituated because they have successfully satisfied selfish personal interest.

Respectfully, your servant,

Maelstrom Fairweather.