I was checking Smallsteps' math homework yesterday and she made an error in one of the questions. She makes so few, so the errors she makes tend to be speed errors, where she doesn't slow down enough to check her answers. The other thing is that she has a great memory for many things, but she doesn't necessarily understand why she is doing some of the equations, or what is conceptually happening. So, with my highly limited math skills, I tried to explain the concept of the "=" sign in an equation.

Bear with me.

The equations were written in apples, but they were something like this:

[] x 4 + 6 = 18

The box in one of the apples is the unknown she has to solve for. But, when I asked her what was happening, she didn't really understand what I meant, but could work it out easily in her head using trial and error. That is brilliant when at her age, but I know from experience that even f it works now, it doesn't work later as the problems get harder. I was very good at simple math too - then it all went downhill, because I didn't understand the concepts of what I was doing, or their relevance. The teachers never gave context.

Anyway, as you know, whatever is on the left, has to equal what is on the right of the equation. This means that we can work backwards piece by piece until we have the " [] = something " and working backwards means moving each component over to the other side, which means doing the opposite.

[] x 4 + 6 = 18

[] x 4 = 18 - 6
[] x 4 = 12
[] = 12/4
[] = 3

So, because we have nothing left on the left but the [], and nothing else can be done to the right with the 3, it is now in its simplest form, and therefore, [] is 3.

3 x 4 + 6 = 18

I know you are pretty impressed by this.

What are the implications?

She didn't quite get it still, so I used another example from the coffee table we were at saying that the vase of flowers weighs one kilo and the candlesticks weigh have a kilo. How many candlesticks equal the vase? I then used a similar example with her visualizing it on a set of weighing scales, instead of numerical weights. This helped her realise that the "equals" isn't just about numbers.

But, there is more to it than this, and I believe we don't spend enough time thinking about what equals what in this economy. So, in a session with clients this morning after talking a fair bit about the global political and economic situation, I used the same example above to illustrate my point on how the economy works, and why it doesn't work for us.

I used the example of a contract that they have worth in the billions, and said that despite all the complexities, there is a simple equation there that someone has worked out.

1 Billion = Delivery + Profit

Simple, right? But of course it isn't quite as simple as that, because the "Delivery" placeholder of the equation includes a host of factors that have many variables included with each. For instance, there is planning, design, materials, production, labour ... and the list goes on. This in turn means that the "Profit" placeholder final total is variable, based on how the Delivery goes. However, as a silly example, if the company spends all of the billion on internal parties, at the end of the project, there is no delivery, or profit. If they spend the profit part on parties and the delivery runs over budget, they are in the red. But to keep it simple, in order for them to meet the contract terms, they have to deliver a product, and that takes doing a lot of things. Whatever is left over, is their profit.

And??

Well, as I have said many, many times already, we have an economic problem in the world, because we have lost sight of the purpose of trade and have started using the marker of trade as the desired outcome. Trade at its core is about swapping goods and services for mutual benefit. A tribe with pineapples will trade with a tribe with coconuts, and then both tribes can enjoy pina coladas. Tokens of trade were introduced because straight swapping isn't going to be equitable, especially at scale. What we have done though is changed the focus of trade to get more token, without thinking about the benefits.

Money = Wellbeing

Many will disagree with me at that point seeing that equation, saying that "money doesn't buy happiness" (or wellbeing) and they are wrong. Well, not completely wrong, but wrong enough for my needs. The reason is that "Wellbeing" is made up of many components and in the complexity of the world in which we live, many of those things we are unable to provide directly for ourselves. If we were living alone in the forest or in a small group, perhaps it might be possible, but we are not, and will not be at scale - so the reality is that in order for our personal wellbeing, we are going to need to trade.

But, let's keep it simple and say there are 5 things that we need for wellbeing.

Wellbeing = a + b + c + d + e

Each of those things has a cost of 20 a year for a total of 100 dollars. Therefore,

Wellbeing = 100 dollars

Now you see the problem we have in the economy, don't you? Because while we could trade that 100 dollars for our wellbeing, that 100 could be spent on any number of things that are not going to add value to our wellbeing factors, meaning that our wellbeing is compromised. And then, if we are earning less than the 100 required, even if we spend all of our money on the wellbeing factors, the set can never be full. If we earn 50 dollars, we could average them at 10 for example and maybe be okay, or we could max out two of them and have another at 10, and leave two unserved completely. But, we will always be lacking.

And this is the problem in the economy, because it doesn't matter how much money is made, if it isn't being spent on what brings wellbeing, it isn't going to deliver wellbeing. Large parts of the money side of the equation is being spent on trade that doesn't provide a mutual benefit to society. And ultimately, that is the key point of why businesses formed in the first place. Business is a formalisation of the bartering trade - the things that were keeping us "busy" and "occupied".

Our occupation.

Formalising and tokenising trade, meant that we could scale trade and therefore bring in more certainty and equity of the trade, rather than have "unfair" trades where one item can't equate to another well. For instance, A high value item paid for in strawberries isn't going to work, because the strawberries will spoil before the value can be extracted from them.

But, as you can hopefully see from these examples, is that the economy at every level is broken for society, because rather than keeping ourselves in busyness generating wellbeing, we are in business generating money, as if it is going to then be spent on trade that provides us with wellbeing. That is not the case though, because the majority of trade is in trade that will grow more token, not more wellbeing. And, it has got to the point over the last fifty to a hundred years that there is so much being spent on token growth, that now our wellbeing is degrading.

More and more compromises are being made on wellbeing in order to achieve more token growth, so that our 5 placeholder factors are not balancing the equation.

Wellbeing = a + b + c + d + e

Wellbeing = 100 dollars

But if only 80 dollars is being spent on wellbeing, and the other 20 is spent on token growth, we will degrade. Then, in the quest for even more token growth the next decade only 70 is spent on wellbeing and 30 on token growth, and then 60 and 40, 50 and 50... we have an accelerated degradation of wellbeing, because we can't maintain and just keep falling further and further behind.

The obesity, depression, loneliness and addiction epidemics are illustrative of this slide.

So yes, money does equal wellbeing, if wellbeing is our business baseline in the economy. But it is not. The world economy is in the business of making money, but isn't in the business of spending that money on wellbeing. If it was, business would be dominated by wellbeing companies, not data, finance and natural material exploitation companies. This is the same for the governments and tax money, because that isn't being spent on wellbeing either.

If we want to have wellbeing?

The money = wellbeing equation has to balance.

Such an easy concept to understand.
Yet, we keep getting rushing to the wrong answer.

Taraz
[ Gen1: Hive ]