Is 100% Solvency Possible?

                 The rich of this world are not rich in money, they are rich in rights – Anonymous

bankruptcy_graph

(care of https://www.stlouisfed.org/publications/bridges/spring-2006/100-years-of-bankruptcy-why-more-americans-than-ever-are-filing)

The purpose of this article is to demonstrate that it is impossible for everyone to treat all human needs as commodities and at the same time ensure everyone’s needs are met, because by the very act of treating them as commodities throws us all into a competition, which is no different to monopoly. We are playing a game called ‘Staying Solvent’, where those who are succeeding are just that, ‘staying solvent’, and those who fail are those who have become bankrupt. The reason for this impossibility is because it is impossible for every entity to be solvent all at the same time (“100% solvency”). We then attempt to address this obvious contradiction by a thing called welfare, without dealing with the fact that welfare itself is a creature of competition.

Because of the ignorance of this simple fact, all debate centered around economics and how to ensure each person has sufficient capabilities to meet their needs, is a waste of
time provided we still maintain this need to treat all needs as commodities. Further, this fact will never change until society recognizes that it is ‘society’ itself which has placed a monopoly over all resources which are required to satisfy all those needs. The solution is not welfare, socialism, nor capitalism, but co-existence (more on this later).

In my attempts to write this I have found that the more time I spend on it the more obvious it becomes that 100% solvency is not possible, and so I continuously find myself trying to work out why I should even bother explaining it – I mean isn’t it obvious? But I have realized that proving it is not really the issue; what is the issue it seems is that no
one has ever bothered to ask the question to begin with, like it doesn’t matter. By not asking the question, one does not need to deal with the obvious contradictions that it
produces – contradictions which lie at the heart of all our desires. With this said, I shall begin.

By treating all human needs as commodities, we are forced into paying for everything with money (expenses), which requires earning money (income). In order for this to work, we must ensure that all income is guaranteed. That means guaranteeing that everyone will pay their expenses. Provided the only things produced for sale are those very human needs, that no one’s produce fails (rendering them unable to pay their expenses), everyone earns exactly the same, and everyone’s terms of agreement are the same, then the net result is zero; no insolvency. Does it work like this? Of course not (and to suggest it should is ludicrous).

For starters, a person will only earn an income if their produce does not fail (this is a generalization of all the things which can go wrong in an economy regarding income; for
example, a farmer’s crop fails, a business fails, employees are laid off, injury, acts of nature, accidents, lawsuits, etc, not to mention economic busts and crises etc). So,
because we can’t guarantee anything or tell the future, the next best thing is to insure ourselves. This means, it is not enough to earn an income in order to buy things, we need
to insure our ability to pay for our needs. One way is paying for income insurance, the other is to own property, both of which require one to earn a surplus. A third way is to
have greater bargaining power. A fourth way, as already mentioned, is a welfare system.

Regarding the first two methods, from where does this extra income come from when one persons income is another’s expense? So, right here, as plain as the nose on my face, it becomes obvious that it is not possible for 100% solvency because no one can guarantee they can pay all their expenses, meaning no one can guarantee their income, which means no one can guarantee their ability to meet their needs. What transpires is a race (competition) to see who can insure themselves the quickest and the most. As a result, we clamor to own whatever we can and likewise push the prices of commodities (including needs) and/or other assets (financial) up and at the same time diminish the size of what those prices will buy. Take housing as an example; we are constantly pushing the price of housing up and yet the blocks of land get smaller. By our own need to insure ourselves, we squeeze everyone.

This forces us into the third option, i.e. to learn how to gain greater bargaining power. Every party to every contract or agreement is looking to insure themselves as best they
can against anything and everything, but especially against the other party. As menioned above, in a perfect world no contract or agreement would ever have terms which differed. By this what is meant is that all agreements would have their accounts payable within the same time frame, for example, 30 days. Any entity which is able to extend the terms in which their debts (expenses) are due, whilst at the same time enforce their own contractual rights (income) sooner, they are in a far superior position to those who can’t.

By squeezing your debtors to pay you earlier, and to force your creditors to wait longer, you inevitably force others to try to do the same thing. How then is it mathematically
possible for everyone to do it? Do we all need evidence of this above the proof which is the constant bankruptcies that happen everyday? Is this not proof enough for everyone? As the anonymous saying goes ‘the rich aren’t rich in money they are rich in rights’.

What about welfare? Before we go into this, it’s important we address the concept of ‘full employment’. There is no such thing as full employment. Full employment assumes several things. First, it assumes everyone wants to treat human needs as commodities, then it assumes we all want to insure ourselves a result (property etc), then it assumes we all want full-time jobs, and most of all, it assumes we want to fit somewhere along the political spectrum. Because of these false assumptions, there is some political train which always aims at full employment, and yet ironically, full employment (as the assumptions go) is not possible because, as the central banks of the world will tell you, it is an inflation nightmare to have 100% employment, so full employment is usually somewhere around 95%.

With this said, even though 5% cannot be employed, they are still treating needs as commodities (whether they wish to or not) and as such they must pay for them. If they can’t, then eventually they will break the law out of sheer necessity. Centuries ago, if you stole you were hung. Today, you are not hung, but even begging and dumpster diving is
illegal. whilst being homeless itself is not illegal, being homeless will inevitably force you to break some law, it is only a matter of time before you do. It seems, in an
attempt to address this obvious absurdity, that we invented the social security system. The problem is, all the property owners (the insured) don’t like the idea because
apparently it reduces the value of their insurance, and so they demand their representatives in government to keep welfare to an absolute minimum or scrap it altogether. Whilst on the other side of the fence there are plenty of people who will stand up and fight for the less fortunate.

The problem is however, it is always a political fight and so it is always a competition. As long as it remains a competition, it matters not how hard you try, there will always
be winners and losers. As long as we ‘all’* treat human needs as commodities, it can be no other way; even the most devoted of socialists still lack the vision to imagine a way in
which some people can get around having to treat human needs as commodities. It seems the often-parroted saying ‘it’s a fact of life we all need money’ is so entrenched in
everyone that no one has the courage to see otherwise.

*(I purpsoly highlighted the word ‘all’ when I said ‘As long as we ‘all’ treat human needs as commodities, it can be no other way’ because I am not advocating that we all stop
treating human needs as resources, on the contrary, I welcome capitalism. My vision is that there be an option available to people who do not wish to treat anything as a commodity to do just that – I call it the way of the custodian).

In MILLS & ORS v SHEAHAN [2007] SASC 365 (16 October 2007), in the Supreme Court of South Australia, DEBELLE J said the following:

In a competitive world where one person’s economic gain is commonly another’s loss, a duty to take reasonable care to avoid causing mere economic loss to another, as distinct from physical injury to another’s personal property, may be inconsistent with community standards in relation to what is ordinarily legitimate in the pursuit of personal advantage.

Speaking generally, a person owes no duty to prevent economic loss to another person even though the first person intends to cause economic loss to that other person. This particular immunity from liability reflects the common law’s concern with the autonomy of the individual and its desire to give effect to the choices of the individual by not burdening his or her freedom of action. Thus, as long as a person is legitimately protecting or pursuing his or her commercial interests, the common law does not require that person to be concerned with the effect of his or her conduct on the economic interests of other persons.

I highlight this case to demonstrate that the law deems the pursuit of economic gain a legitimate pursuit, not because it is fair or just or equal, but because of the fact that it
is a competition where there are definite losers, otherwise why legitimize it? More to the point, that because it is a legitimate pursuit it would appear that there exists
alternatives including the choice not to compete (Do you the reader believe that such a choice exists? Can you provide for yourself and your family without competing, or failing that without welfare, and if not, why not?).

What has happened over time is that because we have failed to admit that 100% solvency is not possible, we have slowly but surely turned more things, which once were not, into
commodities. Any and all attempts to address the issue of insolvency are always the focus of competition, debate, and fighting. This is ludicrous and to be frank, quite
embarrassing.

The only solution, is in fact individual. It is not political. It is what I call the ‘way of the custodian’. If even 1% of the population lived this way, the amount of relief it
would create for the rest of the population (including those who wish to continue to treat resources as commodities) is far greater than what any welfare system can do.

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