Efficiency, a socialist problem


One of the reasons money came into existence, was due to efficiency, some would call it productivity, whatever the term, a person thinks up a better or easier way of doing something. This usually means more people can enjoy whatever has been produced, this if Socialism was based on reality would be a Socialist ideal, just the opposite it is a socialist problem.

Sharp CS 10a All transistor calculator
This was state of the art office equipment in 1964, an all transistorised calculator, pic courtesy Sharp corporation

Back in 1964, the Sharp Company of Japan produced the first all-electronic calculator. It was sold in USA for around $268, or about three weeks wages, for the average US citizen. Not that the average person could afford $268 for a luxury item like a calculator. However many companies could, and the Sharp CS 10A was a roaring success, it made calculating long lists of numbers so much easier, also it could work out percentages. It paved the way for others to copy. Calculators had been around for centuries, but not in electronic form, and they now started to be a commonplace piece of kit.

a slide rule

In 1964, the human brain aside, probably the most common general purpose calculator, was a slide rule. The Far East used the Abacus quite a lot, but that is less general purpose. Also a common item in the work place was a book of percentages, for working out the interest on various items. A slide rule is very good, however it is not fast, where it scored was on things like long division, or where methods requiring calculus were involved.

Originally mechanical, then electro-mechanical and finally all electronic calculators, made life so much easier and efficient. Sharp were the first to the market place. From then on there was a steady stream of developments and improvements. Here is a good example of where Socialism and its ideas fall flat, they are just fantasy. In the Socialist world there is central planning, this does a way with inefficient duplications and wastage. Well that is the idea, however it is a load of old garbage, that just leads to corruption.

In the free trade model, individuals use their own money, and waste it as they wish. This leads to some person being sat in an office using a Sharp calculator and thinking, well that latest piece of electronics printed circuit I read about, could do everything that is needed here, and they are sure they could sell it at under $200 and still make a fabulous profit. So they do, and also because it is there own money they have invested, they look at ways of reducing overheads. This is efficiency at work, and an example why efficiency, a socialist problem.

Typical desktop office calculator
A modern day calculator, you can buy them in £ or $ shops, a far cry from 1964, and they actually do more.

So pretty Polly Perkins, sets up her factory producing calculators, and selling them at less than $200 each. Initially she just employs three people, basically buying in the parts and assembling the machines, but business being brisk, she has to hire more staff.

electronics called a microchip

In the mean time, there has been some developments in the world of electronics, and some company called Intel has produced a new piece of electronics called a microchip. This is cheaper and does away with lots of the components. Over in USSR where they have everything passed by central planning, to reduce wastage, no one in that department has even a passing interest in desk calculators, so they are not even being developed.

In the meantime Polly Perkins has noticed that she can make an improved toaster using, some of the electronic bits, she buys. This is good because $200 for a calculators in now expensive, and although she has reduced the production costs, she finds she can make more money selling ten times the number of toasters, that lots of people can afford for their homes?

So Billy Brainstorm, elsewhere in the world, decides he can make a calculator for less than $50, and it is so small due to a new chip from Texas Instruments, that you can fit it in your briefcase. Other companies making calculators go out of business, making people redundant, but due to the fact they now have experience in making electrical items, some are taken on at a local factory making alarms systems, which are becoming more common, due to being affordable. They are more affordable because, of the new electronic chips, and the fact that things like calculators in offices means there are less staff needed to run a company.

Another example of why efficiency, is a socialist problem. Why when less people are needed to produce things, is employment going up.

Back with Polly Perkins, she has sold her factory, and could if she wished retire, but that would be boring, plus she always liked the side of business where she wrote the adverts to sell her products. So she gets a job at the local ad agency, as a personal assistant, and before long she has left and started her own company, specialising in making catalogues for distribution companies, and she does this efficiently enough, to take them within reach of small, local outfits.

calculators are now below $20

The efficiency has come from these new micro computers, which are now less than $2,000 for a good office machine. Meanwhile the calculators are now below $20, and they have a memory function.
A further efficiency causing a further socialist problem, how come when manufacturing is in decline, does employment keep going up, and people keep getting paid more?

Simple, when the Luddites in the 18th Century were breaking up the weaving machines, they had no concept, that in the future people would be employed to drive a vehicle to help someone whose car had broken down? How could they?

RAC breakdown assistance
RAC do breakdown cover in UK
Pic courtesy RAC

Efficiency is a socialist problem, because they object to people being made redundant. They then make erroneous comparisons, like the fact that a warehouse has been built on an old coal mining pit, and that the people there are not paid the same as the coal miners were.

Luddite socialists

That a person working at these warehouses, on minimum wage, drive to their place of work, has a disposable income far in excess of a 1980s miner, is lost on these Luddite socialists, and also has nothing to do with trained workers. The equivalent worker in 2017 to a miner in the 1980s, doesn’t expose themselves to the dangers back then. They work in an office, are required to use their imagination, and have a disposable income, that allows holidays in exotic world wide locations.

All because of efficiency, and the ease with which people today in UK can be made redundant.

Commodity and fiat money


Pounds sterling
Fiat money, is not quite the same as commodity money, but commodity money can be fiat money?

In my last two blogs I went into the beginnings, and what might be termed the invention of commodity and fiat money. As I pointed out, when the first exchanges would be made, there was probably no concept of the term money, certainly there was no word for it.

this is commodity money

Those first transactions probably came about through convenience of application. The new farmer had a surplus of some good, and exchanged it for another good he required, basically this is commodity money. The point being, that there was a medium used by all, in this case the commodity of food, but also an item that can be adaptable in quantity, so the ox is not viable. The upshot is that one person can receive in exchange, for work or goods an item that can be saved or used to exchange with someone else, and although many call this commodity money, it can also take the more abstract idea of fiat money. It is not beyond the possibility of reason, that arrow heads may have been used, the problem here is we have no way of knowing.

Let’s face it before writing, there is no way of distinguishing archaeological finds used for hunting, deposited in a living area, with those used for exchange of goods? All the evidence is, there were no bartering societies as such, so the concept of commodity and fiat money appears to be grasped, in one way or another.

It is clear that very early on, other more neutral items than grain started to be used for these transactions. The main problem we have is, not knowing what the order of events were, that led to the concept of commodity and fiat money, coming into being. Was there a term for buying or selling, before there was the neutral token? We do know that it wasn’t just metal in the form of copper, silver or gold that was used as commodity and fiat money, famously shells were, along with other novel items.
Also the people on the South Pacific Island of Yap used large stone rings as their commodity and fiat money, that was usually not moved. A blog on the subject of Yap currency.

adoption of abstract numbers

In the Sumerian kingdom where the first written records of commodity and fiat money have been found, it can be seen that there was a gradual adoption of abstract numbers. The first written records were on clay tablets. The Sumerians also kept records of transactions and ownership of goods, for traders who were leaving one City to travel to another, with clay pouches that were sealed so that the contents wouldn’t be tampered with.

tally man
Tally men in Kent hopfields, courtesy Arcturus publishing

The very first counting system was probably tallying, which doesn’t require any counting by numbers. One merely keeps track by having some stones or marks on a stick. With stones you put one in a pile for each of the animals you wish to count, then when you ‘tally’ them you just take a stone away for each animal. If you are left with a stone then you have an animal missing. A tally stick is simple and straight forward, you simply take two equal lengths of wood tied together. Then you make a notch or line across the width to represent each item. So if a herdsman has ten sheep, then there will be ten lines marked across it. Then you untie the sticks, this way two people can keep track of the items. No actual counting is required, you just need to tally the marks with the items.

independent way of keeping track

At some point people started identifying numbers, two, three items and so on. When the Sumerians started using the clay pouches, they worked like this. You were travelling from one city to another, and leaving so many items with a trusted person. The thing is, both sides wanted an independent way of keeping track. This is similar to the pile of tally stones, you put one tiny pebble in the clay pouch for each item, and then sealed it up, and when you returned you just broke open the clay and checked the pebbles against your items.

The reason for going into number history is, that money accounting in Sumer advanced at a similar pace. It wasn’t long before the clay pouches started to have the counting numbers, also symbols for different items, so writing was involved. But the big breakthrough appears to be the idea of abstract numbers and quantities.

The archaeologists found that in less than thirty years through the daily use of these clay pouches, abstraction of quantities, numbers and money becomes a concept. Money as a measure came about through the use of the measure of grain, the shekel. This soon transferred to the grain being equal to so much gold, silver, bronze or goats, oxen and the like. Once there was a measure of metal, this could be held without using any resources.

You didn’t need to feed it

While the exchange was in perishable form, like grain or goats, the medium of exchange used as money would deteriorate. As soon as metal, especially silver, gold, bronze was used, it didn’t deteriorate, you could have piece of silver sat around minding its own business, and it needed no looking after. This was counted as commodity money, but is actually fiat money. You didn’t need to store it away from rats, or in special conditions, like food. You didn’t need to feed it, like animals.

Assyrian Charioteer
This is an Assyrian charioteer, Assyria, Sumer, Babylon were all a similar area, just different times.

The other point about the Sumerians (they may have been the Babylonians by this time) is that because of these clay pouches, they soon became adept at thinking of things as abstract ideas. So number no longer had to tally, they could be divided, multiplied and more to the point, not exist. So why go to the hassle of counting so many of these tiny pebbles, when you were going to mark the outside with a number, in fact a complete invoice. One might as well just mark the outside, with items and the numbers they represented, and forget about tiny pebbles. After all they were just a collection of pebbles. On the outside of the pouch, some of those pebbles represented goats others an amphora of grain. The pebbles all looked alike, it was the inscription marked in the clay pouch that told you what they were.

This then passes from commodity money into fiat money, at this point the currency is unmarked metal that was weighed to find its value. Again, this concept is fairly abstract, but these transactions were happening on a daily basis, and we all have our specialities in work where we know something just by looking. The ancients were no different.