3DN Economies of Integration
Economies of integration
- A business participating in the global economy must employ economies of scale to lower the unit cost of production to be competitive in the market. This mirrors what we do in reductionist science. We know a great deal about how each part of the system functions – a great deal about this one product that we are producing. What we do not consider, as we employ this vast knowledge, is how a given choice impacts all other aspects of the whole system. To address the global problems of poverty and the environment we will need better knowledge on how all the parts fit together.
- A CIE creates an internal economy designed to acquire the assets necessary for the comfort and growth of its worker/shareholders. This is the opposite of a business corporation's mandate to minimize cost to maximize available financial resources*. The internal economy of the CIE is identical to the purposes of a family – except that a family is generally too small a unit to produce the scale of internal transactions required for our purposes – maximizing living resources available for the use of our members.
- In both cases we are talking about production and consumption cycles. Resources are converted to goods and services, exchanged through the economy and consumed. We are all familiar with that process in the global economy – and with problems associated with that – poverty and environmental degradation. The CIE sets up an alternative – internal – set of production and consumption cycles focused on those things required for humans to thrive. The CIE changes the incentives by combining ownership of the production part of the cycle with the right to consume part of the cycle. It removes the incentive to deplete the assets on which you rely to produce that which you consume – because it is clear in integrated economic calculations that depletion of the asset in order to reduce the cost in the current cycle increases costs in subsequent cycles.
- Imagine a community that acquired all the land, facilities and equipment to produce all the food, clothing, shelter, education and health care that any of its residents needed. We could think of this as a “total spherical integration” of the production and consumption cycles in which the community participates – a complete internalization of its economy. That would be the ultimate self sufficiency – but probably not the desirable end state. Rather, I think we want to talk about what cycles of production and consumption do we want to control to insulate our community from problems inherent in a global economy – and what natural advantage do we have in the competition of the global economy.
- Integrated systems of production, as employed in the CIE, are about completing the cycle of the conversion of living resources into financial resources by expanding on the family's ability to convert financial resources back into living resources – bringing balance to the system. The CIE would allow each community to control the balance. This would be the ultimate democracy – each citizen having the choice of whether they will sell their time in the global market or in exchange for shares in the local accumulation of living resources - the global market and the local CIE competing for the hearts and minds of individual citizens.
- Everyone gets to make their own choices. The world we have is the cumulative result of all the choices each of us has made. If we want the world to be different we will need better choices.
- From David Korten, A Post Corporate World
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