Economics

Introduction to the issue? Why is economics important in a post-apocalyptic context and how does it differ from the pre-apocalyptic context?

The Short Term

In the short term everyone is alone or in smaller groups of people, presumably groups of about three to fifteen members. Such a small community cannot truly establish any real form of economy because all resources will be shared and distributed somewhat equally.[Economics is often defined as the science which studies the distribution of scarce resources. How does it not apply in this situation?] These groups of people would be disorganized and scattered, looking for safe places to try and form some sort of stability. Inevitably these groups will happenchance upon each other from time to time. There are four possible outcomes if this happens:

1. They choose to team up and work together.
2. They meet up and battle to the death.
3. They see each other and agree to move along.
4. Finally, the last reason which pertains to the topic of discussion, they agree to trade resources and a system of barter is established.

"Under barter economy, the goods are exchanged for goods. This implies that if one wants some commodity, this can be exchanged only by giving some other commodity in exchange." A barter system of economy is not ideal for four main reasons. The first is the lack of double coincidence of wants. Trade can only happen fairly if the people engaged in the trade both desire the bartered commodities equally. For example, if Group A wants apples which Group B has, Group A must offer something of the same value to Group B. Settling on terms of these exchanges is obviously extremely difficult. The second problem is division of larger goods. If the only thing that Group A has to trade for these apples is a car that is not a fair trade because the car cannot be cut into smaller pieces while still holding its worth to either group. The third problem is a common measure of value. There is no index guide that everyone follows which tells you how many apples it would take to buy a car. Individuals have different tastes and different needs so a car is worth a different amount to different people. The last problem is a long-run issue. People cannot store value in forms of commodities because many goods are perishable. All of these reasons can be summed up by saying that the barter system lack liquidity, the absence of ease in which assets can be converted. Without a store of value the accumulation of capital economic progress would be difficult to accomplish.

The Mid-Term

In the mid-term people will have started to group together and are aiming to build some sort of society, somewhere they can settle down and start a new life. When people first come together trying to set up an economic system to form a new sort of monetary system will not be the first priory. Before people can start to think of how to set up market-places or a system of trade they need to cover basic necessities such as food, shelter, clothing etc. For the purpose of an economic viewpoint let us break the mid-term into two sections.

Short-range midterm

The short range midterm is the time period where people have started to come together and have found a place to start settling down. A really great fiction example of this happening is found in Stephen Kings The Stand. Since the apocalypse in both our new world and The Stand was viral and not environmental everything that we have built is still majorly intact and available. Once people have found each other and they have decided to settle down in an area they are going to look for shelter. The previous home-owners are gone and fully furnished homes are just sitting there available for someone to come and take over. So things like rent will not be a part of the economy. It is the same situation for clothing and other non-consumption goods. So the main focus of the economic short-range midterm is food.

After only a short time most grocery store products will have either gone bad or been consumed. People will have to gather [food] and [water] through methods that are discussed in detail elsewhere. Once these essentials have been gathered we get into the issue of distribution.

People cannot solely consume the good that they are collecting, for example a person collecting water needs food to eat as well and the person collecting food will need water. To further extend my point someone who has been given the task of collecting protein and meat will need and want other forms of nutrition. Similarly to the short term barter will be the system of economy. The short-midterm differs because it is in a way a less formal system of barter, assuming the small community does not have conflict, everyone will be willing to share and trade.

The long-range mid-term

Once more people have joined the community and an informal barter system will become more complicated for the reasons listed above. To try to fix some of the barter system problems the government has implemented a system of “points” which can also be thought of as currency.[Reference is to "Creating Community Currency: A Bartering System." - For Dummies. John Wiley & Sons, Inc., 2013. Web. 24 Mar. 2013. The only thing I can find online for this is the website of the publisher. Perhaps you should find a more credible source than ad copy!]. Although rather than actually currency in the form of coins and paper bills we have scan-cards. Scan-cards are in many ways like credit or debit cards. Before we can really explain the scan-card the point system needs to be explained.

The point system is an extensive chart of what common-goods are worth. For example an apple would be labeled as half a point. Rather than calling them “points” they quickly developed the nickname “Pins”. So the apple would be worth a Half-Pin.

The Pin index is not constructed by the Government, but rather the Government over sees the index and people’s interactions to prevent over-pricing. The last thing we want is food riots as were seen in pre-industrial England [The source discusses--in two sentences while providing a link to a PDF copy of EP Thompson's paper on the moral economy--the concept, but it isn't a "real" source: it is someone's very short blog post. Footnote: David. "Ed and Edward on the ‘moral Economy’." Freely Associating. The Free Association, 1 Oct. 2011. Web. 24 Mar. 2013.] So, with Government supervision, the producers of the goods label their prices. For example, if Joe is an apple farmer and he has just picked a dozen apples and decides to sell six of them he can go into the market of the new community and post this offer on the what is called the Sale Index with a Pin price with the options of listing goods that he wants to trade for his apples. The people in the community can then go to Joe and either offer him a trade. For example Anna has a banana for sale and she calls upon Joe to trade. Joe can either trade with her or she can pay him the amount of Pins he requests.

These Pins are not actually currency but they are recorded on scan-cards. Each scan card is about the size of a cellphone. They have personal information along with passwords so no one can use anyone else’s scan-card. So if Anna wants to buy an apple from Joe but she has nothing to trade him she can scan his card, enter her password(s) and directly transfer Pins into Joes card. Of course all of the information on these cards are tracked and documented by the Government to insure safety and prevent theft.[This seems to require quite a complex computer network. Will this technology exist at this time?]

To introduce the point-system the Government gave people these scan-cards. To earn Pins originally people had to work for the Government and they would get paid the amount of Pins agreed upon, which was the beginning of wages.

The Long Term

In the long term the scan-cards and Pins held true. Once people had accepted Pins and everyone started to use them barter just went away. The Pin Index was no longer required as people came to understand the yard-stick measure of what a Pin could buy. People no longer had to work for the Government to earn Pins and private firms and production became common. Debt, saving, and investment all exist and are a part of the economy.

The long run economy of the new world is very socialist. Why would our new society want to go back to its westernized capitalist ways? Capitalism is based off of private ownership and private forms of production. The division between rich and poor is devastating and although it made many people very rich it also made many very poor. The old westernized market system or the “free market” dominated everyone’s lives with what Karl Marx called “generalized commodity production”. The two main arguments against capitalism can be summed up in one word; exploitation. Workers are exploited because they are not paid the full value that their labour produces. The consumers are exploited because prices are marked up and they are over-charged because if they weren’t the firms would not be making a profit which, obviously, is no good for them.

The people that have survived the apocalypse have a chance to re-build a new world in any way that they want. It’s true that not all people are good and want to share equally, but many people in the world do and are not controlled by their greed. Socialism prioritizes human needs and that is how the new economy will run. A socialist economy is based in the idea that wealth should be shared equally. In a Utopian world communism would be efficient. If everyone just agreed to work hard and do what they are good at and get paid what the government thought was fair then life would be perfect. Unfortunately this has never and will never work in the real world as beautifully as it does on paper. Unlike communism there will be ownership of private property and private production. Although the tax on private production will probably be about 45% profits with opportunity to get most of that money back at the end of the year. With that tax money the government will provide a GMI, a guaranteed minimum income so everyone can meet their basic needs. All education and healthcare are free to everyone. People will get paid more for certain jobs that either require more schooling or are high risk. Whatever extra money people have can go to improving their standard of living. But of course if people choose to just live off of their GMI then that is their choice. This system is especially beneficial for people who cannot take care of themselves such as, the old, the young and those in poor physical or mental health. When basic needs are more easily obtained not only can people focus on education or other economically productive activities but there is more time for people to pursue other forms of enjoyment outside their careers.

References

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