29 August 2013

Day 245: Living Income Guaranteed and Equal Currency

The ideal of free market in terms of globalization in being able to buy from anyone and sell to anyone - is based within the idea that: one should be able to get access to the best products and services - and if that means people keep buying cars from Germany, then it means car companies in other countries have to step up their performance if they want to compete - and so - creating a worldwide stimulating environment for excellence in service and quality-price ratio.

Though, one of the major influential factors determining whether people buy their stuff in their own country or in a foreign country - is the exchange rate between currencies. The exchange rate is in fact the price you pay for a currency in terms of another currency. So - if in the US the price of the car you want is 40 000 dollars and in Germany a very similar car would cost you 40 000 euros and say that both cars meet your requirements and you have no preference between the two - then there is still a difference in cost. Say that you are located in South Africa and that the price for 1 dollar is 7 Rand and the price for 1 euro is 10 rand - then the car in the US is 'cheaper', but only because the American dollar is cheaper than the Euro. One would have to pay 280 000 Rand for the American car and 400 000 Rand for the German car. With no preference between both cars, the choice is easily made, and the American car is bought.

To understand what determines the exchange rate between two currencies - read: 'What are Currency Exchange Rates and Why do they Keep on Changing?'

From there - you can see that the exchange rate is a result of the performance of an economy as a whole in relation to the performance of other economies - and, in turn, the exchange rate affects the economy deeply. You can also see that within currency exchange rates there are always winners and losers. Say - if the euro is 'strong' in relation to the dollar, then Americans will buy less from Europe and more locally, and Europeans will buy more from America and less locally. That would mean that European exporters are worse off, but American exporters are better off. At the same time, America importers are worse off and European importers are better off. So - the exchange rate is one of those things that has a deep impact on the individual lives of people, that does not stand in relation to their particular merit. So, the whole global free market is skewed, because it's not only the quality of goods and services that determines in which country you buy your products - much is determined by the exchange rate, over which one, as an individual, can exert no influence. So, here is another example of how the free market theory as yielding the best result is not being applied and lived.

So - why do we propose equal currencies with Living Income Guaranteed?

Because the Living Income Guaranteed system ensures that one's economy is stable and effective from the perspective that each one will have an income with which to purchase the required goods to live a dignified life and in turn this income that was spent becomes the income of the labor force, that now can afford a more luxurious lifestyle - as such Human Rights are ensured and the principle of those who work harder earn more money is still in place as well. However - if we now have currencies with different values - the whole point can collapse - because instead of buying the products locally, one can buy the exact same products abroad for a 'cheaper' price, just because of a favorable exchange rate - as such, money drains out of the economy and the cycle is disrupted. Unequal currencies distort the values of goods and services across the globe. With equal currencies - if one goes and buys products abroad, its not because of a distortion - it's because the goods and services are actually better or are produced more cost-efficiently. Therefore, when in a particular country it is noticed that one's company is suffering due to people buying abroad, it is an actual indication that one requires to change the quality of one's goods and services or become more cost-efficient - such indications are valid and stimulate the economy in the way it is supposed to.

If one has a look at the entire Living Income Guaranteed proposal, one will notice one thing: Central to this entire economic system stands one point: Real Value. The Real Value of Life, the Real Value of Labor, the Real Value of effort and merit, the Real Value of goods and services - to be done with the charade of survival on the one hand and outrageously extravagant entertainment on the other - neither have Real Value - to get back to what matters, to give back to ourselves and each other that which we have lost: Dignity, Respect, Consideration, Support, Acknowledgement, Integrity, Gratitude.

Living Income Guaranteed is an effective, clear-cut way to make an end to all and everything that has been diminishing Life over the centuries, of which we see it is unacceptable, but for which we haven't been able to formulate a solution before - and to bring back all that we have always wanted and searched for - not just for the rich and famous - but for every single human being.

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