The Four Laws of Value and DCIT Model

Unit 2

The Four Laws of Value and DCIT Model

Supereconomics deals with the sustainable flow of resources within and between societies

Juan Juan
9 min read
Table of Contents

Chapter 9f explained the concept of group feeling which:

  • facilitates mutual communication
  • allows symbiosis or mutually-beneficial exchanges

This leads to an unwritten economy of living feeling-energy within an ecosystem.

In the current human society, the feeling-energy economy is based on goods and services that are exhchanged for mutual benefit.

This leads to the 4 Laws of Value

  1. Exchangeable Value is based on Relational Desire
  2. Exchangeable Value is created to remove lack
  3. There must be balance in the creation and spread of Exchangeable Value
  4. Exchangeable Value spreads through fair exchange

We got the 4 Laws by consolidating the maxims of Adam Smith:

The general industry of the society never can exceed what the capital of the society can employ… Every individual who employs his capital..necessarily endeavours..the greatest possible value… or to exchange for the greatest quantity either of money or of other goods. [Law 2]

But the annual revenue of every society..is precisely the same thing with that exchangeable value. The quantity of industry..is..regulated by the annual demand, in such a manner that the average annual produce may..be equal to the average annual consumption [Law 1] (Book 1, Chap. 10, Par. 49).

When we compute the quantity of industry..we must always have regard to..provisions, materials, and finished work: the other, which consists in money..must always be deducted [Law 3] (Book 2, Chap. 2, Par. 37). If the paper money which the bank advances never exceeds this value..it can never exceed the quantity which the circulation of the country can easily absorb and employ. Though the stream..continually running out from its coffers may be very large, that which is continually running into them must be at least equally large..If, on the contrary, the sum of the repayments..falls commonly..short..those coffers must soon be exhausted altogether. [Law 4] (Book 2, Chap. 2, Par. 60)

Adam Smith
Adam Smith

Economic problems happen when these laws are violated.

Law Problems Created by Violations
1 Poverty Cycle, Unemployment
2 Bubbles, Excess Capacity
3 Moral Hazard, Low Tax Revenue
4 Inflation, Trade Deficit

Solution: Demand, Capital, Industry, Trade

To make the implementation of th 4 laws easier, we create a Demand, Capital, Industry, Trade (DCIT) Model with 4 components.

  1. Demand

This is based on population size in a group or society. Its main goal is to ensure that the population has their basic needs met through the minimum requirements doctrine.

  1. Capital

This is based on productivity of the population. This is done by:

  • finding the economic gravitational signature of each person, as the primary arbitrage
  • maximizing the relationality between people, as the secondary arbitrage

Unlike economics which only focuses on capital that is measurable in money, as objective valuation, Economic Superphysics allows subjective valuation as natural capital such as a powerful voice, beautiful face, connections in society, respected family name, etc.

  1. Industry

This is the structure of the production and distribution to make the economy sustainable, including government regulations and taxation.

  1. Trade

This is the mechanism for exchange and distribution of goods and services. This includes logistics and finance.

First Law: Exchangeable value is based on relational desire

The first law has the equation:

VA1 : VB1

  • VA1: value perception of identity A at time 1
  • VB1: value perception of identity B at time 1

This introduces the following concepts:

  • Relationality
    • Doctrine of Minumum Needs as replacement to Profit Maximization
  • Spin
    • Absolute and Effective Demand
    • Nominal Price
    • Points Valuation as replacement to Money-only Valuation
    • Time Value of Life as replacement to the Time Value of Money

Second law: Exchangeable Value goes from areas with high value to areas with low value in order to spread and remove the lack in society

This has the equation:

F = (V↑ - V↓) / E

  • F: Flow or Force (such as the force of capital)
  • V↑: high value perception
  • V↓: low value perception
  • E: effort (toil and trouble)

This introduces the following concepts:

  • Primary Arbitrage (relationality)
  • The Invisble Hand of Human Dharma (spin)
    • Effor Theory of Value
    • Real Price

Third Law: There must be a balance in the creation and spread of value in an economy.

P = Vl1 + Vl2 + Vl4

  • P: Consolidated Price
  • Vl1: Nominal Price (Exchangeable Value from Law 1)
  • Vl2: Real Price (Exchangeable Value from Law 2)
  • Vl4: Market Price (Exchangeable Value from Law 4)

Vl3,t = Vli,t / P

  • Vl3: Natural Price over time (Exchangeable Value from Law 3)
  • Vli,t: Nominal, Real, and Market Price over time

This introduces the following concepts:

  • Economic Balance (relationality)
    • DCIT Model
    • Net Domestic Product
  • Usufruct Circular Economy (spin)
    • Natural Price
    • Taxation in kind

This shows the natural price, which results from the balance of the demand, supply, and the logistics that connects supply with demand.

For example, the table below shows the economy growing by 1 unit each year. But it exposes an imbalance favoring market price at year 3. Thus, even if the consolidated price shows growth, the third law exposes market price as being unnatural -- it overfeeds the merchant class and starves the working class.

Year Total Value of Economy Nominal Real Market
1 10 3 4 3
2 11 3 4 4
3 12 2 3 7

Fourth Law: Value is transferred through fair exchange whether it be through money, barter, points, promises, etc.

Vl4,t = k • Pt

  • Vl4,t: Market Price as the actual value exchanged (markup, fee, or payment) at time t (Exchangeable Value from Law 4)
  • k (The Fair Exchange Coefficient): The agreed-upon "Markup" or "Service Fee" ratio. Unlike interest, k is a percentage of actual output, not a fixed percentage of a past debt. We call this "secondary arbitrage."
  • Pt: Consolidated Price as the total value of the economy or the individual's productivity at time t which includes Value from Law 1 and 2

This introduces the following concepts:

  • Secondary Arbitrage (relationality)
    • Economy as a Service
  • Barter Credits (spin)
    • Points Banking
    • Clearing
    • Market Price

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