Question: Who makes the decisions concerning
what is a necessity and what is a luxury?
Answer: The nature of a non-POM does not require that any particular group or individual
make such decisions. Also, these designations can change from time to time.
But I think it most likely that the Payers would be the most likely group
to make such decisions. They have a vested interest in getting it right.
If the Payers designate too
few things as necessities,
they cannot survive. Also,
there won't be enough persons
volunteering to be Payers to
do the job well and people
will blame the Payers. On the
other hand, if the Payers designate
too many things as necessities
then there will be too many
Payers and the individual Payer
will lose power and importance.
Besides, the power and influence
of the Payers depends on how
much people value the money
they can pay. If one doesn't
need money to get most things
which are really luxuries,
then that reduces the desirability
of money and the Payers' power.
Therefore the Payers want to
have enough things be necessities
to make their life tolerable
yet not so many as to reduce
their power and prestige. It
is a good balance that the
Payers would notice early and
value.
Also, you will note that the
principles which speak of luxuries
and necessities speak of things
designated as luxuries or necessities,
not things which actually are
luxuries or necessities. It's
just that things people can
consume must be identified
as one or the other. No doubt
some things (like coffee, perhaps)
might be designated as necessities
when they are actually not
necessary to life at all.
So that gives us a good idea
of consumer goods and how they
are divided. What about capital
goods? They are everything
else.
Wait, what about something
that can be both a capital
good and a consumer good? Let's
say, handicraft tools. Some
people refinish furniture as
a hobby. Other people do that
same work as their job to earn
money. How do we tell the difference?
There isn't any difference
in the tool itself. The difference
is in how the producer of the
tool treats it. If he puts
the tool up for sale as a luxury
item, the Payers will assign
it a price (if they haven't
already) and it will be available
for sale. The person who buys
the tool owns it, even if he
loans it to a neighbor. The
producer gets paid shortly
after the sale for providing
the luxury. He has now gotten
his full reward as have those
who provided help in producing
the tool.
If the producer gives the
tool to someone with the understanding
that they will use it to produce
benefits for others, there
is no pay for the tool until
those benefits are realized.
That pay continues so long
as the tool is used to produce
benefits. If the owner of the
tool gives it to someone else
to use, that person now owns
the tool.
So those capital goods which
can be both luxuries and production
equipment are controlled by
their owners and their fate
as luxuries or capital goods
is decided by those owners.
A tool can even switch back
and forth as each new owner
has the same decision to make.
Thus, one can actually "invest," in
a sense, one's money in capital
goods if one can find a willing
owner of capital goods. (Remember
that the owner of the capital
does not get the money the
buyer pays and the owner doesn't
set the price so his decision
will depend on how much he
thinks someone he gives the
capital to would earn for him
over the life of the capital
versus the probable amount
the Payers would give him for
the sale of the capital as
a luxury. That is a faster
payoff but could be far less.)
Finally, some things might
be a necessity in one place
and a luxury someplace else.
Since it is the "dead" of
winter as I type this, let's
consider skis. If one lives
in a city and goes to the slopes
in winter to ski, the skis
are going to be luxury items.
But if one lives in Alaska
in the wilderness then the
skis may be necessary to get
around. They may be an essential
part of one's survival gear.
Thus, the same pair of skis
might be designated a necessity
in one place and a luxury in
another.
(Nobody said life was going
to be simple. What I am describing
as "rules" here all
depend upon decisions made
by the people involved. None
of this is explicitly required
by the definition of non-POM
money. This is what I would
expect to happen in any non-POM
society, not what is "legislated" by
any legislature or by any Payer
organization. One would expect
practices to change and evolve
as the needs and circumstances
of the society change. Whatever
seems to work best is what
they will try to do because
that maximizes everyone's rewards,
monetary and social.)
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