Distributed Market Substitution 2018

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The OSE Change Model calls for distributed market substitution - the substitution of common goods and services with efficient ones. The assumption here is that any enterprise that is not open source is not efficient. And the definition of 'efficient' matters - efficient must be in an integrated sense of taking care of the environment (planting trees, regenerating land, no pollution, no resource degradation), taking care of people (no slavery, alienation, violence; educates people), and taking care of the economic prosperity (right livelihood).

For an enterprise to be efficient all social, environmental, and economic terms - there are some needs:

  1. It educates. Education systems will continue to create disparity as long as proprietary information exists, because access is limited whenever information does not flow freely.
  2. It takes care of the environment
  3. It takes care of economic prosperity

Take a case of centralized production and why we believe that proprietary production cannot compete with open source. Production is increasingly information rich. And information can be shared freely at zero economic cost (Rifkin). Thus, more access is available on a local scale - which suggests that the limit of the economy as information becomes free is economic localization.

What is economic localization? It is the local production of goods which can be produced efficiently in the local area.

Is there a case that centralized companies will be replaced by larger numbers of smaller companies? In the world of megacorporations this does not seem the case - but from a deeper analysis it appears to be the only logical end.

For local production to happen, high quality plans are required. And so are open source productive machines.

In the early 20th century, there were thousands of car companies in the USA. That changed to 3 biguns today, and 27 total including minor manufacturers.

But is there a case for the open source version to arise in every city of 100,000 people and up? Yes, because that distributes wealth. That would mean thousands of manufacturers.

What would life look like then? Before that - is this feasible?

The question is - are there now 2000 entrepreneurs available that can run these enterprises - or is it really that there is only 20 entrepreneur CEOs that are available in the talent supply?

And how are the numerous entrepreneurs incubated? Do they exist, or would people rather be employees?

The requirements are:

  1. Their performance to cost ratio is higher than industry standards
  2. Their performance to cost ratio is 10x better than industry standards

That's it. This includes usability, service, environmental aspects, social aspects (more wealth distribution), etc.

Why Distributed Market Subsitution (DMS) is Inevitable - Or Not?

The biggest questions for DMS are:

  • Can efficiency be obtained on a small scale? With automation and open source tools - there is little doubt that this can be obtained. People can now make Air Bearings in their garages - the foudation of digital age technology
  • Can materials be processed on a small scale? Yes, the village scale is an appropriate scale, and we have initial calculations for steel and concrete that eco-steel and eco-concrete can be produced as such.
  • Are there entrepreneurs willing to train as Open Source Ecologists? Common wisdom says no, but unreasonable wisdom says yes. It's a question for an entrepreneuer to solve.

But there are proofs of concept that OSE must still document to demonstrate feasibility points of complete DMS.

  1. Metal production on a small scale - 200kW furnace - can it compete with steel mills in terms of efficient production? Initital calculations at Technological Recursion indicate that steel can be produced more cheaply in a 200kW microfactory than in a centralized steel mill - all things including transportation and overhead considered.
  2. Production of heavy machines is about 6x more efficient in a 4000 sf microfactory than in the largest factory in the world - according to first-principle calculations at Productivity of the Tractor Industry
  3. Demonstrate that high-tech production, complete line from sand to PV panels is feasible in a 10,000 square foot facility, as applicable to distributed production in all cities of 100k or larger size

Training Entrepreneurs

The questions are:

  1. Can entrepreneurs be trained? Yes
  2. Is it efficient to find and train entrepreneurs? Possible.
  3. Can efficiency on a small scale be created at the level of $1k/day of economic output for an open source microfactory?
  4. What is the personnel model - hiring independent contractors?
  5. What is the vetting process? Must be able to select for hard work, respect for valid authority, learning capacity, ability to problemsolve, more.
  6. What is required for a 1 year immersion? Curriculum, proven business model, proven scalability of business model, operations.