Presenting SORA, NARA, DIRA, and FIRA

In a previous post, we explained our proposed online platform which implements Adam Smith’s free trade system as Social Resource Allocation or SORA, which Non-Arbitrary Resource Allocation or NARA is a part of. The other parts of SORA are made up of Disaster Resource Allocation or DIRA and Financial Resource Allocation or FIRA which all connect together to form a scalable ‘free’ trade system.

 

 

  • SORA or Social Resource Allocation is based on Book 1 of the Wealth of Nations and in Chapter 9 of the Lectures in Jurisprudence. Its goal is to increase the circulation of goods and services directly by reducing the reliance on money (which Smith said was a very expensive tool to use for circulation):

 

“The worth of a piece of ground does not lie in the number of highways that run through it. Similarly, the riches of a country does not consist in the amount of money used to circulate commerce, but in the great abundance of life’s necessaries. We would greatly increase our country’s wealth if we could find a way to send the half of our money abroad to be converted into goods, and supply the channel of circulation at home, at the same time.”

 

  • NARA or Non-Arbitrary Resource Allocation is based on Books 1, 4, and 5. Its goal will be to scale SORA, to be used to circulate goods and services quickly between manufacturers, resembling a just-in-time system:

The wholesale dealer affords a ready market to the manufacturer by taking the manufacturer’s goods as fast as the manufacturer can make them. It enables the manufacturer to keep his whole capital constantly employed in manufacturing. He can manufacture more goods than if he sold them himself to end consumers or retailers. The wholesaler’s capital is generally enough to replace the capital of many manufacturers. This intercourse between the dealers and the manufacturers interests the owner of a large capital to support the many owners of small capitals. The merchant is interested in assisting the manufacturers in their losses which might be ruinous. 59 The same intercourse universally established between farmers and corn merchants would equally benefit the farmers. The farmers would be enabled to keep their whole capitals constantly employed in cultivation. In case of any accidents, they would find that their wealthy corn merchant customer has an interest and the ability to support them. The farmers would not be entirely dependent on their landlord, as at present. It is not very easy to imagine how great, extensive, and sudden would be the improvement to the entire countryside if it were possible to establish this intercourse between farmers and merchants universally and all at once: if it were possible to withdraw the nation’s whole farming stock from other employments and divert it towards land cultivation and if it were possible to provide another, almost equally great, stock of trading to support this great farming stock.

 

  • DIRA or Disaster Resource Allocation is based on Book 4, Chapter 5: Digression on the Corn Trade and is a customized version of SORA. Its immediate goal will be disaster relief and its long term goal will be disaster reconstruction and to rebuild disrupted supply chains (for example, after the 2011 East Japan Earthquake)

As the freedom of the inland trade is the best palliative of a dearth and the most effectual preventative of a famine, so is the freedom of the exportation and importation among the states of a great continent. One part of the continent will be less exposed to calamities the larger the continent and the easier the land and water communication through it. The scarcity of one country would be relieved by the plenty of another. But very few countries have entirely adopted this liberal system.

 

  • FIRA or Financial Resource Allocation is based on Books 2 and 5, Chapter 3. It will be a scaled up version of NARA to be used for country to country trade, acting as a clearing system, following the requirements of Adam Smith and that of John Maynard Keynes regarding the International Clearing Union. Its immediate goal is to stabilize the currency system so that currency speculators will be less able to attack currencies. Its long term goal is to allow countries to pay off its national debt by paying in kind. This can solve the Greek debt crisis without needing austerity:

79 It has been said that the Americans have no gold or silver money. Their interior commerce is done by a paper currency. Its gold and silver are all sent to Great Britain for the commodities they receive from us. Without gold and silver it is impossible to pay taxes. We already get all the gold and silver which they have. How can we draw from them what they do not have?

87 It is not the poverty of the colonies which creates the present scarcity of gold and silver money.. It is not because they are poor that their payments are irregular and uncertain, but because they are too eager to become excessively rich.. It might be unnecessary to remit any part of the American revenue in gold and silver. It might be remitted in bills drawn on and accepted by particular merchants or companies in Great Britain to whom some of America’s surplus produce was consigned. Those merchants and companies would pay into the treasury the American revenue in money after receiving the value of those goods. The whole business might frequently be transacted without exporting a single ounce of gold or silver from America.

 

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