Third Earth is a model of how things ought to be. Third Earth is a Utopian World. The Third Earth model was developed to give a better understanding of how the world ought to work.

Exchanges are a Third Generation Market or what is called a Progressive Market. Third Generation Markets have no need to restrict credit because the issuance of credit does not create risk as it does in First and Second Generation Markets. Credit is not a zero sum quantity that eventually gets used up and is no longer available nor does it expose us to default as it does in First and Second Generations Free Markets. Exchanges give credit when and where needed.

The concept of Third Earth helps us to understand the Free Market and the importance of distinguishing which sort of Market we are actually talking about.

3rd Generations Markets use cash not debt. Credit and cash differs from debt. Credit is extended equity. A person who has equity has credit. Debt is the inverse of credit. Debt is the use of credit owned by and owed to a third party. This is the orgin of Couble Entry Bookkeeping.

First Earth is a Direct Exchange or barter market limited by the individuals capacity to absorb risk. Doing business by means of direct barter and reciprocal obligations as in tribes and civil society limits the amount of business that can be done. Direct Barter serves as the economics of First Generation Markets.

Second Earth is a Free Market. Participants in a Second Generation Free Market compete and by the nature of competition they view the success of a competitor as directly hurting their own possibilities of winning. Second Generation Free Markets are limited by their dependency on debt. The market can absorb only so much debt and risk. Lending becomes a zero sum game. The more money lent the greater the risk and the less value a given dollar has. 

Third Earth uses cash it is limited only by what it has the more it produces the more it is able to produce. Third Earth tends to grow exponentially.

 

revised  October 15, 2013

 



Third Earth