[From Bill Powers (2001.11.18.1124 MST)]
For Bill Williams and other programmers ---
I see I forgot to CC this to the net, so here it is again, Bill -- sorry to
waste your space.
Attached is CP008.pas, which wraps up my thoughts so far on an interacting
consumer and producer. Bill, you will be glad to see that the output of the
consumer control system is a rate at which "transactions" occur, and Plant
transactions are always equal to Household transactions. Each transation
conveys some number of goods (the magnitude of the transation) out of plant
inventory and simultaneously into consumer acquisitions, and the price of
the transaction decreases consumer cash (called savings) and
simultaneously increases plant cash (called reserves). So the transfers of
goods and money take place instantly, during each iteration, as you say
There are no provisions for anything fancy like investments, and wages and
capital income probably aren't treated right yet. There is 1 plant and 1
The consumer, who controls the variables making up a "household", has two
goals: a goal for the store of goods acquired, and a goal for not spending
more than some specific amount. I think this part needs a little more work.
The goal settings are adjustable, and would eventually be set by
The manager, who controls the plant, has goals for the monetary reserve R
and for inventory V. Inventory is controlled by adjusting the price of
goods, and the reserve is controlled by varying Wages. This, of course,
could be made more complex. For example, if inventory were too high, the
inventory error might be counteracted by changing both wages (or number of
workers) and prices, and ditto for the Reserve error. But I like to start
simple and see where we are before adding complexities.
The control systems, I believe, will, through their interactions, create a
relationship between supply and demand that will equilibrate automatically.
A circular monetary flow will be established, and production (and wages)
will settle to the state where all that is produced is consumed, with some
amount in inventory, and nonzero cash reserves or savings will be build up.
I think it will prove tricky to make sure there is enough money in the
system to keep anything from hitting a limit. I'm trying to leave banks out
of it, but they may be necessary to provide new money when needed.
There is noithing in the system yet to create growth/contraction, and
negative savings or reserves (borrowing) is not allowed. But one thing at a
Cp008.pas (91 Bytes)