2005-02-20

Debugging society - part one

Debugging society - part one:

Thoughts on free markets and a capitalist economy

I believe our current economy and capitalist system to be deeply flawed, unjust and ultimately doomed. Let me state a couple of the reasons why:

It's flawed because it encourages all the wrong mechanisms and motivations. Free market advocates quote the fundamental mechanism of supply and demand and competition as the driving forces that keep the system healthy and alive.

Competition is what I call a destructive motivator. Meaning that to thrive in a competitive market it is to your advantage if your competitors (opponents?) struggle. This is not a healthy situation, not productive for society as a whole. Cooperation on the other hand is a constructive motivator. It is good for you if your partners thrive. If competition is the only viable motivator (as seems to be assumed) how can it be that even in a capitalist system the greatest leaps in productivity come when people cooperate? Rebuilding after a war, causing “economic miracles”? Building up to a war? Why, if competition is the only viable option, do we expect friends and family to work by wholly different and opposite principles?

Supply and demand is a broken system as well. There are lots of things that are in huge demand and are not in the hands of capitalism to supply (rightly so). Think about our natural resources like air and water. The demand is huge and never-ending. Yet at the same time they have no monetary value attached to them. Which means it’s not, cannot be, in a capitalist’s interest to invest in, or even just to conserve them. But the alternative also isn’t possible. We cannot attach a price value to natural resources as that’d mean poor folks would only get three breaths a day or something…

Another key observation is an individual worker's productivity. In previous centuries, when work mainly consisted of manual labour, all workers were pretty much equal. Sure, if you put in twice as many hours as your neighbour or are twice as strong as him you might manage to work twice the land he does. But basic physical principles prevent huge differences in work productivity. Not any longer. Technology has changed all that. A farmer using modern machinery can easily be a hundred times as productive as one that doesn't. A logger with modern equipment cuts down a whole forest in the same time even Hercules needs to cut down a single tree with his axe. A good software developer is light-years ahead of a bad one. This increase in an individual's productivity is a good thing. It is enabling. Only because humanity invents ever more powerful tools do we progress and are able to sustain our numbers. And yet, capitalism punishes these advances. Oh sure, the one productive farmer is rewarded for his work. Yet the 99 others that are now without work are now without work- read: unemployed. This too, should actually be a good thing, because they are now free to pursue other venues. Yet their choice of alternative occupations is severely limited by what the market supports. Unemployment is only bad because it is made so. Think about it for a second: How often did you say “If I only had more free time I could…”. Unemployment is the ultimate in free time. Granted you need a system in place to keep the 1 worker that supports the 99 unemployed happy and working. The current system’s answer is to punish the 99 and make them all compete for the 1 worker slot. Is there really no alternative? More on this in another post (as it is a topic that interests me very much because my job as a software developer is basically making other people’s jobs superfluous).

It’s unfair because the old saying of money breeds money is just all too true. I think I don’t even have to argue this point much. Once you have a million it’s easy to make the next. Even if you didn’t even deserve (earned with your own labour) the first to begin with. It’s unfair because it actively sustains and supports the current global imbalance. It’ll never be in our best monetary interest to share our resources with the poor, yet it is in our interest to use their labour. It’s unfair because work is valued crassly to the advantage of the already rich. The further away your job is from work that is necessary, from work that actually must be done, the more money you’ll get for it. Imagine that! The more needless and dispensable your job is the more money you’ll get for it. Someone working the fields until his fingers bleed every day of his life just to support his family doesn’t even compare to someone working the stock market 20 years of his life and retiring early. Someone selling lottery tickets earns more than the local bakery… I’m lucky; I’m pretty much at the top of this chain. I enjoy a very high luxury standard of living for typing stuff on a keyboard each day without any real risk of starving or even losing my standards. But is this fair? Should this be so?

It's doomed because of all the reasons stated above (individual productivity increasing through technology, money piling in fewer and fewer places) and because it’s already failing in a downward spiral. Take a look at the world today. How many are we? 6.000.000.000? Common wisdom has us believe that free market capitalism is the best option, the survivor, the winner, the dominant. I’d go so far to even argue that point. Seriously, of those 6.000.000.000 people – how many do even participate in capitalism? How many of them have more than a dollar a day at their disposal? Less than that and you do not really participate. I bet if you view it that way capitalism doesn’t come out all that well. And if I had to guess again I’d say the group that’s not actively participating in, but just being controlled by, capitalism is increasing faster than the other one.

Disclaimer: I don’t have the slightest clue about what I’m talking here. These are all just personal observations and first stabs at refining them into some more or less coherent arguments. If you agree/disagree/have strong opinions on the topic yourself – feel invited to cooperate and shape my views ;-)