so capitalism has an inherent flaw, in that those who are good at making a profit continue to do so, accumulating profit and power in the process. having attained their lofty position, it would be natural to protect those privileges, both for yourself and for your descendants. culminating in our current economic situation, whereby an exclusive few control the vast majority of economic power, and economic power controls everything else as the capitalist paradigm reigns supreme....
why is capitalism so revered? what does it provide that is so essential to our modern civilisation and society? again, not claiming to have any exclusive knowledge, and precious little research, however my opinion is that the true value of the market is the information it communicates - that being where scarce resources should be allocated to obtain maximum benefit. adam smith's invisible hand, pointing out to market participants where they can maximise their profit, and as a side-effect, where best to allocate those resources for the aggregate benefit of society.
however the invisible hand, while still ably fulfilling the task of maximising profits for the individual, is no longer providing as much benefit to society. i speculate that this reduced societal benefit is due to the transition from an environment of scarce resources (ie the vast majority of human history), to an environment that would be ample and abundant for all our needs, but for all the games we humans play which result in so much wastage and over-consumption. but again, easy to have an unsupported opinion, no real intention of backing it with research or evidence.
so any alternate economic system would need to provide this allocation signal, but in a way that doesn't result in profitable individuals hoarding the abundant fruit of their profitable endeavours. communication of information, seeing as we are currently in the 'information age', surely this is problem for which we can find a solution. the difficulty as i see it is - consistent with my concerns with communism - trusting any individual with the power to allocate resources. so clearly it cannot be a government babu, it either needs to be divorced from human manipulation, or democratised so that no individual can benefit.
however, this thought bubble will have to be revisited.
Wednesday, 31 October 2012
Sunday, 21 October 2012
alternate economic system
most of us, having been raised in a capitalist environment, having never been exposed to any other system, i expect find it difficult to imagine anything different. a higher level of government involvement in various industries we can picture, although in many countries even that is distasteful. the government fixing the price of money we are all used to - for some reason the free market ideology doesn't apply to money.
attempt to picture an economy not based on capitalism, i expect most of us would still subconsciously expect market based mechanisms to be involved in the majority of daily interactions. from electricity, to water, to food, business inputs, education, medicine, petrol, there is almost without exception a transaction, even if the markets are sometimes not competitive or free. but how else might it all happen?
one of my many vices is reading, and a good dystopian novel would be one of my favourite genres. one thing i like about them is how, in the post-apocalyptic world in which the novel is set, survivors will sometimes gamble using 'real' money. just months previously, those green dollar bills dictated most everything in life, but with the flick of an apocalyptic switch are suddenly rendered worthless.
money symbolises wealth and value only so long as market participants agree that it does - once that agreement is gone, it is just monopoly money, just paper, no inherent value except maybe for burning, or children's craft (or gambling). this criteria we judge ourselves by, our income, our net worth, which can make or break our happiness, marriage, that can dictate life or death depending on the medical coverage we can afford - all an illusion that remains because we all continue to believe.
the standard definition of money is a medium of exchange, a store of wealth. store of wealth i will go into another time, but a medium of exchange is based on trade, which is still based on capitalism. going back before artificial currency - gold, valuable commodities, or even a barter system, trade is still taking place (in theory) between two willing participants who seek to maximise their profit. if this profit motive is causing economic disparity (as i think, see 'capitalism' post), what other mechanism is available to get required resources where they are needed?
communism, i would suggest, has been tried extensively, and has extensively failed. i have very little knowledge of communism, but in my blissful ignorance would attribute its failure to two key problems: corruption, and the delusion that a government bureaucracy could do anything well. i have worked in government, lots of nice people, not so much stress, not so much urgency to perform, a whole lot of entitlement to a job for life. and i believe much higher levels of stress leave (fully paid) than the corporate sector. go figure.
i recall being instructed by senior management to hurry up and spend the full budget, otherwise we won't be allocated as much next year, which as a tax-paying citizen is just wrong, and best not to dwell on that sentiment being echoed in every department at every level of government in every country in the world. i am sure there are many government workers who truly do try to improve the country and provide the best possible service to the tax-paying public, but they would be the exception. governments are almost as much a parasite as the unions.
so i'm not going to suggest communism. need something new, i would suggest....
attempt to picture an economy not based on capitalism, i expect most of us would still subconsciously expect market based mechanisms to be involved in the majority of daily interactions. from electricity, to water, to food, business inputs, education, medicine, petrol, there is almost without exception a transaction, even if the markets are sometimes not competitive or free. but how else might it all happen?
one of my many vices is reading, and a good dystopian novel would be one of my favourite genres. one thing i like about them is how, in the post-apocalyptic world in which the novel is set, survivors will sometimes gamble using 'real' money. just months previously, those green dollar bills dictated most everything in life, but with the flick of an apocalyptic switch are suddenly rendered worthless.
money symbolises wealth and value only so long as market participants agree that it does - once that agreement is gone, it is just monopoly money, just paper, no inherent value except maybe for burning, or children's craft (or gambling). this criteria we judge ourselves by, our income, our net worth, which can make or break our happiness, marriage, that can dictate life or death depending on the medical coverage we can afford - all an illusion that remains because we all continue to believe.
the standard definition of money is a medium of exchange, a store of wealth. store of wealth i will go into another time, but a medium of exchange is based on trade, which is still based on capitalism. going back before artificial currency - gold, valuable commodities, or even a barter system, trade is still taking place (in theory) between two willing participants who seek to maximise their profit. if this profit motive is causing economic disparity (as i think, see 'capitalism' post), what other mechanism is available to get required resources where they are needed?
communism, i would suggest, has been tried extensively, and has extensively failed. i have very little knowledge of communism, but in my blissful ignorance would attribute its failure to two key problems: corruption, and the delusion that a government bureaucracy could do anything well. i have worked in government, lots of nice people, not so much stress, not so much urgency to perform, a whole lot of entitlement to a job for life. and i believe much higher levels of stress leave (fully paid) than the corporate sector. go figure.
i recall being instructed by senior management to hurry up and spend the full budget, otherwise we won't be allocated as much next year, which as a tax-paying citizen is just wrong, and best not to dwell on that sentiment being echoed in every department at every level of government in every country in the world. i am sure there are many government workers who truly do try to improve the country and provide the best possible service to the tax-paying public, but they would be the exception. governments are almost as much a parasite as the unions.
so i'm not going to suggest communism. need something new, i would suggest....
Friday, 19 October 2012
capitalism
capitalism has been great. for a significant portion of human history, it has provided a clear indication as to where scarce resources need to be allocated, and has provided adequate incentive (ie profit, or self-interest) to then allocate the required resources. this has benefited the individual, the customer, society, frequently mankind as a whole. humans would not be in nearly so good a position now, if it weren't for the benefits of capitalism.
however there have been periods of time when it hasn't worked so well. no doubt there are other contributing factors: protectionism, oil cartels, unions, political interference from both liberal and conservative sides - with many others that don't immediately come to mind. but in my short life time, i have experienced boom and bust, recessions, stock market crashes, sovereign defaults, financial crises, none of which reflect a stable and healthy system. and of course, these primarily financial phenomena lead in to various other spheres of human activity - poverty, persecution, unemployment, mental sickness, unhappiness, revolution, war. again, far too many to mention.
recently, it has occurred to me - there is nothing holy and sacred about capitalism and free markets. it is the dominant economic paradigm of our generation, but to bastardize a churchill quote on democracy - it is the worst economic system, except all the others that have been tried. specifically, i would suggest it is producing bizarre, even amoral, economic consequences, producing suffering for many of us where suffering is potentially unnecessary, and the logical consequence of capitalism is occurring before our very eyes - the growing differential between the haves, and the have-nots.
as evidence for the above charges against capitalism, i would offer the following. people are starving in many places in the world, cannot access medicine, have inadequate shelter, inadequate drinking water - all of which could be provided. we, the humans of the world, produce enough to more than satisfy the basic needs of the entire human race. but instead of satisfying these needs, there is cosmetic surgery, luxury brands, electronic gadgets, 5-star hotels, fast food. this is because the economic system, capitalism, dictates that we allocate our economic resources where profit can be maximised. there is no profit in feeding the 3rd world masses, but feeding time-poor westerners a salty, fatty, addictive hamburger - that is the highest aspiration capitalism can offer.
much of our daily life is driven by this model - our consumption, calories, work, housing, social mores, all is based on a foundation of maximising our income. in reality, for those of us not directly involved in food production (plus a couple of occupations like doctors and other services essential for prolonging life), everything we do is just a game, developed by humans, to relieve the boredom now that we don't need to hunt and gather. and despite the massive technological breakthroughs in recent centuries, there has been no reduction in stress and work levels - any productivity increase is offset by new 'games' that need to be done for us to earn an income, which will enable us to consume goods, calories, pay for housing, impress our friends, and hopefully save some for a rainy day or for the next generation.
the consequences of this profit driven system, is that profit accumulates at the top of the economic food chain. those that are very successful at making a profit continue to do so, accumulating more and more profit, more and more power, and being celebrated as the pinnacle of success because that is what capitalism is all about. and who can begrudge them - would we be different if we were the rich and successful? as with all of us, i expect the natural instinct is to protect and preserve your position, and then to protect and preserve the next generation. but when you control such vast resources, why stop at the next generation? you would plan in centuries, and use your resources to manipulate society, countries, politics, anything required to keep your legacy supreme.
the name of the blog - ample - is intended to reflect that what we now have, is ample. if resources could be allocated according to need rather profit, if so many resources weren't wasted in competition and if there was more cooperation, perhaps less people would be suffering. perhaps more people would be happier. perhaps without so much waste there would be more opportunity for ingenuity and innovation, perhaps there would be more freedom to pursue these objectives as well.
this blog will be a record of my thinking process, my insights, theories that have been half-thought-out and that are100% untried. and i expect it will go unread. but it may help me preserve thoughts that would otherwise go unrecorded, so why not.
however there have been periods of time when it hasn't worked so well. no doubt there are other contributing factors: protectionism, oil cartels, unions, political interference from both liberal and conservative sides - with many others that don't immediately come to mind. but in my short life time, i have experienced boom and bust, recessions, stock market crashes, sovereign defaults, financial crises, none of which reflect a stable and healthy system. and of course, these primarily financial phenomena lead in to various other spheres of human activity - poverty, persecution, unemployment, mental sickness, unhappiness, revolution, war. again, far too many to mention.
recently, it has occurred to me - there is nothing holy and sacred about capitalism and free markets. it is the dominant economic paradigm of our generation, but to bastardize a churchill quote on democracy - it is the worst economic system, except all the others that have been tried. specifically, i would suggest it is producing bizarre, even amoral, economic consequences, producing suffering for many of us where suffering is potentially unnecessary, and the logical consequence of capitalism is occurring before our very eyes - the growing differential between the haves, and the have-nots.
as evidence for the above charges against capitalism, i would offer the following. people are starving in many places in the world, cannot access medicine, have inadequate shelter, inadequate drinking water - all of which could be provided. we, the humans of the world, produce enough to more than satisfy the basic needs of the entire human race. but instead of satisfying these needs, there is cosmetic surgery, luxury brands, electronic gadgets, 5-star hotels, fast food. this is because the economic system, capitalism, dictates that we allocate our economic resources where profit can be maximised. there is no profit in feeding the 3rd world masses, but feeding time-poor westerners a salty, fatty, addictive hamburger - that is the highest aspiration capitalism can offer.
much of our daily life is driven by this model - our consumption, calories, work, housing, social mores, all is based on a foundation of maximising our income. in reality, for those of us not directly involved in food production (plus a couple of occupations like doctors and other services essential for prolonging life), everything we do is just a game, developed by humans, to relieve the boredom now that we don't need to hunt and gather. and despite the massive technological breakthroughs in recent centuries, there has been no reduction in stress and work levels - any productivity increase is offset by new 'games' that need to be done for us to earn an income, which will enable us to consume goods, calories, pay for housing, impress our friends, and hopefully save some for a rainy day or for the next generation.
the consequences of this profit driven system, is that profit accumulates at the top of the economic food chain. those that are very successful at making a profit continue to do so, accumulating more and more profit, more and more power, and being celebrated as the pinnacle of success because that is what capitalism is all about. and who can begrudge them - would we be different if we were the rich and successful? as with all of us, i expect the natural instinct is to protect and preserve your position, and then to protect and preserve the next generation. but when you control such vast resources, why stop at the next generation? you would plan in centuries, and use your resources to manipulate society, countries, politics, anything required to keep your legacy supreme.
the name of the blog - ample - is intended to reflect that what we now have, is ample. if resources could be allocated according to need rather profit, if so many resources weren't wasted in competition and if there was more cooperation, perhaps less people would be suffering. perhaps more people would be happier. perhaps without so much waste there would be more opportunity for ingenuity and innovation, perhaps there would be more freedom to pursue these objectives as well.
this blog will be a record of my thinking process, my insights, theories that have been half-thought-out and that are100% untried. and i expect it will go unread. but it may help me preserve thoughts that would otherwise go unrecorded, so why not.
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