Capitalism or communism?

Question of the Day ~ May 23, 2013 Capitalism or Communism

What should replace capitalism or communism?
What would be the meaning of intrinsic value in your interpretation of a utopian dream?
Alternatively, if you are an advocate of capitalism or communism, please explain what you see as the pro’s and con’s of the system and how you would improve it?

Capitalism is firmly based in the market model of valuation and all existing forms of communism are also firmly based in a market model.
Markets are great tools for allocating scarce resources, and the competition of the market can also act as a source of innovation and change.

And markets have a major systemic flaw when viewed from the perspective of human welfare.
Markets are the product of supply and demand. Economists are used to dealing with these notions from the perspective of supply and demand curves. Few (if any) economists look at the source of those curves.

Each of us as individuals will have a valuation we place on things. Exactly how we come to those valuations is a very complex and mostly subconscious process that factors together all the different sources of value that we as individuals have.
We have various values that come largely from genetics, many of our likes and dislikes of tastes and smells in particular, and to a lesser extent, colours and sounds and textures.
We all have survival values – things we see as essential to our survival.
We all have many different values that we simply pick up from our cultures, and never seriously examine or question. These will include other aspects of our likes and dislikes of tastes and smell and sounds and sights and touches, and will also include a vast array of ways of being (different forms of responses to different contexts we find our selves in – broadly classed as “socially acceptable behaviours”) and the values derived logically from them.
We all have different ways of thinking, different contexts of value, that we get from culture.
We all have our own choices, choices that we have made at times and places in our lives that have altered our default cultural conditioning in subtle and not so subtle ways.
We have aesthetic values – usually a subset of cultural values, and not always.
All of these myriad values go into the subconscious milieux that leads us toward giving a particular value to a particular thing at a particular time.

Then there is the supply side.
How much of the thing is there?
How much do we need it now?
How likely is it to be more cheaply available in the future, and what is the cost benefit to us.

On this side of things, something that is really abundant, has no value in a market – because we all have all we need already.

Markets value scarcity.

The less there is of something, the more we are willing to pay for it.
This is all very sensible in terms of allocating scarce resources, but makes no sense in terms of incentivising abundance.

There is not, nor can there logically be, any incentive in a market based system (and money is a market based measure of value, so read here any system that uses money) to deliver abundance of anything to everyone. There is always a systemic incentive to create scarcity in some form and thereby drive up the market value and thereby create more profit (the difference between cost price and sale price).

For most of human evolution, we have lived in times of scarcity, where there has been competition for the resources of survival, and small tribal groups have adopted in tribe cooperative strategies to counter out of tribe aggression in the race for resources.
Coming from that environment, markets were a great tool to incentivise production and the creation of new resources.

However.
We have now come to an age where we possess the technology to allow us to produce almost unlimited quantities of almost anything.
Our ability to automate is now extending to the processes of production and automation themselves (ie we can create machines that create and maintain themselves – under orders from us).

We have the ability to provide everyone on the planet with all they need to survive and prosper; yet we are trapped in a cultural paradigm (money and market valuation) which values such abundance at zero.
It is very difficult for most people to think outside of money when valuing something.

Both communism and capitalism are centrally controlled. In communist states this is done by the central party committee. In capitalist states it is done by the political-military-corporate complex. And in both sets of systems, the underlying systemic incentives are those of the market, and there is no real incentive to give everyone their independence.

I am in favour of a system that guarantees to everyone all of the necessities of survival.
Under my system, freedom is conditional upon social responsibility, and acknowledging the interdependence of all of us on each other and the systems that support us (natural and man made).
To the extent that we each as individuals demonstrate our willingness to be responsible on each new level of awareness of those relationships, we would gain the freedom to be free moral agents within that realm.
The choice of morality is our own, what is not negotiable is the right of all others to exist, and their rights to their own freedoms, and the need to negotiate where there is conflict in the exercise of those freedoms.

In this technologically empowered world, there would be individual security at levels never before seen in human evolution, in large measure derived from massive redundancy of technology at all levels.

We have the technical ability to deliver such a world, and there will never be a market incentive to do so (in fact there will always be enormous market incentives to prevent such a thing ever happening).

So bringing this possibility into reality involves creating an ability for most people to think beyond money and markets, and to see our own personal long term interests as being worth the effort of going through a roughly decade long transition period.

About Ted Howard NZ

Seems like I might be a cancer survivor. Thinking about the systemic incentives within the world we find ourselves in, and how we might adjust them to provide an environment that supports everyone (no exceptions) - see www.tedhowardnz.com/money
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