Fair Economy

Question of the Day, May 15-16, 2015, Fair Economy

Do unto others as you would have other do to you…what is a fair economy?

As soon as you base systems on markets, fair disappears.

Markets do not have inherent stabilising factors.

Small advantages tend to magnify.

Money accumulates.

The whole concept of markets and exchange is contrary to the notion of fairness.

The idea in a market is to get more value than you give.

If we can get away from the classical ideas of market based economics, we can move to an age of technologically empowered universal abundance, freedom and security.

Markets are not fair.

We cannot make them fair, as they are founded in asymmetries.

It seems to me that a “fair economy” is a contradiction in terms.

[followed by]

Hi Paul

I don’t quite see it the way your words seem to me to imply.

To me it is an issue of systems, not the people within the systems.

Those at the top of the heap could just as easily be any of us in a sense, given a different accident of circumstance and genetics.

To me, it is not about the people within the system, but rather the sets of unexamined assumptions and assumed truths that deliver the existing system.

It seems clear to me that most of our cultural and political systems evolved in times when scarcity was a genuine persistent feature of life for most people much of the time, and those systems were a genuinely beneficial response to that set of conditions. However, that has all changed with the invention of automation. We can now automate any process, and deliver freedom to everyone, yet our systems are not adapted to deliver that.

We are in a time of transition.

Transitions are difficult.

Genuine major transitions are quite rare.

When a major paradigm changes, conservatism breaks.

Under normal conditions it makes sense to follow the distilled wisdom of the ancestors, but at times like this, when something quite genuinely novel happens, that rule breaks – it no longer works.

That can be profoundly dislocating for many people.

It is a time that requires many leaders, at many levels, in many places.

It is a time for tolerance, for trust, for cooperation.

That at least, is what appears intuitively obvious to me, from my particular vantage point of some 50 years immersed in the details of how biological systems operate, and some 40 years of working with all levels of computer systems and politics (at local, regional and national levels).

[followed by]

Hi Paul

You wrote “the end to universal prejudice, the end to intolerance, inequality,poverty are contained within the credentials of a better universal contract of validation of all rights though progressive economic forecast, eliminate fear in the avenues of change equal and fair”, and much of that I agree with. I agree that we need tolerance, an end to poverty, an end to fear, an end to prejudice. These things we agree upon.

Where we disagree is the how.

You wrote “Why not project economic equality into the future, what is wrong with this idea?”

For me, it is clear that once we accept economics as currently practised, we have already lost.

For me, it is clear that it is the incentive structure of the market, the fact that value in a market is defined by the product of two functions, commonly called supply and demand; but that phrasing hides their real meaning.

Demand is in a sense how much we really need something (rather than how much advertising or culture has convinced us we need something).

Supply is how much of it is there.

If supply exceeds demand (in all cases) then the price drops to zero. This is the case for oxygen in the air. We all need it, some litres of it every few seconds, every day of our life; yet it is there and available to each and every one of us, so the price point is zero.

The word demand is only half of the case. What markets really value is unmet demand. If there is unmet demand then that will require an exchange of values – a price, which allows for profit.

We could quite easily develop automated systems to meet the reasonable demands of every individual on the planet for fresh nutritious food, clean water, secure and comfortable housing, education, transport, energy; yet we don’t, because to meet all such demands takes those things out of the realm of the market – they become free goods, like the air is now.

To harness the energy of the sun directly could give us energy as easily as the atmosphere gives us the oxygen in the air to breath. Our current generation of solar cell are already about 6 times as efficient at producing electricity as any biomass based system, with room to improve on that by a factor close to four (we already have solar cells deployed on satellites that are more than 3 times as efficient as those we sell commercially today).

So far from seeing markets and money as part of the solution, I see them as the biggest part of the problem – as the value they create is always zero for any universal abundance of anything.

Markets give the illusion of prosperity for all, and cannot ever deliver on that illusory promise.

We have technology that can deliver on the promise, and if we hold on to the concepts of markets and market values (money) the incentives that come with markets will strongly incentivise the destruction of abundance.

As to “truths we all share” – that to me is an even bigger myth, the greatest illusion of them all – the very idea of truth.

It seems highly probable to me that the very notion of truth is an illusion; a simple approximation to a much more complex set of probability distributions about the coherence between our models of reality and reality itself.

You ask “What are these assumed truths Ted?”

I have given you a couple already, I could give you thousands more.

We must all have such things during our development, they are a necessary part of the personal experience, and the sooner we can transcend them the better off we all become.

I agree with you that our current economic system is “not fit for purpose”, and I go a level beyond where you have gone. I say that just giving people equal shares of money would not solve the problem. The problem is not a lack of equality, very few people actually want equality. The major issue lies in the very heart of the system, the market, the system of exchange values in a competitive environment.

We have the tools to cooperate.

It is valid to characterise all major advances in the complexity of evolved systems as being the result of the emergence of new levels of cooperation.

Automation allows us to take that to the next level – of universal cooperation, universal abundance.

Markets can never provide that.

Markets require a price point to work, and there are always incentives within a market based system to push that price point up to a point that some miss out.

I ask you – do you really want equality.

Do you really want everything the same as everyone else?

Equality is not the right word.

People don’t want equality, they want a fair and reasonable distribution, sufficient to meet all of their reasonable needs, plus a bit.

[followed by]

Hi Paul,

For me, justice is not something that the universe brings to us, it is something we bring to the universe.

The universe just seems to be – as it is and as it isn’t – devoid of justice.

Justice and value seem to be human constructs, emergent properties of these amazing brains in our heads, instilled with culture and language and with emergent awareness at what appears to be a potentially infinite series of levels.

Looking “out there” for justice doesn’t seem to be powerful – for the most part it isn’t there.

What seems most powerful is looking to the highest level constructs we can create, and bring to those the intention of justice, in the context of our creative expression.

If we do this, then we can bring justice to reality.

Expecting reality to deliver us justice seems to me to be backwards – and I understand that it is a part of many cultural constructs, and to me it makes no sense. I can understand why it made sense in the past, and with the experience and constructs that I have, it makes no sense to me.

So for me, creating fairness is a commitment, a personal creative act, not something to expect from reality, rather something to aspire to being in reality.

It seems that we as human beings have certain basic needs – food, shelter, energy, transport, communication, healthcare – that once met enable us to explore other levels of being, to exercise our creativity and choice.

Markets (and all their derivatives like money) are culturally evolved entities that came form a stage in our development where most things were genuinely scarce. They made sense in that environment.

We have now evolved our technologies to a point that we can automate any process (it is 42 years since I learned how to program computers, and for the last 28 years I have run a software company – where I am the company in a sense – I do everything, from design to building to testing to documenting, to support). I have worked for large organisations where individuals specialised in very tiny parts, that can bring some power, but also significantly increases the risk of major failure modalities due to no-one having a total overview of the entire process.

To manage large projects, one needs to be able to hold the overview, and also to be able to deal with any and every level of detail if needed (in communication with the specialists at that level). Very few seem to manage that. Large software projects are renowned for failure because no one actually has that overarching & detail role.

One of the things I have learned is that very few people in business are actually consciously aware of exactly what it is they do, because the doing of it is just so much a subconscious part of who they are.

The trick in making projects work is in actually figuring out what it is that is needed, and delivering on that, irrespective of what it is that the people involved think they want.

It is amazing how many top level people in the software business work that way – completely contrary to all the systems, and it works – where the systems often fail (simply through ignorance).

Equality to me is not an appropriate word.

Ailsa (my wife) owns crampons and ice axe, and loves climbing mountains.

I experience paralysing fear (which I can override, and get little enjoyment from doing so) in climbing ice faces.

Ailsa on the other hand experiences fear in boats, where as I get great joy from synchronising my body to the vessel, and my senses to anticipating the wind, waves and currents, to get the vessel where I intend when I intend.

We don’t want all things the same.

We want access to the things we want.

We need our reasonable needs met – and equality isn’t a good word for that – it has too many connotations of sameness – and we are not the same, we are diverse.

Markets are tools that are fundamentally based in inequality. Markets require unequal distributions of relative abundance and scarcity to function. There is no market for air – air is universally abundant. Air has zero market value.

There is no possible stable mechanism to use markets, or market value (money) to deliver universal abundance.

To deliver universal abundance of the essentials of life demands a system that is outside of markets, it demands that we adopt values above market values.

If we just rely on markets, there is no value for the delivery of clean air. And when people started dying in cities there was a demand for legislation to clean up the air pollution. Markets could not do that.

Very few people can yet clearly see that the very concept of markets stands between us an the peace and prosperity that most of us desire. We are enculturated to think in terms of money when it comes to material values.

And it cannot work.

Markets, money, cannot deliver universal abundance.

We can.

We have the technology.

We have the systems and tools.

We just need to get enough people to break free of the unseen bonds of unseen assumptions.

And it isn’t easy.

So many culturally evolved systems to keep people within known systems – like the idea of faith, which is an idea that once accepted, demands the dismissal of all evidence to the contrary. It’s kind of a neat trick in a systemic sense, as a programmer and games theorist I have to have a certain respect for the simple elegance of it, and in another sense it is little different to a virus; something that we have an “immune system” for (called curiosity).

So I agree with you that we need to deliver systems that empower every individual (no exceptions), to do whatever they responsibly choose, and responsibility in this sense includes a universal respect for the life and liberty of every other sapient individual (human and non-human, biological and non-biological), which necessarily involves a respect for the systems that sustain them (both biological {ecosystems} and technological).

It is not a trivial exercise.

There are no clear and simple boundaries.

It involves constant uncertainty, calls for constant good will, constant tolerance.

And it seems to me to be both achievable, and worth the effort to achieve.

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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