Evonomics – Bernie Sanders and Adam Smith

What Bernie Sanders and David Sloan Wilson Should Learn from Adam Smith

Does classical liberalism explain Norway’s success?

I definitely class myself as a classical liberal. My highest values are life and liberty.

I live in the country listed 3rd in the world in the Fraser Institute list of economic freedom.

I started from poverty, got the benefits of an education funded by the state, and built two businesses from starting small. I was never a big time money maker, my best day was a little under a quarter of a million (though it took me several years of work to get to that opportunity, and I have twice lost a hundred thousand when things didn’t go to plan). I have friends who have made well over ten million in a day.

I am definitely no advocate of central control, though group ownership can work – as we see in corporations, and in many stable commons property regimes such as those studied by Elinor Ostrom and colleagues.

I note that Smith clearly recognised the dangers of the tendencies towards aggregation of resource control that are inherent in market systems, and the need to actively counter them to achieve some sort of stability.

What Smith did not address is what we face today, the role of automation, and exponential technological development. I started working with computers 42 years ago, and have that length of experience of the exponential effects of digital technology. The first hard drive I got to touch was 2MB and cost as much as 6 new houses. Today I can buy one 4 million times the storage capacity for one thousandth the cost of a new house. A 20 billion fold change.

The value of exchange is becoming marginal.

We are still thinking that the outputs traditionally associated with human labour (intellectual or physical) are something scarce.

They are not.

We now have the technical ability to develop and deliver total automation of manufacturing, and to distribute that capacity.

The problem is, that doing so would break the need for exchange, break the whole basis of our economic system of exchange values.

We are very close to the point that using mechanisms based upon exchange values actually become the single greatest threat to both life and liberty, as people start to wake up to the reality that the only reason they are experiencing scarcity is the need to keep the exchange based system operating (because things need to be scarce for some for it to work at all).

Not very many people are operating at that level of abstraction yet, and a lot of people are experiencing extreme insecurity, at a time when the only real reason for them to experience such insecurity is the need to keep the economic system going.

The psychology of stress, and its effect of causing people to focus on basic needs, and to reduce the group they consider as human (like them) is well understood (thus creating risk for anyone existing outside that group – this is a fundamental driver of radicalism at all levels).

Delivering material security is actually a precursor to building higher levels of understanding and relationship.

We have the technical capacity to deliver such security, yet our focus on the values of exchange, which are fundamentally based in scarcity, work against the delivery of universal abundance.

Our Intellectual Property laws restrict our progress, not enhance it. A standard limit on IP of 2 years, with a maximum of 5 years under exceptional circumstances would be more appropriate at present. And I own and run a software company, and understand the cost to me, and weigh that against the security benefits to myself and the community as a whole.

When we have the ability to produce almost any material good, or any service, in universal abundance, the exchange value of all such goods and services must drop to zero (like oxygen in the air, arguably the single most valuable thing to any of us, yet of no monetary {exchange} value due to universal abundance).

Markets are nearing the end of their social utility.

Automation does deliver us the ability to deliver universal abundance of a large and growing set of goods and services.

The big question of our age, is how do we manage the transition from a system based on exchange values to a system that values life and liberty first and foremost? How do we change to a system where we do actually, in practice, and universally, value individual life and individual liberty? Surely, the manufacture and use of weapons that indiscriminately kill people, or even kill people on a very targeted basis, is contrary to the universal value of individual life!

As a classical liberal, who values life and liberty, I see that our continued reliance on the values of the market now poses the greatest danger to both my life and my liberty, in the medium to long term (30 to 100 year) time frame.

We can now realistically deliver (on a 10 year timescale) the two servants to everyone referred to in the 1978 conversation between Milton Friedman and Edward Lupinski (fully automated robotic servants).

It is clear to me in logic that we will develop the ability to extend lifespans indefinitely, that much has been obvious to me since completing my undergrad biochemistry studies 41 years ago. So a 100 year time-frame is very definitely in my personal self interest, as is a 1,000 (or one million) year time-frame (the discount rate on future returns is more than offset by current trends of exponential technological development – and the reduction in risk profiles such things make possible).

It is the conceptual field of our awareness that constrains what we see as possible, not reality itself.

I agree completely with Smith that markets were an effective organising principle in times of genuine scarcity, however, he did not envisage our ability to automate the manufacture and delivery of goods and services. He certainly did not live in a time where key technological factors were doubling in under a year. In his time, exponential growth meant 2% per year, with 3 doublings per century, not 120% per year (a factor of 10 every 3 years).

In his day, molecular level manufacturing was the preserve of living systems, now we are bringing our automated systems into that domain (certainly today they are tentative steps, and they are steps).

Our economic thought has to start to catch up to our technological reality, if it wants to retain any relevance.

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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