Time to rewrite the rules of the economy

To survive, the game of business needs to update its rules
We Can’t Wait for an Invisible Hand. It’s Time to Rewrite the Rules of the Economy

Interesting thinking Tim, as far as it goes.

Unfortunately it doesn’t go nearly far enough, and misses the most important aspects of our age, which appear to me to be a series of interlinked ideas.

1/ Is the exponential increase of automation. Most people have now heard of Moore’s Law, a doubling of price performance of computation every 2 years. There are some aspects of computation that are doubling every 10 months.
Most people consider something that is only 0.1% of the economy insignificant.
To get from 0.1% to 100% is only 10 doublings – or 8 years.
Automation is already way past 0.1%.

2/ Most people are told and believe that market based economic systems are based on matching supply and demand.
That is untrue.
Markets do not measure demand.
Markets only measure unmet demand.
Consider the oxygen you breath.
You (and everyone else) has a massive demand for oxygen, it needs to be met by taking a breath every few seconds.
The supply of oxygen in the air is so abundant, that for most people all of the time there is no unmet demand, so no market price for air.
There must be unmet demand for markets to function, or in other words, markets demand poverty (unmet demand) for some significant fraction of society, in order to function.

3/ Most people are taught that evolution is all about competition.
That is untrue.
Certainly, in some circumstances, competition can be a powerful force in evolution.
What evolution is about is differential survival.
What that leads to is two general classes of strategies.
In contexts where there are sufficient resources for all to do well, then cooperation will do better than competition.
If there are insufficient resources, then those who compete best survive.

There is a general illusion that we don’t have enough for everyone.
That is false.
We could easily create automated systems to deliver enough goods and services to allow every person on the planet a high modern standard of living – clean air and water, nutritious safe food, energy, secure housing, healthcare, education, transportation, tools and toys (within reasonable limits).
The major reason it has not been done is that it would break the current system of economic control and slavery that dominates this planet, because for most people they would have no unmet demands, and no need to engage in economic activity.

4/ There is a persistent myth that people are motivated by competition. That is true only of a certain set of rather basic activities. Most of what people call creative activities are actually inhibited by the stress of competition (competition narrows the focus, closes the mind to creative possibilities).
Creativity flourishes in secure cooperative environments.
That has clearly been true throughout history.

All life forms are a mix of cooperative and competitive systems.
It seems clear that all major advances in life forms are the result of new levels of cooperation becoming stable – and as games theory tells us, raw cooperation is always vulnerable to exploitation by cheating strategies, and requires attendant strategies to prevent cheats invading – thus the truism – The Price of Liberty is Eternal Vigilance.

We have a narrow window of opportunity to take humanity as a whole to a new level of cooperation. Not one built on central control, but one empowered by distributed automation, distributed cognition and communication, and distributed trust networks.

Centralised networks are always vulnerable because they provide a single point of focus for cheating strategies to dominate.
Biology has long since established that the safest strategy is massive redundancy at all levels (and as human beings we all have many levels).

We are not short of either energy or matter.
The Sun produces enough energy for every person to have what humanity as a whole currently uses – very few people need anything remotely approaching that much energy.
Similarly with matter – we live on a vast ball of it, with other large balls in nearby space.
Most people only need a few tens of tons to provide all the things they want.

The thing to really get about very smart automated systems, is that they allow us to do a lot more with a lot less.

So we are nowhere near running out of stuff.

The scarcity many experience is created by the rules of the economic game many are playing – and is not a necessary aspect of reality.

What endangers us most is holding on too tightly to ideas that worked well in our past, but are no longer of positive value in our future. Markets and money are one such idea.

So yes – interesting article, with some very true aspects, and it also entirely misses the deeper and more relevant truths of our age.

[followed by]

Some of us have been consistent for decades in the need to meet the reasonable needs of everyone, and the improbability of any market based system ever doing that.

While it is true that no population can keep exponentially expanding forever, we do currently have the materials, energy and technology to sustain far more people than we currently have on the planet. We are just highly unlikely to do so in the current mix of strategies present.

There are many levels of threat present today, not least of all that of a runaway military industrial complex in the US, and in another perspective that is more effect than cause.

So we live in complex systems, complex times, with many subsets of systems that are past the boundary of complexity and into the realms of chaos that are not even potentially controllable.

And the logic of long term personal survival, at any and all levels, does seem to point clearly to a set of strategies that delivers abundance and security for all – however historically improbable such a scenario may appear.

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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