Tag Archives: Capitalism

Money Can’t Change The World

imgresTwo people are stranded on an island. One person has a trillion dollars in cash and the other has nothing. It doesn’t matter if the trillionaire pays the other person one dollar or a trillion, the other person will not be able to build an airplane to get either of them off the island.

The above example also applies to the entire world population. An infinite amount of money does not mean an infinite amount of output. If we want to change the world we must understand that money can’t change the world, only human allocation can. If we want to cure aging, for example, we need to have more researchers. So far money has been our best system for human allocation. There is, unfortunately, not a very strong connection between changing the world and making money. A person in Africa building wells that will save thousands of lives might make significantly less than a Starbucks franchise owner.

To fix this problem involves mixing both capitalistic and socialistic ideals. Money that is collected in the form of taxes need to be distributed based on performance of philanthropic capability. This of course is currently faux pas because anyone who is doing charity work shouldn’t be making good money and this is completely backwards thinking. If money is our best method for human allocation then people doing things to help the entire world should make the most. Philanthropy should be a competition; we should be competing over who can feed the most people.

Bother conservative and liberal ideology are incorrect in regards to economy. While private enterprise can create quality, it cannot create wide spread quality. In contrast, while governments can create universal services, it cannot create universal services at peak quality. The best political system is one that utilizes socialism for infrastructure and capitalism for quality services on top. Infrastructure includes everything that allows humans to physically survive; these  include water, air, shelter, military/police, food, healthcare, roads, fire fighting, and garbage collection.



Marx Promoted Capitalism Accidentally

The biggest mistake Marx made was informing the group he referred to as the  proletariat of what they would ultimately do. Marx believed that a series of events would occur which would ultimately lead to socialism and communism all fueled by the engine of capitalism. Capitalism would eventually turn over after a widespread proletariat revolution and there was a high probability this would of happened organically but because of activism it stopped.

Instead of a wide spread revolution what you got was micro revolutions that occurred from company to company in the form of unions. The unions demanded higher wages and then got them. This effectively increased the standard quality of life for the average proletariat which made a wide spread revolution improbable and most likely impossible.

Marx believed, some what as I do, that as the means of production got better this would slowly make capitalism collapse in on itself. If you get good enough at producing things then less humans are needed and less will have jobs and ultimately this group may become cohesive and demand the abundance. The biggest irony is that the biggest hurdle to a socialist/communist revolution is greed by the proletariat. By visualizing a socialist utopia, the proletariat instead of letting capitalism run its pure and absolute course which would of lead to what they wanted instead demanded the changes now, the problem is that society is not actually at a point where it could ever support something like pure socialism or communism. We don’t have super abundance.

If you need to wait 10 minutes for bread, you just spent 10 minutes of your total net worth or the cost of the bread was 10 minutes.

Super abundance means that if the means of production were taken over by a co-operative there would be so much there would never be a wait. If you have to stand in line to get something that is your personal currency or money, it doesn’t matter that it does not have a physical representation, it’s still a currency. Let me elaborate, if you need to wait 10 minutes for bread, you just spent 10 minutes of your total net worth or the cost of the bread was 10 minutes. If you want to get a new car and the wait is 6 months, the cost is 6 months. If there is any form of waiting super abundance does not exist. The problem with these systems is that the people in control end up with more time (currency) because they can get things faster. It’s capitalism but instead of rewarding innovation or passion, it rewards authority. This is the problem with all modern day political philosophies on socialism and communism they negate the fact that currency will always exist as long as there is scarcity. The only difference between communism and capitalism is that in communism the currency is in time and the people in charge of the time didn’t have to do anything to get more of it. This will of course lead to a drastic decrease in quality of life because corruption is much harder to prove.

The only difference between communism and capitalism is that in communism the currency is in time and the people in charge of the time didn’t have to do anything to get more of it.

In order to have a wide spread revolution you would need a wide spread discontent. The problem is as the means of production increases the capitalists can continually to marginally increase the standard quality of life for their workers to make sure a revolution never happens. However, even if you could have a revolution what would happen? It might work temporarily but because of the issues stated above, and the lack of super abundance, people’s quality of life would drastically decrease which would ultimately lead people back to capitalism and proclaim these other political systems do not work.

The dream, in my opinion, of Elolight is super abundance where we can get anything we want or need in almost an instant and there is a fundamental change in human psychology. However, we cannot jump directly to this because it is impossible. Implementing political systems that may work far far in the future now will only set us back when they ultimately collapse and force us to get back on the original course we were on.

Socialistic Capitalism & Healthcare

The arguments over social healthcare in the United States have been raging for several years, and they will continue on even with Obamacare being passed. However most of the arguments coming from the conservative right revolve around this idea that the free market can solve all issues. This is historically inaccurate during medieval times the Vatican profited greatly and more recently we had the robber barrons; the pure capitalism experiment has been tried and failed. The flavor of capitalism that the United States has is not a pure capitalism instead it is a capitalism built on a socialist state. This particular unique flavor of political system is what let the USA and other first world countries sky rocket in the past 200 years.

Roads, fire, police, hydro, and electricity are all controlled and funded by social means through taxes. Not only does this benefit massive companies like Wal-Mart but it also helps the small entrepreneur easily enter the market at a relatively low cost compared to if they had to build their own infrastructure or rely on other private companies to build it for them. The argument may come back to quality but just as you do not need a Ferrari to get from point A to B, you do not need the highest quality services for everything either.

Ron Paul has made the claim that healthcare is not a right, however, according to the USA’s declaration of independence this is not true.

“That they are endowed by their Creator with certain unalienable rights, that among these are Life, Liberty, and the Pursuit of Happiness.” – Declaration of Independence

Now in my universe health is a synonym for life because when someone’s health fails, their life ends. If you do not take care of your health then you will die faster. However there are a large group of Americans who believe you should have to pay for your right to live. I involuntarily received a condition called Ulcerative Colitis, it doesn’t have a cure and the cause is unknown. Luckily I live in a country that does not penalize people for things they did not control because if I lived in the USA I would of now fallen under the pre-existing condition category and would of had a very hard time getting insurance. My week long stay at a hospital would of wiped out my savings.

Economic implications aside, human health should be a right. As humans have evolved our scope of rights has increased and that is not a bad thing. Clean running water never used to be right, or education, or security. If we can’t afford universal healthcare the answer is not the private sector, which has already proven it will do everything in its power to let people die, but rather figuring out ways to make it cheaper. Cure more diseases and cure aging/death are all possible and viable options. However, what is definitely not an option is allowing people to be treated in animal stalls.

The Automatons

Replaced Humans

Every single economic theory or philosophy whether it is capitalism or communism function under one primary assumption, humans are always doing work. In the past 50 years something has happened that puts all economic theories into jeopardy and the consequences are not science fiction, they are already happening. Humans are being replaced by automatons both in physical activity, by robots, and virtually with code.

Capitalism which to date has been the best system for rising quality of life has had an unexpected consequence that no one is truly confronting. Contrary to what idealists may believe capitalism doesn’t have the objective of creating jobs, instead jobs are a bi-product or a side effect of greed. If a CEO has the option of two employees that can do the same job as ten employees, if he is a capitalist, he will choose two. Employees are a huge expense, everyone knows it, but they are a requirement of scale. The system works perfect until you start cutting humans out. The side effect of creating jobs is being cured paradoxically by the very system everyone believes is supposed to create jobs.

Capitalism works perfect until you start cutting humans out.

Unemployment will continue to rise and everyone will continue to look at the traditional reason and this is highly problematic. Governments will dump money into companies who will throw it into R&D to create more advanced systems that cut more humans out.  Most developers are aware that their job usually involves making things that cut jobs. The more efficient the code, the less people are needed. When I write code there is the potential I could be writing an employee that will work 24 hours a day, and be 100% efficient; you won’t stand a chance no matter how nice your resume is. These problems will continue to snow ball and by the time everyone realizes that the biggest competition for a job isn’t a human but a mainframe, it may be too late.

The answers may be difficult, but a place to start is to realize that work generated by automatons at some point, even if it is a percentage, need to be redistributed socially. Since automatons don’t generate revenue for themselves, they can not spend their own work product. Without spending all economies will fall apart. If automatons are not taxed the only way anyone will be able to purchase anything is by enslaving themselves to corporations who will employ people not because they need them but because they can. If this happens it will make both robber barons and the darkest communism look like utopia. Even worse would be the situation that, in response to wide scale loss of jobs due to technology, humans respond by destroying technology and moving the world back in time in order to support dated economic systems.

AI and Government

20120422-214716.jpgA primary issue of government is that regardless of the political affiliation it suffers from scalability issues, as a population grows, government grows. As government grows the amount of money needed to support it will often grow at a rate that exceeds the net economic units created by the population growth. In simple terms as a population grows the net income produced by taxes will not be enough to cover the new cost of government because of inefficiency. Whether you support it or not, this is further made worse by social features of government which will have an additional uncontrolled cost.

In a hyperbolic example if a road system costs $1000 to make there will need to be a government management fee to pay for management of said project, for this example we will say $100. In order to pay for the $1000 project $1100 would need to be collected. This is fine since most social projects people understand the utility of and most would not contend the management fee. What happens in reality however is that as the population grows the management fee does not grow in a predictable fashion because of system complexity so what will end up happening is that the developer of the road project will either be paid a sub-optimal fee or a provider will be selected that can work at a sub-optimal fee which will result in lower then average quality product. The other option of course is that the inefficiency cost will be subsidized by credit, a possible unending black hole.

Having people implement methods that would cost them their own jobs is a tough sell.

As the demand for social services increases there is only one possible way it can be economically feasible and this is through reduction of government size. This will sound contradictory to expectation and the views of most that support social programs but the reality is that now we are in a situation to actually make this a reality. No longer does an increase of population need to translate into an increase of government work force. No other time in history would of this ever been possible and that is because of technology. With the emergence of computers, computerized automation, and artificial intelligence we can now start moving a lot of required government functions to electronics. There are hurdles to this of course because many of the efforts that could be automated would cost the jobs of the people responsible for implementing such automations. Having people implement methods that would cost them their own jobs is a tough sell.

What do you think? Are there easy ways to get government minimizing technology implemented?

The Value of Money

MoneyValue is something humans cherish and is the cornerstone of all our economic and technological progression. However, when you hear about things like occupy wall street or idealistic quotations like, “money is the root of all evil” you may start to wonder about the value of value but anyone who believes money is the root of all evil has a fundamental misunderstanding of what money is, why it came into being, and why it gave us an incredible amount of freedom.

Imagine you wanted to obtain a chicken, and didn’t have money, how would you obtain it? The answer is simple, trade. So you go to a farmer and tell him you will work for him for a week for a chicken, excellent. Next you need shoes, so you go to a shoe maker; the only problem is he doesn’t want your help. So instead you ask him what he wants for shoes and he tells you a robe. So now you either need to make a robe, steal a robe, or trade for a robe. You could potentially do this to obtain everything you needed but the only problem is you would have very little time to do very much else and you would never really be able to master anything. Even if you did become a trade master of making shoes, there is no guarantee you would be able to find someone who would be willing to trade you for what you need for shoes and heaven forbid there is another shoe maker in town.

“Blaming created things such as money or even religion for evil is a way of masking the real problem, human imperfection.”

Money acts a medium and allows you to transfer any type of work you can do into almost anything. You can do one job, like making shoes, and then use currency as a way of obtaining food, tvs, or clothes and you don’t need to figure out exactly who needs what; this is the value of money. Unfortunately what money also allows for is the easy transfer of work into things like weapons, drugs, and war. However, it must be noted that even if money didn’t exist you would still be able to trade to accomplish the same tasks, but money makes everything easier both good and evil. The root of all evil is not money, it is want, and want is a human trait. Blaming created things such as money or even religion for evil is a way of masking the real problem, human imperfection.

This all said, we must not rule out the potential possibility for other means of value transfer and trade. Currently our best method is the use of currency, but that is not to say that as technology improves we might figure out a new method that puts our current system into the dark ages.