Disclaimer: If I’m wrong about something, I appreciate corrections, but please don’t be an asshole about them. I know myself not to understand economics very well.
When something is as ubiquitous, as pervasive, as well-supported, as institutionally-backed as capitalism, you have to make significantly better arguments against its use than the mere fact that it has some obvious inefficiencies in some branch of it. Capitalism can wreak ruin among large swathes of the world, for all people care about. That still wouldn’t stop them for doing their damnedest to preserve the system.
As someone who’s been working for a while at coming up with economically sane alternatives to capitalism, I’ll do my best to share my understanding of why, as it were, “it’s complicated”.
One, capitalism is what emerges when an economy can make proper use of currency, and the state allows people to trade without monopolizing all economic activity within its territory. Wherever it is found, money obeys certain laws and trends, which have been codified into a fairly rigorous science called economics. In other words, you’d have to move beyond money and trade for capitalist economics not to apply. This is non-trivial. Take my word for it. I’ve dedicated a lot of brainpower to the matter and I have yet to find a factor as motivating as money that you can introduce into an economic system. Socialist states have attempted to run money economies on non-capitalist principles and got fucked over by economics—the same economic laws which they rejected. It is far easier to invent capitalistic workarounds for disruptive technologies than to redesign the economic system of a country or of a planet.
Two, capitalism does not exist in a vacuum. It’s not intellectually self-contained. You cannot uproot explicitly capitalistic ideas from people’s minds, in ignorance of the implicit ideas they were founded on, and expect them not to grow back. This goes as deep as people’s understanding of the idea of property or the necessity of trade. Take property, for instance. You can get a feeling of the fluidity of the concept by looking at the debates around intellectual property. Is piracy theft? Yes or no? In ye olde days, to steal something meant to forcefully and illegitimately transfer ownership from someone to yourself, depriving the rightful owner of his/her wealth. Piracy of digital products, however, does not deprive anyone of anything; you can make as many copies of something as your storage space allows, without anyone getting poorer; you only deprive some people (the author, the distributors) of potential wealth. With intellectual property, the concept of property gets redefined so as to allow capitalism to continue as normally. You could also take a look at the extremes of the ideological spectrum to see how they differ in their understanding of property. On the right side, you have the libertarians who say “taxation is theft”. They draw the borders around the idea of property so as to include their gross income, as decided by the market forces, and view the state’s claim to a share of that as illegitimate. On the left side you have those who say “(private) property is theft”. They feel (not kidding here) entitled, as a class, to everything that came out of the hands of wage-workers, a.k.a. the proletariat, a.k.a. people who do not own other means of production than their own capacity for labour. When they speak of the revolution of the proletariat and the expropriation of the wealth of the bourgeoisie, they feel like they’re taking back what was rightfully theirs from the start.
Or take trade. One of the most stupid… eh, I mean, frequently asked questions I get when I suggest the idea of a moneyless economy is, “but doesn’t that mean going back to barter? How would you convince people to work for nothing?”. It’s a struggle to get people to simultaneously keep in their minds the ideas of working for nothing and of paying for nothing, and why, when taken together, they don’t lead to the sort of disaster that they would if they were considered separately. With modern people, there’s simply a trade-shaped hole in their minds. It’s how they were raised to view an equitable acquisition of something—as an exchange between two things of equal value.
These conceptualizations of the economic side of life are fundamental. They cannot be changed in a population within two or three generations, and they meaningfully impact the economic behaviour of people.
Three, it’s quite the mistake for folks to focus so much on ordinary vanilla goods like food or water or various widgets, and to neglect the sorts of products that barely ever appear in non-capitalist economies—the edge cases that prove the real challenges. You could be completely primitive and still not worry about the availability of food or clothing or shelter. This therefore has no important implications for capitalism. Consider instead other classes of goods or services. Benefiting from the time and skills of a good surgeon. Luxury goods. (Have you been around upper class people? It’s one of those rare circles where the impact of prices over desirability deviates from ordinary intuitions—goods get more desirable as they get expensive.) Exceedingly good service. Mercenary work. (It used to be a thing, you know.) The value of a good engineer. Basically everything that requires going that extra mile. There’s no motivator quite like profit.
Four, people, and the powerful sort in particular, happen to very much like the status quo. For all the talk about eradicating poverty and income inequality, there’s something that some people want, that you cannot get in a relatively egalitarian society: bargaining power. You cannot get a child who isn’t starving to work in a sweatshop. You cannot have so much leverage against someone who can defend himself from your attacks. Without slaves, there are no masters. There are less cruel ways to talk about what I mean, as well: money is enmeshed in modern government, and states (whose income is overwhelmingly extractionary) demand for taxes to be paid in money. (After all, it would be inefficient for a government to demand payment in physical goods or in labour, for much the same reason as barter is inefficient.) Libertarians love to emphasize the antagonism between the government and the market, but in truth they’re deeply interconnected, more so than they have opposing interests. The only category of people that do not directly have a vested interest in the preservation of capitalism comprises poor and powerless people, and even they may get used as cannon fodder if capitalism, when it eventually goes down, goes down in flames. (So they’re indirectly interested in the general stability of the regime.)
Long story short, no, capitalism and the profit motive are not going anywhere, and no disruptive technology is going to change that. It doesn’t matter how cheap basic goods become, or how easy everything is thanks to automation. If the maintenance of the system requires that producers tap into the endless bag of bullshit needs and jobs in order for us to still have something we call “value”, then so be it. If you look at technology as some kind of way out of capitalism, ask yourself who produced the technology, and what their revenue is.
It’s a struggle to get people to simultaneously keep in their minds the ideas of working for nothing and of paying for nothing, and why, when taken together, they don’t lead to the sort of disaster that they would if they were considered separately.
Because they still lead to disaster when taken together. If the idea is that people work for nothing and get goods for free, what’s anyone’s motivation to work?
To be fair, a lot of work is self-rewarding. To understand Steven Jobs, you cannot really just look at his bank account.
But a lot of other work isn’t. But I guess a good answer would be that people use money to buy status anyway, so any system that that just gives status to people doing the best work could roughly work and in small communities it indeed does.
On the other hand, money has clear advantages as a vehicle of conveying status, rather obvious ones. The real “trick” seems to be that money also buys productive resources, not just status. So a succesful businessman can cash out into a yacht or reinvest the profit. This seems to be the difference, it is possible to give status to someone just through popularity, or a king giving a medal and a knighting, but this cannot be converted into productive resources. Probably every transactional system needs a medium of exchange that buys both status and productive resources and if it does it will be effectively equivalent to money.
On the third hand, lacking status does not make people starve.
I guess I am back to the idea I talked about before. Within small communities, like an extended family, socialism. Give status to best workers but not through money, because you want to feed etc. everybody inside your microcommunity. And between these microcommunities capitalism.
To be fair, a lot of work is self-rewarding. To understand Steven Jobs, you cannot really just look at his bank account.
And yet he did in fact wind up with a rather large bank account. Are you seriously going to argue that if managing Apple wasn’t profitable he wouldn’t be doing something else?
For some values of “not profitable” yes. The point is that the “profits” must came in the form of success, achievement and status. Not necessarily money, although indeed money is the most common form of success, achievement and status in a commercial, peaceful period of history. Jobs may have been a stellar general during WW2, and in that case making headlines and history books would be the “profit”, not the generals salary.
You know what, I’m still trying to figure this one out, but when I do, I’ll share it with someone who’s open to the idea of an answer. I’ve seen you around. You’ve made up your mind already. I’m totally not getting sucked into that kind of conversation.
everything that requires going that extra mile. There’s no motivator quite like profit.
Yes, this is the question I would want to have answered first, when speaking about a hypothetical non-capitalist economy. Imagine that there is a situation where...
someone else needs you to do something for them (because they and their friends don’t have the necessary skills)
you are neither their friend nor family; after doing the work for them you will probably never meet them again
you would honestly rather spend your day doing something else, such as playing your favorite computer game
if required, you have a plausible excuse (you can pretend that the work exceeds your skills, even if it doesn’t)
...what would motivate you to do it for them anyway?
One option is to bite the bullet and say “well, in my utopian society such things would simply never be done”. It is an option; and maybe living in such society could still be better on average than what we have now.
Yes, a few people would sometimes die because all surgeons would be playing League of Legends online. But everyone accustomed to living in that society would understand that you cannot blame those surgeons, because they made their free decision they were entitled to; and if you have a different opinion about what surgeons should do, instead of complaining, you should have become a surgeon yourself and do what you believe is right. Maybe the number of people who would die this way would be still smaller than the number of people who today die for other capitalism-caused reasons.
But in our society we have this intuition that if you require other people to go an extra mile for your benefit, you should in return do something else for their benefit. Money, token money, barter, or just something nebulous like status. (“I will remove your appendix if you upvote all my LessWrong comments.”)
Other solution is coercion. You have a Taskmaster General, people tell him what they need done, and he assigns those tasks to people who have the necessary skills. If you don’t do the assigned task, you get shot. No money necessary, and people are still motivated.
This comes with a lot of problems, for example sometimes you are assigned a task that is truly above your skills, but no one believes you (too many people already tried to excuse themselves by claiming something was too difficult for them, but when a gun was put to their heads, they did it successfully), so you fail, and then you get shot. Also, the Taskmaster General will most likely abuse their powers horribly.
Yet another choice—beyond trade, coercion, and not having things done—could be perfect brainwashing. A society where people would be psychologically unable to refuse a request for help. Some people already tried this, but they overestimated their brainwashing skills. But for the sake of experiment, let’s suppose that the brainwashing is done successfully. We still have a problem of what happens when there are more requests than people can fulfill. You have to make priorities. How specifically? What if no one will give priority to your pressing needs, because they will always prioritize something else, including completely stupid stuff? Maybe the brainwashing should also include making people unable to requests things they don’t seriously need. Or maybe, before you make your request officially, a jury of your peers will evaluate whether your request is reasonable. -- But I feel this direction assumes that the brainwashing itself will act like an intelligent and benevolent entity. Otherwise you could get a society where e.g. most people become religious, and most of the tasks done will be religious rituals. People will request them because they will honestly feel that making God happy is the most important thing, and their brainwashed neighbors will be unable to refuse.
Good points. I don’t know, I genuinely don’t know yet; this problem is by far the biggest obstacle in the face of a non-capitalist economy (all the rest require more easily conceivable technological and institutional infrastructure). Still racking my brains...
(A more detailed, but still incomplete presentation of this little snippet of an idea was actually the theme for a mega-post I got planned, but it looks like every time I open my mouth about a potentially controversial topic my karma barely manages to break even and I get trolled to hell and back, so that’s a bit of a deterrent for me to even talk about politics any longer.)
The challenges are on multiple levels: 1) to show up at all at work; 2) to exceed expectations and do a great job; 3) to innovate, invent, revolutionize a field.
The only other bunch who has about the same stated goals consists of the anarcho-communists (which provide most of the availabe discussion on the topic), but they don’t go about it in a rational way. When confronted with the problem of laziness, their approach is 60% “revolution will kiss it and make it better”, 30% “we need to indoctrinate everyone thoroughly into communism” and 10% “if someone refuses to work, off with their heads!”. (Broadly, the three approaches you mentioned.) They can’t into incentives, disapprove of even mild and justified hierarchy, are heavily into Marxist concepts, and allow wishful thinking to heavily bias their model of how things would happen. That’s not how you succeed in such an endeavour.
Coercion is probably the worst way out of this. Creating an atmosphere of fear is inimical to prosperity, innovation, industry, and the entrepreneurial drive. It puts people out of the “thrive” mode and into “survive” mode. The output is bound to be mediocre at best.
It might be very necessary to think outside of the box on this topic, to step outside the contemporary Western paradigm and explore the matter from all possible angles. Who knows, maybe money isn’t the end-all-be-all of it. The neural underpinnings of self-interested motivation certainly predate the invention of money. I’ve considered rewards in luxury goods and in status, promotion to aristocracy, demotion to serfdom, consumers as management class… heck, even getting people on stimulants to improve their productivity. I’ve even considered limited monetary circuits for certain classes of goods, but before becoming convinced of the merit of this idea, I need to quell my fears that down that road lie Wall Street, landfills, corporate jargon, and mandatory ubiquitous advertising.
I won’t expand on this any more until I feel like I have something especially useful to say, and will only post that essay (which gets a few FAQs out of the way) if I have reasons to expect that more good stuff than bad will come out of the ensuing discussion. And even that, probably not here but on Omnilibrium.
Good points. I don’t know, I genuinely don’t know yet; this problem is by far the biggest obstacle in the face of a non-capitalist economy (all the rest require more easily conceivable technological and institutional infrastructure). Still racking my brains...
So do you have any evidence this is doable, because right now you sound like the crackpot saying “my perpetual motion machine will work just as soon as I figure out a way around the second law of thermodynamics”.
By the way, getting money for your work is not only about motivating you by a reward. It is also a way to give you resources for your future plans.
“If your plans work, you get money, which you can use to finance more ambitious plans” is a nice feedback mechanism that channels money towards plans that work, as opposed to wasting resources on stupid plans that fail. (Yeah, it does not work perfectly. But in many small cases it does.) Without this mechanism, your ability to realize your plans would only depend on your military power or social skills.
So it’s not just about the risk that the possible startup investors would not be allowed to keep their profits, but also the risk that they would simply not be allowed to create the startup, because they couldn’t accumulate the necessary capital. -- Imagine that you have a great startup idea, which requires 100 days of uninterrupted full-time work, and then will revolutionize the world. But as soon as you don’t participate in your usual work for 20 days, your comrades become resentful, and after 40 days they will physically stop you from working on your startup (which they believe is a bad idea that cannot work; this is why no one already did it before you). Even without violence, maybe just everyone will refuse to cooperate with you anymore, and let’s say that you need some cooperation to succeed.
you would honestly rather spend your day doing something else, such as playing your favorite computer game
Is quite easy to have a system where there’s social disapproval for people who spent a lot of time playing computer games. Especially when you have social norms where it’s normal that people are open about how they spent their time.
Then instead of freedom, you have to do what other people think you should do. Unless you have enough social skills to convince them to let you do something you actually enjoy.
If people can punish you for playing computer games, they can also punish you for e.g. writing a book about rationality.
You can have social norms that hold people who have passion for big long term goals in high regard. That discourages sitting around and playing computer games all day while it encourages big projects like writing a book about rationality.
Don’t treat present societal norms as universal when it comes to taking about possible systems.
Then instead of freedom, you have to do what other people think you should do. Unless you have enough social skills to convince them to let you do something you actually enjoy.
For a society like this to work in a way that people can do what they enjoy you might need a higher average social skill level than we have in our society. You need deeper interactions.
Then instead of freedom, you have to do what other people think you should do.
We also don’t have perfect freedom. In our society you get punished socially if you are poor. You can replace that norm with asking whether people work towards a life purpose that inspires them.
I don’t think the central point of money is that it’s the best motivator. The great advantage of a market economy is that the amount of resources that get spend on useless projects that nobody is willing to pay for get’s reduced.
For all the talk about eradicating poverty and income inequality, there’s something that some people want, that you cannot get in a relatively egalitarian society: bargaining power. You cannot get a child who isn’t starving to work in a sweatshop.
I don’t buy that argument. The West doesn’t really need sweatshops at current labor prices. Labour costs are only a tiny element of the price of our products.
Instead of jeans from China I would much rather have a computer doing the work and creating a jeans that matches my own size.
(After all, it would be inefficient for a government to demand payment in physical goods or in labour, for much the same reason as barter is inefficient.)
Various countries have a draft and the US has jury duty which asks for payment in labor.
The payment that German had to pay because of the treaty of Versailles was in physical goods.
The West doesn’t really need sweatshops at current labor prices.
That’s… better news than I hoped for. I had a hunch that extremely cheap labour is not so much a necessity than a preference of the producers, but not that the practice could be eradicated altogether.
You ever been to a village with a “sweatshop”? I have. They’re the highest paying employers in town. The kids working at the “sweatshop” have more food, more clothing, and ultimately more education than their peers. These “sweatshop” factories result in more social benefit than all of the foreign aid that flows into these countries.
This is important. On an absolute scale, sweatshop jobs are not great jobs. But they are better than many of the jobs that most of humanity has worked over the centuries, both in terms of labor and reward.
Many people are enthusiastic about eliminating sweatshop jobs. Eliminating bad options does not create better ones. If a sweatshop job is the least bad option around, and you eliminate it without creating a better option, you have just worsened someone’s life.
I wouldn’t want to work in a sweatshop. I don’t want anyone to need to work in a sweatshop. But we should recognize that bad options are the best options available when all the other options are even worse. You can’t just get rid of bad things. You must also create something better to replace them.
Even if Nike wants to have it’s T-Shirts manufactured at a higher hourly wage, it’s not as easy for them to do so because they don’t own the factories in which the T-Shirts get produced.
There were attempts by Western companies to pay workers more money but the factories owners simply lie over the wage they pay the workers. That wages also often is still over the average wage in the region.
It’s entertaining to think about, and besides I’m not expecting anything bigger than a village-sized intentional community to come out of it. I’m pretty okay with capitalism existing and being successful for as many people as possible.
… and are mostly Marxist and I’m tired of that shit. It’s exhausting to try to talk about economic matters with ideologues who can’t take a good honest look at reality. That’s why I strive to improve the accuracy of my beliefs by testing them against the most unfavourable, painful, and cynical version of reality that still remains plausible.
From what I’ve researched so far, there certainly seems to be a world of broadly “leftist” economic thought imaginable beyond Marxism.
Any opinion on Mondragon Corporation? Seems large and successful… well, guessing from the Wikipedia article, because I do not have other information about them. And they are not completely anti-capitalist, but neither are they a typical capitalist corporation.
An interesting business model, one I knew about for quite a while and would like to see a little more of. If the numbers allow, I’d go a step further and satisfy internal (employees’) demand of co-op products for cheap or for free, and sell the surplus, thus paying people partly in goods, partly in money. Sharing with insiders, trading with outsiders. (I don’t know whether Mondragon co-ops do that, and couldn’t find anything about it.) It seems to combine the best of both worlds… at least to the naive eyes of a non-economist.
A frequent complaint I found online about co-ops is that the ability to take profits without sharing is too tempting, and soon most of them become two-tiered.
You have the old employers who have founded the company together and now they are co-owners; and the new employers who were not given the option of co-ownership, and have to work like employees in a regular company. Alternatively, instead of hiring new employess, some services are supplied by a contractor, so the contractor’s employees de facto work for the co-op, but are not its co-owners.
This is something that idealists complain about, because their dream is that “if co-ops will become popular and successful, gradually all companies will become co-ops, and every worker will be a co-owner”, that is a peaceful gradual transition from capitalism to workers-owned economy; but in reality it seems like the co-ops only change the economical monarchies to economical oligarchies, not economical democracies. They become similar to companies as usual with multiple owners.
Actually, I imagine that this change can come quite naturally, even if you don’t plan it. Imagine that you are an idealist, and your dream is to transform the whole world to co-ops. You and your other idealistic friends create a co-op which e.g. makes computer games. And you need someone to clean your rooms. Would you make that person an equal co-owner? That feels like an overkill. So you would just pay some company to send someone to clean your rooms.
But in a way that shows practical problems of workers-owned economy. If you have people who work for multiple companies, should they get an ownership in each of them? But then they should probably get smaller ownership than people who only work for one company. If there is a production chain where a company X produces tools or services for a company Y, shoud employees of X automatically get ownership of Y, and vice versa? That could be rather impractical for companies which provide services to huge number of customers, such as phone companies. -- Saying that something is “workers-owned” is merely an applause light unless we specify which workers owns how much of which company.
Disclaimer: If I’m wrong about something, I appreciate corrections, but please don’t be an asshole about them. I know myself not to understand economics very well.
When something is as ubiquitous, as pervasive, as well-supported, as institutionally-backed as capitalism, you have to make significantly better arguments against its use than the mere fact that it has some obvious inefficiencies in some branch of it. Capitalism can wreak ruin among large swathes of the world, for all people care about. That still wouldn’t stop them for doing their damnedest to preserve the system.
As someone who’s been working for a while at coming up with economically sane alternatives to capitalism, I’ll do my best to share my understanding of why, as it were, “it’s complicated”.
One, capitalism is what emerges when an economy can make proper use of currency, and the state allows people to trade without monopolizing all economic activity within its territory. Wherever it is found, money obeys certain laws and trends, which have been codified into a fairly rigorous science called economics. In other words, you’d have to move beyond money and trade for capitalist economics not to apply. This is non-trivial. Take my word for it. I’ve dedicated a lot of brainpower to the matter and I have yet to find a factor as motivating as money that you can introduce into an economic system. Socialist states have attempted to run money economies on non-capitalist principles and got fucked over by economics—the same economic laws which they rejected. It is far easier to invent capitalistic workarounds for disruptive technologies than to redesign the economic system of a country or of a planet.
Two, capitalism does not exist in a vacuum. It’s not intellectually self-contained. You cannot uproot explicitly capitalistic ideas from people’s minds, in ignorance of the implicit ideas they were founded on, and expect them not to grow back. This goes as deep as people’s understanding of the idea of property or the necessity of trade. Take property, for instance. You can get a feeling of the fluidity of the concept by looking at the debates around intellectual property. Is piracy theft? Yes or no? In ye olde days, to steal something meant to forcefully and illegitimately transfer ownership from someone to yourself, depriving the rightful owner of his/her wealth. Piracy of digital products, however, does not deprive anyone of anything; you can make as many copies of something as your storage space allows, without anyone getting poorer; you only deprive some people (the author, the distributors) of potential wealth. With intellectual property, the concept of property gets redefined so as to allow capitalism to continue as normally. You could also take a look at the extremes of the ideological spectrum to see how they differ in their understanding of property. On the right side, you have the libertarians who say “taxation is theft”. They draw the borders around the idea of property so as to include their gross income, as decided by the market forces, and view the state’s claim to a share of that as illegitimate. On the left side you have those who say “(private) property is theft”. They feel (not kidding here) entitled, as a class, to everything that came out of the hands of wage-workers, a.k.a. the proletariat, a.k.a. people who do not own other means of production than their own capacity for labour. When they speak of the revolution of the proletariat and the expropriation of the wealth of the bourgeoisie, they feel like they’re taking back what was rightfully theirs from the start.
Or take trade. One of the most stupid… eh, I mean, frequently asked questions I get when I suggest the idea of a moneyless economy is, “but doesn’t that mean going back to barter? How would you convince people to work for nothing?”. It’s a struggle to get people to simultaneously keep in their minds the ideas of working for nothing and of paying for nothing, and why, when taken together, they don’t lead to the sort of disaster that they would if they were considered separately. With modern people, there’s simply a trade-shaped hole in their minds. It’s how they were raised to view an equitable acquisition of something—as an exchange between two things of equal value.
These conceptualizations of the economic side of life are fundamental. They cannot be changed in a population within two or three generations, and they meaningfully impact the economic behaviour of people.
Three, it’s quite the mistake for folks to focus so much on ordinary vanilla goods like food or water or various widgets, and to neglect the sorts of products that barely ever appear in non-capitalist economies—the edge cases that prove the real challenges. You could be completely primitive and still not worry about the availability of food or clothing or shelter. This therefore has no important implications for capitalism. Consider instead other classes of goods or services. Benefiting from the time and skills of a good surgeon. Luxury goods. (Have you been around upper class people? It’s one of those rare circles where the impact of prices over desirability deviates from ordinary intuitions—goods get more desirable as they get expensive.) Exceedingly good service. Mercenary work. (It used to be a thing, you know.) The value of a good engineer. Basically everything that requires going that extra mile. There’s no motivator quite like profit.
Four, people, and the powerful sort in particular, happen to very much like the status quo. For all the talk about eradicating poverty and income inequality, there’s something that some people want, that you cannot get in a relatively egalitarian society: bargaining power. You cannot get a child who isn’t starving to work in a sweatshop. You cannot have so much leverage against someone who can defend himself from your attacks. Without slaves, there are no masters. There are less cruel ways to talk about what I mean, as well: money is enmeshed in modern government, and states (whose income is overwhelmingly extractionary) demand for taxes to be paid in money. (After all, it would be inefficient for a government to demand payment in physical goods or in labour, for much the same reason as barter is inefficient.) Libertarians love to emphasize the antagonism between the government and the market, but in truth they’re deeply interconnected, more so than they have opposing interests. The only category of people that do not directly have a vested interest in the preservation of capitalism comprises poor and powerless people, and even they may get used as cannon fodder if capitalism, when it eventually goes down, goes down in flames. (So they’re indirectly interested in the general stability of the regime.)
Long story short, no, capitalism and the profit motive are not going anywhere, and no disruptive technology is going to change that. It doesn’t matter how cheap basic goods become, or how easy everything is thanks to automation. If the maintenance of the system requires that producers tap into the endless bag of bullshit needs and jobs in order for us to still have something we call “value”, then so be it. If you look at technology as some kind of way out of capitalism, ask yourself who produced the technology, and what their revenue is.
Because they still lead to disaster when taken together. If the idea is that people work for nothing and get goods for free, what’s anyone’s motivation to work?
To be fair, a lot of work is self-rewarding. To understand Steven Jobs, you cannot really just look at his bank account.
But a lot of other work isn’t. But I guess a good answer would be that people use money to buy status anyway, so any system that that just gives status to people doing the best work could roughly work and in small communities it indeed does.
On the other hand, money has clear advantages as a vehicle of conveying status, rather obvious ones. The real “trick” seems to be that money also buys productive resources, not just status. So a succesful businessman can cash out into a yacht or reinvest the profit. This seems to be the difference, it is possible to give status to someone just through popularity, or a king giving a medal and a knighting, but this cannot be converted into productive resources. Probably every transactional system needs a medium of exchange that buys both status and productive resources and if it does it will be effectively equivalent to money.
On the third hand, lacking status does not make people starve.
I guess I am back to the idea I talked about before. Within small communities, like an extended family, socialism. Give status to best workers but not through money, because you want to feed etc. everybody inside your microcommunity. And between these microcommunities capitalism.
And yet he did in fact wind up with a rather large bank account. Are you seriously going to argue that if managing Apple wasn’t profitable he wouldn’t be doing something else?
For some values of “not profitable” yes. The point is that the “profits” must came in the form of success, achievement and status. Not necessarily money, although indeed money is the most common form of success, achievement and status in a commercial, peaceful period of history. Jobs may have been a stellar general during WW2, and in that case making headlines and history books would be the “profit”, not the generals salary.
You know what, I’m still trying to figure this one out, but when I do, I’ll share it with someone who’s open to the idea of an answer. I’ve seen you around. You’ve made up your mind already. I’m totally not getting sucked into that kind of conversation.
Only in the same sense that your typical physicist can be said to have “made up his mind already” about the possibility of perpetual motion machines.
Yes, this is the question I would want to have answered first, when speaking about a hypothetical non-capitalist economy. Imagine that there is a situation where...
someone else needs you to do something for them (because they and their friends don’t have the necessary skills)
you are neither their friend nor family; after doing the work for them you will probably never meet them again
you would honestly rather spend your day doing something else, such as playing your favorite computer game
if required, you have a plausible excuse (you can pretend that the work exceeds your skills, even if it doesn’t)
...what would motivate you to do it for them anyway?
One option is to bite the bullet and say “well, in my utopian society such things would simply never be done”. It is an option; and maybe living in such society could still be better on average than what we have now.
Yes, a few people would sometimes die because all surgeons would be playing League of Legends online. But everyone accustomed to living in that society would understand that you cannot blame those surgeons, because they made their free decision they were entitled to; and if you have a different opinion about what surgeons should do, instead of complaining, you should have become a surgeon yourself and do what you believe is right. Maybe the number of people who would die this way would be still smaller than the number of people who today die for other capitalism-caused reasons.
But in our society we have this intuition that if you require other people to go an extra mile for your benefit, you should in return do something else for their benefit. Money, token money, barter, or just something nebulous like status. (“I will remove your appendix if you upvote all my LessWrong comments.”)
Other solution is coercion. You have a Taskmaster General, people tell him what they need done, and he assigns those tasks to people who have the necessary skills. If you don’t do the assigned task, you get shot. No money necessary, and people are still motivated.
This comes with a lot of problems, for example sometimes you are assigned a task that is truly above your skills, but no one believes you (too many people already tried to excuse themselves by claiming something was too difficult for them, but when a gun was put to their heads, they did it successfully), so you fail, and then you get shot. Also, the Taskmaster General will most likely abuse their powers horribly.
Yet another choice—beyond trade, coercion, and not having things done—could be perfect brainwashing. A society where people would be psychologically unable to refuse a request for help. Some people already tried this, but they overestimated their brainwashing skills. But for the sake of experiment, let’s suppose that the brainwashing is done successfully. We still have a problem of what happens when there are more requests than people can fulfill. You have to make priorities. How specifically? What if no one will give priority to your pressing needs, because they will always prioritize something else, including completely stupid stuff? Maybe the brainwashing should also include making people unable to requests things they don’t seriously need. Or maybe, before you make your request officially, a jury of your peers will evaluate whether your request is reasonable. -- But I feel this direction assumes that the brainwashing itself will act like an intelligent and benevolent entity. Otherwise you could get a society where e.g. most people become religious, and most of the tasks done will be religious rituals. People will request them because they will honestly feel that making God happy is the most important thing, and their brainwashed neighbors will be unable to refuse.
Good points. I don’t know, I genuinely don’t know yet; this problem is by far the biggest obstacle in the face of a non-capitalist economy (all the rest require more easily conceivable technological and institutional infrastructure). Still racking my brains...
(A more detailed, but still incomplete presentation of this little snippet of an idea was actually the theme for a mega-post I got planned, but it looks like every time I open my mouth about a potentially controversial topic my karma barely manages to break even and I get trolled to hell and back, so that’s a bit of a deterrent for me to even talk about politics any longer.)
The challenges are on multiple levels: 1) to show up at all at work; 2) to exceed expectations and do a great job; 3) to innovate, invent, revolutionize a field.
The only other bunch who has about the same stated goals consists of the anarcho-communists (which provide most of the availabe discussion on the topic), but they don’t go about it in a rational way. When confronted with the problem of laziness, their approach is 60% “revolution will kiss it and make it better”, 30% “we need to indoctrinate everyone thoroughly into communism” and 10% “if someone refuses to work, off with their heads!”. (Broadly, the three approaches you mentioned.) They can’t into incentives, disapprove of even mild and justified hierarchy, are heavily into Marxist concepts, and allow wishful thinking to heavily bias their model of how things would happen. That’s not how you succeed in such an endeavour.
Coercion is probably the worst way out of this. Creating an atmosphere of fear is inimical to prosperity, innovation, industry, and the entrepreneurial drive. It puts people out of the “thrive” mode and into “survive” mode. The output is bound to be mediocre at best.
It might be very necessary to think outside of the box on this topic, to step outside the contemporary Western paradigm and explore the matter from all possible angles. Who knows, maybe money isn’t the end-all-be-all of it. The neural underpinnings of self-interested motivation certainly predate the invention of money. I’ve considered rewards in luxury goods and in status, promotion to aristocracy, demotion to serfdom, consumers as management class… heck, even getting people on stimulants to improve their productivity. I’ve even considered limited monetary circuits for certain classes of goods, but before becoming convinced of the merit of this idea, I need to quell my fears that down that road lie Wall Street, landfills, corporate jargon, and mandatory ubiquitous advertising.
I won’t expand on this any more until I feel like I have something especially useful to say, and will only post that essay (which gets a few FAQs out of the way) if I have reasons to expect that more good stuff than bad will come out of the ensuing discussion. And even that, probably not here but on Omnilibrium.
So do you have any evidence this is doable, because right now you sound like the crackpot saying “my perpetual motion machine will work just as soon as I figure out a way around the second law of thermodynamics”.
By the way, getting money for your work is not only about motivating you by a reward. It is also a way to give you resources for your future plans.
“If your plans work, you get money, which you can use to finance more ambitious plans” is a nice feedback mechanism that channels money towards plans that work, as opposed to wasting resources on stupid plans that fail. (Yeah, it does not work perfectly. But in many small cases it does.) Without this mechanism, your ability to realize your plans would only depend on your military power or social skills.
So it’s not just about the risk that the possible startup investors would not be allowed to keep their profits, but also the risk that they would simply not be allowed to create the startup, because they couldn’t accumulate the necessary capital. -- Imagine that you have a great startup idea, which requires 100 days of uninterrupted full-time work, and then will revolutionize the world. But as soon as you don’t participate in your usual work for 20 days, your comrades become resentful, and after 40 days they will physically stop you from working on your startup (which they believe is a bad idea that cannot work; this is why no one already did it before you). Even without violence, maybe just everyone will refuse to cooperate with you anymore, and let’s say that you need some cooperation to succeed.
Doctors already have a high status in our society. If you look at upvoting LW post you miss how most status works.
Is quite easy to have a system where there’s social disapproval for people who spent a lot of time playing computer games. Especially when you have social norms where it’s normal that people are open about how they spent their time.
Then instead of freedom, you have to do what other people think you should do. Unless you have enough social skills to convince them to let you do something you actually enjoy.
If people can punish you for playing computer games, they can also punish you for e.g. writing a book about rationality.
You can have social norms that hold people who have passion for big long term goals in high regard. That discourages sitting around and playing computer games all day while it encourages big projects like writing a book about rationality.
Don’t treat present societal norms as universal when it comes to taking about possible systems.
For a society like this to work in a way that people can do what they enjoy you might need a higher average social skill level than we have in our society. You need deeper interactions.
We also don’t have perfect freedom. In our society you get punished socially if you are poor. You can replace that norm with asking whether people work towards a life purpose that inspires them.
You forgot an important qualifier: in Northern Europe.
You miss the point. We are talking about possible social systems.
I don’t think the central point of money is that it’s the best motivator. The great advantage of a market economy is that the amount of resources that get spend on useless projects that nobody is willing to pay for get’s reduced.
I don’t buy that argument. The West doesn’t really need sweatshops at current labor prices. Labour costs are only a tiny element of the price of our products.
Instead of jeans from China I would much rather have a computer doing the work and creating a jeans that matches my own size.
Various countries have a draft and the US has jury duty which asks for payment in labor. The payment that German had to pay because of the treaty of Versailles was in physical goods.
Yes, the Chinese should just stick to pre-industrial age agriculture.
That’s… better news than I hoped for. I had a hunch that extremely cheap labour is not so much a necessity than a preference of the producers, but not that the practice could be eradicated altogether.
You ever been to a village with a “sweatshop”? I have. They’re the highest paying employers in town. The kids working at the “sweatshop” have more food, more clothing, and ultimately more education than their peers. These “sweatshop” factories result in more social benefit than all of the foreign aid that flows into these countries.
This is important. On an absolute scale, sweatshop jobs are not great jobs. But they are better than many of the jobs that most of humanity has worked over the centuries, both in terms of labor and reward.
Many people are enthusiastic about eliminating sweatshop jobs. Eliminating bad options does not create better ones. If a sweatshop job is the least bad option around, and you eliminate it without creating a better option, you have just worsened someone’s life.
I wouldn’t want to work in a sweatshop. I don’t want anyone to need to work in a sweatshop. But we should recognize that bad options are the best options available when all the other options are even worse. You can’t just get rid of bad things. You must also create something better to replace them.
Even if Nike wants to have it’s T-Shirts manufactured at a higher hourly wage, it’s not as easy for them to do so because they don’t own the factories in which the T-Shirts get produced.
There were attempts by Western companies to pay workers more money but the factories owners simply lie over the wage they pay the workers. That wages also often is still over the average wage in the region.
http://lesswrong.com/r/discussion/lw/m4y/why_capitalism/cbjc
Given all this, I have to wonder why have you “been working for a while at coming up with economically sane alternatives to capitalism”.
It’s entertaining to think about, and besides I’m not expecting anything bigger than a village-sized intentional community to come out of it. I’m pretty okay with capitalism existing and being successful for as many people as possible.
If that’s all you want, kibbutzim exist, are about village-sized, and are definitely not capitalist...
… and are mostly Marxist and I’m tired of that shit. It’s exhausting to try to talk about economic matters with ideologues who can’t take a good honest look at reality. That’s why I strive to improve the accuracy of my beliefs by testing them against the most unfavourable, painful, and cynical version of reality that still remains plausible.
From what I’ve researched so far, there certainly seems to be a world of broadly “leftist” economic thought imaginable beyond Marxism.
Any opinion on Mondragon Corporation? Seems large and successful… well, guessing from the Wikipedia article, because I do not have other information about them. And they are not completely anti-capitalist, but neither are they a typical capitalist corporation.
An interesting business model, one I knew about for quite a while and would like to see a little more of. If the numbers allow, I’d go a step further and satisfy internal (employees’) demand of co-op products for cheap or for free, and sell the surplus, thus paying people partly in goods, partly in money. Sharing with insiders, trading with outsiders. (I don’t know whether Mondragon co-ops do that, and couldn’t find anything about it.) It seems to combine the best of both worlds… at least to the naive eyes of a non-economist.
A frequent complaint I found online about co-ops is that the ability to take profits without sharing is too tempting, and soon most of them become two-tiered.
You have the old employers who have founded the company together and now they are co-owners; and the new employers who were not given the option of co-ownership, and have to work like employees in a regular company. Alternatively, instead of hiring new employess, some services are supplied by a contractor, so the contractor’s employees de facto work for the co-op, but are not its co-owners.
This is something that idealists complain about, because their dream is that “if co-ops will become popular and successful, gradually all companies will become co-ops, and every worker will be a co-owner”, that is a peaceful gradual transition from capitalism to workers-owned economy; but in reality it seems like the co-ops only change the economical monarchies to economical oligarchies, not economical democracies. They become similar to companies as usual with multiple owners.
Actually, I imagine that this change can come quite naturally, even if you don’t plan it. Imagine that you are an idealist, and your dream is to transform the whole world to co-ops. You and your other idealistic friends create a co-op which e.g. makes computer games. And you need someone to clean your rooms. Would you make that person an equal co-owner? That feels like an overkill. So you would just pay some company to send someone to clean your rooms.
But in a way that shows practical problems of workers-owned economy. If you have people who work for multiple companies, should they get an ownership in each of them? But then they should probably get smaller ownership than people who only work for one company. If there is a production chain where a company X produces tools or services for a company Y, shoud employees of X automatically get ownership of Y, and vice versa? That could be rather impractical for companies which provide services to huge number of customers, such as phone companies. -- Saying that something is “workers-owned” is merely an applause light unless we specify which workers owns how much of which company.
Another example is John Lewis, a UK chain of department stores owned by its employees.