Money does not distribute wealth
Tim O’Reilly wrote about the business needing to change, in order to survive as part of his blog series The Next Economy.
I am a huge fan of scale-free network theory, especially when combined to the fields of cognitive and social psychology. You see, when it comes down to systems, we need to know the topology and principles of the system, in order to achieve a goal, by changing it. One of the most important principles of the scale-free network theory is Preferential Attachment.
For example, I believe Tim O’Reilly’s critique towards Über seems a bit misplaced as their preferential attachment as a company is in technological development, not in taxicab workers; and considering the goals and progress of Google Car and Tesla, I would not prefer having a person driving for me in 2021. It would be less safe and more expensive.
For me it seems, that we as human beings have a preference for safety rather than equality; perhaps rightfully so, because too absolute equality can be very dangerous for unforeseen threats. Diversity is more natural, than equality and has always increased the survival capability of humans and perhaps all living beings (or even perhaps all entities within the scope of the energy conservation laws).
Should we instead strive for a better capacity to tolerate diversity and use it against the control structures? I believe, that accepting the diversity will free us from the top nodes of the network topology, who prefer to communicate their role through mysterious complexity and fear. We do not fear simplicity, the complexity fears simplicity, which might ridicule them if time has changed their value from complex to simple. Who ever claims, that having a gun pointed at your face is a consequence of simplicity, is a liar.
Accepting diversity is not the same as approving inequality. It is merely a perspective, which allows us to see beyond equality, where diversity can work against oppression. In terms of physics, an equal system can not be achieved without a system of control, thus equality is always an agenda of the control structure. Approving diversity and non-mystical simple communication lifts us from the need to be controlled.
This encloses me to the core of the problem in Tim’s text.
Distribution of Wealth is a Complex Problem of Control
In everything we humans do, we seem to be dictated by the rules of scale-free networks. Even the early days of “anarchistic” world-wide-web and non-human networks, like food-chains. All these real world networks seem to follow the scale-free network topology, which builds itself upon a timeline by the principle of preferential attachment.
The problem, in my opinion, is not the division of the wealth, but the roles of the nodes, and the capabilities of the nodes, within the scale-free network of labour markets.
Those roles define the input source of financial security for many. As it is illegal to eat without money, or to sleep safely without money, many of us are very dependant for the input source provided by the financial security providers, the employees. This creates a preferential attachment towards labour markets as it is a precondition for our preferential attachment for survival.
The division of the wealth is merely a consequence of the structure of the network: if there is more food for the lions, there will be more lions. The lion needs some competition.
Tim uses Walmart as an example, but fails to point out, that the business model of the Walmart is not dependant on the labour, but instead it’s agenda is to provide cheap goods for the consumers and profits for the share-holders.
Tim proposes an increase to the minimum wage and then calculates the affect on the consumer prices and share-holders. He considers, that the share-holder disadvantage would have no effect to the economy at large, but fails to see, that pension insurance companies and pretty much everything within the Western countries is bound to the profitability of stock market profits. There are no solutions, which does more good than bad, because we live in a networked world. There are only perspectives for what would be the right thing to do.
Rising consumer prices and reducing corporate profits would mostly hurt the elderly, whose pensions are paid by trust funds, which require profitable businesses.
I would suggest, that rising the minimum wage is not a solution here, because giving man a fish doesn’t teach him to fish. It does not solve the complex problem of dependency towards the control structures.
Here is why:
A) If proportion of the population is risen above the poverty line with a complex process of redistribution of the wealth, there is always exponential increase in the inequality, because people become dependant on the people who control the complexity, who will always take their “fair share” (and after the invention of propaganda, democracy has not been sufficient mechanism to defeat this aspect of self-importance from people trusted by the popular opinion).
B) If portion of the population is risen above the poverty line by the process of value generation, the inequality of the network will decrease. This is because our preferential attachment towards to the top nodes of the complex wealth network also decreases. If our survival depends less upon complexities, which we do not understand, we will not be controlled by the fears of change. Being able to know your real value and ability to participate will create empowerment.
Let’s get a bit side tracked now.
Before writing Das Kapital, Karl Marx discovered, that it will be inevitable, that the future will be ruled by the ability to create and use automation, and the control of the labour process.
His deduction was based upon the nature of fixed and circulating capital assets. When a capitalist invests in a machine, it creates value over years, while salaries once paid might not generate more value than the labour invested by the contracts. At some point investments in productivity are more important than investments on labour. Thus the act of working is less important, than being able to foresee how work can be done more efficiently.
What I am saying is, that rising the minimum wage will make unproductive jobs even more safe to possess, but at the same time less safe to create for the corporations. Also this can further outcast people from the society through unemployment. Unfortunately it is necessary for people to learn social skills and attributes, which enable them to do more diverse jobs, because the physical performance of a task might reduce in value significantly within a decade; e.g. the taxicab industry.
Of course, being a Finn, I do not know if the minimum wage in US is far too low and is the social security system as bad in US as it sounds like. Rising the minimum wage might be a good temporary solution, but still, for many reason, I believe that instead of offering money and power as consumers, the people should be provided education and power as value creators (labour).
As far as I know, for decades the US has been taking more and more debt in order to secure cheap import goods from China to relieve the material needs of the working class. The intellectual elite has been able to increase productivity outside the US (and greatly profit from it), while the commons have fallen deeper to the pit where the bubble will burst, while they drown with it.
Education Removes the Fear of Change
What if we would change the game in such way, that instead of labour markets providing the safety-net for survival, the government would. Instead of encouraging employment, the government would encourage education, personal development and personal risk taking (as enabled by the safety-net).
The idea, that some people are better at value creation is a sickening one. While it is true, that some people have higher capacity to create value, we should also focus on enabling people to learn about becoming value creators themselves. Otherwise someone will create imaginary bullshit jobs to be done by their contract monkeys.
While the common narrative holds corporations as evil in it’s purest form, they are not that different from governments, who sacrifice the future of the young men for the safety of the nation during the eras of aggression.
Corporations are the modern day format for imperialism and we as consumers accept their existence, because we can’t afford products created with our own salary rate. The trust funds, which pay the pensions of the old are married to the corporations profits. All service jobs are dependant on cheap imports. Corporations are our silent conscience for the lack of value creation and acceptance of the easy meaningless jobs.
However, thanks to corporations, less people in developing countries are living underneath the poverty lines. Of course this aspect assumes, that our life-style has any value at all. I do believe, that a life with predictability and safety might be a better one, than being at the mercy of the nature alone (although I find beauty in minimalism). Some might not share this belief with me.
The hierarchical structure of work-life culture seems to be born from our tendency to over-estimate our own value creation and under-estimate the value of others (Dunning-Kruger effect). Due to the sum of many cognitive biases, we tend to be very dependant on hierarchical management practices, which forgive the physical labours inability to understand their value creation chain completely.
The complexity of H&M makes the employees feel like they are selling real creative fashion, which is not limited by the production capabilities of cheap foreign labour and their own ability to work with minimum-wage and performing very simple tasks with insanely fast pace. Even the simple tasks are camouflaged to be complex by “educating” the employees to do things like machines.
This is the core problem.
We treat ourselves the way we treat our food. Instead of letting it grow and to be eaten, we need complex machines to do things we don’t quite understand or want to accept ourselves to be doing. Somebody else does the moral choice. If a machine does a thing, it is not a thing I do by pressing the buttons. Then we allow someone else to press our buttons.
Maybe we should rethink and take responsibility of educating people to understand the value chains, instead of encouraging people to become dependant on complexity, which makes them feel worthless.
Rising the minimum-wage will not change the structure of society. Minimum-wage will always be too low, for allowing people to educate themselves and making moral choices as a consumer.
After all, the reason we are dependant on the profit driven corporations is the optimism of the old, who used democracy to approve the dependency to trust funds as a source of social security. Trust funds, which require constant economic growth from the corporations.
The problem is not the profit driven corporations, but the bubble of economic intellectual property driven phase of imperialism bursting. The labour force has not been creating value to anyone except themselves, the Western World, by performing service jobs at H&M, which increases the value of Chinese jeans from 5$ to 50$.
However, the service jobs are important, because they bring balance for the gap between international trust of value creation and the actual production prices. They provide people identities, which are today more than important. They create the intellectual social reality, which is not dependant on physical survival, but flourishes upon it. This is why ethical consumption has a future.
If the money used by the consumer is redistributed or the consumer has more money overall, there will only be a new Walmart (which somehow rises the prices), which is more invisible due to the complexity. The distribution of wealth is not about the distribution of money, it is about the distribution of opportunity, that affects the preferential attachment towards the source of income.
The distribution of opportunity is redistributed by enabling education about the value creation chain. Instead of building up american dreams, we should get down towards our real identities. Discover our inner value production assets and accept them. Discover methods to refactor our inner value production assets and contribute for the creation of simplicity, just like Open Source. Fight the complexity, which creates intermediaries for our survival and opportunity to have a voice.
The only way to change the topology of the wealth network is to affect the roles and weights of the nodes. We should enable risk taking for the commons during the 40 hours a week, not just enhance their ability to participate in consumption. When labour can compete against the labour conditions, changes will start to happen in the topology of the wealth network.
Consumption does not create happiness. The capital assets — which control the structure of supply and demand (prices) — they are more or less fixed due to the nature of the labour network. The control over ones labour conditions does create more happiness, as it opens up the opportunity to navigate towards either more consumption power or instead something else, which has more personal ethical appeal.
Opportunity for change creates hope, which is essential for happiness. I do not entirely believe, that any general level of happiness can be achieved. After all, some people are perfectly happy, when they do not have to choose or weigh opportunities. Some people are constantly anxious about choosing or opening new opportunities.
Inequality is always a consequence of limited opportunities. Denying a person, who has a voice. Dialogue rises from these voices. Not all voices are equally profound by the principles of ethos, pathos and logos. That is, where the mentoring should start. Not only intellectual mentoring, but also social and financial mentoring.
Why can’t we, the Western World as democratic nations, learn the vert same lesson, which has already been learned by the charity organizations? Money does not solve the problems, education does. Do not feed the hungry, you should all eat less, while you teach people to fish (to become useful within the culture). Hungry people get angry, frustrated and eventually violent; this is the story, which our current narrative has picked up from the book Das Kapital.
In May 5th 2018 it will be the 200th birthday for the old man Karl Marx. Perhaps we should commit ourselves for building a world, where labour is no longer a physical task to be performed, but an intellectual and social pursuit for value creation within the community, that provides us? Wouldn’t it be a high time for opposing the narrative of the military industrial complex, in which the narrative about Das Kapital is a cynic and violent one.
Best 200 year anniversary gift for the old genius, would be to prove them wrong! Hungry minds are eager to learn about the value creation within the community. Unless they are mentally abused or in other ways treated as slaves. Through education we can make people feel less worthless.
[I will later add another post about the practical issues of the matter; there is a risk involved, when government takes too active role in feeding and educating people (national socialism; communism; fascism), which has to be dealt with global division of control. There can be a dystopian future, if we gamify education too far, which is a necessity in an atheistic and free, consumerism oriented, society.]