The Social Capitalist Manifesto

Systems Evolution

In the beginning, energy was in a competition for space. Eventually, energy settled into cooperative states we know as matter. From matter was born a new field of competition — gravity — leading to the more complex cooperative states of heavy elements. Upon them were born fields of rich, novel environments, allowing for competition that gave way to molecular compounds; competition among compounds induced cooperative, autocatalytic dynamics; competitive autocatalysis begot cooperative autopoiesis — the first reproducing, single-celled organism. At each phase of the universe’s evolution, competing entities stabilize and internalize the complexity of their environment, giving way to new, higher forms of competition.

And so it went with life — single-celled organisms were in competition for resources, evolving into colonies of ever greater cooperative complexity, giving rise to multicellular organisms; multicellular organisms were in competition, eventually evolving into plant and animal colonies. Competing groups of cooperating animals eventually evolved emotions and language in order to more efficiently coordinate their activities. And here we stand, cooperating with ourselves while competing with others, and cooperating with our group while competing with other groups.

All systems evolve from competitive behaviour toward cooperative behavior and at each stage of evolution entirely new fields of competition are born.

Socialism

Like all things, humans are naturally in competition with each other. However, more so than any other life-form on earth, humans cooperate on a grand scale. Using emotion and language, we learn and share human protocols for behavior, articulating lessons learned about theft, murder, greed, anger, jealousy, love, appreciation, trust, agreements, promises, etc.

Through the evolving customs of cooperation among humans, an advanced division of labor emerged — some got the water, some got the food, some made the fire, some cooked the food, some sharpened the blade, some made clothes, some built shelter, some made jewelry, etc. By specializing and optimizing on a particular skill, and by being able to conceptualize the relative worth of each product or service produced, humans were then able to leverage each other’s skills.

Once labor was sufficiently divided and coordinated, the patterns of cooperation between people were formalized into common laws, thus giving rise to what we call social systems. Once a sufficient level of social cooperation was present, a whole new field of competition was born among humans: Capitalism.

Capitalism was born out of the stability of social systems.

Capitalism

There is a natural limit to the number of social interactions that groups of individuals can mentally coordinate. Social dynamics are built on emotion and language — a kind of emotional arithmetic that evaluates the relative fairness of a collection of actions within a group. As the number of individuals and resources within a group increase, the cognitive burden of fairly allocating labor and resources leads to brittle systems that collapse under the weight of their own complexity. The development of bartering systems between individuals ameliorated much of the cognitive overhead of coordinating the distribution of labor and resources, however, this form of trade was confined mostly to local transactions for goods in kind.

When there is a sufficient level of trust within a social system, the individuals within the system can collectively agree to place temporary, artificial value in fiat currencies. The currency then effectively decouples the demand for goods and services from their point of supply. Once the social system has developed enough trust in the currency, capitalism acts as a decentralized, distributed, uncoordinated algorithm for blindly allocating labor and resources.

This decoupling effect of capitalism leverages the wisdom of the crowds — multitudes of demand-side actors, through their transactions, signal to the supply-side actors which services and goods to increase or decrease the production of. With this crowd wisdom and this profit motive, innovation trended upward and small industries were born.

Though these capitalistic industries brought progress, their competition was hampered where individuals disagreed on common practices. As far back as the Babylonians, societies have implemented economic rules that govern business contracts, debt and the ownership of property. While these forms of cooperation constrained the degrees of freedom in financial transactions, entirely new competitive industries could be built on top of the stability of those systems, including banks and collateralized debt. New industries are usually born with minimal regulation but as they mature and stabilize regulatory forces often enable more complex industries to be built on top of them.

Capitalism is an engine of innovation, which can generate higher forms of social competition, cooperation, and progress.

Cold War

In the 19th and 20th centuries, the world was grappling heavily with the meaning of these concepts. Some saw the amoral competitiveness of capitalism as the primary cause of suffering and inequality, instead advocating for a radical abandonment of all money in favor of fully socialized “communal exchanges” for goods and services. By developing a fully managed economy, they believed they could eliminate the waste created by seemingly unnecessary competition, thereby ushering in an era of abundance and prosperity. Russia’s communistic experiment (the USSR) resulted in a totalitarian state, perpetually unable to realize their communistic ideal. However, the rise of this hyper-socialistic communism worried other world powers.

Western culture reacted to this growing threat of communism by developing anti-communist ideologies. Reactionary defectors like Ayn Rand even advocated extreme forms of laissez-faire capitalism. Western democracies promoted individualism as opposed to the collective, freedom rather than social welfare and, most of all, an unwavering faith in private ownership and free markets. Socialistic ideologies were demonized and eschewed.

By the mid-20th century, as the Cold War set in, tensions grew so strong between the world superpowers that the United States increasingly began to suspect their own citizens of being communist sympathizers. These fears further entrenched the United States into anti-socialist views and promulgated individualistic, self-centered political philosophy throughout the public discourse. By the end of the 20th century, it was clear that the USSR’s communist experiment had failed, falling under the corruption and complexity of a managed economy. Capitalism became the heir apparent of the ideological crown.

Fears associated with capitalistic and socialistic policies have more to do with the terrors of wars gone by than they do with the actual merits of competition and cooperation in society.

Balance

The truth is: both capitalism and socialism are absolutely necessary for a civilization to thrive. One cannot exist without the other. They are symbiotic. Despite our anti-socialist rhetoric in the United States, we’ve implemented vast socialist policies under Franklin Roosevelt’s “New Deal” — social security, five day work weeks, the public highway system, workers unions, Glass-Steagall, the Securities and Exchange Commission and various work programs. In fact, all programs funded by taxes are “social programs.” The police, fire departments, military, Medicaid, medicare, public education and other government departments and agencies are all social, funded at the expense of capitalism.

The choice between capitalism and socialism is a false dichotomy. Our tendency to argue for one over the other is a vestige of an ideological war of times gone by — ideologies not shaped by reason but fear. The fact is, to have a thriving, capitalistic transportation industry, we need a public road system. We don’t want a private road system because the geographic resources are too scarce, too prone to monopolization and too critical to the health and welfare of the nation. To have a thriving housing market, we need police and fire departments. We don’t want to privatize those services because we don’t want to incentivize house fires and crime with a profit motive. To protect the whole system, we want to have a military. But we don’t want to privatize the military, for all the same ethical reasons — the current military industrial complex proves how ill-advised it is to place a profit motive on the health and welfare of the state.

And so from this logic we can see that we do want public health care and public college education. Placing the health and welfare that these services provide our country in the hands of profit motivated, private entities has proven just as counterproductive as the military industrial complex.

Now, of course, that doesn’t mean all goods and services should be socialized. All forms of discretionary spending, recreation, hospitality services, tourism, specialized education, specialized health care, most food, gas, houses and cars, etc., etc., these goods and services are not critical to the health and welfare of our country and can be acquired after children have grown up and saved their money. And by keeping them in the free markets, we can maximize their potential for innovation.

As industries evolve, some of them will require regulation. We are seeing this with net neutrality laws today. Conversely, some public services may avail themselves of privatization in the future in ways that are safe for the health and welfare of the country. For instance, if flying cars become the norm one day, the public road system will become less necessary. If artificial intelligence replaces teachers one day, the public education system can be significantly downsized. If in-home robots can act as doctors one day, health care costs could drop significantly. Whatever the case may be, we will need to use intelligence to decide what public infrastructure is necessary for the health and welfare of society, depending on the needs and the technology and resources available at the time.

We shouldn’t be afraid of capitalism — competitive systems naturally evolve and innovate towards cooperation anyway. We shouldn’t be afraid socialism — cooperative systems allow for the creation of entirely new free markets of competition. For example, imagine the economic opportunity that would be provided by free internet across the nation, via perhaps low orbit satellites. Like the public road system, that would be a smart public infrastructure investment. But it would make more sense to let the private industry innovate in the low orbit satellite space first. That would be even smarter.

All successful societies strike a unique balance between socialism and capitalism and evolve that system to meet the health and welfare needs of the society at the time.