Human Investment Democracy (HID) aka Democratic Human Capitalism (DHC), Not (naked, unfettered) Capitalism, Socialism, Libertarianism, or Anarchy; not even Democratic Socialism.

Stephen D. Williams
Oct 2, 2018 · 17 min read
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Summary: Human Investment Democracy (HID) aka Democratic Human Capitalism (DHC) is a new term that perhaps best describes both the balancing alternative to Capitalism and the heart of Democratic ideals. As defined below, it seems to effectively encompass the cumulative goals of many progressives, liberals, and the DNC. Conservatives, libertarians, and the GOP would benefit from contrasting their goals and decisions with the concepts and rationale here. [I strongly suggest reading the linked analysis pieces. They are cogent, instructive, and form the basis and impetus for this piece.]

Not basic income, basic investment.

Politics in Flux: Both the Democratic and Republican parties in the US, and their equivalents in much of the world right now, are fractured, evolving, and confused, albeit for vastly different reasons. Voters are variously clinging to fragments of the establishment, exploring new people and options, and searching for a new identity, clarifying what they stand for and why. Now, more than is usually the case, the range of ideas, differences & diversity, inside / outside hurts, and legitimacy & ranking of goals is greater and potentially more in flux than ever. This can be a good thing, on the way to reaching better approaches, if we think clearly and we work to avoid all of the known traps, about which we should all educate ourselves.

Need for Clear Terms: One of the biggest obstacles to effective intra and inter party debate is finding terms that clearly describe and sum up our ideas and positions. Often, terms are used by different parties at the same or different times to mean much different collections of concepts. Due to the current dynamic, Democrat and Republican can’t be used to indicate many specifics beyond how you are likely to vote in the most general sense. A big part of the problem is the war on facts, reality, and terms, often with creatively malicious mischaracterization and rebranding or outright poisoning of terms. The main possible antidote to this is more clarity about facts, principles, goals, and methods. While the acid test is unpleasant and dangerous, we can get through it to a positive outcome. To some extent, conflicts between different groups are often based on a range of misunderstandings, along with different estimations of the probabilities of various positive and negative outcomes. Measurement and clear analysis can minimize this, if concepts and models can be created, communicated, and used.

Communicating Our Ideas: When we have read, listened, and thought about an area enough, we tend to form complex associations, differentiating points, and preferences. Without effective terms, we are stuck with the closest term, often too imprecise to allow us to communicate well or even clearly perceive what we’re feeling. We may or may not be able to correctly guess whether certain others are using the same terms to mean much the same thing without an extended discussion. Choosing to use a new term and providing a clear definition of it as often as possible is an option, but it can be difficult for a number of reasons.

Creating New or Recycling Terms: Most recently, Bernie Sanders chose Democratic Socialism to signal his departure from the establishment Democrat platform. He made it work impressively well, but GOP-favoring voters seemed to seize on ‘socialism’ literally and even DNC-favoring voters seemed unsure by various degrees. Here, Bernie’s speech explaining what he means by Democratic Socialism is detailed. His philosophy is to push for economic security, economic rights in the ways of Franklin Delano Roosevelt and Martin Luther King Jr. To push for “protecting the needs of the working families, the elderly, the children, the sick and the poor”, as other countries have done better than the US. He supports “universal health care, Wall Street reform, universal college education, paid family leave” … “Black Lives Matter movement, immigration reform, abortion rights, LGBT equality and more as issues in his vision for greater fairness.” All of these goals are easily shared by many. But does the term Democratic Socialism fit?

Socialism:Socialism is a range of economic and social systems characterised by social ownership and democratic control of the means of production.”

Democratic Socialism: “Democratic socialism is a political ideology that advocates political democracy alongside social ownership of the means of production, often with an emphasis on democratic management of enterprises within a socialist economic system.”

Social Democracy: “Social democracy is a political, social and economic ideology that supports economic and social interventions to promote social justice within the framework of a capitalist economy, as well as a policy regime involving a commitment to representative democracy, measures for income redistribution and regulation of the economy in the general interest and welfare state provisions.”

“The ultimate ideal envisioned by liberalism is the perfect cooperation of all mankind, taking place peacefully and without friction. Liberal thinking always has the whole of humanity in view and not just parts. It does not stop at limited groups; it does not end at the border of the village, of the province, of the nation, or of the continent. Its thinking is cosmopolitan and ecumenical: it takes in all men and the whole world. Liberalism is, in this sense, humanism; and the liberal, a citizen of the world, a cosmopolite.” — Ludwig von Mises

Libertarianism: The thing that shallow libertarians, i.e. immature college kids, don’t get is that there are secondary, tertiary, n-ary effects and possible motivations for everything. Tangible benefit, for mature people, is naturally defined as enlightened self-interest. A key threshold is whether you can buy into ‘pay it forward’ and similar concepts. Yes, voluntary is good. But what to do about the pathologically selfish or those otherwise disrupting the efficient flow of mutual cooperation toward mutual benefit? A malicious or even maliciously ignorant actor can negatively affect many others. A deep libertarian gets that; although, depending on your definitional narrowness, maybe that’s an oxymoron. The gap here is evident with Paul Ryan and others: they are all for collectively investing in and advantaging business and owners, i.e. naked capitalism, but completely miss the point of investing in people, i.e. human capitalism.

The Correct Term?: Of all of these terms, Social Democracy fits closest to what Bernie Sanders is saying and seems to think. (If Wikipedia is authoritative here.) It is also closest to what those who don’t have an overriding fear and/or distrust of the government and the electorate expect. I suspect that Democratic Socialism seemed a better brand, construable to the other definition.

No One Wants Pure Socialism: Virtually no one in the US actually wants any significant form of Socialism or Communism, especially not “of the means of production”. Socialism or socialist, in the US, is used to mean non-commercial social support of some type, a la Social Democracy, but usually in a very limited sense. A government program to prevent certain infections in babies is a social program. That is not to say that it is never acceptable for government or non-government cooperative ownership and/or management of certain things. There are those, usually more GOP leaning, who disparage nearly any government ownership of anything. Most agree there are clearly acceptable categories (weapons, treasuries, Executive basics, Legislative, Judiciary), and a series of increasingly gray areas (postal service, licensing, research, education). It is perfectly reasonable to debate each area rationally; new developments in science, culture, and economics change needs, opportunities, and optimality. Some changes have been very successful (military invention, Internet, and now Space) while others were clearly mistakes. The privatization of hospitals decades ago to save cost is likely a key driver of our health cost conundrum now. The privatization of incarceration is both morally and financially wrong, virtually destroying a large segment of our population, leading to corruption, and, worse, leading away from minimizing. Ironically, “Much like China, Vietnam remains an authoritarian country today. And it’s communist, too, but in name only. … According to a recent Pew Research survey, Vietnam today has the single most positive views on capitalism of any country”

Competition vs. Cooperation vs. The Commons: The models of competition, cooperation, and shared resources, “the commons”, are all good things. These come in all forms, including government, commercial, academic, scientific, artistic, sports, and relationships.We’re taught this in various ways, and we can see it all around us. We often have some sense of when each is appropriate, although many people seem to have blind areas as well. There are various dynamics in everyday life, business, politics, education, research, finance, art, etc., along with complex history, traditions, and philosophy, that cause us to understand where one strategy is more appropriate than another. For the most part, we make this work well. Sometimes we see or experience situations that look wasteful or broken: We are whisked through a Target or Amazon purchase but agonize at the DMV. We detest traffic on the highways but can zip to any destination directly by aircraft. Making political decisions between these can be tough for several reasons:

  • We often have to operate on large time scales for investment in infrastructure, neighborhoods, raising children, etc. making it very difficult to compare approaches.
  • Many people have incomplete understanding of the full range of models, elements, risks, opportunities for / protection from gaming by bad or ignorant actors, etc. for each of these approaches. Often, they are familiar with how these models work or don’t work in particular cases and don’t know details about, for instance, the degree of education, scrutiny, and oversight of a typical Federal employee.
  • Particular models may have been strongly associated with very narrow, specific instances that have been affected by specific cultural circumstances, gaming by those involved, and much different levels of ignorance or personal goals than a more modern case.

It is good to learn key lessons from history, avoiding repetition of major mistakes, but also good to avoid mis-learning lessons from history. If you took 100 or 1000 competent, skilled, healthy, friendly people from the US and placed them in any location and asked them to operate in any half-way reasonable regime, it is very likely that things will operate smoothly and productively for some time. Conversely, if you started with people who were incompetent in one or more ways, who were thieves or gangsters or corrupt officials or who grew up with food and safety insecurity, no system will work well and only the best engineered and constructed will work at all allowing them, or their descendants, to converge to something healthy. The goal of a society should be to help everyone converge to being that competent, healthy person whenever possible. This is nearly always a wise investment, and it is certainly the wisest investment overall as it will usually pay off.

Every approach can be a combination of competition, cooperation, and use of shared resources. The goal of politicians should always be to reach an optimal outcome through the best use of these aspects of a solution.

Socialist Collectives are Everywhere: There is an ongoing demonization of anything “socialist”, apparently an echo of the Cold War. Collective action is not necessarily socialist, and almost never socialist in the Cold War sense. Often we just use a different term for cooperation, coopetition, teamwork, etc. What many fail to realize is that many situations are socialist or collective in some real sense. A family thrives on cooperation, while competition can be bad. Corporations are usually, to some degree, dictatorships or oligarchies where most people operate in a kind of socialist collective where they have little or no voice or power. Employees often have less autonomy than medieval peasants but work more. [peasants]

One of the charges of the Right is that unions are a socialist incursion against capitalist companies. [unions] A more appropriate model is that unions are democracy in the socialist dictatorship that a typical large corporation creates for their employees. (A democratic corporation is one owned in some fairly equal way by the employees or employees balanced with investors.) Union leaders are elected by other employees and union actions are generally voted on, or operate as a representative democracy. This provides a democratic balance to the autocratic owners of the corporation.

You Get What You Incentivize For: An incorrect framework will lead to inefficiency, corruption, abuse, and generally away from optimality. It is common to be suspicious of government workers: Will they be efficient? Correct? Fair? Uncorrupted? Will they somehow create a situation where they are well paid with good benefits but provide little value? While sometimes those things happen in the commercial sector, we understand that if the company as a whole isn’t competitive, eventually that will resolve itself. (That assumes that there is no unfair monopoly or oligopoly or other runaway situation that hinders competition.) It’s not always clear to most people what happens in various agencies; most people have only heard stories of expensive hammers and experienced slow service at the DMV. I’ve worked or consulted in a wide range of commercial environments for many years, and eight years in Federal agencies. I’ve interacted with management, administrative, and technical people in at least 13 agencies without ever experiencing clear incompetence or lack of care. Most agencies, most of the time, strive for levels of efficiency at least similar to the private sector, within their limitations. Where inefficiency comes in is not chronically with workers, but with the design and award of contracts. Large government projects, which are usually contractor led, are often incentivized poorly, too often getting what the contract incents them to give. Contracting companies have evolved to survive, but not always to improve the cycle much. Government workers are usually committed to the mission, asked to be efficient, but not working to enrich shareholders. For many government function jobs, the presence of a profit motive would inevitably lead to corrupt or at least suboptimal outcomes. The case of localities living off of fines rather than taxes, shortening yellow lights and needlessly lowering speed limits to pad their budget, is the privatization abuse problem in reverse.

Human Capital: Capitalism is well-understood to include private ownership of the means of production and some degree of coordination, usually overseen by non-participants like government regulators. What many on the capital-owning, management, finance, and commercial side of society don’t seem to clearly think about is that all of the same principles of investment apply to people. Human capital doesn’t quite fit in with capital investment in the “means of production” because the timeframes, directness, and certainty are much different. All of society exists to invest in their citizens as a whole, developing them to be the most educated, skilled, capable, and fulfilled they can be. Yet, if you look at voting by certain groups and statements by many business-oriented people, it is clear that there is little interest in investment in people beyond their myopic bubble. Some people think in Us vs. the Other, zero-sum games, short term paybacks, or a narrow concept of fairness. Some may even desire worse outcomes for certain groups that they disapprove of, even if it hurts others and is a drag on the overall system. People often are dimly aware of all of the investment, effort, and care that they have benefited from while expecting better overall outcomes than would actually occur if less funding were provided to others.

Human Investment Democracy (HID) aka Democratic Human Capitalism (DHC): (Both terms are proposed; let’s A/B test.)

This is a democratic movement embodied by the concepts of pay it forward, enlightened self-interest, and generalized caring about others. Humans are the most valuable commodity on Earth, if and when we invest in them so that they can reach their full potential. When we don’t, we have poverty, strife, misery, and wasting of human and other resources. Citizens of Western democracies should know this. Perhaps, since many grow up in such a sheltered mono-culture, they can’t really understand other segments of society and other societies in any deep way. They can’t see the gaps in culture, education, and opportunities or feel empathy that might cause them to help those in other perceived tribes. Within the US, we’ve made a lot of progress in bridging these gaps for many, but also highlighted the gaps in understanding and empathy that remain. This is even more true for those perceived to be very foreign to the generic American experience.

In a strong sense, people are who they are programmed to be by culture small and large, education, experiences, the range of their community and travel, religion and philosophy they are exposed to and taught to follow, and their perceptions of themselves and how the world works. Many groups are in competition with others for mind share, resources, and political power. The goal of a fully progressive, democratic movement should be to maximize the effectiveness of people in their lives, happiness, productive pursuits, and creation of a closer-to-optimal society and world. We can argue over the details of what optimal means, but almost everyone agrees on the core: real education, real skills, meaningful / productive / useful work, healthy relationships, and happy / fulfilled / pleasant lives.

These are some core tenants:

  • Strict limits on lack of support for children: We should not punish children for the crime of being born into a poor family in a bad location. We should not allow bad parents to limit or damage children too much. It is difficult to get this right, but not difficult to do better.
  • The Purpose of capitalism is human capitalism, not just to make the rich richer. Fettered capitalism, which is what we’ve had to some extent since the age of robber barons gave us anti-trust and similar safeguards, should be carefully and deliberately structured to avoid runaway disparity of any kind.
  • What you don’t measure gets ignored. The overall health of society should be measured and used as a key input to important decisions. This should include wellness indexes, effectiveness measures, A/B testing of approaches, and competition in all forms, especially commercial vs. non-profit vs. governmental functions.
  • Some functions are inherently gameable, while others have tendencies or possibilities. We should recognize when this is possible, and especially when it is happening, and have a general approach to solving this before it sours people, markets, and societies. Obvious examples are the military, police, and jails. We’ve allowed the latter to become privatized, leading to kickbacks to a judge to give unfair sentences to juveniles to increase profits. We no longer have many public hospitals, probably a key part of the rise in healthcare costs.

Let’s be very clear about what our goals are for society and the world, what frameworks and limits we will insist on, what flexibility we agree to, and what strategies we find most promising. Let’s specifically engineer for the outcomes we want, trying to be clear about all of the aspects, costs, benefits, risks, and ways we know things could be gamed and what our mitigations will be. Let’s hold all past, present, and future positions, strategies, and mechanisms to clear standards of evaluation, criticism, and openness to consider all options.

Most people in the US actually share a very large common understanding and preference for things. Often, political differences come down to different weights on importance, likelihoods of good and bad things, perceptions of cost or quality, or emotional fairness concerns. Yes, I see that happens sometimes, but I don’t think it happens often and this other problem is much worse. And that may be true for each of your experiences. Orange County California, home of the Richard Nixon Library & Museum and one of the few highly conservative heavily populated areas of California, is just a few miles from Compton, notorious for gang violence and other problems. Extreme disparity leads to great fear and otherness, greatly diminished empathy, and apparently no interest in investing to solve an apparently unsolvable problem.

We need to rise above this: No societal problem is unsolvable. We need to overcome our collective poverty of imagination, our wasted cognitive surplus, and our concentrated mismanaged sequestered capital to bring everyone at least to a healthy baseline of competency and living. It is the responsibility of competent, capable individuals to help those who aren’t there yet.

[1] Why Are Conservatives More Susceptible to Believing Lies?
An interplay between how all humans think and how conservatives tend to act might actually explain a lot about our current moment.
John Ehrenreich, Nov. 9, 2017

[1a] “Many conservatives have a loose relationship with facts.” “false beliefs about generally accepted science.”

[1b] ‘If “truth” is judged on the basis of Enlightenment ideas of reason and more or less objective “evidence,” many of the substantive positions common on the right seem to border on delusional. The left is certainly not immune to credulity (most commonly about the safety of vaccines, GMO foods, and fracking), but the right seems to specialize in it. “Misinformation is currently predominantly a pathology of the right,” concluded a team of scholars from the Harvard Kennedy School and Northeastern University at a February 2017 conference.’

[1c] ‘at the most basic level, conservatives and liberals seem to hold different beliefs about what constitutes “truth.” Finding facts and pursuing evidence and trusting science is part of liberal ideology itself. For many conservatives, faith and intuition and trust in revealed truth appear as equally valid sources of truth.’

[1d] “Fairness and kindness place lower on the list of moral priorities for conservatives than for liberals. Conservatives show a stronger preference for higher status groups, are more accepting of inequality and injustice, and are less empathic”

[1e] ‘Baptist minister and former Republican congressman J.C. Watts put it succinctly. Campaigning for Sen. Rand Paul in Iowa in 2015 he observed, “The difference between Republicans and Democrats is that Republicans believe people are fundamentally bad, while Democrats see people as fundamentally good.”’

[1f] ‘Conservatives are also less introspective, less attentive to their inner feelings, and less likely to override their “gut” reactions and engage in further reflection to find a correct answer. As a result, they may be more likely to rely on error-prone cognitive shortcuts, less aware of their own unconscious biases, and less likely to respond to factual corrections to previously held beliefs.’

[2] Speaking as a…, Jonathan Rauch, Nov. 9, 2017 reviewing The Once and Future Liberal: After Identity Politics, Mark Lilla, 2017

[2a] ‘“Identity politics” is a hard term to pin down, but a reasonable working definition would be: political mobilization organized around group characteristics such as race, gender, and sexuality, as opposed to party, ideology, or pecuniary interest. In America, this sort of mobilization is not new, unusual, un-American, illegitimate, nefarious, or particularly left-wing. My parents’ and grandparents’ generations took it for granted.’

[2b] ‘Lilla, a historian and professor of humanities at Columbia University, acknowledges that identity-based social movements “have made this country a more tolerant, more just, and more inclusive place than it was fifty years ago.” His complaint is with two aspects of the way many left-of-center activists and intellectuals practice identity politics today. First, he argues, they define identity in a way that drives away support. Second, too often they don’t really do politics at all.’

[2c] ‘liberals lost their common touch.’ … ‘Many liberals hope to win blue-collar and middle-class support with jobs programs and skills training and health insurance and child care. They argue that there is no need to downplay the concerns of minorities in order to appeal to whites without college degrees. Lilla’s rejoinder is bold: today’s version of identity politics is framed in a way that inherently restricts its appeal and marginalizes its influence.’

[2d] ‘Politics in America is about storytelling more than policy, and the narratives that tend to be the most politically attractive — Roosevelt’s Four Freedoms, for instance — tell stories about making Americans better off individually and nationally. The benefits of the New Deal may not have been extended equally to all Americans, but the liberal rhetoric of that period spoke of the national good and the need to build broad electoral coalitions. In their campus redoubts, Lilla argues, liberals forgot how to talk that talk. They began to conceive of and practice politics not as a common struggle for national improvement but as a diverse set of quite distinct struggles against specific forms of oppression.’

[2e] ‘Writing last year for a Nation magazine symposium on identity politics, Walter Benn Michaels remarked, “The defensible heart of identity politics is its commitment to opposing forms of discrimination like racism, sexism, and homophobia.” Discrimination is of course a good thing to be against; but what is identity politics for? Programs and policies like affirmative action and equal pay and police reform and humane immigration rules, yes; but what it hasn’t yet arrived at, Lilla argues, “is an image of what our shared way of life might be.”’

[2f] ‘Mainstream liberals, including Hillary Clinton, have expended no little effort searching for a persuasive story about national betterment. If Lilla is right, however, no amount of effort will suffice until liberals remove the identitarian blinders that impede their vision. Similarly, progressives can offer job training and day care and health insurance, but until they frame their calls for minority rights and social justice within a story of common uplift, they will fail to fire moral imaginations in ways that consistently win elections. That failure is costly not only politically but also substantively, for if ever there were a time when progressives had reason to make common cause with less-educated white men, that time is now.’

[2g] ‘He wants movement liberals to rebalance their priorities, and he believes their conception of politics prevents them from doing that. “The paradox of identity liberalism is that it paralyzes the capacity to think and act in a way that would actually accomplish the things it professes to want.”’ … ‘He concludes: “Identity liberalism has ceased being a political project and has morphed into an evangelical one. The difference is this: evangelism is about speaking truth to power. Politics is about seizing power to defend the truth.”’



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