A New Economy for a New Age
Capitalism has a history and a theory, but it also has a mythology. These look like simple stories that help to motivate understanding. There’s a just-so story about how Barter plus Money equals Markets, proving we were always capitalists at heart. The parable of Supply and Demand teaches us why prices are always fair. Enjoy the myth of Competition, where the market is a level playing field and companies fight fairly entirely on the merits of their products.
While these stories elide a fair number of complexities, they do serve a purpose. Humans need stories to justify our ideals, our beliefs, and our actions. A collection of simple stories is not a terrible way to organize our knowledge.
Popularized by arch-conservatives Thatcher and Reagan, the TINA myth — “There Is No Alternative” — says that free market capitalism is the final, perfect system forever. Fortunately we know this myth is false because capitalism is destined to be replaced.
The process of digitalization — the transformation of everything of value into digital information — dissolves the foundations of capitalism and renders it unable to function. The theory is handled in more detail elsewhere, but you may have noticed how the bottom has dropped out of the encyclopedia market thanks to Wikipedia. The same thing is going to happen to … well, everything.
Thus a new economy will arise, one that must emerge as result of the postcapitalist era. Perhaps we can start to give it a bit of mythology today.
Picture a complex, modern, worldwide economy without money. How will it function?
In the new economy all labor is done by volunteers. People volunteer to assemble textiles, to run microchip fabrication facilities, build housing, and write software. Doctors, firefighters and police are all volunteers. Everyone volunteers for something they want to do, and can stop or change at any point. Volunteering your time and expertise for no payment isn’t just something done on weekends like in the old economy; in the new economy it’s everyone’s entire career.
And people volunteer to do this work, sometimes dirty or dangerous work, for the same reason they volunteer today — for the satisfaction of contributing, and for the recognition of their value to society. People admire individuals who strive to make the world a better place, and aspire to be admired themselves. While people may be venal and selfish sometimes, they can also be generous and cooperative. There are enough of these noble attributes in everyone to power an economy.
The new economy starts by providing essentials. Every living person gets what they need not just to live, but to thrive. Not just clean air, water, food, clothing and shelter, but also medical care, education, access to information, media and communication, creativity and self-expression. Everyone gets these things for their entire lives by virtue of being born. In exchange the new economy only asks — but does not demand — that everyone volunteer some time to make the whole venture work.
The new economy might look smaller than the old economy, and it might be. After all much of what the old economy did simply doesn’t exist. There are no banks, no stock exchanges, no hedge funds, no day traders, no insurance, no monetary consultants or brokers, no payday lenders, no pawn shops. None of that is necessary because there’s no money. There’s also no marketing, no advertising, no retail stores, no wholesalers or middlemen — nothing involved in buying and selling is needed either.
Nobody misses any of those things because they never really created any real value even in the old economy. They may have created wealth, but not value.
Denizens of the new economy value what really matters — human wellbeing, health, and happiness — seriously enough that it gets counted. If Abby does anything that improves the life of Ben, that gets recorded. If Ben goes on to do something for Carol that’s also recorded. The public database of all of these events computes a continuously-updated closure, which credits Abby for contributing to Carol, albeit indirectly. It also propagates backwards, so if Abby’s actions were inspired by Pat’s idea, then Pat has also helped Carol. People are known not by their salary or their credit rating, but by what they have done for others.
Goods and services are distributed by queuing. If you want a thing you get in line, and when you get to the front of the line you get the next one available. The record of your past contributions, however, can influence how quickly you move through the line. A person who has done more for more people will tend to get what they ask for faster. It’s a not a huge effect, but it’s the tangible reward for people who choose to volunteer.
One thing the old and new economy share is accountants. In the old economy accountants track money; in the new economy accountants track relationships.
Jobs that were given very little money value in the old economy — things like childcare, teaching, food preparation, sanitation, art and culture —those are important in the new economy. They have value because they enrich people’s lives, and not for the old reason of making someone else richer. Another intended consequence of this system is to promote science and research. A scientist who makes a discovery no longer needs to be content with lots of journal citations but a pauper’s salary. Those citations are exactly the kind of thing that the new economy accounts for, and if that discovery makes lives better — directly or indirectly — that scientist can expect be rewarded for their efforts.
Creative people want their output to be copied and shared, because that’s how they contribute. The new economy thrives on digitalization.
Capitalism won’t vanish tomorrow, and it won’t give up without a fight, but it will eventually fail. I don’t believe that the postcapitalist world will be one without scarcity or strife. After all it’s still full of human beings struggling to get along. But if we start to think about it now, and write about it, and dream about it, I believe we can make it a much better world than the one we inherited.
