Wednesday, January 15, 2014
A Reformed Capitalism for the 21st Century
What if we changed the rules of capitalism? What if we stuck with private capital organized into corporations but required them to compete for access to resources, not according to which would pay the most, but on the basis of what they were going to do with it?
As we steadily run out of resources, we'll need to devise some sort of allocation system to replace the free market model of the past two centuries. It would be entirely sensible, if we are to start living within the finite limits of our environment, to require those who want access to resources to justify themselves.
What do they intend to produce? How is it superior to other products? How much research and development has gone into the product? To what extent is it durable, upgradeable? What will be the lifespan of the product? How will it improve the consumer's quality of life? What will be the resources to production ratios? What will be the resources to utility ratios? How much of it will be made with recycled materials and how much will be recyclable at the end of its lifespan? How will it be produced? What will the manufacturer do to curb emissions and other forms of environmental degradation?
What if we could deter companies from making enormously wasteful, useless junk? Imagine if we could withhold energy and resources from the production of crap?
It would still be a form of capitalism. There would still be private investment. There would still be profits and rewards. However it would be capitalism harnessed into service of a steady state economy, not capitalism rampaging unchecked in a free market economy.
Yes, it's a controlled economy. Anything short of free market capitalism must be controlled, regulated in some way or another. This is inevitable in a world without more than enough to go around. It is essential to a transition to a steady state economy. Change is frightening and the idea of giving up free market capitalism is really scary to a lot of people. Yet standing on the edge of a cliff is scary and you have to make a decision whether to go forward or go back. If you want to be able to make future decisions, you realize you have to step back. Free market capitalism has brought us to the edge of that cliff and we've got a big decision to make.
I was inspired to formulate these ideas by an article in TruthOut by Richard Smith, Beyond Growth or Beyond Capitalism. Smith sees no role for capitalism and, while I understand his reasoning, I think he's overstated his case.
This discussion is best considered with at least a working understanding of Steady State or Full Earth economics which, if we're to avoid some very ugly outcomes, is pretty much the direction we'll need to go in our overpopulated, under-resourced world. I've provided a link to the Wiki page and, while it's a useful introduction, I would recommend that you read some of the works listed in the bibliography at the bottom of the page. The more you learn, I'm pretty sure the less radical and less scary you'll find these concepts.