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Diversity is the key that underpins what our capitalist system and nature itself requires to be stable and grow.

The Diversity Principle

Where game theory fails is in the principle of diversity.
If you consider that our capitalist monetary system is clearly Darwinian in nature where the best and also the biggest wins, it tends towards every larger financial and trading structures.
It also follows that if you recognize that capitalism is Darwinian in nature that it has some basic attributes similar to nature and and therefore needs to managed as such.

The basic idea that only that capitalism can regulate itself producing ever bigger financial and trading institutions fails to recognize the need for diversity in the market place.

In its simplest form, imagine a local market that only had four stalls each selling the same thing, naturally it would stagnate by its on lack of diversity.

This is where the idea on a global level we have been pushed to amalgamate and centralize such as in the Euro single currency which has caused stagnation and lack of diversity /growth.

On a local level we can see the stagnation in local economies brought about by the shopping giants and retail outlets. The idea that bigger is better totally fails to understand the need for diversity in the market place.

On a global level and local level the protection and promotion of diversity and diverse trading conditions needs to be addressed and considered in the same way that game theory was embraced.

Diversity is the key that underpins what our capitalist system and nature itself requires to be stable and grow.

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    Jun 25 2012: How about a fairer society via leveling the value of contributions of individuals? Check it out here:

    http://thenewsocialsecurity.wordpress.com/2012/06/25/the-new-social-security-position-paper/
  • Jun 15 2012: It would be helpful if you would elaborate on just what "diversity" means.; it is not obvious that this is such a great virtue in markets, or indeed , that markets are "darwinian". In our modern version of "Capitalism", this meaning seems to have more relevance to a kind of benign brainwashing about the virtues of one kind of soda drink versus another, for example. In oother words, mass consumption is not really about anything useful, but rather fashions, etc. If you are tallking about banks, or industry, that is different.
    It is a bit bizarre to be even talking about Darwinism in these days of "Privatizing Gains, Socializing Losses". In the case of banks "Too Big to Fail", "rescued at taxpayer expense, it would seem that the main struggle is between the taxpayers and the Banks, with the Banks "winning". So who is "Unfit" ?
  • Jun 13 2012: Thank you for the interesting replies

    In reply I would point out that as in nature there are parallels with capitalism which is also Darwinian

    As in nature a landscape that only contains super predators soon becomes a wasteland. An unmanaged environment has checks and balances that eventually sees the hierarchy of predators and other species change with the super predators dying out to some extent.

    I'm am proposing that big business not only manages their local environment but actually promotes minor competitors even if they are unrelated to their business model. As within nature a diverse macro economy provides a stable and healthy environment for sustainability and growth .

    In the present model big business feeds on the environment pushing out minor competitors leaving local economies a wasteland as it would in nature.

    On a global level a system that only contains 3 or 4 super economies and very few currencies will also stagnate through lack of diversity which is a basic principle from the trading markets before the Roman times.

    The principle of diversity in the market place whether it be a small localized macro economy or at a national or international level has been overlooked by the omnipresent idea that capitalism can't be managed and must be left to the Darwinian belief that the finical environment will regulate itself without massive human cost,the idea that an environment where the super predators can consistently grow without a healthy diverse environment to sustain it.
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    Jun 12 2012: your logic fails at several levels.

    1. there is only one fitness in an evolving system, not two. the better wins, there is no such thing as "also the biggest". if the biggest is the best, it wins, if not, it doesn't. in capitalism, there is an ideal size of entities, depending on many factors.

    2. in nature, nobody guards diversity, yet it naturally develops. if it was true that monocultures naturally form, we would not see the mind blowing diversity in nature.

    3. as in your example, not the market, but states push things the wrong direction. they make superpowerful superorganisms which then starve to death under their own weight.

    all in all, you are right the diversity is necessary. the right level of diversity is discovered automatically by the free market. it is distorted by the power hungry, ever-watching, all-controlling state.
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    Jun 12 2012: Are you saying that capitalism favors larger firms- that there are economies of scale in all things? Doesn't the economic theory underlying capitalism assume lots of small suppliers and lots of small independent buyers and that sellers will compete by offering combinations of price and value that meet the demand of different niches of customers? Don't we see all around us evidence of small business and large trying to compete for business by offering different things, which is to say diverse and changing offerings?
    I see you are arguing that diversity is fundamental to capitalism, but isn't this also precisely what the theory we all learned in school says?