TED Conversations

Jah Sun
  • Jah Sun
  • Los Angeles, CA
  • United States

CEO, Water Charity

This conversation is closed.

What alternatives are there to the current economic system? Should global capitalism fail, what would be the best model to replace it?

There are a ton of people who are dissatisfied with how our current system operates. Quite a few people are coming to the conclusion that this system is endemically flawed.

The Occupy movement is merely the most obvious and vocal outgrowth of a sentiment that many feel very strongly... namely that our Capitalist model of resource and labor management is unfair, environmentally unsound, inefficient, and unsustainable.

The fact that the people who profit the most in our system are often people who do little or no actual work is fairly self-evident. The hardest work, like toilet cleaning, often garners the most minimal of recompense, while investing in abstract economic instruments like the S&P Index can net one millions of dollars in a 10 second phone call placed from a poolside lounge chair in a 5-star resort.

Given that any system, no matter how well designed, can be improved... this debate is an attempt to spark a rational conversation on what we could do to make the exchange of goods and services more just, more effective, and more healthy for the biosphere.

There are scant few models out there that even propose any clear alternative. Most of the writing on the subject amounts to either pure critique of the current system, or pie-in-the-sky Utopian idealism with no clear path to get from here to there.

So, brilliant TED lovers... anyone got any good ideas?

We can discuss the pros and cons of such extant alternative models as The Venus Project, the "Basic Income" (ala B.I.E.N.), some of the ideas presented in Pinchbeck's latest Evolver essay compendium "What Comes After Money?" or any other relevant topic that tickles your fancy. Feel free to defend global capitalism if that is how you feel.

Let's keep it civil and worthy of this esteemed venue. Logic, clarity, rationality, and respect are paramount.

It is worth pointing out that what is better or best, in this case, will be considered in light of all people and the biosphere we share.

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Closing Statement from Jah Sun

It has been quite an interesting exploration.

Inspiring , frustrating, informative... but most of all, it has brought certain things into sharp focus.

The basic question of "what alternatives to the global economic system are there?" has been only cursorily addressed, because the answer is that there really AREN'T any that are ready for prime time. We've seen plenty of good fixes, adjustments & modifications... some quite striking & comprehensive... but nobody has been able to put forth a clear model of what we could actually do INSTEAD of the current status quo, should this model fail.

And, fail it could... make no mistake about that.

Also, I don't think the focus should be on what is best for US Citizens (or any single nation state or group of nations). The problem is already trans-national. National solutions to trans-national problems tend to prove disastrous. Unilateral actions & heavy handed moves in one nation's interest should become a thing of the past as people wake up & realize that we all share this one Earth, that national boundaries are imaginary lines drawn by people who often never even visited the place in question, and that humanity is going to have to work together if we want to solve the major issues of our time.

As far as short term fixes go, fractional reserve banking & debt based currency need to go. Lara posted this link: http://issuu.com/margritkennedy/docs/bue_eng_interest to an e-book which does a good job showing how this monetary system is crippling us.

The data that Richard Wilkinson put forth in his TED talk (linked in the intro) argues for us to recognize that economic inequality hurts everyone... even the ones at the top. The most equal societies are clearly the healthiest & most successful.

I think the Basic Income Guarantee is a good place to start in addressing the remorseless & uncivilized blight of abject poverty.

It is clear that we need to redress our priorities as a society.

Another conversation will follow.

:-)

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    Nov 4 2011: i still haven't seen any logical relationship between the problems of our time and capitalism. though many seems to simply accept that as a fact. we have many distortions to capitalism today. it is just as logical to address problems to distortions. it is not enough to claim. we need analysis.

    the notion that cleaning toilets would be the hardest work is wrong. granted, it is a work with great discomfort. however, virtually every person on the globe can clean a toilet. however, writing computer programs, like i do, is a work that requires constant, brain tiring thinking, and needs 10+ years of learning. and to be a world class mathematician requires 20+ years of learning and exceptional talent. one can not judge the hardship of a work by the physical.

    not that this matters much. it is not the discomfort that determines what you get. rather, the value of your contribution. surely, a man who grows apples provide much less than a man who heals the sick. if you can provide something that is greatly demanded, you can ask for more in return. if you can offer something that is relatively abundant, you can not ask for too much. this is fair. why would you get more than you gave?

    another problem with your reasoning is too much abstraction. you want to find the value of investing in a financial derivative for 10 seconds. it is not your job to find that. it is not your money they took. they engaged in voluntary exchange with other people. what is the benefit for society? what is the benefit for society if you buy an apple in the store? it does not have to. it has benefit for you and the store owner. story ends. nobody else is involved. we can find social function though, apple is healthy, food is required, etc. but we can also find the social function of derivatives: they determine the value of firms, bonds, etc. the derivative market distributes capital, which is a very important role.
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      Jah Sun

      • +4
      Nov 4 2011: Unfortunately, the value of one's contribution to society is completely unrelated to one's income. It is your value to a capitalist.

      Toilet washing may or may not be as valuable to society as computer programming, but it certainly requires more effort than e-trading. It also doesn't cause families to live under bridges when done unethically.

      Investing in commodities & stocks is a kind of gambling that can be justified perhaps in setting the value of actual things... namely corporate shares and physical items like gold and frozen concentrated orange juice. The farther away from this you get (futures, options on futures, options on the indexes of futures and so on) the more it becomes just gambling.

      And while nearly every state in the union sees fit to limit your right to play craps or bet on sports games, the betting of people's pension money and retirement funds on abstractions that can be easily manipulated is fairly well unregulated.

      I am not calling for regulation. Merely recognizing that derivatives & the poolside gambling of millionaires nearly collapsed our economic system. We are still reeling from the greed of the financial sector. Europe still teeters on the brink of collapse, and people are still living in tent cities.

      Capitalism started out as a reaction to the unfairness of the Feudal system. It provided upward mobility, and enabled people to simplify the trading of goods and services. Investment banking today, however, has very little to do with this. Many people in the financial sector make their money by siphoning it out of the economy, playing middlemen, and gambling with other people's money.

      If you see no logical relationship between the problems of our time and global capitalism, I urge you to visit an Asian sweatshop, one of the many sprawling tent cities, a metropolitan landfill in Guatemala, a factory town where the factory was moved south of the border, or a clearcut in the Amazon Rainforest and its displaced indigenous population
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        Nov 4 2011: to be even more precise, one's income is not dependent on his contributions to "society", but to those who employ him. it is of course possible that they judge it incorrectly, but it is their fault and their loss. if a broker earns a million, it meas that someone considered it a worthy payment for some services of him. you don't have to worry though, it is not your million.

        the farther away you get in derivatives, the less you understand it, but it does not lose its reality. futures actually came from farmers, not money markets. futures were invented for seasonal products like wheat and corn. all these financial tools were invented to fulfill real needs, they serve real demands. they pave the road for capital to move around easier.

        capitalism did not start as a reaction to unfairness. capitalism is a stage in the constant struggle for freedom. also a step in technological progress.

        the notion that middleman is unnecessary is rather unfair to wholesalers. middlemen do work.

        suppose i visit such places, but still don't understand how capitalism caused it. can you tell me?
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          Jah Sun

          • +2
          Nov 5 2011: It is not your million? Are you serious?

          The economic catastrophe we are all suffering from was a direct result of the actions of bankers, investors, and trans-national corporations. Their negligence and greed has cost all of us huge sums of money. Debt based money & fractional reserve banking cost all of us.

          Our currency has dropped, our national credit rating has been lowered, the values of our houses have diminished, pension plans have been gutted, and now they want to strip away vital elements in the safety net to pay for the handouts and bailouts we already gave to these capitalists...

          I humbly suggest that your concept of Capitalism is somewhat short sighted. If you are unable to understand how our economic system is responsible for vast problems that the mass of the 7 billion human beings on the planet face, I suppose I could help you to see it... only I am guessing the 2000 characters per post rule here would not be sufficient.

          You say Capitalism did not start as a reaction to unfairness, and then you say it is a stage in the constant struggle for freedom... which is it? Capitalism is not a step in technological progress.

          Middlemen do work... for themselves.

          Personally, I understand derivatives just fine. I have even designed neural networks to trade them back in the 90's. What you fail to recognize is that the value of the currencies, commodities, and indexes have nothing to do with their actual worth anymore, but rather the emotional (and heavily manipulated) perception of their worth.

          Large money holders can create runs, manufacture bubbles, sell short and then tank the market on purpose... Futures are not necessarily bad, options on futures and indexes, either, But what we have is packaged debt, falsely valued and sold as if it was something real. We have people gambling with other people's future.

          I am sure there is a tent city near to where you live or work. Go check it out and think about what you are saying.
        • Nov 5 2011: That's not a good argument. The reason the economy at large suffered is because finance is the blood of the economic organs. The shock to the financial industry was like an economic heart attack, so the whole body went into shock and money immediately flowed to mainly the most 'vital' parts as determined by some ingrained idea that has evolved over time; in this case everyone kept their own money in their own pocket, because this Randian deregulation that allowed the crisis was driven by that value system in the first place.

          Additionally, the "tent cities" are, at least in the U.S., an entirely contrived media spectacle. Many people may have lost homes, but they are not the people showing up in the tent cities. Since OWS is predominantly anarchist, I'll use their term: those tent cities are a "simulacrum" of truth. They do not deserve the name given to the tent cities of the great depression, which were predominantly homeless people gathering together so they could be seen by society, because we are talking about ideological warriors masquerading as "the 99%". No matter how 'right' they might be, acting is still just acting.
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          Jah Sun

          • +2
          Nov 5 2011: Danny...

          For the record, homelessness is not a contrived media spectacle. There are REAL people, really suffering in the streets, alleys, and out of the way places of most major metropolitan areas worldwide.

          It is rather cavalier of you to dismiss the undeniable reality of poverty and destitution that exists.
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          Nov 6 2011: Krisztian, if you visit a sweatshop in china and still do not understand how capitalism creates it, then it shows how little understanding you really have of real capitalism. The theoretical Austrian school 100% unregulated does not exist
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        Nov 5 2011: there are many theories about the financial meltdown and its causes. if you start to dig it up, indeed, the first layer will be financial corporations, mainly american, trading derivatives. however, it is advisable to dig deeper, and ask, how could that happen? why nobody saw it? why now, and not decades earlier, or a hundred years earlier. so far, the only coherent and believable explanation i've found is the austrian business cycle theory. it nails misguided government policies as the cause.

        also please bear in mind that neither money nor the public debt is a capitalist thing. they are both managed by the state.

        freedom's opposite is control, slavery, dictatorship, etc. not unfairness. capitalists never wanted fair system. they wanted freedom to act on their own behalf, as they can, undisturbed.

        to maintain civility, clarity and logic, i would rather skip reflecting the rest of your reply.
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          Nov 5 2011: I suppose I am most interested in hearing about ways to improve our situation.

          New ideas about how we could deal with resources, labor, goods, services etc.

          I am not anti-capitalist per se.

          It just seems prudent to imagine what OTHER ways we could organize our species, biosphere, and local solar system... given the fact that the current system is teetering on the edge of an abyss.

          Think of it as a brain teaser.
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          Nov 6 2011: I've heard a lot of people blaming the government instead of the private sector for the recession, but I only agree in a limited fashion. Its true, certain mortgage lending practices and derivative practices should have been illegal under sound financial regulation. However, the government did not FORCE mortgage brokers to lend irresponsibly. The government did not FORCE financial institutions to bundle those debts into derivatives, raise their credit rating and sell them around the globe. The people that did those deeds are still responsible for those actions.

          Furthermore, it takes a certain degree of double think to say it is the governments fault the recession happened in one breath and call for deregulation in another. Calling for the government to take responsibility and prevent such things from happening is essentially a call for stronger regulation. The recession happened due to lack of sound regulation.

          In Canada, where I live, we had strong financial regulation. We have stricter requirements for mortgages, and the banks more are limited in how much they are allowed to lend compared to how much liquid assets they must keep on hand. It is our regulations that insulated us and resulted in not needing to bail out any Canadian banks.

          As was mentioned earlier, the 100% pure austrian school capitalism doesn't exist, and probably never will. Furthermore, if it did exist, it would most likely fail miserably. Regulations we have on capitalism exist out of necessity.

          The problem with the austrian school of economics is the rationalist approach. In reality, economics is too complicated to be understood by "arm chair reasoning". Only empirical observation of businesses in action and in history can develop a realistic understanding of economics.
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        Nov 6 2011: Jah Sun; responding to your comment; 'Unfortunately, the value of one's contribution to society is completely unrelated to one's income. It is your value to a capitalist.'. The teacher is a very good example of this. Traditionally teachers have been highly valued in human society, but since education is only useful within certain elite spheres of capitalist monopolistic structures and an educated workforce could even be considered detrimental to the capitalist greed machine, we see that teachers continue to fall behind other professions annually.

        Was not feudalism just another example of a monopolistic, aka capitalist, economic structure? Sure back then, people used the simple idea of birthright (which could be bought) to hold the reins of economic power, whereas today's free marketeer has to tap dance around democracy and a constitution in order to hold power. The outcome, polarisation of wealth, wide gaps between rich and poor, exploitation and devaluing or of human rights, seem to me, to be the same.
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        Nov 6 2011: Hi Danny...were the bodies floating down the streets after Katrina also actors? Honestly. There comes a point where trying account for the financial collapse in the U.S. and the consequential human suffering with arguments like 'The reason the economy at large suffered is because finance is the blood of the economic organs. The shock to the financial industry was like an economic heart attack,' is delusional. Reuters did a story in September 2011 that 45000 people, one every twelve minutes, die each year due to not having access to healthcare in the U.S. How much further evidence would it take to convince you that free market capitalism is extraodinarily destructive, and inhumane?

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