Adam Engstrom

Service Learning Coordinatior, AmeriCorps

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Possible Alternatives for Capitalism?

Lately, the current public discourse surrounding capitalism presents it as "bad" due to its propensity to create and maintain economic disparities and its poor management of environmental resources. This discourse was largely vocalized by the Occupy Movement (although I tend to agree with Dr. Martin Bauer of LSE ISP that it is more of a "rhythm" than a "movement", but that is another discussion entirely). However, what I think is really at the core of the Occupy Movement (Rhythm) is a critique of the competitive nature of the capitalism model, i.e. that the system tends to promote individual property/rewards than collective cooperation.

Taking a page from Professor Saadi Lahlou (also of the LSE ISP), one could argue, in contrast to capitalism, that socialism and communism focus much more the cooperative nature of humanity. However, the problem with just focusing on the cooperative part of human nature results in what is often called the "problem of the commons" or "public goods" in political science. In other words, while it is true that people can be cooperative, they also have a competitive side to them that often results taking advantage of others' work to benefit themselves.

So the question becomes (as aptly voiced by Dr. Lahlou, if socialism/communism overly focuses on the cooperative part of the human psyche, and capitalism overly focuses on the competitive nature of humanity, and this is the reason why neither (nor ultimately will the Occupy Movement be) are highly successful in a general, historical sense (apologies for the run-on sentence), then wouldn't the best system by a combination of both parts of the psyche, i.e. a system that simultaneously encourages both cooperation and competition within one unified framework?

Thus, I pose to you (the TED Community) to develop a workable system that allows for both parts of the human psyche to work together. Such a system would clearly be the best model for the future.

  • Mar 4 2012: I think the anger is directed toward the greed more than capitalism itself. People don't mind if you make a fair profit, on an honest product. Credit cards stopped being honest when banks starting to passing them out to people they knew couldn't pay them off. Mortgages stopped being honest when they created things like interest only loans. Banks knew the people getting these credit types couldn't afford them, that is why they gave them out - if you can't pay the principal, banks make a lot of money on the interest.

    People did not realize that the banks wanted them to fail to make payments, nor did they realize that one late payment would make unrelated prices (like insurance) go up. No one quite understood that banks were lobbying to change bankruptcy laws because the banks knew the house of cards was on its way down. What people are angry about is banks causing the mess and not caring. Looking back, they can more clearly see how the financial segment manipulated the masses. People expected the banks to say NO if the people couldn't afford credit, and the banks did not do that. Banks pay the biggest bill first, even if it is the last one to come in, because then they can charge overdrafts on more transactions, putting people who are struggling into more difficulty.

    We don't really need to replace capitalism, we need to replace the laws that once controlled the greed. We also need to replace the "got to have it" mentality that easy credit brought about. Sometimes excessive supply creates the demand, as easy credit exemplifies. Everyone deserves to get a fair price for a fair product or service. What we really need is a clear definition of "fair price" and "fair product or service."
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    Feb 29 2012: There is a problem of scale. Small scale co-operatives can be very effective. Large scale ones degenerate into bureaucracies.

    Once a structure reaches a certain size, the majority of the people within it begin to feel anonymous and unaccountable. This can lead to people feeling disenfranchised. The anonymity also encourages people to exploit the system for their own ends.
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      Feb 29 2012: That is very true point which is one being faced by the Occupy "Movement" at the moment (i.e. direct democracy works great for a small camp, but the bigger the camp gets, the more it falls apart). Perhaps a system that works through the global inter-competition of small scale cooperatives?
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        Mar 1 2012: There's a natural inclination of small groups to band together into larger groups for a range of reasons, so there's a kind of negative natural drive which favours bureaucratisation. The trick would be to find a way of limiting that instinct.

        It was interesting that both Bill Gates and Warren Buffet set time limits on their charities by which all the money had to be divested. I suspect that part of the reasoning was to prevent those rich foundations from developing into self-sustaining bureaucracies.
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    Feb 28 2012: I believe that the system you visualize was presented by Karl Marx. Under that system everyone shared equally. The only ones I know of that made it work was the American Amish Mennonites. There were sinoffs to socialism and communism but they never worked as designed. We could of course return to trade and barter systems. Unfortunately that depended on each person having something to trade or barter. Many of the welfare dependent would not survive that system. Purtain ethic made food and housing available to those who worked but again the welfare society would not be capable of surviving that system either. The current system seems the only one that the welfare system people can survive in. The system of I work you play for half of my pay.

    The occupy Rhythm is political where the welfare society wants something they did not work for but was promised by our president that they could have. That is a socialistic thought and the major problem is that at some point you run out of other peoples money. It would be much smarter to get a job than to bring the whole country down. A major political donor, George soros, wants a one world government and is pushing our president toward socialism. Money talks and after you take it you "owe" a debit. Sadly even our presidency and legislators can be bought. My opinion. Bob
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      Feb 29 2012: Thank you for your reply, but I think you might have misunderstood me a bit, and I feel also socialism, although there is some truth in some of what you say. I would lump socialism (and its political cousin Communism) in a system that operates under the ideals of human cooperation (this is what I take Marx to mean regarding the workers of the world to unite, although I am barely a Marxist scholar as I haven't even found the time to read any of his work directly so what I say should be taken with a grain of salt). It is my opinion, that just like systems that over-prioritize the competitive nature of humanity, those that prioritize only the cooperative part of human nature (which certainly does exist!) will be doomed to failure or abuse; hence why one could argue that pure, unadulterated socialism or communism has not really occurred. Basically, I am looking for something that combines communism, socialism, AND capitalism into a new and so far unseen system that is more in tune with human psychology. It would be nice if it also took into account cross-cultural differences, although that might be a bit much for a start.

      As for your comment about socialism being purely about taking other peoples' money, I would have to, unfortunately, disagree. For example, I would point to Sweden and Norway which have some of the lowest debts of the Western world (i.e. they do not take money from other countries), have some of the most robust economies with very hardworking individuals (i.e. they don't just take money from the state--indeed, there wouldn't be money from the state if they didn't pay taxes of which they would have to work to earn), and are the few countries that are actually surviving the current recession. That being said, I do totally agree with you that governments have FAR too much of a propensity to be bought and sold these days which is a terrible shame and a disgrace.
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    Mar 26 2012: I'm a Trekkie by nature and I always felt that the way they lived their lives on Star Trek was socially responsible. No focus on monetary gain, non interference in other societies values, etc. Their goal was not to earn a paycheque and spend it to feed a capitalistic engine. Instead they all tried to reach their full potential and lived their lives to maximize not only their own potential but to ensure the betterment of all. No greed, no envy, no need to covet what others have. Perhaps if we could maximize our ability to be more fully human,we could end our dependence on capitalism as a dysfunctional lifestyle model that we all blindly follow.
  • Mar 4 2012: Capitalism is the breeder of greed and corruption.
    It is capitalizing on other peoples problems, on what they don't know, on what they lack.
    It is by its very nature taking advantage of others directly or through stealth.

    If the principle of all loans were to be paid back, the amount of money still owed for the "hidden tax" called interest, would be un-payble because there would be no money in circulation to pay it with.
    This is inherently fraudulent, dishonest and worthless as a system that one could imagine making right again.

    It was never right to begin with, has been unraveling for 2,000 years and is unjust to the core and cannot be made just.

    A truly just system is what everyone wants and needs and is not about repairing the "box" most just cannot seem to live or think outside of.

    If a truly just system is not what you want or think the world needs, or is impossible to build, then I don't know what to think.

    The needs of a monetary system are crime, greed, inequality, poverty, slavery, war and death. You cannot change the laws of such a system. You have to change the system into something entirely new and different and it would be best if people started thinking and envisioning the new and different or they will always say, "Oh, it can't be done!"

    Then it won't be.

    How decisions are arrived at is more important than "who?" for that lends itself to crime, corruption, deceit, greed and inequality. The 'ole boy system, including women today, who buy into this method and means of functioning.

    Capitalism inherently is all about the "ism" I Self Me!

    It is best to remove government but not to remove governing. This involves how we make decisions, not who makes them. Today, decisions are made for one of two reasons:
    1. Things don't "get done", because of money.
    2. Things "don't get done", because of money.

    Politicians do not solve problems and they are not going to begin doing so now.
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    Mar 1 2012: As a psychologist myself, I am always attracted to psychological scales such as measuring happiness. I think that well-being is something that really needs to be taken into account in whatever system is created, at least in a general sense. Pardon my ignorance though, but can I ask what a "City Sindex" is exactly?
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    Feb 29 2012: The question is how best to produce and distribute goods and services necessary for group functioning. There are only two possible answers: 1) Allow individuals, or groups of individuals, to make it their business, their livelihood, to produce and distribute goods and services. 2) Allow the government to control the production and distribution of goods and services. The former system is motivated by profit, the latter by bureaucratic responsibility. The former is Capitalism, the latter is the only alternative, Socialism.
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      Feb 29 2012: I agree with you to a point, mainly I am not sure that those are the only two answers. Indeed, I don't even have to go into the unknown to pull a few: communism, totalitarianism, fascism, and monarchies for example (each with their own strengths and weaknesses). However, what I am currently interested in is what is almost impossible thinking. Let me put it this way, 3000 years ago, our ancestors would not have been able to conceive of current systems such as capitalism, socialism, and communism, they would have looked around at other city-states and used those as a basis for saying what were possible systems. To that end, many would have said that monarchies were probably the only viable solution, but today we would (I hope) see this logic as flawed. However, the trick is to not be trapped by the "naturalized" systems of thought that exist today; the limit to human ingenuity and creativity is only constrained by our imagination. If we were banned from using any concepts or practices from communism, socialism, monarchies, fascism, capitalism, or totalitarian states, what would we create? Imagine that you were in such a situation, what would be the possibilities? It is very tough, and I have failed at it which is why I am addressing the question to the TED Community.
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        Feb 29 2012: Again, I see two, and only two, possibilities Mr. Engstrom. There is nothing unique about communism, fascism, etc when it comes to the question of production and distribution of goods and services. There really are only two sides to the coin, either the government (no matter how many, or how few hold the power) or free individuals. There is a big difference between forms of Government and forms of an Economy. If there was a third option it would be an individual economy where you sovereignly provide all your own goods and services, and I mine. Good sharing with you.
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          Feb 29 2012: Thanks for the replies, it is nice to have an intelligent conversation with another person, I love being a member of the TED Community for that very reason. You are quite right to point out my mistake in conflating forms of government and economy, they are quite different, although I would think they probably should both be questioned. And I would agree with you that communism, fascism, etc. are not wholly unique, they are an output of a long line of cultural evolution and adaptation. In a sense, everything we think (to the very words we use) is taking an old concept and adding another level of meaning on to it.

          However, I guess what I was trying to say (and quite badly at that) was that we what we often forget is that there are things that we haven't thought about, new ways of doing things that we can't even imagine (e.g. the idea of space travel for the ancient Egyptians), and when there is no "impossible thoughts" (so to speak), then there is nothing let to invent, discuss, think, etc. For that reason, I tend to shy away from absolutism because I do not know what I can not conceive.

          I would also like to state that I don't think that we need to remove government, I think we just need to re-envisage the economy which might alter the form of government as a by-product. Or rather, I should say that others have suggested this. Personally, I see huge flaws with capitalism, but I think that the economic woes we are facing now are only the end of our economic hegemony the West has had and shifting it to China, Brazil, and India (among others). They are now currently benefiting from our recession while we benefited from their economic disparity before. Thus, capitalism is actually balancing previous economic inequalities... at least in a semi-arguably way.
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        Mar 1 2012: You will have to forgive me Adam for dealing only in reality. Your optimism about possible new ways of controlling the production and distribution of products and services is not something I can understand. I wish you the best though in your effort to come up with a better way, maybe even a way free of the flaws which plague capitalism. Remember, those flaws are almost entirely attributable to human foibles, so in your New Economy minimize, or eliminate even, the human factor. QUOTE: "The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries."-- Winston Churchill
  • Feb 28 2012: From each according to his or her need to create.
    To each according to her or his ability to appreciate.
    Kenneth Boulding once wrote something he called the "Grants economy." That's worth thinking about.
    What about finding some basis for distributing money income other than "work?" I know Aristotle would have appreciated that.
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      Feb 29 2012: I wonder if we can't create a system that doesn't prioritize the economy of resources, even if in opposition to it (i.e. "X" defines itself as "not Y" so is always linked to and partially defined by "Y"). In my opinion, a model that incorporates more intersectionality might produce a better effect. For instance, gender, race, and even happiness are currently not factored well into resource based systems, although those are just a couple poor examples from my lack of imagination on the topic.
      • Feb 29 2012: Adam, many years ago, when I worked for The Urban Institute, I came up with the idea of measuring the success of a country with a Gross National Happiness indicator. One measure I thought of was:
        quantity of smiles per day on the faces of children. I also came up with an idea for a City Sindex to measure what was happening in cities such as Las Vegas and New Orleans. Let's keep working on this very important project. Happy Today.
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    Feb 28 2012: i recommend to watch the talk of matt ridley

    to find out that capitalism is a scheme of cooperation on grand scale
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      Feb 29 2012: I've actually seen this before, although I must admit that I had forgotten about it; it is a very good and interesting video. However, while it does highlight the amazing (often forgotten) complexity of human cooperation, it doesn't really address human competition. Obviously, it wasn't the aim of the speaker to address such a wide range, but that does limit its instrumental use in redefining global systems other than to point out that an over-focus on inter-group/individual competition is a limited and incorrect approach.