We need to rethink capitalism

Sometimes major trends can conceal less conspicuous ones, but sometimes these less conspicuous trends can build over time into enormous effects. I think that is the case now with automation versus economic turbulence. Global financial turmoil and re-levelling due to development are largely concealing another major trend towards automation. If we look at the consequences of developing technology, we can see an increasingly automated world as we head towards the far future. Most mechanical or mental jobs can be automated eventually, leaving those that rely on human emotional and interpersonal skills, but even these could eventually be largely automated. That would obviously have a huge effect on the nature of our economies.

Sometimes taking an extreme example is the best way to illustrate a point. In an ultra-automated pure capitalist world, a single person (or indeed even an AI) could set up a company and employ only AI or robotic staff and keep all the proceeds. Wealth would concentrate more and more with the people starting with it. There may not be any other employment, given that almost anything could be automated, so no-one else except other company owners would have any income source. If no-one else could afford to buy the products, their companies would die, and the economy couldn’t survive. This simplistic example nevertheless illustrates that pure capitalism isn’t sustainable in a truly high technology world. There would need to be some tweaking to distribute wealth effectively and make money go round a bit. Much more than current welfare state takes care of.

Some argue that we are already well on the way. Web developments that highly automate retailing have displaced many jobs and the same is true across many industries. There is no certainty that new technologies will create enough new jobs to replace the ones they displace.

We know from abundant evidence that communism doesn’t work. If capitalism won’t work much longer either, then we have some thinking to do. I believe that the free market is often the best way to accomplish things, but it doesn’t always deliver, and perhaps it can’t this time, and perhaps we shouldn’t just wait until entire industries have been eradicated before we start to ask which direction it should go.

So here is the key issue: Apart from short-term IP such as patents and copyright, the whole of humanity collectively owns the vast intellectual wealth accumulated via the efforts of thousands of generations.Yet traditionally, when a company is set up, no payment is made for the use of this intellectual property; it is assumed to be free. The effort and creativity of the founders, and the finance they provide, are assumed to be the full value, so they get control of the wealth generated (apart from taxes). 

Automated companies make use of this vast accumulated intellectual wealth when they deploy their automated systems. Why should ownership of a relatively small amount of capital and effort give the right to harness huge amounts of publicly owned intellectual wealth without any payment to the other owners, the rest of the people? Why should the rest of humanity not share in the use of their intellectual property to generate reward? I think this is where the rethinking should be focused. I see nothing wrong with people benefiting from their efforts, making profit, owning stuff, controlling it. But it surely is right that they should make proper payment to everyone else or jointly share profits according to the value of the shared intellectual property they use. With properly shared wealth generation, everyone would have income, and the system might work fine.

There are many ways this could be organised, and I haven’t designed anything worth writing about yet. Raising the issue is enough for this blog.

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2 responses to “We need to rethink capitalism

  1. Pingback: Progress and The Care Economy (btw, the UN is badly wrong) | Your guide to the future

  2. Pingback: Capitalism 2.0 | Your guide to the future

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