Notes on 21st century economics
Paul D. Fernhout
towards some sort of document about 21st century economics. Or, in the
context of this group, an economics that would be ""open manufacturing
friendly".
What I'd like to do is turn this into something that is approachable by the
average person -- maybe as a YouTube video or something. I guess these are
sort of the things that might go as key points on power point slides or
something. But ultimately, it needs to be jazzier.
A key issue I want to emphasize is that, as with open manufacturing,
solutions related to "Blessed Unrest" (Paul Hawken) are developing now.
http://www.blessedunrest.com/
So, I expect, in decades to come, mainstream politics and mainstream views
will more and more reflect this emerging new reality.
For those who don't like wading through my long paragraphs and block quotes
and citation links, maybe these fragmentary points without attributions will
be more accessible? :-)
These notes were especially inspired by reading this morning an Atlantic
article on Ron Paul and Austrian/Mises school of economics from the November
issue. Related links:
http://andrewsullivan.theatlantic.com/the_daily_dish/2010/10/will-paul-run-again.html
http://www.theatlantic.com/magazine/archive/2010/11/the-tea-party-8217-s-brain/8280/1/
http://www.theatlantic.com/politics/archive/2009/07/pollsters-put-ron-paul-in/21722/
http://caivn.org/article/2010/10/21/ron-paul-may-be-right-about-root-cause-suicide-terrorism
That's not to say I'm a total Ron Paul fan, even if I do like some of what
he has to say. For balance, see also:
"Libertarianism: Marxism of the Right"
http://www.amconmag.com/article/2005/mar/14/00017/
These notes are also written the context of my recent discussions here with
P.M. Lawrence (getting me writing on some of this again :-), and, of course,
also my previous "Beyond a Jobless Recovery" knol.
http://knol.google.com/k/paul-d-fernhout/beyond-a-jobless-recovery
Also, just to say I'm not completely abstract, :-) I'm letting my back
recover from installing a ductless range hood yesterday
http://www.amazon.com/Broan-QS136WW-36-Inch-Allure-Range/dp/B000R9ABPI
for our somewhat passive-solar house -- 1980s/1990s vintage, so with various
issues including no integrated air-to-air heat exchanger and so the house
gets smelly when we cook (or burn :-) stuff.
http://www.google.com/search?q=no+furnaces+house
The charcoal filters for the hood in the ductless configuration came without
the metal clips they were supposed to have to keep them attached to the
other filters (otherwise the carbon filters will get sucked into the fan on
high), so, it's unfortunate I just can't print some replacements yet. :-)
I'll probably need to improvise something from sheet metal (maybe with the
help of a neighbor who knows a lot about sheet metal?), although it is
easier to first try the Amazon matter replicator interface again, :-) with a
different supply center, to order some new filters that I hope come with clips.
http://www.amazon.com/Broan-NuTone-BPSF36-Non-Ducted-Filter-Allure/dp/B0013ECT7Y
===
Some thoughts on economics at the moment:
Here is a list of issues with mainstream market-based thinking and some
solutions related to transcending them. Ron Paul and Austrian/Mises
minimalism address some but ignores others (as in the Atlantic article, pain
about unemployment or externalities) -- things that Ralph Nader or Dennis
Kucinich may get right even as they may get wrong some things that Ron Paul
is right about, and they all may miss some other things, as may I. :-)
Facts (US point of view):
* The US GDP grew 40% in the 2000-2009 time period, with 0% growth in net jobs.
* Inflation-adjusted real wages have been flat for most occupations for more
than thirty years, despite continued exponential productivity growth for
that entire period.
* Robotics and other automation are continuing to improve, driven both by
creativity and competitiveness, to be able to do more and more work
previously only thought doable well by humans (examples: playing chess,
identifying vegetables at the supermarket checkout, driving cars, tossing
and catching a cell phone, making a medical diagnosis).
* Better design avoids the need for a lot of work, like passive-solar homes
that don't need furnaces, or materials like stainless steel that resist
damage, dirt, corrosion or are easier to clean; for example, you can build
a house today in a cold climate that does not need a furnace and that can
generate most of its own electric power, and it overall costs less over a
decade or two when considering a mortgage plus utilities.
* Voluntary social networks like of free software developers bloggers are
replacing work that used to be paid like software engineers or newspaper
reporters
* Pollution and war can be profitable if you get the most of benefits and
other people pay most of the costs.
* Institutionalized schooling, used as a filter for many "good" jobs, has
gone from about four years of school from ages eight to twelve (first
through fourth) with continual self-education afterwards to about twenty
years from aged four to twenty-four or more (pre-K to post-doc).
* Debian GNU/Linux, Wikipedia, Twitter, Facebook, and bloggers are examples
of emerging social trends towards voluntary participation.
* The USA is spending a lot of money on war, schooling, and health care but
the society is less secure, less educated, and more sick than ever.
* You can buy a printer for US$1000 (Makerbot) that enables you to print in
3D; more expensive 3D printers can print metal parts or even multi-material
products like hair brushes, staplers, and colorful action toys.
* The USA already transfers a big chunk of the GDP away from workers and
property owners to old people, disabled people, and (in theory) young people
through Social Security, Medicare, Medicaid, and public compulsory schooling.
Key points:
* Externalities (good and bad) like pollution, the need for infrastructure
* Concentration of wealth (rich get richer as it takes money to make money)
* The reality of limited demand vs. the assumption of infinite demand
* The need for continual growth in the face of limited demand from
environmentalism and a law of demising returns and some specific current limits
* Assumption of equitable distribution through jobs but a declining value of
paid human labor in the face of robotics and other automation, better
design, and voluntary social networks in the face of limited demand
Other factors:
* Pervasive social problems reflected in hiring practices (racism, sexism,
homophobia, nationalism, religious discrimination, political affiliations)
* Opportunities only accessible to the lower-stress, healthy, well-parented,
well-educated (self-perpetuating aristocracy or upper class as a social knot)
* Regulatory capture by most powerful interests
* Purchase of the media by powerful interests
* Many things get done better by volunteers or local interest groups
(non-profit)
* Important externality: security, especially the need for intrinsic/mutual
security vs. war is a racket external/unilateral security
* Information economy can only fit into the market by artificial scarcity
and DRM and a police state to enforce that
* War, sickness, endless schooling, prisons, bureaucracy, social problems,
inefficiency, and pollution are profitable to some and create a lot of
makework jobs
* proving need for social benefits requires an invasion of privacy
* much (maybe all) property is ultimately based on finders/keepers or might
makes right for land or artificial scarcity backed by police
* Typical boom/bust business cycles related to currency issues
* Essential things for a healthy society (stereotypically, often called
"women's work") like parenting, caring for sick relatives, or being engaged
in the local community are not considered "work" (in terms of deserving
"pay"), and women have been abandoning those roles for paid roles while men
have not been taking up the volunteer slack (instead, institutions have
become more involved in these things, if the work gets done at all).
*** Irony of militarism -- tools of abundance wielded to by those worried
about scarcity, who ironically create scarcity artificially with those tools
of abundance instead of just creating abundance with them.
*** Obvious exponential growth in technological capacity for decades and
predicted to continue for decades
Solutions:
Exchange and gifts
Individualistic and communal
Meshworks and hierarchies (and interfaces, following Manuel De Landa)
* Basic income to address centralization of wealth and rampant
discrimination and past inequities and limited demand
* Democratic resource-based planning at various scales using taxes,
subsidies, regulation, and direct investment to address externalities and
social vision
* A gift economy, especially for informational things involving artificial
scarcity, including through stronger broad social networks
* Locality: Stronger local economies with improved local subsistence
(including 3D printers, solar panels, organic gardening)
Avoid the negatives: Endless war, schooling, prison, sickness, prisons,
bureaucracy, inefficiency/planned-obsolescence, pollution, etc.
Where are we now:
* Basic income: Social security for the old and disabled, compulsory
schooling for the young (though all is needs based or age based)
* Gift economy: Free and open source software, bloggers, Wikipedia, indy
music scene, Freecycle, non-profits and charity
* Democratic resource-based planning: US tax code, environmental
regulations, and various public works programs and grants
* Locality: Improving 3D printing, local currencies, local garden clubs,
renewables, energy conservation
Focus on communities that are joyful, healthy, educated, friendly,
prosperous, self-governing to the greatest extent possible, resilient, &
intrinsically/mutually secure
Ways forward:
* Avoid the bad: Minimize direct activities related to promoting war,
sickness (especially related to factory-farmed fast food and vitamin D
deficiency), bureaucracy, schooling, prisons, pollution, and inefficiency,
faddism, and planned obsolescence.
* Basic income: Expand basic income and remove the needs test as
discriminatory. Might still have extra needs-based benefits for special
cases as essentially medical insurance (so, separate needs-based insurance
aspects from basic income aspects)
* Gift economy: Change copyright and patent law to promote the informational
gift economy -- recognize that conventional economics does not work well in
that sector; improve liability protections for gift givers
* Democratic resource-based planning: Make public decision-making more
transparent for democratic resource-based planning (version control,
structured arguments, public access)
* Locality: Encourage investment in local manufacturing, gardening,
alternative energy, alternative local currencies, and related education
* Integration: Demonstration projects like Blue Zones and healthy
infrastructure in Albert Lea, MN, or Ithaca, NY with HOURs alternative
currency, or Isles, Inc. in Trenton, NJ with community organic gardens, or
many others that are parts of "Blessed Unrest" like 100K Garages, and so on.
What to call it? 21st century economics?
How to rework this into an integrated appealing presentation that is
generally accessible and transcends left/right distinctions, or Ron Paul vs.
Ralph Nader vs. Dennis Kucinich vs. Whoever? And one that mainstream
economists and mainstream politicians and a mainstream public don't scoff at?
--Paul Fernhout
http://www.pdfernhout.net/
====
The biggest challenge of the 21st century is the irony of technologies of
abundance in the hands of those thinking in terms of scarcity.