This is the fourth article in a series. The previous ones are
So I feel uneasy about the near-to-middle term economic future. I feel like there are a lot of challenges we face as a society, and we’re going to have to go back and rethink a lot of things to get through.
But that’s not all that’s going on here. I do have political sensibilities behind this. They’re kind of… unusual.
There’s this dualism between liberalism and libertarian conservatism in American politics that I’m unsatisfied with. In economic liberalism, there’s a focus on human value, and an idea that human beings deserve support and care. Society should provide a baseline level, a ‘safety net,’ that keeps people from falling into destitution, and it does that by some amount of redistribution of wealth. In libertarian conservatism, there’s an idea that society has scarce resources that need to be managed, so historically, we defined an economic game to manage those resources. Those who play the game well deserve to keep their rewards. (Never mind that the game we chose was predicated on uninterrupted, infinite economic growth, and stands in mathematical contradiction to the scarcity conservatives are concerned with. But that’s certainly not the fault of today’s conservatives.)
Both of these ideas presume the game itself. They presume a game whose rules aren’t completely understood by most folks in the debate. Liberalism has some amount of redistribution around the edges, but it presumes the same game as libertarian conservatism.
And it fails both sides. From a liberal perspective, redistribution has not lifted generations out of poverty. And from the other side, there is enormous (and growing) human potential lying unfulfilled. I think the problem is not just the game itself, but that there is limited room for establishing new games with new rules, that might solve this problem and others in better ways.
The debate about socialism versus capitalism feels very twentieth century to me. I’m much more interested in exploring the new possibilities information technology opens for us. I hope the previous articles give you a sense of what I’m talking about.
I’m interested in thinkers like Kevin Kelly more than Karl Marx. Kelly’s ‘Out of Control’ [free download] was formative for me. I think it’s best to approach economics as a branch of systems theory. Liberal though I may be, I’m not a fan of centrally controlled systems. I’m interested in self-organizing systems, games, new ideas and abstractions applied to economics. I want to add degrees of freedom to our civilization’s operating system, and help people find new ways to create more justice and prosperity together. Thus, open architecture economics.
in knowledge is power; in wisdom, humility
If you ever get an email from me, you’ll notice a line at the bottom: ‘In knowledge is power; in wisdom, humility.’ These are serious watchwords for me. Initially, I put them there so that if I said anything arrogant in the body of the email, people would have something to call me on: I’m more sensitive to my hypocrisy than my arrogance.
But as an idea, it took root and spread into my thinking about a lot of things. The deepest way to make it relevant here is: understand the limits of your ideas. There’s very little in economics that is not subject to legitimate debate. That doesn’t necessarily mean split-the-difference is always the way to go.
It also says this to me: pursue approaches that are experimentation-friendly. Maybe your bright idea works well in your head, but when real human beings in the real world start trying to use it to rip each other off, it will be tested. Economic ideas need a laboratory where real people can try them out in the real world.
This, to me, is a big failing of globalism as it’s currently conceived: it forces a uniform economic architecture on the entire world. It creates an intellectual monoculture. And if it’s flawed or ill-adapted to changing conditions, that architecture doesn’t accommodate new systemic ideas well. It doesn’t compare well with, say, the Internet. A neutral Internet allows lots of sophisticated, powerful systems to be built upon it: email, the Web, Bittorrent, and so forth. It’s designed to support new architectures and systems, without imposing a lot of its own priorities.
I think technology and economics are two halves of the same thing. Together they bracket the operational capabilities of a society. Talking about economics without considering technology tends to lead you to miss revolutionary possibilities; building technologies without considering their economic dynamics tends to lead to, well, unforseen economic dynamics. I suppose people in the music industry have an understanding of what I’m talking about.
And when new technologies emerge for economic mechanisms themselves, you have an intersection of powerful levers for social change. Any economic theory that doesn’t take that into account seems badly incomplete to me.
I think one problem with the current economic order is its lack of forced understanding. There are a lot of details that the casual user of money doesn’t have to understand to use it. By ‘forced understanding’ I mean you have to understand things in a complete way to make use of them. For example, in Greco’s you standard, you are hit over the head with these details: how does money enter and exit circulation? How do I make use of those mechanisms to produce wealth? This puts a premium on understandability, simplicity, and good user interface design.
But it also makes a distinction between ‘understandability’ and ‘dumbing-down.’ The current system is ‘dumbed down:’ you get money, and you spend it, and you don’t need to care how it was born into the system, or how it will die.
But you’re also left scrambling to get it from those who have it. Ulimately, you’re at the whim of those who control its production for the system. Your sense of its abundance or scarcity is a matter of luck more than mastery. You might be a master of some skill that is in demand, but you have no handle on where that demand ultimately comes from.
Widespread mastery of monetary operations at a societal level seems to me like a good thing. If there’s a way to make that knowledge more accessible and useful, we should pursue it.
the information age
The information age may feel like it’s in full swing. iPhones, mp3s, music and newspaper and movie and publishing industries collapsing and reshaping, capital zooming through computer networks… there’s been a lot of change the last few years.
I’m of the opinion that it’s still in its infancy.
The Information Age can be described in a lot of ways, but the relevant patterns here are: industrial capacities in individual hands, and flexibility. So, desktop manufacturing is beginning to get exciting: your Reprap/Makerbot will be a manufacturing plant. People are beginning to grapple with how to make big tools more flexible and accessible. Your laptop is now a mixing board and recording studio (and a million other things), you can rent a some space on a server and get your own radio/tv station or spread your own crackpot ideas to the masses (I resemble that remark!) The industrial is personal.
That logic can apply to the way you account for the wealth you produce.There isn’t a reason to delegate that to Wall Street and Washington anymore. It can be democratized. The foundational framework is here. It’s now a design problem: how do we take the means to manage an economy and turn them inside out? How do we make them easy enough to use without diluting their power? How do we make them as easy as money is now? And how do we do so and enhance economic integrity?
the holographic economy
When everyone has industrial capacities at their fingertips, the economy will have a holographic structure. If you break a hologram, you’ll find you can see its entire image through each piece. Much like a hologram stores its entire image in every part of its structure, I think the economy of the future will replicate fundamental production capacities across its entire structure. Global trade may be unrestricted, but people will meet their needs by using capabilities close to home as much as possible, and exchanging and sharing capabilities globally.
This economy will be more responsive to changing environments and cultures. This economy will be more resilient, responding to catastrophes through distributed capabilities. This economy will exploit economies of flexibility rather than scale.
But a holographic economy needs a holographic system of accounting for its wealth, a holographic, highly adaptive monetary system. It can’t have a hypercentralized financial capitol (Wall Street) organizing its investment (and siphoning off an ever larger share for itself). As fast as Wall Street operates, it isn’t close enough to the real action to respond to more than crude quantified signals.
And information technology operates like crack cocaine for Wall Street: it’s not helping. Systems like high-frequency trading cause problems faster than humans can respond. I think Wall Street is basically becoming an economy for machines and not people. It’s informational in its capabilities, but industrial in its pattern of ownership and operation.
I’m essentially advocating a human-scaled, human-paced, human-serving information age.