By Writer KJ McElrath
If there is a silver lining to the current coronavirus pandemic, it is that it has exposed fundamental weaknesses in the current capitalist free-market economic system that most of us have taken for granted our entire lives. People in low-wage service jobs, food-service workers, education support personnel, private tutors and instructors and others with jobs that frequently bring them into contact with the general public have been hit especially hard. Most of these workplaces – restaurants, lounges, schools and even libraries – are closed for the duration.
Today conservative leaders, who typically expect most people – including those they claim to represent – to fend for themselves, actually support massive financial aid programs…that’s how bad it is. The Trump Administration’s $2 trillion dollar stimulus package perplexes my imagination. That a conservative administration would offer such a thing boggles the mind.
Other governments around the world are following suit. For example, the U.K. government recently announced that it will pay 80 percent of worker salaries up to £2500 per month ($2900 USD) for 12 weeks, while offering tax breaks and interest-free business loans. Across the Channel, France is preparing to nationalize several industries while suspending tax, rent, and utility payments for small companies.
The problem is we, as a global, tightly interconnected economic society, now are in uncharted territory. Our economics can’t handle much more of this and for two fundamental reasons:
- One, our economics depends on endless growth and expansion. Coronavirus has stopped that dead in its tracks.
- Two, our economics finances endless growth through debt cycles, which fall apart when debtors can’t pay creditors. Debtors can’t pay if they can’t work.
If there was ever a time to think outside the box, it is now. Our immediate solution is for government to throw money — cash payments, low interest rates, subsidized loans or grants, etc at the problem. In the short term, this is indeed necessary as most of us have not slack in our finances to weather such storms.
But such actions treat the symptoms while ignoring the underlying disease. Biologically, coronavirus is most dangerous to those who have other health problems, such as compromised immune function. Economically, it appears to have a similar effect on unhealthy financial systems.
Socialism is not the answer
Would the type of socialism offered by once-presidential hopeful Bernie Sanders save us? For awhile, it could — but like government stimulus programs, it would be a stopgap solution. The problem here is that socialism can’t spur innovations that benefit society.
Second, the idea that people should receive free anything — including housing, food, health care and education — is anathema to those who espouse unbridled, free market capitalism. Yet, lack of these basic survival needs, or even the threat of losing them, is at the root of virtually every problem society suffers today.
People can live without jet skis or the latest and greatest smart phones. They cannot live without food, clean water, shelter and medical care when needed. Without some degree of education, they cannot be productive members of society. Yet, our economies demand that all of these things be commodified and profit their providers.
Meanwhile, those very same providers must pay labor, cover raw materials costs, pay taxes, legal and other operational expenses.
To suggest that “necessities” should be “free” may rightfully evoke hard resistance from free market supporters, yet the stress from putting price tags on necessities creates crime, disease (mental and physical), environmental degradation and more — adding hugely to the cost of running society.
Perversely, money spent addressing these problems contributes to a nation’s Gross Domestic Product (GDP). Ergo, someone who contracts cancer living near a factory producing toxic waste actually contributes to GDP when they (or someone else) pays for their treatment. Law enforcement officers pursuing criminals become part of the GDP as well. Divorcing couples contribute to GDP through lawyer and court fee costs.
Is there a better way? Some visionaries believe so — and are working to bring it about.
A better way…
These visionaries recognize a major part of the problem is not capitalism, but rather the way the exchange of goods and services happen — i.e., money, or currency. Whether it is tangible cash, an amount recorded in a bank ledger or other account, or invested in securities, money can be transferred easily. That is a definite advantage, but there are downsides; money can be lost, stolen, taxed away (directly and indirectly), devalued and manipulated, and withheld when someone is prevented from earning or receiving it — as is happening in today’s coronavirus pandemic. The consequences can be devastating.
Barter comes to many people’s minds as an alternative, but there are reasons why money replaced trading livestock, handicrafts, produce, etc. Unless people have many different productive skills and abilities others need, or offer wide ranges of services, the barter system can’t alleviate poverty and inequality. Barter also involves material things that can be lost, stolen or destroyed (and even taxed, as many have discovered).
Imagine an alternative:
- a means of exchange representing actions benefiting society and the planet, that cannot possibly be stolen, taxed or otherwise transferred away from owners
- a system guaranteeing everyone access to housing, food, medical services and education without incurring long-term debt servitude or worry about a paycheck
- a system based on free market principles that encourage innovation
- a system in which only actions benefitting people and/or the environment in some way are rewarded
Such innovations are already underway, and have been for some time. They are made possible by rapid technology advances. As more working people suddenly find themselves idle for the long term, some are finding interesting innovations that onced looked ridiculous, but today are not so.
Humanity: where great ideas come from
Dr. Albert Einstein reportedly said, “Imagination is more important than Knowledge.” In light of Dr. Abraham Maslow’s famous Hierarchy of Needs (a review and explanation for the uninitiated is available here), imagine what humans might achieve if they were liberated from the need to “earn a living,” but still expected and motivated to strive for more by simply making choices and acting in ways that serve the greater good.
We all see it happening now, with the popularity of “humanely raised” eggs, poultry and meat, recycling and repurposing, reducing one’s ecological footprint, roadside miniature lending libraries, community tool and vehicle share programs and more.
In Portland, Oregon, homeowners are being offered incentives to provide shelters for homeless people on their property. Some small businesses specialize in making new products from existing and/or previously used components. Entrepreneurial individuals are creating solutions for environmental problems.
Admittedly, so-called “Utopian” societies have failed in the past. As floundering and corrupt as American capitalism has gotten over the past four decades, it has not yet become the total and abject failure that was the late U.S.S.R.’s Socialist Worker’s State.
That said, western capitalism is nonetheless a very large, unwieldy vessel sailing at a high rate of speed — one that needs to change its course fairly soon, if it is to survive.
As the Captain Edward Smith of the R.M.S. Titanic discovered too late, such sudden course changes are difficult at best.
Perhaps what needs to be changed is not so much the system itself, but rather the means of exchange. Such change must happen so nobody goes homeless, hungry, without medical and dental care, and everyone has access to education in any field. At the same time, the new system must encourage industry and innovation while respecting private property rights. Nothing would be confiscatory or redistributive, nor would taxes be assessed.
It sounds almost like “Bernie Sanders Meets Ayn Rand” or “Bernie Sanders and Ayn Rand have a baby”. This has been one of the primary issues in recent elections: do we want or need the State to own and operate everything, distributing “to each according to their needs” while taxing “from each, according to their abilities”?
Or do we want to do away with government and regulation altogether, and allow individuals and organizations to become as wealthy and powerful as possible, regardless of any harm in done the process?
What if a society could have the best of both? What if one fed the other? What if, through Bernie-style socialist programs, more people were unleashed from having to have “jobs” simply to pay the bills in order to survive, and instead were free to pursue their passions, such as science, research, technology, engineering and invention as well culture, humanities and the arts? Can one imagine the new Renaissance that might come about?
Such a system has the potential of generating wealth and well-being in a private, free-market system beyond Rand’s wildest dreams.
You don’t have to look very far back to find examples. Would the world have had the genius of Leonardo da Vinci without the patronage of the Medicis? Would we have heard the music of Franz Josef Haydn without Prince Esterhazy?
Now, multiply those two examples by a few billion.
Passions can create our future
Would everyone throw themselves into their “passions”? No. Many may not even know what their passions are. For them, there are educational opportunities (which would bring their own rewards), or they may decide to sit on the beach all day — and as long as they do no harm, that’s fine. If they ever want something more, they’ll find ways to make the world a better place.
If not — at least they won’t go hungry and homeless. But really, earning that “something more” would not be difficult under such a system. In fact, it would be more difficult not to contribute in some way.
If the 1933 Harold Arlen — Yip Harburg song Paper Moon comes to mind, you’re not alone. Indeed, some skepticism is warranted. Nonetheless, two communities, one in California and the other in Oregon, tested out such a comprehensive economic system, with success. A devoted group in Portland continues exploring it over the last six years, and it has generated significant attention around the world.
This group’s website recently came online, where one can go to learn more about this alternative economic system in which there are no losers, and winners’ victories do not come at the expense of someone else. Under such a system, disparities of wealth will certainly still exist, but the kind of grinding poverty that causes hunger, disease, crime and other problems will not.
Meanwhile, the barriers to people who want to accumulate more will largely go away; there will be equal access to opportunity and tools to improve one’s material lot in life for those who choose to do so.
Greed will still exist, but in this new system it’s harnessed and channeled into positive outcomes for everyone.
Now that so many of us are under lockdown or quarantine and are starting to clearly see problems existing in the current system, it is as good a time as ever to consider alternatives.
Learn more here.