As the world evolves, so does its economic systems. The next stage of capitalism, a concept both intriguing and inevitable, is on the horizon. Let's delve into the factors driving this change and what it could mean for our future.
Progress Studies
A growing and influential intellectual movement aims to understand why human progress happens and how to speed it up
- Progress studies is a nascent self-styled academic field and intellectual movement, which aims to dissect the causes of human progress in order to better advance it
- Founded by an influential economist and a billionaire entrepreneur, this community tends to define progress in terms of scientific or technological advancement, and economic growth
- What does the progress studies movement believe, and what do they want to see happen in the future?
- Over the past few years, a number of researchers and economists have raised concerns that scientific and technological progress could be slowing down which they worry will cause economic growth to stagnate
Climate Differences
The past two centuries of growth have been powered by burning carbon, which will most harm people in poverty and future generations
- “degrowth” movement points to these facts as reasons we should deliberately slow economic growth
- Dozens of countries have managed to decouple their growth and emissions, and cheap, large-scale carbon-removal can extend the trend
- A progress-inspired approach? An advanced market commitment (AMC), which guarantees a market for a not-yet-existing technology
- There is an entrepreneurial bias towards action
- Fear of missing out overwhelms the fear of losing everything
- Ultimately, the progress community wants its followers to believe that they can do better
- They are not content to merely study progress; they want action
A dollar sum for an elephant or whale could also be used to define fines and penalties for those that would harm them
A ship that strikes and kills a blue whale off the coast of Brazil should be fined the full value of the whale, say Chami and colleagues.
- Will capitalism as we know it evolve into something new?
- Nearly 250 years ago, the economist and philosopher Adam Smith wrote The Wealth of the World: It would be hard to compare figures because the techniques deployed vary so much, not all services would be captured, and relationships between animals within ecosystems are difficult to unpick
- However, it is clear that there are no easy answers.
What Covid-19 is throwing into sharp relief is just how false our beliefs about markets are
The dominant idea of the current system we live in is that “exchange value” is the same thing as “use value”.
- Basically, people will spend money on the things that they want or need, and this act of spending money tells us something about how much they value its “use.”
- This is why markets are seen as the best way to run society. They allow you to adapt, and are flexible enough to match up productivity capacity with use value.
Have all the low-hanging fruit gone?
Some from the progress community point to sclerotic funding bureaucracies, which eat nearly half of researcher time and create perverse incentives
- US research productivity has declined more than 40 times since the 1930s
- We partially compensated for this decline by increasing the share of the population going towards research, but this is expected to slow and then reverse before the end of the century
- It’s also possible that artificial intelligence could help reverse the decline – or even initiate a new era of explosive growth – but some researchers fear that superintelligent AI could bring other risks that harm progress, or worse
The World Health Organization (WHO) report:
COVID-19 appears to be reversing the trend, taking healthcare and labor goods out of the market and putting them into the hands of the state.
- These changes give us hope. They give us the chance to save many lives. They even hint at the possibility of longer term change that makes us happier and helps us tackle climate change.
- But why did it take us so long to get here? Why were many countries so ill-prepared to slow down production?
- Our economic imaginations
- There has been a broad economic consensus for 40 years. This has limited the ability of politicians and their advisers to see cracks in the system, or imagine alternatives.
What would a better funding model look like?
Many of the greatest scientists in the world spend nearly half their working time applying for funding, a process that diminishes creativity, collaboration, and interdisciplinary approaches and encourages poor research practices.
- The Arc Institute aims to lead by example by giving funding to accelerate scientific progress and understand the root causes of complex diseases
- Their top priority is increasing “GDP per capita”.
- What is the best response to climate change? For progress studies, stopping growth is not the priority
The Economics of Collapse
Businesses exist to make a profit
- If they can’t produce, they cannot sell things
- This means they won’t make profits, which means they are less able to employ you
- Lockdown is placing pressure on the global economy
- We face a serious recession
- The correct response isn’t a wartime economy – with massive upscaling of production
- It is an “anti-wartime” economy and a massive scaling back of production
Barbarism
Barbarism is the future if we continue to rely on exchange value as our guiding principle and yet refuse to extend support to those who get locked out of markets by illness or unemployment
- Businesses fail and workers starve because there are no mechanisms in place to protect them from the harsh realities of the market
- State socialism
- The state nationalises hospitals, and makes housing freely available
- Citizens no longer rely on employers as intermediaries between them and the basic materials of life
- Payments are the same to all based on the usefulness of the work
Mutual aid
The second future in which we adopt the protection of life as the guiding principle of our economy
- Individuals and small groups begin to organize support and care within their communities
- Risk with this future is that small groups are unable to rapidly mobilize the kind of resources needed to effectively increase healthcare capacity
- Could enable more effective transmission prevention, by building community support networks that protect the vulnerable and police isolation rules
- Most ambitious form of this future sees new democratic structures arise
- Covid-19 is highlighting serious deficiencies in our existing system
- An effective response to this is likely to require radical social change
The room went quiet and it seemed like forever before the hammer went down
The syndicate promptly gave Dave back to Hicks – the plan all along was to reunite the pair as a retirement gift
- Dave became the world’s most expensive duck, joining a select club of Earth’s most valuable animals
- While he could lay claim to being the diamond of ducks, there are many other species that are worth a great deal more
- Animals have always been a part of human economies, and the way people value some more than others can reveal striking truths about the world that we live in
- Some of the most mind-boggling numbers can be found in the world of agriculture, where trading animals is commonplace
- For example, in 2019, an Angus bull called SAV America 8018 was sold to a former advisor to the Trump administration for $1.51m (£1.1m/€1.27m).
- Double Diamond, a Texel lamb that sold for an “obscene amount of money for a sheep”, poses with one of his prior owners (Credit: Catherine MacGregor/MacGregor Photography)
- But the farming industry is not the only domain of human life you will find staggeringly high prices paid for animals
Inequality can unbalance a society over the long-term
As a result of rising inequality, people have less trust in institutions and experience a sense of injustice
- Liberal democracies may now be at an inflection point, where citizens contest today’s capitalist norms with greater political intensity worldwide
- J Patrice McSherry, a professor of political science at Long Island University in New York, has observed this change in Chile
- Social mobilisation began with a rise in subway fares in October 2019, sparking broad-based protests that convoked more than one million people in demonstrations
- The social movement has exposed the deep sources of discontent in Chile: entrenched and growing inequality, the ever-rising cost of living, and extreme privatisation in one of the world’s most neoliberal states
Economies cannot become completely divorced from the demands of democratic majorities
It may be time to reconsider the social contract for capitalism, so that it becomes more inclusive of a broader set of interests beyond individual rights and liberties
- Capitalism has evolved before, and if it is to continue into the longer-term future, it can evolve again
- The future of capitalism
- Various ideas and proposals have emerged that aim to rewrite capitalism’s social contract
- In business, there’s “conscious capitalism”, inspired by the practices of so-called “ethical” brands
- Policy: “Inclusive capitalism”, advocated by both the Bank of England and The Vatican
- Sustainable capitalism: the idea of “doughnut economics”, which suggests that it’s possible to thrive economically as a society while also staying within social and planetary boundaries
