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ACE & Capitalism

Capitalism is not the enemy, in ACE or anywhere else.

It has always been fashionable to bash capitalism as an inherently unfair economic model, the tool of the wealthy, built on the backs of the exploited, yadda yadda, so forth, so on, ad astra. This hatred is at a peak in recent years, with much of the under-30 demographic and some good number of their elders using the word as standalone damnation, the pentasyllabic cause of every economic and most social ills requiring no further explanation or justification.

Funny how things change; I’m old enough to remember when “communism” was the one-word reason for all geosociopoliticonomic ills in the world. I’m also a fan of Alvin Toffler, who among other things originated the concept of “super-simplifiers” who advocate bumper-sticker solutions for every complex problem. So excuse my wariness towards all such well-packaged, one-size-fits-everything accusations. In developing the lines of thought that have led to Analytical Consumer Economics, I have developed a few thoughts about the popularly championed and derided economic systems that don’t derive from bumper stickers or social media memes.

I’m not going to argue that capitalism is the best possible economic model… but I maintain that it persists in being the best-working one.

Since economics is largely behaviorism, behavioral engineering can be used to devise and implement an almost infinite number of economic models. Any such system can “work” if two conditions are met:

  • Its precepts are logically and financially consistent, and
  • Its participants can be induced to play by its rules.

The problem here is not in the first requirement; fully functional and self-sustaining economic models can be devised that have truly wild notions and elements. Across the spectrum of social, political and economic systems, it’s easy to set up complicated interacting rules, rewards and punishments, and there’s no shortage of ideas for all three, some of which have even been implemented. After all, sorites (the obscure term for this kind of logical construction) aren’t bound to truthfulness or reality, and examples such as this…

  1. Green is a color of illness.
  2. Dollar bills are green.
  3. Therefore, dollar bills are a sign of illness.

…are perfectly valid in internal logic. A functional chain of logic (or economic practice) does not need to be consistent or compatible with any different, equally functional chain. Systems such as capitalism, communism and socialism all work… but contain elements that are contradictory or even illogical within the other systems. The number of economic systems or models that are logical, consistent and could work is large to infinite, even when those systems look like complete nonsense when viewed from a comfortable Capitalist club chair or brutalist Communist lectern. And, of course, everything looks crazy from a strident Socialist march.

The problem, also across the spectrum, is that while these systems might work great in a theoretical vacuum, an isolated experiment or on our old friend the econ whiteboard, most fail miserably when those miserable human individuals get involved. Nearly all are examples of battle plans that account for everything but actual contact with the enemy… said enemy being individuals more driven by integral behavior than self-sacrificing compliance. Most of us, in other words.

Of the three major economic systems in modern use, both big-S socialism and communism require each and every participant to conform to highly artificial rules that go against most relevant behavioral decision making. Unless every individual sacrifices individual gain for the greater good, the system cannot work. Only a small number of active rebels or a somewhat larger proportion of the casually noncompliant is needed to destabilize the system and send it on a slide into… capitalism. Which is what has happened to every significant alternate economic system in modern history. So:

Capitalism is the system that works even when every player doesn’t voluntarily play by artificial rules.

That is, instead of requiring comprehensive control for the system to work, capitalism reinforces compliant behavior and punishes contrarian actions, and thus produces a sustainable system even if there is not majority cooperation by the players.

Most vocal anti-capitalists don’t actually want formal socialism or capitalism, at least, not in my reading. What they want is some imaginary, Candyland, fregalitarian, non-wealth model whose primary attribute is that it makes everyone equal to them. Robert Heinlein once suggested the proper course of action with such minds was to take away their lollipop and spank them with it, but I’m content to just let them go on being suckers who are convinced the world won’t let them succeed.

Capitalism is what we realistically have to work with; the task is to make capitalism work for us.

The problem is that capitalism readily slides into faulty modes… which is a polite word for oppressive, unfair and predatory, if not diseased. At present, we have spent almost four decades slowly side-shuffling into a grossly unbalanced form of capitalism, with monstrous wealth inequality and a continuing rise of rules ‘by the rich for the rich.’ But again, it’s not the tool: it’s the users.

Capitalism and democracy are compatible only if democracy is in the driver’s seat.

Robert Reich

As a tool, capitalism is not only the most successful economic system across centuries, cultures and nations, but may well represent the closest thing to a natural economic system for humanity as we know it. It tends to arise in every new situation; it tends to displace all other systems from sheer internal pressure. As a tool, it is subject to both use and misuse; as a system, it can both build unimaginable empires and create unthinkable suffering.

The users of the last few decades have not been building empires, but personal wealth; they have blithely ignored suffering and inequality on national scales because their investment portfolios are doing just fine, thanks. And those causing this imbalance are devoutly championed by blinkered idiots who might have their own investment portfolio someday.

The enemy is not capitalism: the enemy is capitalism’s unequal wielding by those who have cornered its power… and thus those wielders themselves.

ACE is not anti-capitalism, for all those reasons and more. The problem is not the system, it is its misuse… which in my opinion has come about because of the dominant inversion of reality that is at the core of conventional economics. If your models, language and viewpoint take the systems and the wealth as the core and that nameless rabble out at the edges as nothing more than economic fuel, it’s easy to reach, settle on and believe in capitalism as a process to build wealth for the wealthy.

On the other hand, if you view economics from its real core—consumers—and model the rest of the system from that perspective… you will still have capitalism, but a form in which gross exploit of the sustaining population is unthinkable and distribution of wealth far more equitable.

Such a system will never more than strain towards perfection, but we’re not angels. We’re consumers.

—published on Quora, 12 Jan 2022

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