Provocation #17. New economics to support new needed experiments.
The world is going through the kind of chaos that is being met by a vast number of experiments; bitcoin, blockchain, uber airb&b, farmers markets, new living arrangements..
For these to succeed they will require new forms of economy. For example currently the goal of venture capital is to make high profits from green technologies, they hope with federal guarantees. This process keeps in place the mechanisms that concentrate wealth, increasing inequality – and dissatisfaction, and probably leading to violence.
The process of investment in innovation needs to be rethought and the choice of tech subordinated to social well-being, not just profit. But who will decide? While everyone is coming to agree that automation takes away jobs from people, the hope that it will also crate new jobs is the worm in the apple because those new jobs creating and managing algorithms creates jobs for the one percent paid for by society, but benefitting the few, a hidden Keynesian approach paid for by tax and consumer dollars. Worse, the profit will belong to some, not all.
Obviously Google, Facebook, Apple, Microsoft could not have generated such wealth without the confluence of
military research paid for by tax dollars
the ideas (give the few the credit, though working the ideas is really boring.)
the large base of consumers
financial backing (asymmetric insider info)
Yet the payoff is to the idea men and women and the finance. They get the billion, we get the iPhone.The billions would be impossible if not for the participation of the millions with education – paid for by taxes – using computers and communication required by their jobs – a hidden subsidy. this kind of asymmetry needs to be rethought if we are to get a negative conventional growth, increasingly green more equitable society that does not rely on jobs to distribute income.
Wisdom actually says it is too late to slow the warming of the world and we will be forced to even broader experimentation with shifting populations and narrowing ecosystems that are inhabitable.. Is economics ready to help? Or should we tell our children to shift target from Harvard to West Point?
Why if we have a confluence of capital and ‘labor’ does the profit, instead of being divided accrue only to the capital side? These are the kind of issues a new economics will need to help rethink.
These are really hard questions, in play since feudalism gave up ownership of production by serfs (who paid rent from what they owned) to the ownership of production by the factory owner (who gets wages from the sale by the owners of what they produced). The world where capital comes out of a transaction with more capital and workers come out with less (part of their life is gone), will not mobilize the good will necessary for coping with the broad range of severe crises we face. Will economics help?