How should an economy be structured?

[hobbsyoyo]

I'm not asking how a government should change an economy or whether or not it has a right to do so.

What I'm curious to know is how you believe an ideal economy would be structured. Entirely free market? Entirely communist?

And what do you mean when you say 'free market' or 'communist'? Please explain your assumptions and define your terms (however briefly) so that we can best understand one another. Too often these discussions fall apart because we all approach it with our own definitions and substitute jingoisms for actual discussion.

In any case, I want to know how you think the economic world should work.

 

[Hrothbern]

I think it depends very much on the techs and resources available.
Techs change what resources become important.

It also depends on what demands people have... more material or more immaterial

 

[hobbsyoyo]

I think it depends very much on the techs and resources available.
Techs change what resources become important.

It also depends on what demands people have... more material or more immaterial

Ok so how would you structure your particular countries economy right now?

 

[Timsup2nothin]

Ok so how would you structure your particular countries economy right now?

You backed off too easily. If you deal in outcomes the technology and resources don't matter. Whether you are looking at a coal heated country in a northern clime, or an advanced technology country dependent on limited silicon, there is some technology and some demanded resource because of it. Economics is about the system that manages the distribution of resources, and doesn't change just because the resources do.

So, to answer the question, I would look for the outcome that whatever labor is genuinely required to make the system work is distributed somewhat evenly among the participants, regardless of the specifics of what that labor actually is, and that all the basic needs of all participants are met before anything else is accrued by anyone.

Elimination of "well, anyone could do that job, so you don't deserve any significant compensation" is a goal, because the proper answer to that is "maybe anyone could, but MF I'm the one that is and you do need someone to do it."

Elimination of "my ego demands that I pile my gold higher upon the base my daddy built, even if other people have to do without in the process" is a goal. Even if those people don't seem to be doing anything all that vital they are still more useful than an egotists gold pile.

 

[hobbsyoyo]

I guess I believe in private property ownership at some level. What I do not believe in are systems that allow wealth concentration or withhold basic rights from citizens.

I define basic rights in this context to be healthcare, education, shelter and food, in addition to bunch of political (and not necessarily economic) rights like free speech and free association. I think everyone has a right to those things and should be guaranteed access to them.

I think companies should exist but employees should always be allowed to unionize. I borderline think the unions should be mandatory. And in any case all workers should be co-owners of their employers and there should be healthy mechanisms for wealth transfer down the economic ladder.

Where I really struggle is trying to frame a system which does not devolve into heavy handed government intervention wherein winners and losers are picked ultimately by party elites. I do think that free markets push innovation and are ultimately good things in and of themselves. I don't really think that having everything ultimately run through a government can be made workable at our current level of technology. On the other hand, if you concede like I do that the government has to play a proactive role in wealth distribution (or else it will inevitably only flow in one direction - upwards - with increasing severity), then you have to put together a method of doing this distribution fairly and without just picking winners and losers in the economy.

I do not know how to do that.

 

[hobbsyoyo]

You backed off too easily. If you deal in outcomes the technology and resources don't matter. Whether you are looking at a coal heated country in a northern clime, or an advanced technology country dependent on limited silicon, there is some technology and some demanded resource because of it. Economics is about the system that manages the distribution of resources, and doesn't change just because the resources do.

So, to answer the question, I would look for the outcome that whatever labor is genuinely required to make the system work is distributed somewhat evenly among the participants, regardless of the specifics of what that labor actually is, and that all the basic needs of all participants are met before anything else is accrued by anyone.

Elimination of "well, anyone could do that job, so you don't deserve any significant compensation" is a goal, because the proper answer to that is "maybe anyone could, but MF I'm the one that is and you do need someone to do it."

Elimination of "my ego demands that I pile my gold higher upon the base my daddy built, even if other people have to do without in the process" is a goal. Even if those people don't seem to be doing anything all that vital they are still more useful than an egotists gold pile.

I'm totally on board with this. I just don't know how to get to that end state in today's world.

As an aside, I do think we are racing toward an utopia, Star Trek world quite by accident. I believe that we can attain a world with such economic productiveness through machines that wealth will simply cease to mean anything in practical terms. But I see this coming only because our technology will advance so quickly and dramatically that it's unavoidable, not because we plan for it. There will be a ton of opportunity for bad things to happen along the way as the old structures resist. I want to know how we can shortcut that cycle and avoid the nastiness. What social changes are required?

 

[Timsup2nothin]

I define basic rights in this context to be healthcare, education and food, in addition to bunch of political (and not necessarily economic) rights like free speech and free association. I think everyone has a right to those things and should be guaranteed access to them.

Shelter? One of the biggest factors in the economy of California that differentiates it from other places, and makes "California solutions" impossible to apply in a wider approach, is that "homeless" in California isn't the death sentence that it is in many places. So it is normalized here to not even consider shelter as a basic right, but it should be addressed in the wider conversation.

 

[hobbsyoyo]

Yeah I'll add it to the list.

 

[Timsup2nothin]

I want to know how we can shortcut that cycle and avoid the nastiness. What social changes are required?

Eat the rich people at the first opportunity.

Oh.

Wait.

That may be the "nastiness" you were trying to avoid.

 

[hobbsyoyo]

I also believe that people have a right to be happy. That means they need access to means of fulfillment whether its through material wealth without working. I struggle to really precisely define what I mean but the obvious means to get there in my mind is string-free basic income that is of a high enough level to meet everyone's basic living needs and then some.

 

[Hrothbern]

A total blueprint for my Utopia is a bit far fetched I think

Bearing in mind that my country spends roughly 10% on Energy and 12% on Health care (because of demographics forecasted to increase to 20% in 2050 by the OECD)
I have 3 changes:

I would certainly make sure that all investments in Energy lead either directly or after some time to state owned Energy plants and units.
The amount of Capital needed for the energy transition to renewables and storage is huge and besides my political preference, the simple financial reason is that a government can get capital from loans enormously cheaper than private companies.
And because the price per kWh will be mainly capital return cost (no fuel needed), the now average 10% of a GDP on Energy can go down significantly, long term and steady for eternity.

The next one would be to tackle the IP (Intellectual Property) issue of medicins.
Ofc the counter argument will be that governments cannot nationalise IP.... well
But governments CAN faciliate or start up manufacturing sites of "good enough" medicins that can be made at a fraction of the costs of the latest, heavily advertised, just 5% better medicin of some big Pharma.

Both industries above are currently a money drain on our societies by the very few.

The third one to adress imo is durability.
Engineering is now so mature that almost all critical components of simple goods like washing machines, fridges etc, have about the same MTBF making repairing not that viable. A designed life time.
Once durability becomes a societal value, lots of things in our economy will change as a consequence.
And I believe we are able to tackle that, just like we will be able to tackle increasing AI.

 

[hobbsyoyo]

Eat the rich people at the first opportunity.

Oh.

Wait.

That may be the "nastiness" you were trying to avoid.

Nope, that's welcome.

I actually want honest opinions and I don't care what they are. What I don't want is people just bickering for the sake of bickering or because they don't like someone or a particular viewpoint.

But I am not making this [RD] either and this is a fraught topic so there's that.

 

[Timsup2nothin]

Nope, that's welcome.

I actually want honest opinions and I don't care what they are. What I don't want is people just bickering for the sake of bickering or because they don't like someone or a particular viewpoint.

But I am not making this [RD] either and this is a fraught topic so there's that.

Different nastiness.

Arguing about it is nastiness that may or may not be avoidable, but isn't something most people are even going to try to avoid. The nastiness involved in transitioning between economic systems may not be avoidable either, and may involve eating the rich people (probably will, IMO), but most people will most likely at least be interested in avoiding it.

 

[Synobun]

Education reform is the best way to execute the changes you have in mind, @hobbsyoyo. Unfortunately for us, such a concept is usually only wielded to enact prejudicial changes or things that move us backwards instead of forwards.

 

[hobbsyoyo]

Education reform is the best way to execute the changes you have in mind, @hobbsyoyo. Unfortunately for us, such a concept is usually only wielded to enact prejudicial changes or things that move us backwards instead of forwards.

I'm actually not sure how education reform gets us there. Can you elaborate?

 

[hobbsyoyo]

I should put a huge disclaimer that all of my notions of how an economy are structured are based on the notion that the economy has a natural end goal or state. Maybe that's an inherently bad idea. Maybe it just is.

But I tend to look at it as the method in which we all improve our lives. And reaching a state without want is where it's always been heading even if that was not intentional.

 

[Synobun]

I'm actually not sure how education reform gets us there. Can you elaborate?

A lot of our ideals are presented and enforced in the education system. The modern economy, where you face the 9-5 dilemma and the ever-present guiding hand of stifling management, is propped up by education standardization and the quelling of personal agency. Even the trendsetters in our society are products of our education systems; the difference being that they were presented with the right set of circumstances to transcend the model put in place for the "common man".

An education system that encourages creativity and more agency in what we learn would run counter to the way our system works, and changing how the system works is easier when people are already 'educated' in wanting that change. The highest quality-of-life nations on Earth have one thing in common: an education system that is more geared towards the individual instead of the state. Equipping an individual to learn is more conducive to positive social change than equipping the state to receive workers.

 

[Borachio]

I think the economy should serve the people. Not the other way round.

 

[Birdjaguar]

Nice thread.

Begin with the end in mind. Outcomes. I think they come in two flavors: economic outcomes (wealth and stuff) and physical (food, health, education) outcomes. If you define rules around those outcomes. you might be able to then let the free market take over within the bounds of those rules. Of course the larger the population and more varied the geography, the more difficult the project will be. Generally, you would set some minimums, and maybe maximums. They could be fixed or relative to one another.
Some examples:
HS education must provide x skill sets and knowledge base
Minimum housing available to anyone must be....
Minimum level of Health care must be....
Minimum level of elder care must be....
Minimum level of access to technology must me....
Minimum level of military readiness and capability will be....

You also have to decide if you are going to cap either income or wealth so that you have some control over the wealth gap.

Once you establish the minimums, you need to figure what has to be done to raise capability up to those standards and the cost to bring each variable up to that minimum over what period of time. Jobs will be a big question. Which jobs in which arenas will need more workers and which don't? Those changing needs will be drivers for education.

How does one implement such a planning process? In China it would be top down. In the US I think you would begin in each state, consolidate at a regional and then national levels. It would be slow and painful and take a dedicated effort on the part of the facilitating organization.

Anyway, those are my first thoughts.

 

[Arwon]

Aggressive flooding of capital into energy transition