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 as restaurants, lounges, schools and even libraries have been shut down for the duration.
It has gotten to the point that even politically and fiscally conservative leaders, who typically expect most of the people they claim to represent to fend for themselves, are actually proposing massive programs of direct financial aid. The Trump Administration and Republican lawmakers have been working on a $2 trillion dollar stimulus package that for once, doesn’t consist strictly of bailouts for big business and industry (although that is certainly part of it).
Other governments around the world are following suit in one way or another. For example, the U.K. government recently announced that it will be paying 80 percent of worker salaries up to £2500 per month ($2900 USD) for 12 weeks, while offering tax breaks and interest-free loans for businesses. Across the Channel, France is preparing to nationalize several industries while suspending tax, rent, and utility payments for small companies.
The problem is that we, as a global society with a tightly interconnected economic system, are entering uncharted territory. That economic system is largely based on two fundamental things:
- Endless growth and expansion with little to no regard of the consequences to society or the environment – which the coronavirus pandemic has stopped in its tracks.
- That growth is financed by a cycle of debt, which starts to fall apart when debtors are no longer able to pay creditors –another problem that the pandemic and resulting shutdowns and quarantines has exacerbated.
If there was ever a time to think outside the box, it is now. Government’s immediate solution is to throw money at the problem in one way or another – cash payments, low interest rates, subsidized loans or grants, etc. In the short term, this is indeed necessary for the majority of people who have been left behind by capitalism’s unchecked expansion over the past four decades, as well as small businesses and entrepreneurs who lack the resources of global corporations to weather such storms.
Such actions, however well-intentioned, essentially 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.
Would the type of socialism promulgated by 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 is not always conducive to the type of innovations that can benefit society and help us leap forward.
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 truly be productive members of society. Yet, the current capitalist system demands that all of these things be commodified and make profits for someone. Meanwhile, those who provide housing, food and health care are under pressure themselves, having to pay for labor, raw materials, taxes and legal costs.
To suggest that all of these things should be “free” may evoke hard resistance from supporters of the free market capitalist system, yet the poverty that results from a lack of basic needs creates crime, disease (mental and physical), environmental degradation and more — adding hugely to the cost of running a society. Perversely, the money that is spent addressing these problems is considered part of a nation’s Gross Domestic Product (GDP). Ergo, someone who contracts cancer from living near a factory producing toxic waste actually contributes to the GDP when they (or someone else) pays for their treatment. Law enforcement officers who must go after criminals become part of the GDP as well when they receive their paychecks. Couples who divorce over economic issues contribute to the GDP when they hire lawyers and pay court fees.
These are hardly ways to make society and the world a better place. Is there a better way? Some visionaries believe so – and are working to bring it about.
These visionaries recognize that a major part of the problem with our current capitalist system is not capitalism itself, but rather the way the exchange of goods and services are facilitated – 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 today as a result of the coronavirus pandemic. The consequences can be devastating.
The idea of barter comes to many people’s minds, but there are reasons that money has largely replaced the trading of livestock, handicrafts, produce, etc. Unless people have many different skills and abilities in the production of things that others need, or are able to offer a wide range of services, the barter system is unlikely to solve the problems of 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 that represents actions benefiting society and the planet, that cannot possibly be stolen, taxed or otherwise transferred away from those holding it
- a system that guarantees everyone will have access to housing, food, medical services and education without having to incur a lifetime of debt servitude or worry about a paycheck
- a system based on free market principles that encourage innovation
- a system in which only actions that benefit people and/or the environment in some way are rewarded
Such innovations are already underway, and have been for some time. They are being made possible by rapid advances in communications technology. And now that growing numbers of working people have suddenly found themselves with a great amount of “downtime,” they are starting to reach out to neighbors and their local communities, where such innovations usually get started – because no amount of technology can replace the human factor.
That human factor – particularly in the light of multiple (and even conflicting) points of view – is 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 were 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 the manufacture of 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. 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 needs to be carried out in such a way that nobody goes homeless, hungry, without medical and dental care, and 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.” 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 in history 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.
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, have been testing out such a comprehensive economic system, with considerable success. A devoted group in Portland has been considering such a system for at least four 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 have been largely erased; there will truly 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 it will be 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 the problems that exist in the current system, it is as good a time as ever to consider alternatives.
Learn more here.