Economics

A system for all of us

My all-time favorite last line of a book comes from William McDonough’s “Upcycle” (about ways to build products that enrich the environment rather than harm it) where he closes by saying:

> It’s going to take all of us, and it’s going to take forever. And that’s the point.

We’re at an interesting point in history, where for the first time most of the people in the world have significant resources and freedom, but that has brought with it environmental destruction and growing inequality. It’s clear that the current path we’re on is not one that we can follow together forever…but what is a viable alternative?

Economics is one of the foundations of a society, so the economics of a collective system are crucial. Daniel Schmachtenberger has put together an interesting list of the criteria a collective economic system must support :

* It must align the incentives of all individuals with each other and with the commons
* It must work well with new systems of governance, law, intelligence, infrastructure, and worldview
* It must solve the problems of today’s systems: perverse incentives, private ownership, scarcity-based valuation,
* It must provide a viable transition path from today’s systems to the ideal future. As the author puts it, “this probably requires out-competing the current system, in a way that can scale to everyone, while obsoleting the destructive forms of competition within the new system.” Beat capitalism at its own game, if you will.

Interestingly, he later points to agriculture as the starting point for our current economic system, as it introduced both surplus and unequal scarcity for the first time. Both of these accelerated exponentially over time:

> Accumulation has reached a point where single individuals have more accumulated wealth than all of the world combined before the industrial revolution. And abstraction has reached the place where tens of trillions of dollars are moved around the world daily, in digital form only, based on financial statements seeking to maximize profits…the consequences of which can include war, species extinction, climate change, increases in poverty, and so on.

More on this perspective soon, from my recent reading of James C. Scott’s Against the Grain.

The solution, in Schmachtenberger’s view, is to reverse the incentives in our current system, and make that process faster by optimizing the coherence of the people in it:

> Extraction is replaced with contextualization; (value) abstraction with instantiation; and accumulation with distribution and flow dynamics…

> Its source of competitive advantage (over the current system) has to come from optimizing coherence – of the agents with each other and with reality.

There’s some pretty heavy economics jargon in there, but it’s really interesting to think about designing systems that would feature these traits. My current strategy is optimizing collective intelligence through collaborative software; but worth thinking more broadly about how that interacts with the other parts of a future-viable system for all.