Thursday, May 11, 2006

Philosophy and Economics

Capitalism is the only real system of economics that has lasted, although no country operates a pure capitalist economy.

New Labour's "third way"” is one of the latest successful reincarnations of capitalism.

Capitalism cannot be described as the pinnacle of human economic endeavour. There are flaws and cracks in the veneer, indeed some commentators would suggest that the system is an unmitigated disaster and the only reason it still exists at all is because there is no viable alternative.

One of the main failings is that small numbers of people get richer while the poor remain poor. Another failing is that people can spend billions on an art-work by a famous artist while people die for want of food and clean water.

This article is not about these flaws, other people state cases for both sides of the argument with more verve, enthusiasm and facts. I seek to lead the reader on a thought experiment of alternatives to capitalism, perhaps not viable ones, but a revolution of thought beyond Labour'’s "third way"” philosophy.

The Problem

The problem that I see with capitalism is that everything is based on monetary value, so to abolish capitalism monetary value has to be replaced with social value. To completely abolish money its value has to be zero and the only driver for human progress is self- fulfillment or self-actualisation (Maslov).

A half way house has monetary reward based on relevance and importance to society, so only jobs that improve the human condition get high salaries. The flaw with this is how do you measure contribution to society, salaries would have to be controlled by a regulatory body.

The abolition of money would require everything to have no value, everyone would be able to have whatever he or she wants, when they want and in whatever form they want. Where could you start to make the transition?


Monetary Value

One part of the economy to start at could be property. All property would have to be nationalised, all rents and mortgages declared null and void. Everyone would be allowed to have any plot of land they wanted within certain limits. I can imagine a large bureaucracy maintaining databases and managing land applications. Planning regulations would still limit development and no one could own land, which was un-productive or unused. All such sites would be assigned back to the ministry in charge.

Of course to prevent the economy from over heating there would have to be a general wage cut between 30-50% of salary, cutting the part of wages currently spent on housing.

Any more than two homes would probably be considered illegal unless each of the extra homes was also home to someone else. A rich owners loop hole could be that an extra home would be allowed providing part or all was a residence for someone else e.g. care taker or house keeper.

This may seem to be an example of the rich getting away with something but consider that first these new residents would have jobs that previously did not exist and secondly that empty houses have become part of the national housing stock.

Other parts of the capitalist economy could be removed and dismantled in a similar way although it is also possible that the entire capitalist machinery could never be dismantled unless further technological and social advances take place.

Privatised Communism

Communism was an economic system, which was less than perfect although had it been an American idea would the enemy of capitalism be the one that was defeated?

What if a private company provided a flavour of communism to its employees.

No more salaries, the company will provide all needs, housing, food luxuries and even holidays.

This idea would be based on the fact that there is a limit to how much a person could spend especially if for 37 hours a week they have to be at work. The system would work in a similar way to job and finish employment; you can work whatever hours you want provided the job gets done.

In some aspects, such as property, it would benefit the company. In the current economic climate the company would see a return on its investment.

For major diversified multinationals the company could provide most goods and services and any other needs bought in could be sourced at reduced cost.

To completely remove cash from the employee / employer transaction each employee would have a company credit card with no limits.

Taxation would become the burden of the company, which could cause some headaches for the Inland Revenue, currently benefits are given a value and taxed on take home pay accordingly. With no take home pay no personal tax, but in all likely hood the revenue would place the tax burden on the company.


These are merely an example of "“too many thoughts", they are thoughts about the betterment of mankind, and they do not have to be practical or of any use in the real world.

Hopefully, they raise questions and thoughts about whether our economic system is perfect or can it be improved upon.

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