Tuesday, 4 September 2012

How Technology Can Fix Capitalism

Just a note on why capitalism works, because I have realized that few people really understand this: Capitalism is a system that can solve problems without having to figure out what those problems are. It essentially turns any problem into a game and the parties that solve the game the best, gets the prize. If you are the only person with a solution, then you can sell your solution to the person willing to pay the most for it. If you are just one of many people with the same solution or product, then there will almost always be someone willing to do that work or sell that product for less than you are.

Part of the problem with capitalism is that there is not enough competition - a situation that governments try to fix with the red tape of regulation - which instead of fixing the problem only makes it worse by making it even more difficult and expensive to compete. To fix the problem, the government should remove every single obstacle possible in order to allow individuals and SMMEs to compete effectively with larger corporates.

(A side-effect of not enough competition is that companies can get away with making products that only last a short while - so that you have to come back and buy it repeatedly, each time making them and their suppliers grow just a little more, bit by bit. People really need to realize that their spending is their real voting power in a capitalist democracy. This engineered failure or planned obsolescence - "they don't make things like they used to" - will not survive if there are enough people making products that last longer; it however does provide a company with a cash-flow and basis to spend on innovation and better products - but this is in my opinion lazy way to encourage innovation.)

Slightly off-topic: Democracy also has minor issues - the greatest being that what's best for the majority is not necessarily best for each minority. This is in my opinion easily solved by simply applying democracy to smaller areas - apply some rules on a province-by-province - or even town-by-town basis - "compartmentalized democracy." But this post is not about democracy: It seems that the public shares the misconception that I have had about socialism - you would be well advised to simply read the first paragraph - or even just the first sentence, of each of these: Communism Fascism Corporatism Fascist Corporatism Capitalism Socialism and Market Socialism.

In light of thinking about this over the last few months (or perhaps my entire lifetime) I have developed a more mature interpretation of a form of Private-Public-owned Market Socialism: I see it as a capitalist system without conventional leadership - rather, the leadership is a free-market information-exchange system - or perhaps initially those administering the implementation of such a system - that can auction work off to the most suitable party by means of algorithms sourced from the brightest minds. (One simply needs to look at the abundance of ERP or "Business Intelligence" applications that has popped up in the past 5 years to realize the proximity of such a solution. Or the ever decreasing amount of time required to have this sort of solution custom built.)

You may argue that this is the way our society works currently - but I'm not talking about a "tender" process - which often requires months to years to implement even the simplest of things - I'm talking about a system capable of breaking large tasks into many more smaller ones and facilitating the process of seeing them completed by those most suited to doing the work by means of a accountablility/quality/price balance.

In our current system, even with 5 competitors, each only ends up slightly undecutting the previous - in order to maximize their profits (this is a form of "top skimming" because there are usually only a small minority (on "top") who can afford - and who ultimately pays for the products or services offered directly.) There is nothing essentially wrong with that, as it gives a company a financial base from which to do better things - but all too often those "better things" in return again only targets a very small minority, often only the directors and shareholders of the company.

The problem to solve here being that, conventionally, inevitably you end up with 3 or more large corporations, each duplicating a lot of work of the others - each reinventing the wheel so to speak - at a proportionally increased cost. It may be paid for by shareholders, but ultimately the weight bears down on the public: Everyone. Effort is exerted where it could be better spent elsewhere. (Moving a pile of sand from one place to another, and back again, repeatedly, is not real work. There is plenty of opportunity for real work and no incentive to simply keep people occupied with "fake" work, ultimately only costing money rather than generating it.)

A system that will make it obvious to companies what the actual demand is and how their competency and price will affect the size of their market, will make it much easier for the first one or two providers of a product or a service to render  a service or create a product at a less lucrative profit - with the promise of capturing a whole market rather than a mere small proportion of it that they would have in an environment that left the door wide open to many competitors.

Imagine a pipe down your street broke - and as one of several people with the necessary experience in investigating anomalies and fixing pipes, you are subscribed to the local municipal module of the system; flow control valves detect abnormal water flow; A notification is sent out to you an everyone else subscribed with your profile; you have a very limited timeframe to bid against your peers to investigate the problem (this could even happen automatically based on parameters that you have pre programmed) - perhaps the problem is just across the road from you, so you don't have to drive there - so you put in the cheapest bid and win the opportunity to do the job because you have a track record of successful completion of jobs. You go out, notice that you need a pipe segment; you put this request in the system; a bid goes out to pipe manufacturers/stockists for delivery of the part you need and by a similar process it gets delivered; you complete the job; another bid goes out to have someone check up on you by an algorithm that is continually finetuned by an appropriate measure for your line of work; if the same issue comes up again in a statistically significant deviation, your accountability record is automatically affected and you are penalized when bidding for similar jobs in the future, until you can prove yourself with smaller jobs - or perhaps even purely training jobs.

Even the software - and the network it needs to run on, can be brought to life by a similar system - initially implemented manually: A software platform and broadband network that is built by literally anyone capable, a broadband network consisting of many small networks, capable of functioning like a large homogeneous network (it's what I specialize in, we have the technology), that provides access to an open source software platform, funded by government - open source because that will ensure that the brightest minds and ideas are attracted and the best possible solutions get in there in a transparent manner - government funded - and funded well, to ensure that it's worth the time of those developing it - no direct return on the investment in software, because the return will come in economic growth; ie. not from the software, but from the growing economic base it empowers; from less duplication of work resulting in more efficient spending of time and money by more people, doing more things, more hours a day freed up to do more necessary tasks.

There shouldn't be any usage fees for the software - running such a system is practically free if you look at the technical details, past the corporate hogwash (you can buy a computer for a tenth of the price of another which performs better - also a field I specialize in - this is actually a more accurate example "top skimming" - swindling something to someone who can spend more - a common - and smart - business practice - it rests on the fact that a poor person can spend an amount on something and a rich person can spend multiples of that amount - so you simply package the same product differently for the rich and the poor in order to sell it to the maximum number of people at the maximum price that they can afford.)

So, a system such as this will have the ability to pull individuals and SMMEs into the market on a more level playing field, literally being able to compete with a larger player for many more functions. The result would be less wastage and duplication of resources and more competition, the single only apparent challenge is quality control and security, which can also be "auctioned off" as illustrated above - technology gives us immense power to automate optimization, monitoring and security.

This system, if implemented properly - not a long shot by any stretch of the imagination, as it can easily be proven on a small scale - will have the effect of accelerating the free-market forces that gives capitalism it's strength.

I believe that this is what Friedrich Engels envisioned when he hypothesized  "utopian" socialism as the natural result of capitalism.

The prevailing forms of "capitalism" more closely resembles fascism - or what Ron Paul calls "corporatism", in fact being fascist corporatism. It incorporates the knee-jerk governmental reaction to slow-moving corporates, in a mephitic feed-back loop. It in effect boils down to corporates bullying SMMEs and individuals by means of their investment-muscle, monopoly power or regulatory protection, ultimately paid for with public money - yours and mine - in terms of duplicated infrastructure and unjustifiable non-performance related governmental salaries and "inefficiency" tax - and the governments inevitably trying to intervene in the wrong place; including the natural human trait for "love of money" only exacerbating the problem. It uses money to slow things down rather than accelerate it: Think of a parking lot - if the parking was free, it would more likely be filled up - if the parking cost too much, there would always be more spaces.

It's not that hard to design a system that functions within the scope of current legislation, but that will, when used long enough, make it near impossible for corruption to prevail by in effect removing the opportunity for people to try to employ corrupt tactics. It will do this by putting in place an automated mechanism for a level of transparency and fair competition: Want the job? Do it better and cheaper, it's yours by default - almost instantly - or do it somewhere where there's more demand - or do something else that's in fact in demand and of economic value. (The US Government has already moved into this direction by developing APIs to access their information from software.)

Think I'm dreaming? I've already invested significant time in a proof-of-concept solution involving many role-players - in a project that will save our country billions over the next few years. Most people won't even know anything is happening - all I hope is that our politicians can keep themselves in check and that we can live in relative peace for long enough to pick the true fruits of 21st century knowledge and technology.

So, perhaps this system already exists - most parts of it does - but not in a free form, and not in a form that is easily implementable where needed. Perhaps you are skeptic that this can work at all - or that we can develop something practical. Or perhaps you've just realized which part of the above you have, packaged perfectly, waiting. Perhaps your price is too high, or perhaps, like me, you simply want to see things work better. Or perhaps you are one of the few out to squash projects like this because it will make it ultimately more difficult for you to get money without working for it.

Whichever way, this is just a little piece of a possible future that I have seen and that I believe is within reach of a co-ordinated effort that I am giving my all. Just a little bit... because the future holds so much more - and perhaps soon you too will realize the possibilities and share my sense of awe.

(I've been carrying this with me for too long; inevitably I find myself reading an article that just begs an answer - and next thing I know I've written an essay instead of a one-liner. Simply copying it here makes sense, I guess - seeing as that the previous 10 posts I had intended to write still has not materialized, I'll not postpone this until I can rework it, lest it may not happen.)

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