Monday, 30 January 2012

Proposal for illiberal cultures - the carmeleon

These days a roadside camera can capture a car's license plate.  That technology can be on-boarded into every car.  Soon car bodies could be covered in materials which cam be programmed to change colour.  Take these two ideas and combine them into a proposal for improving road safety in illiberal but seemingly benevolent cultures like Singapore.

The idea is this:  every car has a button which its driver can press to register a 'dislike' of any other car in the vicinity.    You 'dislike' a nearby car if you see its driver behaving badly - cutting someone up, not stopping at a light, double parking in a red zone, being stationery in a hashed zone.  Those dislikes are aggregated centrally and a signal goes out to the offending car, changing its colour to one which becomes socially recognisable as 'bad'.

A normal distribution of colours soon emerges.  Many drivers improve their road behaviour through social shame.  Safe drivers avoid or pay special attention to clearly dangerous drivers.  Road accidents dramatically reduce.  Roads become sufficiently safer for all that users accept the limits on their driving lives and any additional risks the scheme introduces.

Capitalism and Anti-Slavery

I'd like to make a case for capitalism which isn't often made.  As an escape from slavery.  The history of capitalism is quite tightly bound up with the history of actual slavery; I don't want to deny this part of capitalism.  On a more metaphoric level, Marxist-inspired critiques often pit workers against capitalists and claim that workers become enslaved by the capitalist system.  In time, I believe this same process offers us our only hope for achieving freedom from waged labour, which can very often feel like a kind of modern slavery.  

Veblen famously mocked the leisure class as wasteful parasites but I'd like to rescue this end point as something more noble.  To do this I'd like to describe the two kinds of capital available to every human on the planet.  Their own so-called human capital - including their skills, their physicality, their bodies' rentability, their creativity - and the rest of their capital - what they own or rent productively - in other words, every form of capital other than their human capital.  Dumbing it down a little, think of it as their work skills versus their savings.  

Now, this isn't a piece about inequality, so in all that follows I'll be talking about the average person's human capital, and their average non-human / material capital.  Clearly both of these categories vary hugely from person to person.  But I'm willing to invoke the concept of a population average as a decent simplifying model.

In the above diagram, H represents the average person's human capital.  This is what we exploit when we work.  It is usually the case that our remaining material capital C is insufficiently large to provide a decent income stream for us to live on.  This material capital can be considered as residing mostly outside of the realm of government, G, as in the western world currently, or as residing fully within a governmental framework, as in utopian communist paradigm.  Regardless of where it resides, its relative size with respect to H is of course a separate matter.  Some would argue that, thanks to conspicuous consumption and the hedonic treadmill option 3 - where C is relatively much larger than H, can never become a reality.  Some would argue that there's an amplification which happens to that fraction of C within the scope of G; some would argue the opposite - that the leverage is higher for non-government directed usages of capital.  Chose your preferred amplifier based on your political persuasion.

But I'd like to point out that a world where $C > H$, insofar as it could ever exist,  offers humans the freedom to break free from the daily subjugation of our bodies, our goals, our desire for autonomy.  It allows us to become somewhat more independent in decisions about our bodies, which daily activity we'll engage in, the terms under which we'd be prepared to work for others.  It allows us to be more fully human. We don't need to become a 'leisured class' but clearly the shape of the economic world will change as we approach this capitalist (perhaps post-capitalist) utopia.

Impossible?  Perhaps.  But I reckon certainly in a thousand years' time, most of the households living in developed countries will already own their own properties, removing one large burden from the current generation of workers, who are almost the first to attempt the struggle to become mortgage free.  Mass home ownership is such a young phenomenon.  I don't think we should make the mistake of thinking that home ownership patterns in 1,000 years time will resemble the current situation at all.

Take another example.  Retirement or benefits contributions.  For a given interest rate, there is a single lump sum which will match a lifetime of pension payments.  Say the average person retires at 50 and dies at 100.  And say that they expect to live on the equivalent, in today's money, of a pension of 35,000 USD.  If the 50 year swap point is at 7% and we consider 2% of it as a protection against annual inflation, we're left with the question : what sum of money, invested at 5%, would provide our pensioner with an income of 35,000 USD for 50 years?  The answer is a mere 700,000.  And after our pensioner finally dies, we're still left with an inflation adjused 700,000 USD to apply to another pensioner.  Perhaps Norwar or Qatar will get there first.

Clearly someone still needs to work, and economic growth would need to adjust down to a more sustainable (less growth oriented) model.  Clearly world-coordinated efforts would be more likely to succeed than national ones.  Clearly there's a danger of wage inflation as the H your business needs right now becomes harder to entice, hitting profits, and hence C.  Clearly unanticipated inflation makes assessing the right lump sum more difficult.  But none of this makes the argument economically flawed.  There is a fraction of any economic community for whom $C >H$ already.  That fraction might have an upper limit, but my guess is we're nowhere near that limit and marginal increases in $C >H$ are very achievable, desirable even.  Whether and to what degree non human capital is regulated by governmental structures is an interesting question in its own right, but is surely secondary - an implementation detail - when compared to the far more significant possibility that the average household might have acquired a store of wealth which allowed that household to more freely chose what to do with their working lives.  If none of this can work,  if there's some kind of fallacy of composition going on here, then capitalism is a lottery which fully rewards a few, while increasing general economic well being  for the majority at the cost of some part of their own humanity.