ktz wrote: ↑December 2nd, 2020, 2:53 pm
At this point in time, billionaires are not incentivized to behave in a way that benefits society. They are incentivized to accumulate wealth. The modern interpretation of the invisible hand was reliant on the Kuznets curve to ensure that accumulating wealth would also benefit society, but Piketty made the case back in 2015 that when the rate of return on capital is higher than growth, inherited wealth will outstrip earned wealth and the EKC is a fantasy. I may be somewhat bastardizing Piketty's point here but my understanding is essentially that the endgame goal for individuals and corporations alike is no longer to perform productive work or meet demand with supply, but instead to get a giant pile of cash by any means possible upon which they can sit like gluttonous dragons.
Never heard of this whole concept as I am admittedly very uneducated in formal economics. However, is it possible that this is akin to some broad supply = demand idea in which as these corporations get lazier and lazier and simply stop doing what got them there, that their power and wealth will eventually decline to the point where they need to start producing utility again? This rate of return won't always be higher than growth correct? Regardless very interesting and something I'm going to look into with some free time.
ktz wrote: ↑December 2nd, 2020, 2:53 pm
So getting to your question, what does a solution look like? In short, I imagine the most palatable solution that we will realistically end up with is some combination of China's social credit score system (hopefully one that uses carrots instead of the crazy 1984 stick that's happening over there) to prevent the tragedy of the commons and encourage socially conscious behavior, and then UBI to prevent social instability and unrest.
If we are talking pie-in-the-sky, I do think an optimal solution will make several updated distinctions about money. One aspect of money is its representation of physical goods like food, water, and utilities where not everyone can have enough, and services like maintaining the robots that do all the work -- whether this score is managed by the invisible hand or some centralized algorithm doesn't matter to me as long as it seems egalitarian enough that nobody is starving or whatever. Separate out a different score that represents status. Celebrity culture can be beholden to this number -- we don't need to pay them exorbitant salaries that inflate prices on goods and services for everyone else, when really we just need a number to represent who is hot and who is not in society. Let this number be used for the purchase of scarce luxuries, and hopefully you will also attract the competitive egos of the hoarders and high finance traders to do something useful for society instead of just being a bunch of gambling addict arbitrage vampires. And there should be a third score should be earned by demonstrating the capacity to make good decisions in service of the common welfare -- power. These are independent functions that are currently conflated into the same fantasy pie-in-the-sky number -- I mean, it's not like we have the gold standard anymore where money actually represents some physical quantity in the world. It's literally just a made up digitial number now.
And then, call me a communist but pretty soon, when robots take over all the work, shouldn't we check and see if the cake is big enough now that everyone can get a slice?
I don't believe that this social credit system will solve any of the problems or flaws that we associate with money, I think the fundamental issue of human greed will create all of the same issues but in a slightly different manner if this system were implemented. I do think that, if it is possible to create a non-draconian social credit system, it would be beneficial to society in order to lead people away from doing things ONLY for financial gain, but I still feel that greed will corrupt this entire system in the same way it has corrupted the current financial situation.
I do agree that UBI is a good thing, considering that I think we have passed the need for a "survival of the fittest" in modern society, and that we can fairly say that everyone should be able to survive. However, I think an interesting part of our psychology that could come into play with something like this is shown in the Mouse Utopia (not the exact name but I think we've heard of it) Experiment.
The group of mice that has all of their needs satisfied eventually devolves into chaos and disrepair. UBI can be good, but I think we need to be wary of removing a possibly critical part of our psychology, and that is the need to survive. If we feel "invincible" in this sense, why strive for anything? This is very far off track from the original discussion, but I believe that there is a baby that we should not be throwing out with the bathwater when creating a solution for this problem.