[SPECIAL REPORT: PART 2 OF 3] In Part 1, The Future of Capitalism, we learned that capitalism is not sustainable without growth, nor does it allow for conservation in equal measure.
Though it was acknowledged that capitalism has generally served us well, many readers took great exception to the possibility that capitalism doesn’t truly provide the equal opportunity for all that it promises. And perhaps competition, which requires a loser for every winner—the true trickle-down effect—isn’t such a good thing. Can’t we collectively drive prices down and insist on quality by simply making our purchases elsewhere?
(Note: Reader comments sourced from syndication partner websites.) Some readers requested other readers (and this author) to take an Economics 101 class. Does E101 address that free market conditions don’t actually exist as currencies, commodities and even interest rates are manipulated on a daily basis? What about when governments play economic hit man with each other at our expense? [UPDATE 05/20/15: 5 Banks to Pay Billions and Plead Guilty in Currency and Interest Rate Cases]
Other readers cited exploitive (predatory) capitalism as the problem. Is unlimited speculation off the backs of the working class—profits are privatized/losses socialized—covered in a Harvard MBA? When is it recognized that the only reason for making derivative formulas so complicated that a PhD is required to develop it, that maybe not everyone’s best interests are included in the formula?
A few readers panicked at seeing the word socialism mentioned, taking the entire article as pro-socialist when it was only mentioned that when there is no upward movement, for all the innovation that capitalism brings in high growth mode, it slides backwards just as quickly as funding for infrastructure, scientific exploration, healthcare and education dry up, leaving us with insufficient safety nets.
Since we have thirty years of economic data that says trickle-down economics doesn’t trickle all the way down, but tends to float on top, can we take the best of what capitalism has to offer, returning to its practical application? Or, can we do better, creating win-win, instead of win-lose?
A New Economy
The Organisation for Economic Co-operation and Development (OECD) report cited in Part 1 concluded that, “Cash transfers and increasing access to public services, such as high-quality education, training and healthcare, are an essential social investment to create greater equality of opportunities in the long run.” And they are exactly right. Why? Because capital is put back into circulation. Notice how cutting social services and austerity measures have failed to alleviate capital shortages or generate growth.
If you wonder who is going to pay for a cash infusion and services, you are already paying for it, but so inefficiently that politicians and citizens alike are baulking at the idea even maintaining what we currently have in place—and rightly so.
Most present human activity, including capitalism, is entrenched in short-term gains rather than playing for the long run. War is inefficient; debt-based economies are inefficient; even charitable organizations are not running at peak efficacy as we continue to band-aid the side effects of unsustainable economic activity, rather than addressing root causes.
Again, to acknowledge all the good bits found in capitalism, there are many capitalists who adhere to ethical business practices and only use competition as a means of making sure to provide a unique, fresh angle to their product or service that nobody else is offering (which sounds a little more cooperative in nature). Many a small community is thriving and wouldn’t change a thing.
Whatever economic system(s) we embrace, it must include social agreements, social responsibility, and allow for conservation in equal if not greater measure as we plant the seeds of tomorrow. We are presently living the ongoing results of our failure to adequately address these essential elements.
Why Trickle-Up Matters
Trickle-up economies capitalize from within, beginning at the grassroots level. Trickle-up mirrors nature in that it supports the genius that exists all around us, rather than acting out predatorily. Who starts the trickle? You do.
Trickle-up includes accepting responsibility for being the face of change in the world by supporting paradigms that serve all of humanity, starting locally. When we come together cooperatively, the cost to the individual is very small while the rewards are very large. i.e. Imagine if each of us volunteered just a few hours each month.
Trickle-up business models do already exist, and not as a new form of socialism. Non-profit cooperatives (NPCs) such as food and banking NPCs, employee-owned businesses, private foundations and charities are just a few examples. When you back a non-profit, your investment is returned to you in the form of reduced costs on products or services, and sometimes even in cash. That capital is then pumped directly back into the economy, improving everyone’s quality of life.
In this author’s neighborhood, a credit union is literally depositing $5,000,000 back into its member’s accounts by the first of the year. Subscription food coops are healthfully springing up and non-profit medical providers are thriving—all regardless of economic conditions. These organizations actually are profiting quite nicely, but not at the expense of their employees or other organizations.
Profits are not being pocketed by just a few, but are returned to those who believed in and supported the business’s mission statement—its survival contingent on serving the good of all. What is happening in your neighborhood?
Other examples include crowd funding and open-sourcing. Both encourage transparency, accountability and collaboration in a non-threatening and even exciting environment. Dynamic and responsive, everyone’s genius is recognized, no matter how small the contribution. Efficiency is more quickly assessed in an uninhibited environment. What other constructs can you think of that are trickle-up?
What is clear is that man-made globally systemic poverty is the result of competing for resources, regardless of what economic flag you wave. As nano-technology and 3D printing continue to automate manufacturing and reduce labor requirements, humanity will be undergoing another workforce reduction. This transition will terrify those unprepared. So let’s prepare!
In my opinion, a gift economy is truly the only universal economy that serves humanity and the planet. But until then, multiple economic models will continue to co-exist. For those who enjoy risk and wild speculation, venture capitalists can go play with other venture capitalists and compete all you want, but let’s end the corporate socialism. Let’s end corporations profiting off the negative aspects of our culture, and that includes charities whose agendas are self-serving.
In Part 3, we will learn more on how to create a trickle-up economy, beginning with you. To move humanity to the next stage of our evolution, we must learn how to tap into our individual creative genius and collaborate. (Hint: Your unlimited creative genius is also what creates your unlimited income stream.)
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