What is the relationship between money, blockchain technology, infinity?
Tuesday, May 4, 2010
Next Economy Dialogue - Colin Boyles Editorial
Colin Boyle's article in the Next Economy Dialogue series in the Cape Times is exactly the kind of analysis that I find to be rather boring. It is not that the writer is wrong, or that he is not intelligent or even a good writer. I just find it boring. Once again it is someone talking and thinking inside the box. Yes, we often hear about this idea of thinking outside of the box. You hear this a lot in Business Schools or other sorts of creative entrepreneurial conversations. And, there is much validity. I think it is just about the size of the box. I think often people think outside the box, but that box is inside another box much like those Russian dolls that you can keep pulling out a smaller and smaller doll.
So, the central assumption in much of the type of analyses that Boyle presented is that the box is actually fine - the basic size and the sides of the box are correct and naturally given (not socially constructed), therefore barely up for debate. This type of analysis has increasingly become the norm since the fall of the communist experiment in the majority of the world. Let me note here right now that whatever I have to say I am not a communist, and I don't think I am a socialist, in fact maybe I am a capitalist! The point is that I try to interrogate the dominant way of thinking about our economy in the hopes of finding a viable solution that is not based on the same fundamental assumptions that so much analysis takes for granted.
Back to Boyle, for him what needs to be fixed is the way that the inside of this box is laid out; move this, change that, tweak this and then ultimatley we will free the true and natural economy. And in this case it is quite obviously the capitalist economy which will naturally and "magically" unleash a barrage of job creation and wealth. The solution is just less regulation, more alignment with the private sector and greater business/state cohesion. Perhaps some of these elements are needed, but the assumption is that capitalism and its underpinnings will a) provide these solutions and b) that it is a sustainable and long-term viable path to explore.
In the end it is just about the right mix. The problem is that this type of analyses leads down a slippery slope of constantly tweaking, constant problem identifying and ultimately constant blame. Something or someone else is the problem.
This can only be held true as long as we don't step out of the box. What is worse is that it is for most a glass box. This means that you can't even see the walls, you don't even know that they are there, nor are you sure how they keep standing. What is it that enables those glass walls to stand and exist in the first place, and who the heck built them?
For me the question becomes how would it look if the glue that kept these walls standing started to fail? What if the monetary system collapsed? What if labor stops being sold? What if the compound growth of the economy hits the finite limit that is inherent within this closed system called the earth?
I am not saying that any of these are a given. Yet, there is one that has some very real flaws. Our monetary system! Not only is it premised on compound growth (compound interest) which leads to unsustainable exponential growth, but as research into complex flow systems (which is what our monetary system is - a complex flow system) shows that there is a very real question of the sustainability of a system that is homogeneous and pushes itself to the point of efficiency over all other goals. This has been shown time and again throughout nature and other man made systems (think of our electricity systems with centralized power generation and their collapse such as the great black-out in the North East of the USA about 6 years ago) to be dangerous and susceptible to sudden collapse. Our monetary system is again teetering on the edge. This is not the first time, the question is can it be saved in its current form? And, if it is not saved can capitalism survive? And, if it cannot what do we have planned for this collapse? Have we even thought about this? Are we gonna wait for the possibility to materialize or are we going to spend some of our incredible human knowledge, intellect and creativity to explore alternatives?
I can't believe that we would not do this. It seems completely full hardy. Energy generation is the same - we for the longest time just assumed that oil would last, well if it runs out and we never thought up solar or wind power were would we be? The advantage is that we can almost predict when oil will run out. With the monetary system we have no idea when it would collapse, but based on the physics of it it seems to be almost inevitable.
This is why I get bored by articles like this one by Boyle. It doesn't ask anything new, nothing. It doesn't challenge anything and it certainly assumes everything is fine going forward. Perhaps it will be, perhaps the leaders of the world will come together and cobble together another monetary system that saves capitalism and their political power - much as they did during the creation of the gold standard, the Bretton Woods system and the floating fiat monetary system that dominates today. However, I am not convinced that capitalism can really survive as it constantly attempts to grow and grow and grow exponentially - this is pure suicide.
Come on everyone, lets think creatively here and find new ways of meeting the needs of all of us that are not based on unsustainable efficiency driven compound growth economic models. Exponential growth is just not a viable goal. Step outside the glass box and see if you can find the walls!