Economics / Philosophy

Merit-Based Capitalism and Adaptive Abundance: Re-Inventing a Science of Economics

Monday, July 3, 2023

The Seven Paradoxes

(Not to Be Confused with the Seven Deadly Sins)

The human species is faced with seven economic paradoxes that unless solved will continue to result in immense human suffering, planetary destruction, and eventually the extinction of our species. There are, no doubt, more than seven paradoxes, but why the overkill, when seven more than adequately demonstrate the bankruptcy of economic theories and their deleterious effects on the planet and human survival?

Paradox 1#
Most countries of the world have democratic governments or at least espouse democratic principles.  However, almost all businesses, corporations, nonprofits, and institutions are authoritarian, feudal, and anti-democratic.

Paradox 2#
While citizens who live in democracies like to believe they have choice and freedom and follow democratic processes, most of their time is spent in anti-democratic work environments that are dictatorial like absolute monarchies and where they have few or no choices.

Paradox 3#
Ecosystems are most adaptable when they are the most diverse.  While most humans, in principle, embrace diversity, i.e., cultural, political, ethnic, and economic, most businesses and institutions of the world severely constrict diversity of thought, communication, innovation, and creativity through authoritarian and punitive management structures.  Feudal, authoritarian, and top-down managerial structures are inherently inefficient, nonproductive, non-inventive, conflicted, and very wasteful of human and material resources.

Paradox 4#
While an intrinsic principle in capitalism is competition, which is believed to promote accountability, efficiency, and productivity; the goal of all businesses is to eliminate competition and establish monopolies, oligopolies, or plutocracies.  With a vast reduction in the diversity of businesses, the businesses left standing experience less competition which subsequently reduces their own accountability, efficiency, and productivity.

No business has an interest in strengthening or developing alternative businesses to compete with it.  The goal of any business is to reduce the competition.  Promoting and insuring competition is a social interest.  Without that social oversight, capitalism becomes anti-capitalistic, that is, non-competitive.

Paradox 5#
The redistribution of wealth through income taxes, corporate taxes, universal healthcare, public education, public infrastructure, etc., has significantly increased the wealth of the lower and middle classes.  This redistribution of wealth has enabled the upper class to make far more money on their investments than could ever have imagined without the redistribution of wealth.  Although the upper class is wealthier because of the redistribution of wealth, they remain opposed to the redistribution of wealth, and so their own best interests.

The moral of this tale:  The more the rich hold on to their money, the less they will have; the more they give away, the more they will have.

Paradox 6#
Workers who are the paid the least and have the least wealth are made the most accountable and vulnerable to economic changes, while corporate executives who have received exorbitant compensation and have the most wealth are the least accountable and least vulnerable to economic changes.  CEOs, traders, and their ilk are paid regardless of their poor productivity and receive huge bonuses even when their businesses fail.  Corporate welfare is pervasive.

Paradox 7#
The economics of the past 500 years and especially the past 50 years is one marked by extraordinary expansion and abundance.  Nonetheless, modern economic theory continues to be based on notions of scarcity that have little historical reality to them.  Scarcity is an illusion when compared to the infinite complexity of the universe, the planet earth, human imagination and human resourcefulness.  Scarcity economics is the exception not the rule of modernity.

Scarcity economics promotes simplistic thinking and forecasting which is why economists are no better than astrologists at predicting the future.  An ever-expanding economy and civilization is no more predictable that trying to predict new technologies and creative endeavors.  You would think this is obvious but economists keep trying to predict what is inherently non-predictable:  human history.

The Ultimate Paradox#
If paradoxes were infinite, could there then be paradoxes?