Chapter 22 – A New Economic System: Understanding the questions and objections

Let’s quickly review the new economic system that we are proposing in this book:

  1. We start with the end in mind: we are designing a new economy where all participants in the economy have the opportunity to live happy, healthy, prosperous, fulfilling lives at a great standard of living. An economy where there is no poverty, and where there is none of the rampant inequality of the type seen in the United States today. Specifically:
    • Everyone gets high quality, healthy food
    • Everyone gets clean water and sanitation services
    • Everyone gets high quality, safe, secure housing
    • Everyone gets high quality health care
    • Everyone gets high quality clothing
    • Everyone gets high quality education
    • Everyone gets high quality transportation
    • Everyone gets 24×7 electricity and Internet access
    • Everyone gets a computer and a smart phone to access the Internet
    • And so on…
    • And everyone gets these things in a way that is sustainable, so that we do not destroy the planet we live on.
  1. As long as a resident is willing to productively contribute his/her human time and effort to the new economy, the resident is able to partake of the bounty of the new economy. In addition, as robotics, AI, automation, etc. advance, everyone in the new economy benefits because there is less and less work that the residents have to do. A classic example would be dish washing, or truck driving. Once these tasks are completely automated, then no human will be spending time on these tasks anymore, and everyone working in the economy feels the benefit of the lightened workload.
  2. So let’s take food as an example product, as described in Chapter 16 of this book. Every human being needs food, obviously, and this new economy is providing food to everyone at cruise ship quality. To feed the one million people in this new economy, the residents need to plant, grow, harvest, prepare and serve an abundant amount of delicious, attractive, appetizing, high-quality, healthy food. This is not rocket science… On any given day, the city needs to serve three million meals and a bunch of snacks. In order to make this happen, each day there are a certain number of tasks, requiring a certain number of human hours, that need to be performed in terms of harvesting, cooking, etc.
  3. To handle all of the food tasks, the new economy uses a comprehensive computerized task allocation system. Residents enter their preferences into the system (some people do not want to wake up or work before noon, some people are allergic to peanuts, some people prefer tasks of type A (e.g. baking bread) and some people prefer tasks of type B (e.g. driving tractors), etc.), and the system knows all of the tasks that need to be performed. The task allocation system divvies up all of the food production and preparation tasks amongst the residents to the best of its abilities based on preferences and skills.
  4. It is the same for clothing, as described in Chapter 17. On any given day, the city needs to produce a certain amount of clothing in a huge variety of colors, sizes and styles, based on all of the clothing items that the residents are ordering. All of these orders generate a list of tasks needed to produce all of the clothing, and the task allocation system allocates those tasks amongst the residents to the best of its ability based on preferences and skills.
  5. It is the same for housing as described in Chapter 18. The city needs to build and maintain the housing for the one million residents, and on any given day there are X tasks that must be done to fulfill this obligation. The task allocation system divvies up all the housing tasks amongst the residents based on preferences and skills.
  6. It is the same for every other thing that the new economy needs to do every day. The city needs police officers, fire fighters, electrical linesmen, chip makers, laptop assemblers, doctors, etc., and all of these activities break down into a set of tasks each day. The task allocation system divvies all of these tasks up amongst the residents as best it is able based on preferences and skills.
  7. There are some tasks (those of scientists, engineers, chip-making technicians, teachers, doctors, nurses, etc.) that require training, sometimes significant amounts of education and training. The task allocation system understands all of these education and training tasks and divvies them up amongst appropriately trained residents. Residents choose to become scientists, engineers, chip-making technicians, doctors, nurses, and so on, and the economy provides all of the training they need to do their jobs.
  8. There are some tasks that need to get done and that no one wants to do. There are several ways that these tasks can be handled: 1) They can be prioritized for research and then automated, so no one has to do them anymore, or 2) They can be distributed amongst all of the residents to “spread out the pain” to everyone equally – everyone ends up doing a small number of unpleasant tasks, or 3) These unpleasant tasks can be offered with minor incentives in order to make them more attractive to some of the residents, or 4) people who have violated the laws and rules of the city can be assigned these tasks as punishment, etc.
  9. The new economy wants science and technology to advance as quickly as possible, so the system allocates quite a bit of human time on a daily basis to research and development. Researchers are creating new drugs, new robots, new CPU and laptop designs, etc. In addition, people can do R&D on their own as described in Appendix C and D.

There are three huge advantages to this new economic system for every resident:

  • There is no poverty. Anyone who contributes their productive hours into the system partakes in the bounty of the new economy.
  • As AI, robots, automation, etc. take over more and more of the work, the amount of work that residents need to do declines. For example, when researchers create robots that wash dishes in the restaurants, people no longer need to wash dishes, so there are no more dish washing tasks assigned to people. The workload of the city goes down, and everyone in the city benefits.
  • “Prices” are now completely rational. The “price” of anything is the number of human hours needed to create it. Rational pricing eliminates the concentration of wealth. If it takes five minutes of human time to create a shirt, then a resident can have the shirt by contributing five minutes of productive time to the system.

This new economic system is a radical improvement over capitalism. If we extract a million people from a slum, or free a million people from a refugee camp, or recruit a million people living on food stamps in the United States, and we set them up in a new city practicing this new economic system, their lives will become immeasurably better in every quantifiable way. They will suddenly have access to great food, great housing, great health care and so on. Everyone in the new economy contributes their productive human time to the system, the task allocation system manages all of the tasks that need to be accomplished, and everyone benefits from a great standard of living.

Questions and Objections

Inevitably, people will have questions and thoughts about any new system, so let’s address them here. If you have additional questions, please ask them in the forum.

The most common objection goes something like this: “Your ideas fly in the face of common sense. What you are proposing cannot possibly work. Capitalism is the only economic system that works.”

In response, I think this quote is incredibly interesting:

Two billion of the world’s seven billion people live on less than $2 a day, below the poverty line, Rosling said. And only one billion live about the “Air line,” the term Rosling uses for those who spend more than $80 a day and whose lives are filled with gadgets, including airplanes. But how many live above the “Wash line?” Rosling asked. How many of the world’s seven billion have access to a washing machine? Only two billion. These people live on $40 a day or more. Everyone else — about five billion people around the world — still washes their clothes by hand.  [ref]

Capitalism has had centuries to work its “magic”, and this is the current state of things. Yes, capitalism is sort of working for a small slice of humanity. One billion out of 7.5 billion inhabitants of planet Earth make the requisite $80+ per day to have any reasonable hope of riding on an airplane. And really, as we saw in Chapter 5, a person needs to make $220+ per day to live a reasonable life in America at a decent standard of living. Meanwhile, half of humanity is living on $3 per day or less, which is wretched, and demonic.

Note: 1 billion/ 7.5 billion = 13.3% . 13.3% of the people on planet Earth have the economic means to ride an airplane under the economic system known as capitalism. Even if a capitalistic miracle happened over the next 50 years and this percentage doubled.  It still means that 73% of humanity is cut off from the benefits of modern life. This is an abysmal record.

The point is, capitalism is awful for the vast majority of people on planet Earth. There is no question about this. And if the “invisible hand” were going to fix this problem, it would have done so. Capitalism has failed for the majority of humanity.

Simply step back and think about the full list of insanity that directly results from capitalism. The list includes:

  1. Unemployment – Every adult or family in the economy needs a good job in order to buy food, pay rent, purchase electricity, and so on. Why should any adult who wants to work ever be faced with a “job market” that has no good jobs to offer? Why would we accept an economic system that creates this situation? People must have jobs to buy food and housing, but often the capitalistic system offers no jobs.  [see Chapter 14 for details]
  2. Ridiculously low wages – Ditto for the billions of people forced into the terrible jobs that capitalism usually creates – jobs paying only 50 cents or $1 or $2 per hour. A wage like this results in intense poverty for the recipient. Why would we accept an economic system that leaves billions of fellow humans in intense poverty? [see Chapter 14 for details]
  3. Poverty – The intense poverty that we see all around the world is a direct result of capitalism, caused by the terrible jobs (or no jobs) that capitalism prefers to create. Half of Earth’s population makes less than $3 per day as a result [ref]. Why would we accept this from the world’s predominant economic system? Why not design a new economic system that completely eliminates poverty? [see Chapter 5 for details]
  4. Slums – Ditto.
  5. The gigantic concentration of wealth – The purpose of capitalism is to create a gigantic concentration of wealth in the “wealthy elite.” But why do we want the “wealthy elite” to exist at all? Why accept an economic system that strives to create billionaires by stealing money from everyone else? [see Chapter 7 for details]
  6. Billionaires – The existence of billionaires is a complete absurdity – a totally ridiculous outcome that directly results from the rules of capitalism. No single human being contributes billions of dollars to the economy. Jeff Bezos steals the productivity of hundreds of thousands of people to amass a fortune under the absurd rules of capitalism. Three of the richest people in the U.S. are the children of Sam Walton – they do nothing but exist, and the absurd rules of capitalism allow them to steal billions of dollars from us.  [see Chapter 7 for details]
  7. Asset capture – Asset capture is a powerful tool that billionaires use to concentrate wealth. It is absurd that the capitalistic system allows asset capture, yet this is how capitalism is wired.  [See Chapter 9 for details]
  8. Arbitrary pricing – Prices in capitalism are completely arbitrary. A company is free to charge “what the market will bear”, regardless of the cost of production – an absurdity that fuels the concentration of wealth. Why design the world’s predominant economic system to allow arbitrary pricing? Why not instead design a new economic system in which all prices are rational? [see Chapter 13 for details]
  9. Profit – Profit is an overcharge – typically 10% or 20% over the cost of production – that capitalism tacks on to every sale that takes place in the economy. No consumer wants to pay for profit, yet consumers have no choice under the rules of capitalism.  [see Chapter 13 for details]
  10. Dividends – Dividends allow companies to distribute the profits that they take from consumers, sending all of the profit to shareholders. Shareholders do no work to receive this money, and are usually the wealthy elite [ref]. It is yet another absurdity of capitalism fueling the concentration of wealth.  [see Chapter 7 for details]
  11. Recessions, Depressions – Recessions and depressions are a direct result of capitalism, and cause massive suffering by creating waves of unemployment throughout an economy. Why would we use an economic system that periodically causes massive suffering? [see Chapter 14 for details]
  12. Inflation – Like recessions and depressions, inflation if an artifact of capitalism that causes suffering by reducing the value of money. It is absurd to use an economic system that has inflation baked in, yet here we all are.

These 12 absurdities are the direct result of the rules of capitalism. Why should humanity tolerate, much less embrace, an economic system harboring this much insanity? It is time to replace capitalism with a new economic system that completely eliminates all of these problems.

The obvious question to ask is this: Given the real statistics about poverty on planet Earth, where only one billion of the planet’s inhabitants have any hope of riding on an airplane, while 6.5 billion do not, why does anyone consider capitalism to be a good system? The answer is simple: the wealthy elites (the 0.1%) own the majority of the world’s media apparatus, and the majority of the world’s governments, and they are able to pump out a gigantic flood of propaganda in support of capitalism. They are able to use the education system, the media, government policy, etc. to push their propaganda. They can also work both overtly and covertly to sabotage any efforts to find alternatives or remedies to the problems that capitalism creates.

Please go back and read Chapter 16 again. Approach it with an open mind, and somehow try to put aside the fact that every minute of every day of your entire life has been spent immersed in capitalism. Consider how many billions of people are suffering because of capitalism. And then think about how simple the new economic system described here is. We can take a million people out of a slum (where even the most obvious necessities like food and water are a vast struggle), apply their human time in this new economic system, and we can allow these one million people to eat like kings. All that these people need is an economic system that organizes and utilizes their efforts, and their lives can be transformed from wretched poverty to immense prosperity. Capitalism has absolutely no way to make this happen. In fact, capitalism is wired to do the opposite. Capitalism is the reason why we have slums.

The statement “Capitalism is the only economic system that works” is absurd. Any thoughtful and rational person can understand the statement’s absurdity simply by looking at the worldwide economic state of humanity today.  The fact that 70% of human beings on planet Earth make less than $10 a day is absurd. Capitalism does not “work” – capitalism destroys billions of lives.

What happens to the lazy people?

The most common question is, “What happens to the lazy people?” or “How are lazy people punished?” Or someone will make a blanket statement like “Everyone will be lazy – this new system you are proposing cannot work!” or something along these lines. There seems to be an amazing concern about laziness.

The first thing to understand is that it is easy to detect laziness. The task allocation system can assign a task, and it knows how much time task completion normally takes. So the task might be cooking a dish in a restaurant, or plowing a field, or sewing together a garment, or putting shingles on a roof, or assembling a portion of a laptop computer on an assembly line, or whatever. A person who is lazy or who stops working will take too long. The task allocation system will notice this problem and flag it. The system might choose to retrain the person, or dock the person a vacation day, or issue a warning, depending on the situation. If the laziness persists, the system would deal with the lazy person further. Eventually, the system can expel the person from the city and send him/her back to the slum, refugee camp or ghetto he/she came from. It’s that simple. The whole point of this new economy is to make everyone’s lives better. A lazy person who is not contributing is blocking this process. So we talk to the lazy person, work to help him/her, and eventually replace him/her if necessary with someone willing to happily contribute productive time, and receive a great standard of living in return.

But honestly, simply look at the economic reality we see today. There are millions of people in Bangladesh, Indonesia, China, etc. who are working (and working hard) for $1 per hour or less. They make all of our clothing, our shoes, our electronics, our appliances. They are the polar opposite of lazy. All for $1 an hour.  The idea that people will not work is obviously absurd, simply by looking at the world we live in. People are already doing all of the work for $1 an hour, but currently they are getting none of the rewards of their labor.

The simple idea behind this new economy is that everyone contributes their productive time, and everyone receives the amazing benefits of the economy.

A derivative of the previous question is, “What if a person does a task in a sloppy or incorrect way?” Again, sloppiness or inconsistency is easy for the task allocation system to detect. Say that a person produces a meal, and the meal’s recipient complains. Or the person assembles a laptop, and the laptop does not work. Or the person is assigned the task of plowing a field, and the inspector looks at the plowed field and sees that the work has been incorrectly done. Again, the system can deal with the sloppy person in some rational way, and if the sloppy behavior continues, then the person is expelled from the city. Sloppiness and laziness are essentially the same thing, and are handled in the same way.

How will people feel about this task allocation system?

Another question that arises is, “How will people feel about this task allocation system?” The answer, if you think about it, is simple: the vast majority of American workers, and workers around the globe, already work for businesses and corporations under a task allocation system. It is not like someone comes to work and stands there, with no one telling him/her what to do. Current task allocation systems that people experience are far less flexible and customizable, and drastically less rewarding, than the task allocation system proposed in this book.

The vast majority of Americans get a job, are told to arrive at work at a certain time each day, and are told exactly what to do every minute of every day by a computer program or a manager. If someone works on an assembly line, drives for Uber, works in a restaurant, works at Walmart/Target/any retail establishment, works in an Amazon warehouse, etc., this person is already working under a task management system. Even doctors work under a task allocation system – they have a schedule of patients to see each day. The big differences in the new economy described in this book are:

  1. A person has the ability to input preferences, input preferred roles, etc. and
  2. A person gets to live at an incredible standard of living in return for the work contributed.

Think about a person working at a fast food restaurant today in the United States. The person is told when to work, is told exactly what to do through the tasks assigned to him/her, and in return receives a tiny wage. The person doing the work does not get to participate in the U.S. economy in any meaningful way because he/she has, essentially, no money. The person doing the work lives at a terrible standard of living. He/she likely receives less than $16,000 a year, in an economy where $52,000 a year is required for a single adult to live at a decent standard of living [see Chapter 5 for details].

Meanwhile, if we assume that the person doing the work works for McDonald’s, nearly all of the money earned through their work is flowing up to the elite. Here are some headlines:

Not to mention all of the asset capture (see Chapter 8) that occurs through McDonald’s. All of that money comes into McDonald’s on the backs of workers, who receive a tiny slice of the value they produce. The elites concentrate all of the real wealth that the workers create.

In the new economy described in this book, everyone who contributes their productive time receives an abundant slice of the full economy’s production.

Why would people work if there is no profit?

Another common question is, “Why would people work if there is no profit?” The answer is obvious: the gigantic majority of people on planet Earth work for wages, not for profit. And wages are ridiculously low for most. 70% of the people on Earth make less than $10 per day. In capitalism, in the United States, the only people receiving profit in any significant way are the elites, who receive gigantic piles of profit, to the detriment of everyone else in the economy. See Chapters 7 and 13 for details.

This next one is a statement more than a question: “This new economy cannot possibly work, because it has no price signaling.” [https://en.wikipedia.org/wiki/Price_signal] The first thing to understand is that the pricing techniques used in capitalism are completely arbitrary, and therefore completely absurd, as described in Chapters 6 and 12. In the new economy described in this book, there is price signaling, but it is different in the new economy.

In a standard capitalistic system, prices are expressed in terms of money, and prices are completely irrational. For example, an Epipen can cost $40 one year, and $100 the next year, and a couple of years later it costs $300. There is no reason for the price increase except greed, and there is nothing to prevent the price increase. So the price goes up and up. Meanwhile, the CEO driving this gigantic level of theft gets paid $98 million a year – nearly $50,000 an hour. [http://money.cnn.com/2017/05/31/investing/epipen-mylan-chairman-98-million/index.html]

In short: “Price signaling” in capitalism can be, and often is, completely absurd.

In the new economy, everything has a price. The price is expressed rationally, in terms of the aggregate human time needed to produce the product. People can make decisions about what they want to buy based on these rational prices. The huge advantage is that these prices contain none of the absurdities seen in capitalism:

  • There are not millions of executives making trillions of dollars a year by jacking up the prices.
  • There are not trillions of dollars being wasted on dividends or advertising.
  • There are no executive jets, limousines, parties, bribes, etc. distorting the prices.
  • There is no profit
  • And so on…

Here is an example. In the new economy, there might be 500 different designs for jeans that people have contributed to the design catalog. Some of these jeans are popular, and can therefore be produced on assembly lines and might contain 10 minutes of aggregate human time [see Chapter 17] per pair of jeans. Other jeans in the catalog are hand-stitched and much more complex. Say that the most “expensive” jeans in the catalog are hand-stitched from tail hairs of special Himalayan yaks, and these jeans take 35 hours of aggregate human time to produce.

A person who needs a pair of jeans looks at the catalog and picks the pair he/she wants, contributing the stated amount of productive human time to the system in return for the product. If a person wishes to contribute 35 hours of time to receive one pair of jeans, this is his/her prerogative. I suspect that the vast majority of people will not wish to do so, but you never know. This is price signaling. Every product in this new economic system is expressed as the human time required to produce each product.

How will unpleasant tasks get accomplished?

A derivative question then is: “What if no one wants to snip the tail hairs off of special Himalayan yaks? How will the task get done?” At the very least, the people who are ordering Himalayan yak jeans should be willing to contribute their time to the task. If they are not willing, and no one else is willing, then the task will not get done and the jeans will not exist.

“OK, then how will other unpleasant tasks get accomplished if people can opt out of them?” Let’s take sewage system cleaning as an example. Everyone uses the sewer system, and therefore everyone is potentially on the hook (unlike yak hair jeans, where only those who want to purchase these jeans are on the hook) to help clean the sewer system. Cleaning the sewer system is an unpleasant task, no question.

As mentioned previously, there are several options for getting a task like this done: 1) This task can be prioritized for research and then automated, so no one has to do the task anymore, or 2) This task can be distributed amongst all of the residents to “spread out the pain” to everyone equally – everyone ends up doing a small number of unpleasant tasks each year, or 3) These unpleasant tasks can be offered with minor incentives in order to make them more attractive to some of the residents, or 4) unpleasant tasks can be assigned to people who have violated the social contract and are therefore being punished, etc.

Think about jury duty today. Jury duty is unpleasant, but it is considered a civic duty, and everyone shares the load. When you get called for jury duty, you report, or you go to jail.

“OK, but what if I refuse to do a sewer-cleaning task assigned to me?” Then you fall into the lazy/sloppy category described above. Let’s say you are assigned a one-hour sewer cleaning task, and you refuse. The task allocation system might ask you to do some other task, but do it for two hours, in place of the one hour of sewer duty. The extra hour of work that you have contributed goes to someone else as an incentive to do the task that you refused to do.

How can an economy exist if there is no money?

Another question has to do with money: “It does not sound like there is any money in your new economy, which is of course impossible!” There is not money (in the dollar bill sense) in this new economy, but there is a representation of value in the form of productive human time. The task allocation system keeps track of it for everyone. Let’s say that you contribute an hour of your productive human time to the system, as requested by the task allocation system. Now you can receive an hour of products and services from the system. So if a T-shirt takes five minutes of aggregated human time to produce, you can have the T-shirt, and you have 55 minutes left to “spend” out of the hour that you contributed.

A related question: “What happens if a person is a workaholic?” Let’s say a person wants to voluntarily work 10 hours a day, 6 days a week, all year long? This person will be able to contribute, and therefore spend, 3,120 of productive human time in a year. Alternatively, “What if a person wants to work minimally and live simply?” This kind of person would be able to limit clothing, housing, etc., and work a smaller number of hours per  year. But the person will still need to contribute productive human time to the system. There are certain things, like food, water, healthcare, police/fire protection, etc. that are provided city-wide, and are required by each resident in order to live. Everyone contributes to these activities. Therefore, each resident will be required to contribute some number of hours per year to live in the city, regardless of how simply they may live.

How will healthcare work?

A question on health care: “Do people have to ‘pay’ for their health care according to the amount of health care they consume?” There are two ways to look at health care:

  1. One way is individual responsibility. If an individual gets cancer, and consumes 2,000 hours of health care services to beat cancer, then this person “owes” 2,000 hours of productive human time to “pay for” those 2,000 hours. Meanwhile, a young, extremely healthy person might spend only 1 or 2 hours on health care services per year, and therefore needs to contribute very little time.
  2. The second way is to understand that health care needs are often a lottery (a person does not willfully get cancer, or get in a workplace accident). Also, as people age, their health care needs always increase as the human body deteriorates. In addition, people may consume a lot of health care services, and then die long before they can contribute back.

Therefore, it is likely to be the case that everyone in the city contributes an equal number of hours for health care throughout life. Everyone in the city together consumes, say, 80 million hours of human time in the aggregate on health care. This total number is divided equally among the working residents. This is how health care works across most developed nations.

Another health care question: “What if someone gets depression? Many people in America suffer from depression. How will a person with depression be treated?” One big reason why so many people in America suffer from depression is because of capitalism. Capitalism is a terrible system in terms of mental health because there are so many ways for capitalism to deliver economic catastrophe to millions of people. What happens if you get cancer, or get in a serious accident, in America? You will experience significant medical costs, even if you have insurance. What if you lose your job? You can eventually become homeless if you burn through your savings before finding another job. What happens if there is a deep recession? Millions of people will lose their jobs. The economic system used in the United States today is a recipe for disaster, and an open invitation for mental health problems like depression. Capitalism is a breeding ground for high stress and depression.

As already mentioned, capitalism is the source of SLS, or Shit Life Syndrome, which today affects millions.

A person may still get depression in the new economy – there are many things that can trigger depression [https://www.huffingtonpost.com/2014/09/16/work-and-depression_n_5823534.html, https://www.thewildwong.com/working-with-depression/]. The resident will receive appropriate treatment under the health care system. A resident in the new economy has access to significantly more time off, in terms of vacation days and sick days, compared to just about any human being on planet Earth today, so he/she can take time off for recovery. And the resident can continue working at assigned tasks, perhaps requesting a different mix of tasks or different timing in order to soften the blow. For example, it is well known that exercise helps relieve depression [https://www.mayoclinic.org/diseases-conditions/depression/in-depth/depression-and-exercise/art-20046495], so the task allocation system can respond by assigning more physical tasks.

Here is another statement: “People simply will not work in your new economic system!” Statements like this are silly. Think about a cruise ship operating today, under capitalism. The ship’s crew members are cooking and serving the food, often for low wages, often with extremely long shifts. Crew members on cruise ships often get zero days off, are sleeping in tiny crew cabins, and they work 15-hour days for months at a time [https://www.cruisecritic.com/articles.cfm?ID=1059]. It sounds very nearly like slavery. Meanwhile, the passengers are eating cruise-ship-quality food. This kind of life is completely normal for crews on cruise lines under today’s capitalistic system. Hundreds of thousands of people are working in this demonic system, no problem.

The difference in the new economy is that the people cooking and serving the food are not enslaved. Instead, they get the full benefits of the new economy. They are doing their jobs, as assigned by the task allocation system. In return, using the cruise ship analogy, when they are not working they receive all of the amenities that any passenger receives on the ship. The cooks and servers get all the luxuries and perks that the passengers get, and all of the passengers are periodically working. Everyone benefits.

How will any innovation happen in this new economy?

Another question: “How will any innovation happen in this new economy?” One thing to point out is that, even if we simply take today’s technology and never innovate at all, there are billions and billions of people on planet Earth today who would be 100X better off under this new economy than they are under capitalism. Take the millions of people working essentially like slaves at Nike or Foxconn. Take the millions of garment workers in Bangladesh earning 50 cents an hour or less. Take the billion people living in slums, or the tens of millions of refugees, or the tens of millions of people on food stamps in America. All of these people are being screwed by capitalism. Put them in this new economy with today’s technology and their lives are radically improved in every important way.

We are going to add significant amounts innovation to the mix, so their lives get better and better. There are several different mechanisms that will promote innovation in the new economy, as described in Appendix C.

How do we deal with problems?

Another question: “How will the new economy deal with problems that arise?” In any society, new or old, problems inevitably surface. Here is one possibility for dealing with problems:

  1. We create a piece of software and a website for handling problems.
  2. The purpose of the software is to create and manage a comprehensive list of all of the problems that the city faces. Create a petition mechanism and vetting system so that residents can insert new problems into the system. The goal is for the system to give visibility into ALL of the problems in the city, and to let everyone in the city see all of these problems in a completely transparent way.
  3. Now we need to prioritize these problems. This would likely be done through surveys of different audiences, because different audiences will prioritize differently. For example, if we survey scientists, and the general public, to prioritize a comprehensive list of the city’s problems, there may be differences between these two groups. But there will also be some commonality, and this might be a sweet spot. The software is going to make public the prioritizations of different constituencies. For example, young people and old people might prioritize differently, or male and female. Survey all of these groups, understand what is important to them in terms of priorities, and post them for all to see. (the web site can do a lot of this surveying automatically from known groups of real people)
  4. Now residents come up with proposed solutions and policies that address the problems. What if someone out in the general public has a great way to solve a problem, but no one knows about it? This web site would make it visible.
  5. Let the public see the array of possible approaches for each problem, with estimated budgets. The web site can lay them out, scientists can comment on them, the general public can comment on them, related research papers can be attached to them, etc. What if we have a survey that shows a certain policy is overwhelmingly favored by the public, but the scientific community is leaning in the opposite direction? It would be great to expose this.
  6. A method to address a problem is selected (for example by voting). We put solution X in place to solve problem Y. Does solution X work? We can track it. What was the stated goal of solution X? Is solution X achieving the goal? Is problem Y diminishing? Over a time span, is solution X succeeding or failing? The software can track this with statistics, surveys, etc. Bottom line: Bad solutions will be exposed so they can be replaced with better solutions.

In this way, every problem is visible to everyone, and the most pressing problems get addressed quickly.

Seed capital

Another question: “Where will a new city get the money it needs to start up? Where will it get raw materials like steel?” These questions are answered in Appendix E, on funding.

Another question: “What is the optimal size for one of these new cities?” For the sake of discussion, we have used the idea of one million residents throughout this book. The optimal size for the city may be more like 2 million, or 5 million, or 10 million residents. City size will likely depend, in large part, with the amount of manpower and training and equipment that is needed in the technology sector. If, for example, the new city is making its own chips, it will need a fabrication facility. If this facility costs $1 billion, that works out to $1,000 per person in a million-person city, but only $100 per person in a 10 million person city. There are also needs in terms of expertise. If 10% of the population has STEM affinity, then in a 1 million person city, this yields 100,000 STEM workers. In a 10 million person city, it yields one million STEM workers.

Economic decisions

Another question: “This new city will need to make decisions. For example, where will the airport be located, and how will it be designed? How will decisions like this be made?” Every city in America has one or two airports. There are no cities with a hundred airports – for example, a different airport for every airline in every city. The one airport for a city is designed and paid for by the city, as part of the city’s planning. There is no reason why the same kind of process will not apply in the new city.

The previous question brings up another: “How does the new economy make its economic decisions?” For example, why do most cities have one airport, rather than 100? Why is there one water system, one sewer system, etc.? In these cases, the cost of the system’s central feature is large, and duplicating it makes no economic sense. Runways are the central feature of airports, and runways are incredibly expensive, so there is a big economic incentive to share this cost, and to utilize the runways as much as possible in order to spread the cost out. Hence, one airport for a city. If airplanes were replaced by drones that can take off without runways, then the economics change and dozens of airports may become a possibility.

It is the same for the pipes in the water and sewer systems – pipes are the central feature. If it cost $1 to run pipes to a house, there might be many water suppliers. Since it costs thousands of dollars to run pipes to a house, it makes sense to centralize on a single pipe system. Also, in the case of a water system, there is no advantage gained from having two suppliers – both are going to deliver exactly the same thing. Water is water. It is easy to look at economic advantages and disadvantages of different options and make clear decisions.

Why doesn’t milk come to houses in pipes? Reasons:

  • Unlike water, not everyone uses milk.
  • People use 100 gallons of water a day, but far less milk.
  • Water does not spoil in the pipes, unlike milk.
  • Water costs less than 1 cent per gallon, while milk is $3 per gallon.
  • And so on.

All of these factors mean that we purchase milk a gallon at a time at the store rather than having a city-wide milk piping system delivering milk to every home. Again, the economics – meaning the amount of human time to do it one way or another – makes the decision easy in most cases. Universality also plays a role: if everyone in the city needs something, then centralizing it makes sense.

Uniformity vs. variety

Which raises this derivative question: “Why don’t we have everyone wear identical jump suits in this new economy?” Economically, this would be the most efficient way to do things. It would require the least amount of human time to clothe everyone, if everyone wore exactly the same thing every day. So why not require everyone to wear identical clothing? First, we understand that things like food preferences, clothing preferences, etc. tend to be very personal and individualized for each human being. One person likes chocolate, and another person likes vanilla – this does not make a lot of sense, but there is no denying that preferences are a central part of human behavior. On the other hand, things like water, electricity and internet bandwidth are not like this at all – everyone drinks and bathes with the same “water”, and everything is powered by the same “electricity”. These are commodity items, without any preferences.

Therefore, in the case of clothing, as described in Chapter 17, we can let everyone in the city individually decide how their clothing will work by voting with their hours. The design catalog for clothing will have thousands of different designs. Some pieces of clothing will take just a minute or two of human time to create, some will take hours. Each person can decide how much of their personal time they wish to devote to their clothing needs. One person might choose to dress very simply, and will spend just an hour or two per year on clothing. Another person might feel that elaborate clothing is very important, and choose to spend 200 hours per year on clothing. Each individual chooses to do their own thing based on their personal preferences.

Just for the sake of argument, let’s imagine that one of the researchers in the city invents a new type of water. Let’s call it water2. Initially, usage of water2 will be small, as with any new product. It will be sold in containers in stores, or delivered to the home in containers for the small number of initial customers who use it. But let’s imagine that water2 is just as useful as water, and so consumption of water2 grows and grows. Let’s also assume that water2 usage is universal, and eventually everyone in the city is using water2 at the same rate as water. Eventually, everyone in the city would be using 100 containers of water2 per day. This would obviously become a ridiculous situation long before consumption got to the 100-container-per-person-per-day level. The problem of water2 delivery would show up in the problem system described above, the problem would be analyzed, and the problem would be solved. The solution would probably be a city-wide water2 delivery system of pipes, identical to the city-wide water system. This may sound ridiculous, but this is exactly what has happened in some areas. People wanted water2, in the form of cheap water for watering lawns. Thus water2 can be “reclaimed water”, not suitable for drinking but suitable for irrigation, toilet flushing, etc. So a separate pipe system gets installed for reclaimed, non-potable water. Again, the decisions are made by analysing the economics.

Doctors and nurses

Another question: “How will the new economy train and deploy its doctors and nurses in the health care system?” This is a great question, especially if you are an American. In America, doctors are highly (some would say ridiculously) trained people, and the supply of doctors is intentionally constrained by the American Medical Association, so there are not enough doctors. Under capitalism, this artificially low supply compared to the demand means that doctors are incredibly expensive. You can learn more from sources like these:

In a rational economy, where there is no need to artificially inflate the price of a doctor, not every doctor or nurse needs to be ridiculously trained. The vast majority of patients have simple and/or well-understood ailments. The medical system does not need a doctor with 10 years of education setting a bone, diagnosing another case of the flu, stitching a cut, etc. There can be many tiers/levels of training and skills across the medical spectrum.

In the new economy, people who express an interest helping other people medically (there are lots of people who would choose this path given the opportunity) receive training and have their talents and skills deployed into the healthcare system by the task allocation system.

A central thing to understand when it comes to doctors, nurses and other trained professionals is that this new society is willing to train people, and lots of people have a desire to be trained. For example: Think about what happens today with doctors. They are artificially scarce, because the American Medical Association (AMA) works very hard to limit the number of doctors, so that doctors (who are the members of the AMA) can have high salaries. To be a doctor in the U.S. you need a full undergrad degree (4 years), then a full medical degree (4 more years), then 3 to 7 years of residency [https://study.com/requirements_to_become_a_doctor.html]. All of that to be a family doctor, or a pediatrician? Even to be a brain surgeon, it’s silly. Especially with AI advancing so rapidly. Medical training could be radically streamlined, and millions of people in America could become doctors if we simply trained them. But then doctor salaries would crash, and the AMA would never allow it.

Apply this same kind of thinking across a whole society, across all of the roles needed in a society. When we have a million people in a new city, and we say to all of them, “look, to live here we need you to contribute 40 productive hours a week for 42 weeks a year, and we will train you for free. What would you LIKE to do?” There are people who would like to drive a tractor because they like farming. There are people who would like to be doctors and nurses because they like helping people. There are people who would like to be engineers, because they like designing and building things. And so on. Everyone in this new society will need to contribute, and they can make their contributions in ways they enjoy.

This often leads to a statement like: “No one will become a doctor unless they get paid a million dollars a year!” A statement like this is absurd because it untrue on two counts. First, the number of people driven strictly by greed like this is in reality very small. If it were not small, the existing economies of the world would not work. Simply look at our world – the vast majority of people work now for small amounts of money.

Second, in the new economy, everyone needs to contribute in order to receive. This is incredibly simple and obvious. It takes 200 million human hours of time per year to produce and serve food to 1 million people. One way to accomplish this is that everyone contributes 200 hours per year toward food production equally. Another way to accomplish it is that someone who finds food production enjoyable (e.g. cooking food, or farming, or whatever) spends 1,000 or 1,500 hours per year doing what they enjoy, while someone else spends their time primarily in clothing production, and someone else spends their time primarily in healthcare, and so on, based on individual preferences. The latter system makes a lot more sense, since everyone has preferred activities where they enjoy spending their time. A person who hates the sight of blood is probably not going to self-select into healthcare.

The point is that everyone in this new economy will be contributing in one way or another. And for the most part, people will self-select into their preferred forms of participation. There are plenty of people who will self-select into healthcare, plenty of people who will self-select into farming, and so on.

Another important point: A person working in healthcare is not “better” than or “more important than” a person working in farming. Both healthcare and food production are vitally important to human beings. Without farmers everyone dies of starvation – it is that simple. One thing that will naturally happen in this new economy is that everyone living in this society will have a much stronger appreciation for the work that other people are doing. Everyone is contributing in some small way so that the city as a whole has everything that everyone needs. There is no dog-eat-dog here. In this context, each person’s contribution is important. A doctor is not more important than a farmer – both roles are vitally essential to the city’s prosperity.

The central problem with capitalism as it is practiced today in the United States is that it is a blood sport. There are winners, and there are also losers. Inevitably there are more losers than winners, as in any sport. And once you become a loser even once in capitalsim, you often fall down a rabbit hole that can be very difficult to climb out of. Now you have children, and they are down in the hole with you, and they are disadvantaged as well. And then the winners take more and more and more for themselves, in what appears to turn into pathological greed, rather than “doing what is best for society as a whole”. Capitalism a terrible way to run a human society. It is time to replace it with something much, much better for everyone.

Blowhards

Which leads to an obvious final question: “What do we do with the people who believe they are super wonderful, and who demand that they receive 100X or 1,000X of what everyone else is receiving?” These people believe they should live in a 66,000 square foot house like Bill Gates, and believe it is their god-given right to receive it. Often these people expect to do no actual work. Most upper-Escalon executives in capitalism fall into this bizarre, deluded category – this is how capitalism has evolved the concept of the “elites”, and why there are people like Tim Cook at Apple making $50,000 per hour. These people will refuse to work at tasks assigned by the task allocation system, or they will be sloppy at the work they are assigned, because they are “too good” to work.

Here is the good news: eventually these blowhards will be expelled from the city. They will get flagged as lazy/incompetent, and they will be expelled because they will not work. The social contract in the new economy is simple: everyone contributes, and everyone receives from the bounty that is produced. Without a contribution, the blowhards are expelled. Good riddance to them.

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See also Appendix B > > >