The Humanitarian Economy

post by kylefurlong · 2024-11-12T18:25:09.557Z · LW · GW · 10 comments

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In the past ten years, I have been developing ideas to resolve key issues that I have encountered in my own life, and in the lives of the people around me. In probing these issues for their root causes, I have identified the threat and reality of economic deprivation as the primary motivator of everyday suffering. Just a few of the issues that this current work resolves:  

 

1. Non-voluntary family participation


2. Non-voluntary work


3. Economic entrapment of intimate partner violence sufferers


4. Exploitative working environment and compensation dynamics


5. Food deserts


6. Under and over development


7. Multinational capital concentration, and subsequent self-determination violations


8. Product quality and decency issues


9. Environmental damage and non-systemic thinking 

 

No one system so far alleviates these issues. This one will.

 

(i)

 

Beginning in the early 1990s, certain national banks started to experiment with money creation as a means of achieving certain economic goals. The national bank of Japan came up with the quirky and elegant term “quantitative easing” for this process, and various other central banks picked up the process for their own goals. 

 

QE really picked up speed after the 2008 housing crisis, when the US Fed utilized QE to bail out the financial system. Conventional thinking up until that point, at least in the US, was that creating money for this purpose would be wildly inflationary and so out of bounds for any prudent central bank. 

 

The results tell a different story. If anything, QE was deflationary. Subsequent QEs have borne this point out, with the most recent academic discourse about the actual effects of QE on the broader economy being undecided. 

 

The current financial system elite as embodied by the US Fed and their discourse, talks with two mouths. On the one hand, when it comes to real human needs like social programs and direct assistance, they advocate for rigid “financial discipline”, talking about debt and taxes and interest rates, and on the other, when their colleagues in banking are in distress, printing money to bail them out.

 

We now live in an era where central banks have tested the tenets of MMT^[1] in microcosm, to the benefit of their closest allies, and the capacity to utilize monetary policy for humanitarian ends now demonstrably exists in the hands of monetary policy makers.

 

(ii)

 

The current system imagines a world in which money, instead of being primarily earned through work, flows through the economy in guided ways to bring about humanitarian goals. I imagine money as a given much like light from the sun: input to the system.

 

With this framing, we can start to talk about the best way to utilize this new capability to bring about human flourishing.

 

In the current economic system, those in power artificially sustain a “state of nature” where every adult is faced with survival pressure to “earn a living”. While at least some people need to work to create food and housing, it hasn’t been the case that there is food or housing production shortfalls due to resourcing for a long time. Said another way, market dynamics conspire to keep food and housing scarce, because it serves the people steering those market dynamics. This is frank social darwinism and it needs to end.

 

In the new system, market dynamics still determine prices, but financing for essentials, and supplying those essentials are automatically present through universal consumer support, and matching subsidies. This undoes the market forces keeping people beholden to unscrupulous landlords and corporate overlords, through providing universal basic livelihood support.

 

This universal livelihood support comes in the form of a debit card tied to a transaction processing system that automatically filters and limits transactions to only essentials, and only within sane limits. The funds for the cards materialize automatically through an integration with the Treasury and Fed, the Treasury issuing perpetual no interest bonds titled according to the region of the outlay, and the Fed creating money in turn.

 

The bonds are mostly a form of bookkeeping, since the Fed holds these indefinitely, and record the market transformation induced by the system.

 

Simultaneously, the transaction processing system tabulates all ongoing transactions, identifying matching subsidies to support consumer demand. This requires sophisticated but tractable algorithms and data collection to target producers most responsible for consumer supply.

 

All of this requires a new corps of inspector-accountants trained in on-site and online business validation to verify that business operations utilize given subsidies toward supplying essential demand, and follow market rules to buttress product quality, environmental savvy, and worker wellbeing, as well as recording supplier networks for the subsidy algorithms to process.

 

With all this in place, the humanitarian economy is complete. Everyone spends in proportion to their needs, and the system subsidizes the people supporting them. Since the money creation is balanced on supply and demand sides, this effectively creates new market capacity in proportion to the money creation, the ideal outcome for monetary policy. Not only that, but the externalities of this market creation are an end to involuntary poverty, inhumane working conditions and compensation, and most forms of economic coercion.

 

(iii)

 

The major primary outcome of deploying this system initially will be the removal of the need to work to avoid economic deprivation, and the subsequent exit of a large number of people from the workforce.

 

To see this as a good thing we can hold in mind the following: businesses that survive at the expense of the health and wellbeing of their subsistence workers are perpetuating modern serfdom, and deserve a correction, *and* technology is already available to transition the businesses most affected to automated processes.

 

In the case of retail, where the exit most likely has the largest effect, businesses can transition from a service orientation to a self-service paradigm with backing automation. This looks like warehouse stores with robotic stocking and self checkout, but also the professionalization of jobs like sales clerk in commodity department stores.

 

In the case of other jobs that pay close to minimum wage and can’t be automated, like tricky human interactions or dangerous and complicated physical labor, the wage floor is now automatically living, and any compensation must encourage people who do not otherwise need to do so to engage in these difficult and draining tasks.

 

This has two amazing benefits: first, it incentivizes the market to stop encouraging dangerous and complicated interactions with the natural and social environment, and second, for truly beneficial work, it encourages adequate compensation. The teacher spending all her life and energy raising other people’s children to be good citizens gets to be fairly rewarded with spa days and relaxation and all kinds of luxury from her salary.

 

At this point we stop and take stock: this humanitarian economy encourages a humanity that is more relaxed, less adventurous, and so more ecologically sound. This flies in the face of historical economic values: humanity has encouraged itself through various market forces to go further and do more than previous generations, in order to earn a bigger piece of the pie.

 

In this new system, the only incentive to do more and go further is to transcend the status quo in some way, and earn recognition for a unique contribution. Likely status signaling as a proxy for reproductive fitness is still a robust driver of economic activity, so those who wish to play economic games for a sense of control of their environment still have a stage to do so, but now they cannot use nefarious means to coerce others to play their game, and any number of new games are possible!

 

That leaves us with the mega projects. How does an Elon Musk go to the stars if no one wants to build his rockets? First of all, robotic means are available to machine and assemble rockets, and second of all, the high end of the market above the Walmarts of the economy still exists: with the need to signal freedom from survival needs eliminated, luxury naturally will change from excess or frivolous consumption to more substantive signaling in the form of access to and engagement with culturally relevant artifacts: arts, sciences, and technology. That is, what differentiates someone working a very valuable profession, really, working at all, and someone floating along on basic subsistence support is their degree of cultural achievement: can they appreciate the Bhagavad Gita, Wagner, a brilliant and singular sunset.

 

(iv)

 

In Sid Meier’s Alpha Centauri^[2], the factions portraying societies in microcosm have the ability to spend resources on secret projects that give their societies unique advantages.

In the humanitarian economy, too, we have the ability to fund special projects that benefit the system as a whole or achieve social goals: like space exploration, big science or health, and great engineering or architectural feats like the Hoover dam or Burj Dubai. 

The humanitarian economy imagines a process whereby project organizers are rewarded with full funding through the same QE mechanics and backing subsidies to producers, to the extent that they document and verify worker organization, plan development, local permit and planning engagement, and ecological benefit.

With this section of the outlay operative, construction organizers could develop plans, permits, and site evaluations for new housing projects, new universities, and any other building needs. Researchers at prominent universities would no longer depend on byzantine grant application processes, but would complete research proposals and receive funding nearly automatically, as research funding requirements are so comparatively low. Similarly, funding and venue support for art installations and performances becomes trivial and the arts become ubiquitous.

Projects like building and maintaining a new fusion reactor for a given region become a matter of organizing, not financing.

(v)

Since it is within our power to enact this new humanitarian economy, it becomes a moral^[3] question of why we do not. If the vast majority of democratic participants would affirm the sentiment that “Working conditions are really bad for people earning minimum wage”, and “Life would be better if everyone could afford food and housing”, the question of why we do not implement this or another system like it becomes urgent.

The prevailing sentiment and orthodoxy of monetary policy, that sovereign debt matters, that the role of the issuing authority is exercising fiscal restraint, poses a stern ideological barrier to MMT-focused policies and the new economies they enable. However, when we inspect the actions of the same ideologues and who benefits from their policies, we can clearly see that fiscal restraint is code for "benefit people who deserve it" or even more directly, "benefit people close to me".

[To some extent we can recover the good of the central bank as custodian of the economy by honoring their honest management of macroeconomic indicators like inflation in the interest of economic stability.]

1. ^{^}

   Modern Monetary Theory: https://en.wikipedia.org/wiki/Modern_monetary_theory

2. ^{^}

   https://en.wikipedia.org/wiki/Sid_Meier%27s_Alpha_Centauri

3. ^{^}

   https://www.lesswrong.com/posts/uA6jWodfoT35jSJNe/?commentId=YFewNLz7DJrqLFd63

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