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Speculative socioeconomics, lecture 1:
Communism is predicated on the belief that economics is a closed system. Conversely, capitalism is predicated on the belief that economics is an open system.
Both are, as the astute reader will have guessed, wrong.
A nation could be communist if its borders were closed, and better still if no trade at all were conducted with non-communist nations. This, as has been shown in decades past, proves impossible. If China were to remain a placidly agrarian state, one could argue, then it could be entirely self-sufficient and cut itself off from the rest of the world in order to pursue perfection. However, humanitarianism intervened. The back-to-the-land ideal is wonderful, but it is entirely at odds with any form of progressive government, the kind of government that tries to stamp out high child-mortality rates and starvation. Traditional Chinese values required regular childbirth, and the inevitable improvement of health care and food distribution soon found China in the middle of an incredible population explosion. Progress led to further progress, and the Chinese government was forced to allow a degree of self-interested production, which most of us would call capitalism.
The other communist giant, the Soviet Union, could be considered a failure from its inception. Communist theory was imposed from the top, commonly at the cost of common sense. The Five-Year Plans failed, the collectives failed, the "logical" agricultural methods failed. The Soviets only recently scaled down their dependence on the major capitalist countries for grain.
Conversely, in a perverse twist, capitalism could be totally capitalist if there were no such thing as Fate. Capitalism in its purest form is a brutal, decisive type of Darwinian social evolution, where only the fittest survive. However, even the fittest have bad breaks, and those turns can sink an otherwise sound company as surely as a single large wave can submerge an otherwise seaworthy dinghy.
Capitalism has been around for as long as money has been traded for goods, yet it is the United States, clinging fast to its image as a rough-and-tumble frontier, that has been the laboratory for capitalism.
Someone once called democracy a form of cooperative anarchy: every man for himself, but the expectation that individuals will come together for the common good is writ as large. In the United States, much of the socioeconomic ferment has been over the border between capitalism and democracy. They are not synonymous, and in fact are rather difficult to confuse. When the Dust Bowl set in, capitalism could have dictated that, oh well, they blew it, tough luck, well just buy our food elsewhere, whereas democracy was forward-looking. Despite present problems, welfare and subsidies were an investment in the future, keeping farmers and farms intact and active as an institution, as an investment against future need. Welfare was extended to workers with the same intent.
A decade ago, the city of New York was on the verge of bankruptcy, and was bailed out by the federal government; again, the sink-or-swim mentality would have left it to crumble. The federal government has bailed out automobile manufacturers, airplane manufacturers, and railroad systems.
You see, early in the 20th century the United States became a closed system. We explored all the land, closed the borders, added a few more borders, divided it into plots... and had nowhere else to go. The railway was replaced by the freeway and the air lane. Automobile production began, boomed, and saturated the market... and the rest of the world, at least the ones with money, had their own cars. Ditto for jetliners. Runaway capitalism cannot continue without an open system, and hence the bailouts.
Since a product has to be sturdy in order to sell well, this very sturdiness works against the wearing-out that would make for a steady sales cycle. A car that lasts for 20 years with little maintenance is a car that may well be driven for 20 years; a car that might make it to one year is a car that wont leave the showroom floor at a high price.
So, enter fashion. Consumer products undergo "improvements," everything from drastic mechanical overhauls to new colors. These improvements are tied to the self-image of the consumer, and thus a sales cycle is artificially induced. Some of us like old cars, while others have to have a new Cadillac every year or so. And sponge rubber wears faster than leather, so advertising hypes this years expensive running shoe as a daily-wear fashion statement. The openness of the system is artificially maintained by what is commonly termed consumerism, or, more cynically, conspicuous consumption: having for the sake of having, not from need.
But some areas of consumerism are themselves open, since they are directly affected by knowledge, usually in the form of advancing technology. Who would consider, inflation or not, buying an unmodified Apple II for almost $2,000, its original retail price? Even if the price were slashed, few would want a computer that needs modification and expansion to do such simple things as deal with lower-case characters and color graphics. The Commodore 64 hit the market less than a decade ago, able to do these things for a mere $595; the current version goes for $200, which includes about $75 in software. It is considered a toy, a bottom-end machine, even by its devotees.
When IBM switched from its PC line to the Personal/2, it banked on a wave of "fashion" buying that never happened. A moments thought will reveal the reason. The people gullible enough to fall for the social necessity of at least owning a PC on the first go-round had no motivation to purchase yet another dust-collector, and the people who had come to depend on the older PC saw no good reason to give up the familiarity, not to mention sacrifice all of their files and software. IBMs plan failed because they could not wrap the old technology in a nice shiny new package and stir consumers.
Ive watched in awe as color televisions dropped in price from over $500 to under $200. The model I have is almost 10 years old, and I can now replace it with a better model for what its cost me in repairs. But why should I? It still works quite well. On the other hand, the Sony Watchman, a small black-&-white portable, interested me some five years ago, when it went under $400; now they have a hard time unloading them for $100, as Casio has a color set for under $200 that slips into a shirt pocket and has exceptionally clear reception.
The computer boom will stage an encore when the technology jumps again. Open spaces exist within the closed system, apparently; we only need to be made aware of them.
And capitalism can flourish in a democracys communistic concern for its citizens. What may hap[pen is known by many titles: guaranteed annual wage, minimum annual wage, federal stipend.
There is, to my knowledge, exactly one shining example of economic SF; that is to say, science fiction that rests heavily on the authors knowledge of economics. The book you want to read is F. Paul Wilsons An Enemy of the State. It is an installment in his history of the LaNague Federation, and to my knowledge the only one in current publication. A character in the novel makes a point that will startle many readers.
The original was phrased in "credits"; well use dollars. The system described in the book sounds like the economics of the 1960s anyway.
A family of four, earning $12,000 a year, qualifies for, say, $1,000 in food stamps, since they are considered to be living a bit sparely. However, that same family is also being taxed $2,200 per year; this is taken out in small pieces over the year, otherwise thered be widespread rebellion.
A cynic could say that the $1,000 in vouchers and the $2,200 in lost wages are just the same amount, with losses due to friction. After all, the money paid in has to go to the federal government, then back to the state, then to the county for disbursement, and there are wages and expenses to be paid at every step.
The funny thing is, that $1,000 credit has cost not $2,200, but $3,030. The excess comes from the people who dont qualify for the food stamps.
The implication is that more than $2,000 can be saved just by letting the family pay $1,000 less in taxes. But what of jobs? Remember, over one-fourth of the jobs in this country are either governmental or depend on government contracts. Millions of people involved in shuffling the cash around would be out of work.
Here is the radical proposal: Gut every current government support program (welfare, Social Security, AFDC, WIC, etc.) with the exception of catastrophic health, and use the savings to pay everyone in the nation over the age of 18 a tax-free $1,000 per month. Thinkers from radical genius R. Buckminster Fuller to self-avowed right-wing conservative Morton Downey Jr. have suggested some variation on this theme.
Because it would save money. Feel free to work it out for yourself. Dont forget rent, postage, cars, etc.
Its one of those ideas that causes half the people that hear about it to panic: What would people do? they cry, they would have no meaning in life!
Are people in this country so wrapped-up in their jobs that they base their self-image on their employer? This is the first assumption of many, and it is more than likely wrong. Many people in this nation are holding down two or three jobs, not because they need the ego-boost, but in order to make ends meet. You see, employers have been finding loopholes for years, and the workers have been losing ground unheralded all the while. If a job paid, say, $10 per hour and was full-time, then the employer was also required to throw in benefits, both by federal mandate and in order to remain competitive. However, that same job could be split into two part-time jobs for perhaps $5 per hour; the employer not only cuts gross wages in half for the same duties, but saves the expense of most or all of the benefits, since it is now the sort of thing considered a "second job." However, the number of full;-time jobs has dropped so much that many people have to hold down multiple "second" jobs to make up for the lack of a "first" job, and entirely lacking such benefits as health care.
A guaranteed stipend of $1,000 per month would instantly cut the number of "excess" bodies available for such second-rate employment. There would be no rules to prevent people from working to make even more money above the baseline, but the great majority would no longer be forced to work.
People would have the opportunity to define themselves. Education would boom, with people returning to college for the love of learning, not to add a degree to their resume; the colleges would flourish, and compete for the best teachers and the biggest curricula.
Businesses would get people who enjoyed their jobs; workers would get the incentives to keep them happy. Hard, sweaty, difficult work would be paid the highest wages, not the lowest.
Capitalism would boom. People would have both the time and the money to buy, consume, travel. Small business would flourish as people have time to treat their new avocations as hobbies, not as a primary means of support. As the crafts and trades make a comeback, capitalism would come into its own once again, driving prices down and quality up. The potential for a veritable Renaissance in the arts is difficult to exaggerate.
In the future, I will explain why this stipend must be paid in cash, and not in the form of non-transferable vouchers, a la food stamps and so on.
But, for the moment, the guaranteed wage or some variant seems inevitable. Even if it is not so, where is it in science fiction? I suggest that the science in most SF may be commendable, but such details as the economics are sheer fantasy at best, and that such oversights lead to glaringly wrong predictions of future society. There is much more to speculative socioeconomics than guessing where well be on the capitalist/communist continuum.
article © 2003, 1988, K.Walter Uilleach, Albermarle ARG
Some graphical elements © 1998 SoftQuad Inc., used by permission. Design & content © 2003 by Hazard. Updated 27 Sep 2003.