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Musings Report 2018-30 7-28-18 The Systems We See and Those We Don't See
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For those who are new to the Musings reports: they are basically a glimpse into my notebook, the unfiltered swamp where I organize future themes, sort through the dozens of stories and links submitted by readers, refine my own research and start connecting dots which appear later in the blog or in my books. As always, I hope the Musings spark new appraisals and insights. Thank you for supporting the site and for inviting me into your circle of correspondents.
Welcome to July's MUS (Margins of the Unfiltered Swamp)
The last Musings of the month is a free-form exploration of the reaches of the fecund swamp that is the source of the blog, Musings and my books.
The Systems We See and Those We Don't See
I wanted to title this Musings The Systems We See (and Understand) and Those We Don't See (and Don't Understand), but reckoned it was too long.
What I'm trying to illuminate is not easy to explain, so please forgive any lack of clarity.
There are a couple of strands I'm going to bring together in this essay, and a good place to start is the debate around Universal Basic Income (UBI), a topic I covered in detail in my last book Money and Work Unchained.
The core assumption made by supporters of UBI is: the market for goods and services is all we need to be happy. So the solution is to provide everyone enough income (UBI) to remain a consumer, regardless of any other income they might earn.
My critique of UBI is: humans need the purpose, meaning and socially positive roles generated by work, and only by work; having enough money to be a consumer doesn't generate any of these core essentials of happiness, nor does the market of goods and services even recognize its own inability to generate these essentials.
Put another way: the marketplace of goods and services is a system we see and understand. If there's a consumer demand, some entrepreneur will create a good or service to fill the need at a profit.
As I explain in my book, the flaw in the assumption that markets will naturally and inevitably fill every human need is that many core human needs are not profitable, and others cannot be filled by a profit-driven market.
Consider friendship: if you have to pay for friendship, is that actually friendship? I think we all know it isn't, any more than sex-for-hire is equivalent to a love relationship.
So a wide range of social relations are systems that we don't see or understand. In my book, I delve into the enormous value of social relations found at work, whether it is paid or unpaid (volunteer work). Getting a payment from the central government doesn't magically create purpose, meaning or these essential social networks and social relations generated by meaningful work.
(Needless to say, my conclusion is: what should be guaranteed is paid work in service of the community. That way, the individual has opportunities for meaning, purpose and positive social roles as well as a guaranteed income (paycheck), and the community benefits--something that simply doesn't register in the marketplace. The social relations of a community are a system we don't see and don't understand because they can't be reduced to a commodity / commercial transaction between buyer and seller.)
When we listen to the life stories of people who arrived in the U.S. or other developed nation with no financial assets at all, we tend to see the marketplace as the institution that lifted the individual out of poverty, along with a set of values such as determination, grit, ambition, etc.
But if we ask deeper questions, we discover that it wasn't just the marketplace that enabled their success; a wide variety of social systems played key roles.
Boat People from Vietnam, for example, were often sponsored by churches, which generated a substantial social network and safety net of support and assistance.
The desire to aid refugees often generated offers of scholarships to the academically minded. This layer of academic encouragement and funding is enormously important, and it isn't a market function at all. Parasitic, predatory student loans are market functions: maximize profits via a cartel with captive customers--perfect for skimming sustainably high profits.
Many of the Boat People were of Chinese-Vietnamese heritage, and they came with an embedded social system of family loyalties, frugality and dedication to rigorous academic achievement. These internalized social systems are also not market functions, nor are they magically created by markets.
So the inobservant analyst hears the story of the rise from poverty to prosperity and reckons "the free market economy" deserves the credit. This is the system that we see and understand, because it's constantly being described and referenced as the engine of universal prosperity, any time and anywhere.
But the individual's rise was actually dependent on social networks and social systems that are not easy to see or understand.
The essential role of institutions that embody and enforce social relations are described in books such as Why Nations Fail. If a nation lacks institutions which create and enforce inclusive participation of all residents, the nation falls victim to extractive social and economic relations, a reality that the presence of a free market of goods and services doesn't remedy.
The topic is complex because social relations are ultimately about social trust, which I view as a key form of social capital. Societies that lack the systems required to generate systems of social trust cannot become prosperous, regardless of how free their market for goods and services might be.
But markets can enable the adoption of new systems of trust as well as new systems of distribution and consumption.
I highly recommend reading this article straight to the end, as it speaks volumes to the interwoven roles of markets, profit and social relations:
How E-Commerce Is Transforming Rural China
In economies with very little capital, credit and access to markets, social relations are the primary form of capital and source of identity.
When capital (in all its forms, not just financial capital), credit and access to markets become available, social networks can be monetized / commercialized / exploited. Yet the exploitation of these social networks to enrich entrepreneurs may open a wider world for the employees and consumers as well, as this excerpt explains:
What does it mean when this kind of social network becomes something that a villager like Xia is paid to monetize?
Capitalism, of course, has been steadily eroding that traditional sense of identity in China since the early eighties, but for a long time change did not reach the countryside, whose brutal poverty made it immune to the tide of obsessive consumerism sweeping through the cities.
E-commerce, though, with its ability to penetrate deeper and faster into the hinterland, brings with it a new sense of personal identity—one less tethered to the group and, arguably, freer, but also more vulnerable to social atomization.
A generation back, when everyone in my father’s village was mired in the same kind of deprivation, the name of the village was his most significant marker of identity.
But Zhang told me that, in the places where he delivered, people were increasingly forming subgroups determined by their possessions.The car owners fraternized with other car owners; the computer owners with other computer owners; and those who had little of anything were now a society unto themselves.
My take-away is that this particular company that's monetizing the social networks of remote rural villages is providing much, much more than a marketplace for goods, services and labor; it is consciously developing a system of trust that did not exist before-- trust that the goods will be legitimate and not fake knock-offs, and that the goods will arrive as promised.
This company is also treating its employees as valued assets, providing training, positive social roles and the markers of status every employee desires: a positive-status uniform, a salary higher than the typical factory worker, etc.
My point here is this company is profitable, but the founder established a set of systems to create trust and employee value that were risky in a price-is-all-that-matters / dog-eat-dog marketplace.
The company is profitable not because it pays its employees less than competitors, or ships fake goods because they're cheaper, or because its supply chain is lower cost than rivals; it's profitable because it created a unique social system of trust that has value to its customers and employees.
Any attempt to distill this system down to purely financial transactions misses virtually everything of importance: this is seeing what we understand (marketplaces of financial transactions) and missing what we don't see or understand (social systems of trust that happen to have value in the marketplace).
The mere existence of a market didn't automatically generate these trust-generating systems; it took a founder who saw trust-social systems others didn't see or understand or value.
Markets can function just fine with systems that erode trust even as they generate great profits. Just establishing a market doesn't create social trust, or the social systems that are essential to widespread opportunity and prosperity.
Indeed, as the excerpt above explains, the sudden access to consumer luxuries has created new social divisions and new identities, developments that cannot be understood solely as financial transactions. Those with a new-found group identity (we own iPhones, so we have high status) may revel in their new identity but those left behind find their identity (I live in this village) depreciated to near-zero. That's unlikely to be a positive for those who can't afford an iPhone (which costs a month's salary for those with above-average wages and 2 months salary for regular workers.)
Our understanding of essential social relations and systems is so impoverished that we assume a monthly check and access to a marketplace is all humans need to be fulfilled and happy, and if something else is needed, then the market will automatically and magically create whatever is needed.
But that is a gross misunderstanding of both markets and social relations. Markets don't automatically create what can't be profitably monetized or commoditized (i.e. positive social relations), any more than a marketplace for sex automatically generates romantic love. Having a free market is one piece of a much larger and more complex puzzle of trust, value and social systems that create the open-to-all opportunities and prosperity we all want.
The great undeclared assumption of this era is that markets and government can create everything humans need to be fulfilled, purposeful and happy. All of my books are ultimately aimed at revealing this assumption to be profoundly and tragically false.
The express intent of my CLIME system (community labor integrated money economy) is to create a system that generates positive social roles and relations as its primary purpose. It incorporates mechanisms of both markets and democratic governance; it doesn't exclude markets or government, it adds what they cannot provide.
The loss of non-market, non-state social relations is difficult to discern. We're implicitly told that the state and market can substitute for whatever's been lost, but this is simply not reality. The difficult reality is that the market and the state erode social relations but do not create replacement social systems. This is the reason why so many people in supposedly prosperous developed nations are so unhappy and lost. It's not something that money alone can fix. We want it to be that easy, because we can always borrow/print more money. But it isn't that easy; we need to transform our economy and society from the ground up.
From Left Field
Jobs, Bullshit, and the Bureaucratization of the World -- on Graeber's latest book... I wonder if he borrowed the emphasis on "positive social roles" from me....
The Prophetic Houellebecq (French novelist)
'"In the midst of the suicide of the West, it was clear they had no chance," he writes of the characters in the novel, in what could be a slogan for all his fiction.'
The Birth of Predatory Capitalism: How the Free World Took Four Giant Leaps to Self-Destruction
The Kek Wars, Part One: Aristocracy and its Discontents -- John Michael Greer in excellent form; his explanation of elitism in the arts is spot-on and verboten (the two go together...)
Maggie Haberman: Why I Needed to Pull Back From Twitter: The viciousness, toxic partisan anger and intellectual dishonesty are at all-time highs -- my goodness, who is she "following"?
How thrillers offer an antidote to toxic masculinity -- not sure it's this easy...
Opinion: Why is Russia so damn depressing?
The Death of Media: The planet chokes on electronic waste, and a recycler goes to prison.
THE ENERGY CLIFF APPROACHES: World Oil & Gas Discoveries Continue To Decline
Global Oil Discoveries See Remarkable Recovery In 2018 -- not quite accurate; reserve replacement is still running at about 10%....
The Most Intolerant Wins: Nassim Taleb Exposes The Dictatorship Of The Small Minority
'It’s like a crazy ex that never forgets about you': Want to delete Facebook? Read what happened to these people first -- Trouble with trying to delete Facebook from your life... (via GFB)
"Anything can happen in life, especially nothing." Michel Houellebecq
Thanks for reading--
charles |
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