In five years, we can wipe out poverty, hunger, homelessness and 95% of crime. We can build brand-new cities for billions of people and create a future that will let everyone live the life they've always dreamed of. For free. It's a simple vision, but it's a powerful one: Use technology to make life better for all people, not just a select few.
Our old systems are failing us. All around the world, people can tell something's wrong, but they don't know what it is or how to fix it. All you have to do is turn on the TV and look at the news. A wise man once said "You can't solve a problem using the same thinking you did when you created it." His name was Albert Einstein.
Throwing more money into welfare programs isn't the answer. More foreign aid isn't the answer. Socialism isn't the answer. Even charity isn't the answer. The problem is fundamental to our economic system: It was designed to fail. Capitalism is broken, but it's okay. We can fix it. We have the technology.
It's the way money works. It's endlessly printed without any regard to the limited amount of natural resources we have.
Banks literally press a button to make more out of thin air, whenever and wherever they want. It causes people to hoard far more than they need, instead of sharing the abundance that already exists. Wealth infinitely flows to the top, by design. Money enslaves us. It forces us to do jobs we don't want to do and live lives we don't want to live. You do it because you have to- if you don't, you will starve. And until now, it's always been that way. But it gets worse. Money destroys the most valuable resource we have: Human Creativity.
Think of all the amazing projects that have been cancelled because there wasn't enough "money" to complete them. The countless inventions, cures or ideas that couldn't get funded. The stories that never were told. All the movies never made because they ran out of money to produce them. The question wasn't "could we do it"? or "do we have enough resources?", but "do we have enough paper?" It's tragic when we let something we created hold us back. No other animal in the world has to pay for the right to exist, yet we do. Why? When we have the technology to eliminate most of humanity's biggest issues (and we do), but we don't use it because it isn't profitable, there's a problem.
On a more personal level, how many artists and engineers have we lost because they've been told "you have to get a job to survive". It doesn't matter if it's a job you like or even want to do, all that matters is that it pays the bills. Money isn't just worthless, it actively impedes our progress as a species. It takes some time to realize how damaging money really is, but once you do it will change everything.
Well there's some good news, and some bad news. The good news is that money doesn't exist. It only has value because we, the people, say it does. The bad news is that in order for anything to change, everyone else has to realize it.
Breaking Down Capitalism
If what we have right now is so bad, then why does nearly every country on earth use it?
Motivation.
How do you get people to do things they wouldn't normally want to do? Offer them cool stuff in return! Sure, you could threaten to kill them, but positive reinforcement usually works better. ;)
If capitalism is a game, then money is the reward for a job well done. And what a reward it is! Even with all it's problems, money motivates us to do plenty of things we wouldn't otherwise do.. Like clean toilets or flip burgers. If you really want to get crazy, then you could think of money as magic. What else can turn into pretty much anything you want? Status, power, influence. All the things money can buy. But there are still some things even money can't do like give you true friendship, peace or love.
When you think of how money motivates us to do things we wouldn't otherwise do, you instantly realize there's a dark side. Ask yourself, if it's a job someone wouldn't do for free, is it a job anyone should really be doing in the first place?
Even in a resource-based economy, we are always going to need people around to do certain things, and they are always going to need to get paid. What if we could take this power of motivation, and use it exclusively for good? Think of it like a rewards program. If you work in any of those "dirty jobs" only humans can do, you earn points that could go towards a special category of luxury goods, and only people who work would be allowed to buy them. Fancy cars, expensive rings, designer clothes.. Status symbols are a powerful thing. To prevent corruption, these points can only be used by the people that have earned them. There will be a lot more on luxuries later.
As a side note on motivation, money really only motivates us when the task is manual or grinding. Even better than positive reinforcement is self-motivation.
Here's a pretty cool talk about what really drives us from RSA.
Innovation.
People design new products and bring them to market in hopes of getting rich. The only problem is that most times, they don't get as rich as they want to and are forced to stop. Competition also acts as a great incentive to produce the best products at the lowest prices. Okay, best is the wrong word. Try "acceptable". For the most part, "best" usually means more expensive, and consumers don't like that. In this role, capitalism actually does a decent job- when let loose. Government restrictions such as patents and copyrights stifle innovation and create perverse incentives, meaning the free market can't do it's job properly. In a RBE, creators are automatically credited every time their idea is used, so it actually does a better job of encouraging creativity while remaining open-source.
Signals and Incentives
This one isn't so much capitalism as a fundamental law of nature: Supply and Demand. When prices go higher, producers make more of something because they want to earn more money. In the same way, when prices go lower, producers make less and consumers buy more. As MrUniverity likes to say, "A price is a signal wrapped up in an incentive". All of this means markets tend to balance themselves out.
Or they would, if there wasn't the huge problem of money in the way.
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Capitalism's Biggest Failure
There isn't any doubt that capitalism has led to big increases in wealth for a large percentage of the world's population, and it's far better at generating wealth than socialism. It's just that it's also created equally huge relative decreases for the rest of us. In order for all of this wealth to be "created", it has to first be extracted from somewhere else. You saw it with the slave trade, where countries stole millions of people in order to enrich themselves, while impoverishing others. You see it today, where sweatshops use cheap labor in developing nations to create products their employees wouldn't even buy.
If you look just around the corner and peel back the curtain, you'll find that the shiny facade of free-market capitalism has lead to huge imbalances. Thousands of other people have already explained this far better than I ever could, but all their explanations could be summed up in a single sentence:
People can't get the things they want and need if they can't pay for them.
That's it. This explains everything, from the reason there are more houses than homeless people, to why we let people starve and go without healthcare in the world's richest countries. If you can't afford it, then you don't deserve to live.
Put another way, money artificially distorts supply and demand by putting a barrier between them. In a true economy, one designed to give as many people access to the goods and services they need as possible, we would try to maximize production and reward producers based off of how often their product is used. Instead, we actually limit production of many items to keep prices high.
Capitalism fails to satisfy true demand.
True demand, unlike market demand isn't only what people can afford: It's what people would get if money were no object. It's said that resources are scarce and demands are unlimited. This is true. But that still doesn't mean you can't find a better way to distribute them and reward the people who produce them.
So if you want to fix capitalism, you have to make one really simple tweak: Remove the barrier between supply and demand!
But how? Isn't it true that if everything were free, people would take far more than they need? Wouldn't we run out of stuff? The shelves would be empty! If you said any of these things, you would be absolutely right. But we still have an ace in the hole, a way to produce far more abundance than anyone alive 50 years ago or even today could possibly imagine.
Robots.
Automation and technology are fast killing jobs. And unlike last time, they won't be replaced. That's a good thing.
When we let robots do all the work, humans can be free to do what matters to them. No more toiling away at bullshit jobs just to earn a paycheck. No more living in a tiny apartment when you deserve a mansion. You can travel the world, open up a restaurant or make movies for the rest of your life. You can spend more time with your children. Just do whatever you want! It's almost like you're on permanent vacation. Without the stress of the daily grind and constantly trying to make ends meet, people will live happier and more productive lives. When goods are freely accessible to all, there's no reason to steal. Suddenly your crime rate goes to near-zero. This is a future that we should work together to make happen, as soon as possible. If we do, we can get it done in about five years.
The question isn't "do we have the money". It's "do we have the resources". Do we want it? It's strange that we only think that way in life or death situations. America only had 600 planes at the beginning of World War two. Within a few months they were making 90,000 each year. After the war, with hundreds of thousands dead and millions homeless, average people stood together to rebuild. Brick by brick. Almost everything was destroyed, yet through the tireless efforts of everyday people just like you and me, things were relatively back to normal within a few years. There's no reason why it should take a war or a revolution for us to stand up and demand a better life. We can do it together, voluntarily. We can live to see this change.
So what will it take?
Not much. When I first designed Sociocapitalism, I wanted to create a system that would make life better for rich and poor alike. There's no way any kind of social change will be able to happen without their help, and there's no point to antagonizing or alienating any potential allies. Any type of plan that included redistributing wealth without compensation was immediately off of the table.
So instead, just give them votes equal to whatever they've contributed.
While that explains how we would compensate the wealthy for their resources, that still doesn't explain how the economic system itself will operate. What is it? Who decides who gets what? Who owns the land? These are all important questions that need to be answered. When it comes to sociocapitalism, it's about taking the best and leaving the rest.
A good way to illustrate the difference between sociocapitalism and other economic systems is like this: In socialism, the means of production are owned by the workers. In capitalism, they're owned by the wealthy. In sociocapitalism, the means of production are owned by everyone.
Let's say you wanted to create a new product. Today you couldn't just go into a factory and order them to produce something for you. You would have to get it prototyped, build supply chains, hire workers and get loans.. All in all, you would be out millions of dollars just to bring a single new product to market. Here, all you need to do is upload a design file to the web. Now anyone can use it for free, and you will get paid each time your idea is used. The use of your idea is actually what creates money in the first place. Because production and distribution are fully automated, labor isn't an issue. Effectively, the item costs nothing. In one swoop, we eliminate the problems with copyrights and patents and gain the benefits of an open ecosystem while allowing creators to be fairly compensated.
How money works in a Resource-Based Economy
Money is primarily used as a tool to promote and reward desirable behavior. It could be working to maintain the automated factories, helping out your town or even just being a good citizen. There are multiple types of money that are used for different purposes. The biggest difference between money in a Resource-Based-Economy and money today is a) how it's created and b) who gets it. Instead of being created as an instrument of debt, "money" in a RBE is created and distributed automatically whenever someone uses a product or service. Everyone is given enough money monthly to live a reasonably well-off life, and as usual food, housing and transportation are free.
Oh, and one more thing:
Money has an expiration date.
Money is weird when you think about it. Unlike almost everything else, it doesn't decay or lose value over time (forget about inflation for a second). You have an expiration date. Cars stop working, food spoils and homes need repair- yet money doesn't.
This leads to all kinds of problems, namely the unjustified hoarding of wealth. Imagine what would happen if the wealthy knew that their billions wouldn't last forever. They would spend it or give it away instead of clinging to it with their last breath. All this added spending would lead to a major boost in the economy. I know what you're thinking: Who would take money that's just about to expire? The government of course. Since the bills are legal tender, as far as The Global Assembly is concerned, your old money has the same purchasing power as newly-printed currency. So just before your currency is about to expire, you might go on a online shopping spree. You can choose how long your money will last when you receive it, but the maximum length is 10 years.
The four different kinds of money:
1) Basic Income
Basic Income is the money that every person receives each month just for being alive, no matter how rich or poor. This is the our version of the "safety net", so that if you don't earn enough of the other types of money listed below you will still be financially secure. It's denominated in "credits.", the amount of which will be determined by The Global Assembly. Unlike all other types of money that came before it, credits are a physical quantity that represents the amount of matter and energy that went into producing and transporting a product. A single credit is worth 1000 kilogram-joules. Basic income will cover most of your average expenses and then some, but it's important to note that basic income cannot be transferred directly between people or saved for the next month unless converted into..
2) T- Notes (Tribal Notes)
Only tribes have the power to hold and transfer basic income credits between people or hold them for periods longer than a month. Tribes can hold saved money for up to ten years and are created whenever enough people get together and decide to start one. In a resource-based economy, tribes function a lot like banks do today. When you deposit your unused (or any) basic income into a tribe, the tribe gives you a note that promises to pay whoever owns it a certain amount of social capital some time in the future. It's like a certificate of deposit. You can then use and spend this note as if it were cash. They're a great tool if you want to keep social capital for a long period of time, and they are safe investments because the owners of a tribe are legally liable if they can't give you the money you deposited.
T-Notes don't hold value forever. They come in "denominations" of 1,2,5 and 10 years, and the longer you want to hold the money the more it costs. At the end of the note's life, the money saved inside is given to whoever owns it at the time and is good to use for 1 month. You cannot purchase another tribal note with this cash. Here's an example pricing schedule for a tribe:
1 year- 2% of the initial deposit
2 years- 5% of the initial deposit
5 years- 10% of the initial deposit
10 years- 20% of initial deposit
If you bought a 2 year-tribal note with $100, in 2 years you or whoever you've given it to would be able to cash it in for $95. The other $5 is given to the tribe as a fee for holding the money.
3) Social Capital
The namesake of the entire economic system, social capital is the most important type of money and the most relevant. The mechanics of exactly how social capital works is explained here, but basically it measures your "net worth", or total contribution to society. This measurement includes your influence, prominence on social media and how often your ideas have been used by others. Social capital must be earned and accumulates over time, with the total amount you've ever earned visible on your reputation account. Social capital can be directly transferred between people, although most will convert it into T-notes first since they last longer. Like Basic Income, to prevent inflation unused social capital can't be rolled over to the next month unless converted.
Social capital can be earned by designing new products or creating new things that people enjoy. Every time someone decides to use a product you helped design, you earn social capital. It doesn't even have to be anything fancy- here, "product" means anything a human creates that has value. So online, making funny videos that go viral or just uploading selfies will earn social capital too, albeit a smaller amount. You can use social capital to buy goods and services exactly as you would use your basic income credits.
4) Tokens
Tokens are a special type of social capital that functions more like an award than money. People earn tokens for helping out their community, as a reward for good behavior, being a civil servant or doing important work that cannot be automated (for now). Tokens are also shown on your reputation account and act as a badge of honor. People strive to earn tokens because certain desirable luxury items can only be bought with them. If you want fancy cars, penthouses or designer clothes, you have to have tokens. Even today, the power of luxury items to motivate can't be denied. Take a $5 dollar pair of sneakers made in China, slap a Nike symbol on it, and suddenly they're worth $200. Take a $80 dollar phone, put an apple on the back it and now it's worth $500. We always want the latest and greatest, bigger and better. It didn't always use to be this way, but now that it is we could it to our advantage.
Tokens are dispensed by The Global Assembly through it's Generousity Program. Because tokens are a direct reward for a job-well done, only the person who has earned them can redeem them- period. To make up for this, they don't expire. Once you get them, they're yours and nobody can ever take them away. Not even the government. Tokens are equal in value to a Basic Income credit, and can be used to buy "normal" items too if you wish. The designers of luxury items get half of whatever it sells for while the other half is removed from circulation.
Even though it can be hard to imagine using multiple types of money, it would be helpful to remember that we already have several kinds in circulation today. There's hard cash, digital money, traveler's checks, money orders, stocks etc. Not to mention the hundreds of different national currencies across the world. In a resource-based economy, these four would be all you'd need no matter where you go.
The Money Supply
There are hard-coded limits to how much money can be created monthly, and each type has a limit of it's own. The value of all social capital earned each month is limited to twice the value of all basic income distributed. The value of all tokens given away is equal to the value of all basic income, so the money supply at any one time looks a bit like this:
25% Basic Income
50% Social Capital
25% Tokens
All types of money except for tribal notes are directly managed by The Global Assembly through an elected committee of delegates from various tribes. You earn social capital on networks managed by The Global Assembly, and they also distribute basic income too. If it needs to increase the money supply, the committee will raise the amount of basic income given or buy Tribal Notes. If it needs to lower the money supply it can increase taxes on tribes or sell T-notes. Prices are always shown in both credits and social capital.
The Price System and Preventing Overconsumption
So back to this. The biggest objection to all of this is the idea that somehow, someway, people will take more than they need. "If everything is free", they say, "what's to stop me from taking everything in the store"?
Ah. They don't understand that while everything is free, you couldn't afford to buy everything in the store at once. That's right. While all goods are free, you still have to pay for them.
The secret to preventing overconsumption is really just a rebate: Pay for something now, and when you're finished, return it to the store for a full refund. That's it. This is the way paying for anything The Global Assembly provides will work. Of course, it's a little more complicated than that: Once you return something to the store, all of the money doesn't just flood back into your account at once. It trickles back over time, and the time depends on how long it takes to produce another one. For organic items that are fully consumed (things like food, for instance), this doesn't hold and the money is consumed with the item.
This has two amazing effects. The first is obvious- it encourages recycling! When you can get a full refund for returning an empty container of something, who in their right mind would throw anything away? Of course, the container has to be clean, but this is easily handled by robots. The second effect is that, as long as your'e frugal you will never run out of money. It limits overconsumption because everyone has a limited amount of money, but over time everything really is free.
If you want to buy something on credit, you can get a loan from your tribe and the amount will just be deducted from your basic income each month.
This relationship extends to housing too, which is discussed further in this article. Like today, you pay a certain amount of money monthly to stay in the home, but this money doesn't disappear. Instead, it's held as equity that you withdraw once you leave to go elsewhere. It doesn't matter if the property is rented or owned. This equity can be built up over generations, making homes a rock-solid investment.
Prices
Every product in the world requires resources to produce. Cars need rubber, steel and aluminum. Food needs water and good soil. Homes need cement, wood and plastic. But there's something else they need too: Energy. Without energy, nothing could be produced- not just products, but the molecules life needs to survive. How do we determine how much each of these things is worth without money or markets?Supply and Demand. Just like in today's economy, when supply is high and demand is low, prices should drop. When demand exceeds supply, prices should rise. These signals are then transmitted through the entire value chain and consumers make purchasing decisions based on them. In a resource-based economy, supply is actually based on the physical quantity of resources available.
A more technical definition of "supply" is the "Amount of any material already realized, produced and available (critical). When we say amount "realized", we mean the amount of the material that already exists and is ready-to-go. Not projections, not estimates, but the real amount of any resource sitting in a storage facility. For simplicity, supply of all resources (gas, liquid or solid) will be measured in kilograms. Barrel of oil already refined and in a storage tank? That's supply. Barrel underground? Not supply. Wood already produced and milled into 2x4's? That's supply. A stand of timber? Not. Also included is supply returning to the system via recycling.
That's only half the story. In order to calculate the price of any good, we also need to know how much energy it took to produce and transport it. This is easily measurable in Joules. Once we know these two quantities, multiply them by each other to get the initial price. Then, multiply the initial price by two to get your final price. Multiplying the price gives it room to "breathe" and shift due to changing demand. For natural products that grow on trees, the energy needed to produce them is ignored because it comes from the sun.
A single basic income credit is defined as 1000 Kilogram-Joules. This is equivalent to a product that weighs 1 kg and took 1000 Joules to produce and transport, or one that weighs 0.1 kg and required 10,000 Joules.
Demand: Or how prices change.
In a perfect world, demand would always be constant and so would prices. As we know, this isn't the case. If we want to have an economy that works, then prices need to change with changing demand. Demand is relatively easy to calculate. All you have to do is determine the total amount of a resource requested from all sources, and compare it with the total amount produced. This calculation will happen every day. If more of a resource is requested than available, prices for the resource will go up and products that use that resource will become more expensive. If less, prices will go down. This function is constantly in play for every resource imaginable- corn, soybeans, iron, coal, oil etc
Economic Freedom
Economic freedom is the name of the game. Citizens will be able to design and customize products that exactly fit their needs. There's no room for a one-size fits all economic policy in sociocapitalism.
Who owns the factors of production and how are goods produced?
Even though production is highly automated, someone still has to maintain the factories and act as a safeguard to ensure nobody vandalizes or misuses them. If you want to ask "who will fix the robots", ask "who will fix the sewers"? The means of production are locally managed and owned as a public utility, under the oversight of The Global Assembly.
Most goods are produced locally, while only raw materials are transported great distances. When it makes sense to do high-volume production (for small, delicate things like semiconductors), then the finished product will be shipped instead. This is rare. The article "microfactories" goes into more detail on how small, modular mobile factories will be shipped around the world to produce a wide variety of products. Each individual city will not have it's own factory, but each metropolitan area or region would have an industrial district.
Access to the means of production is guaranteed to everyone in the constitution, which means everyone "owns" it, in a sense. Anyone can design a product online and offer it for sale using the Collaborative Design System. People can constantly improve on the designs of others and import parts directly into their product. Once someone purchases it, the product will be produced and those who worked on it paid in social capital. Note that the good credits used to buy a product don't go to the producers, they are held as a safety deposit until the product is returned.
In the automated factories of the future, people will be able to work from home to remotely operate machines and drive trucks, (until self-driving vehicles take over.)
This doesn't imply that everything will be automated, just the production of most goods. In the service sector, there will always be room for artisans and makers who create products not because they have to, but because they want to and that's what they enjoy doing. In cases like these, whatever they get paid they get to keep. Expect to see an explosion of handmade arts and crafts, sweaters and homeware once people have the time to make it. Food too- even though there will be automated restaurants, a lot of people will still want to eat food made by real chefs and be willing to pay a premium for it.
Buying, Selling and Starting a Business.
Buying and selling in a resource-based economy largely happens over the web, with people browsing through a catalog and selecting the products they want. The products can then be customized and are automatically delivered to their home. Physical stores will still exist, but they are more expensive since they have to be staffed.
If you want to start a business, you first need to register with your tribe in order to create a business account and complete any forms or permits your city requires. By starting a business account, you are creating a separate entity that allows you to get the cash-back benefits while not having to return money to the customer when they are finished with an item. Next, you have to purchase whatever you need to create your product and hire employees, If you were opening a restaurant, you might need plates, food and refrigerators. When you are done with each of these products (except the food), you can return them for a refund.
The role of Tribes in the Economy
The role of Cities in the Economy
Cities manage local aspects of production and help provide a safe space for new businesses to grow. They also inspect businesses to make sure they're safe.
Bringing it all together
So what's the point of all this? It may look a little complicated, but the goal is simple:
Create an economy where people aren't only free to be themselves, but where they're rewarded for it. In a resource-based economy, money is retooled to work better for everyone and maximize creativity. By breaking down the barrier between supply and demand families won't have to worry about whether or not they can afford anything anymore. They'll just get it. No more choosing between gas or food when you really need both! When human knowledge is freed and money isn't an object, social progress will advance at an exponential rate. Don't be surprised if we actually have flying cars or cures for debilitating diseases in a few years.
It's not about creating a utopia, or a world where everyone can just relax all day and do nothing. If you ask me, that would be a nightmare! Instead, Sociocapitalism is about redesigning society so that everyone has the freedom to do what makes them happy, as long as it doesn't harm anyone else. It's a world where people come first, and need is placed before greed. It's unlike anything else we've ever tried before. Communism and capitalism combined couldn't even come close. In an economy that's fueled by friendship, you don't work long hours trying to make ends meet, you work to build and maintain social relationships that add value to society. In other worlds, your social capital.
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