By Cage Innoye
In 1991 communism failed. In 2008 capitalism failed us. In the space of 17 years, two great economic systems based upon very elaborate and self-convinced ideologies collapsed. Two great peoples, American and Russian, are stunned and wandering in a vacuous period of human history, in a great pause between ages.
In 2009 in America, we are victims in the aftermath of a hurricane, stripped of our certainty with a post traumatic stress disorder of economies.
A third system is coming; it is not greedy capitalism, and it is not socialism or statism either. The next system is a “diverse economy” of diverse measures and performance goals, diverse social organization, diverse ownership, diverse firms, and a diverse market. It is the product of a thorough application of the concept of “diversity” to economics, business and finance, and it leads to a completely different system, though it logically follows from the existing one.
This new economy could also be called a “metric economy”; it appends pure money as the sole performance measure of a firm and adds many other fundamental measures of success; when investing in a company these measures are utilized and when buying products from a business these measures are applied too.
Pursuit simply of money and pure profit neglects a myriad of other values and issues; it creates a highly one-sided system. A metric system requires the new metrics; firms would voluntarily join “industrial leagues” and follow the rules of the game. Examples of the new metrics might include: standard measures of efficiency, raw production and consumer data, product quality, innovation, environmental management, charity, community relations, customer relations, employee relations and reward, equity, family support, community service, marketing and advertising ethics, planetary cooperation and aid, measures of long-term investment, raising product standards and many more things. All of these kinds of metrics would set beside money, we would have a full list of measures to consider rather than one sole measure of company performance, and this would limit the obsession and myopia of money.
Such an economy might lightheartedly be called a “sports economy”, the metaphor being sports teams racking up stats, competing in marketplace games. Companies would join leagues that enforce their particular rules for teams, rules that are different from an ordinary business.
This third system would create many new things and behaviors----
-Economic leagues of consumers, investors, communities that develop their own measures to rate company and product performance.
-Industrial leagues would arise where the metrics are mandatory and even sacred
-A new type of stock exchange would appear helping companies go metric and listing their securities for sale
-New metric style investment banking arises
-Exploration of many ownership forms rather than the narrow band that exists today, the idea would be to create diverse equity or “dequity”
-A fairer market would begin, one not dominated by monopolies and huge corporations
-A new kind of fiscal policy would appear that mixes both conventional fiscal tools with metric ones
-There would be a changing role for government as regulation would largely pass to individual companies and industrial leagues which self-regulate through their metrics
-Further, a new citizen will be born who thinks in the new terms of metrics and diversity as an investor, owner, employee, consumer, citizen
The diverse or metric economy is a third system that evolves out of two fundamental philosophic concepts: Diversity and Measure.
Such an economy is neither capitalist or communist. At the same time, it retains the historically proven techniques of capitalism, at least “ideal” capitalism – the free market, competition, innovation, cost reduction and so on. The new economy would thus be an evolution on capitalism, even taking its proclamations about “measure” to heart and following it to its logical conclusion, that is, measuring everything, and recognizing that money is simply one kind of measure among many -- a supply-and-demand measure! And the new economy takes current capitalism’s boasts of diversity and applies diversity to all things comprehensively, and arrives at something much better, much freer, open, creative and democratic.
So the new economy appreciates the critique of the left in regards to money and greed, monopolies and control, social safety nets and general well being. But it does not deduce the solution of government or party control. The new economy puts the measures right inside the firm, not in a government bureaucrat’s office. With the metric as a performance goal within a company, you do not need people on the outside making daily decisions, for they do not understand business in general or any specific business. The diverse economy accepts the left’s critique but not its solutions.
The role of the state in the new economy is for the regulation of only extreme issues and national concerns that one industry cannot manage itself. Also, the state would concentrate on fiscal policy and national economic planning. The state is not negated as in various conservative theories; the state has a role to play, however, not in the daily operation of business. It cannot replace the firms, leagues and citizens for they are the active daily and direct forces.
Today, we are indeed in a strange and terrifying situation.
Monetary capitalism seemed invincible, world communism fell before it. Capitalism
grew, it expanded, it bloated and then it burst. Without the boundaries to free-market thinking, de-regulation or laissez faire, its essential nature was given free rein, and its great inner weakness has been shown for all to see, and not just to policy makers and economists but in a naked and disturbing way to everyone on the planet.
Specifically, why did capitalism fail us? Very simply, de-regulation spread very bad mortgages across the planet in the form of mortgage-backed securities. George Bush, the SEC, the Treasury, the Federal Reserve sat by and let it all transpire. Why? Profit, greed, selfishness; there is no other possible answer.
To be continued...
Innoye is an American writer on the topics of economics, theology and philosophy. You can contact him at his email address, email@example.com. His new book, “The Axxiad”, will be available soon; his website, newphilosophyandreligion.com, is now under construction.