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Economics lessons from wild nature

Posted By Administration, Wednesday, July 25, 2018
Updated: Monday, February 25, 2019

Polina Silakova‘s sixth post in our Emerging Fellows program explores some economics lessons to be learned from nature. The views expressed are those of the author and not necessarily those of the APF or its other members.

If we try to apply Darwin’s theory of evolution to economic systems, would we conclude that capitalism “better suits to the environment” (better suits us) than communism? After all, most of the ex-communist countries shifted to capitalism and the majority of the few remaining are now transitioning to free market economies. Have we naturally selected the better way? Apparently, only a half of us would agree. According to a recent online survey of twenty thousand people in 28 countries run by the research company Ipsos, half of respondents around the globe think that now, in the XXI century, “socialist ideals are of great value for societal progress”.

What exactly are these ideals? Here are some stats:
•9 in 10 believe that education should be free and that free healthcare is a human right
•7 in 10 think that everyone should have the right to an unconditional basic income (UBI).
•Interestingly, about the same number (7 in 10) also agree that it is right for people who are talented to earn more than those who are less gifted, and that free-market competition brings out the best in people.
It seems that although the benefits of free markets in fostering progress are valued when it comes to the essential aspects of life – health, welfare, education – many of us are craving for a more egalitarian system; the one alleviating the polarizing inequality that capitalism has created.

With so many innovations fostering humanity’s progress being inspired by nature, we are curious: what examples of democratic distribution of resources exist in the wild world? One study particularly attracted our attention. A Belgian-French group of scientists studied self-organised collective decision-making by animals when it comes to choosing between alternative resources.

They ran an experiment where 50 cockroaches (Blattella germanica) were presented with three shelters, each with a capacity to hold 40 individuals. For cockroaches, who prefer dark to light, such a shelter is a resource, and they quickly filled them in. But instead of doing this in a chaotic manner, the cockroaches split into two equal groups of 25 occupying two shelters and leaving the third one empty. While in a scenario with larger shelters – each big enough for the whole group – only one of the shelters got occupied. The researchers were astonished by how cockroaches maximise the benefit of limited resources, trading off being together and access to shelter resources and finding a balance between collaboration and competition. “Without elaborate communication, global information, and explicit comparison of available opportunities, […] the collective decision emerges from the interactions between equal individuals, initially possessing little information about their environment. It is remarkable, then, that these rules should produce a collective pattern that maximizes individual fitness.”

Economic democracy observed in behaviour of cockroaches presents some of the features where capitalism and representative democracy did not quite succeed: egalitarian distribution of resource and decision-making benefiting all (or at least the majority of) individuals. It might seem too simplistic to directly compare the economic problems faced by Blattella germanica and those of Homo sapiens. But if we think of some emerging movements – collaborative mobile democracy, participatory budgeting, commons-based economic governance – are they not technologically empowered forms of truly collective decision-making, replicating those observed in nature? With new technologies making us more interconnected, we now have a unique opportunity to access the knowledge and opinions of all interested citizens and reshape the way we, as a society, take decisions and distribute value.

Following nature’s principle of evolution, only a better system, distributive by design and maximising the fitness of more individuals, will be able to replace capitalism by making it obsolete. Mother nature offers us many lessons, and the lesson of balancing collaboration and competition has been one of the hardest to comprehend. It requires both individual engagement and strong leadership ability to connect knowledge and talents from the community and to facilitate the best ideas evolving in something new.

As American sociologist Erik Olin Wright suggests, we cannot smash or escape capitalism, but we can tame or erode it. By slowly introducing new elements, inspired by nature and enabled by technology, we might start shifting the focus from maximising financial value and growth to real value creation and more equality. And then who knows… maybe one day this will make capitalism in its classical form obsolete.

© Polina Silakova 2018

Tags:  capitalism  economics  governance 

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Get Real

Posted By Administration, Friday, February 2, 2018
Updated: Sunday, February 24, 2019

Adam Cowart is one of our Emerging Fellows, and this is his second article written for the program. In it, he explores the real economy and asks a few questions along the way.

Our current economic system and all the social and political systems tied to it require perpetual growth. Growth not only underpins the financial economy but the real economy as well, which requires new goods and services (or more demand for the same) to expand. The end of growth would mean the collapse of financial markets and stagnation in the real economy. It would also lead to social and political upheaval due to financial inequality. The socio-political perspective that underlies our obsession with growth is the presumption that lower and middle-class citizens will accept massive inequality as long as their lives (and wages) get incrementally better, year after year. We would all love to have that private yacht, but are content as long as our annual salary increase allows us to take that Alaskan cruise. And this incremental improvement does not come from increased economic equality or financial redistribution; it is a result of growth.

Another long standing economic assumption is that, as jobs are automated, new forms of work will emerge. While some estimates follow a historically consistent trend of 10% job displacement in the foreseeable future, other estimates predict an acceleration of displacement, up to 50%. If job displacement does enter the 50% range, the creation of as-yet-unknown jobs, at such significantly high numbers in a relatively short period of time, seems unlikely. Even minor displacement can have a significant disruptive effect on political and social cohesion. But there is another option for continual growth in the real economy: instead of creating new jobs, simply commoditize things that people are currently doing for free.

Paul Mason alludes to this in his book “Post-Capitalism” when he suggests that in order to make this a scalable economic area of growth, “would require the mass commercialization of ordinary human life.” Late capitalism appears to be stealing a few plays from the feminist economics playbook. While media attention has largely been focused on pay equity between genders, some of the foundational work in feminist economics has focused on care work and intra-household bargaining. It is not much of a stretch to interpret Mason’s “ordinary human life” as the traditional perspective of unpaid “women’s work”.

If one is looking for a macro-trend in the real economy, one need look no further than the colonization of social interaction by the economy. This is evident in the more ubiquitous forms of social media but is also increasingly prevalent in more innocuous forms. Consider the cuddle party, a social media coordinated interaction where strangers come together out of a desire to cuddle (and watch a movie). Organizations such as “Nurse Next Door” look after the elderly, Christmas dinner can be ordered online, and Chore apps convince kids to (continue) to do work around the house “for free”. The company “Do My Stuff” has succinctly defined the overall trend with their slogan “Outsource your life”.

Anyone considering a new business could start with the question “What are people doing today for free, that I can get them to pay for tomorrow?” Of course, the question now must be asked, if every tiny component of our existence becomes commoditized and outsourced, are we even real anymore?



© Adam Cowart 2018

Tags:  capitalism  economics  work 

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