Imagine there's a society at the bottom of a valley. Every 10 years, there's a flood which means everyone will have to move to the mountains for 3 months and eat stored food. So the wise old men make a flood council, to be populated with responsible people who ensure there's huts in the mountains and plenty of food.
Except it doesn't flood like a clockwork every 10 years. It's more like an annual dice roll. It can happen more often, but it can also happen less often. It's entirely within the scope of probability that kids are born and grow to be adults without a flood.
After a three decades, what has happened?
Someone will have the brilliant idea of using the spare food. Initially it will seem necessary, as hard times have arrived due to other circumstances. Eventually, people forget about filling it up.
Someone else will decide the flood huts are a waste, a bunch of empty homes with great views that nobody ever lives in. Why not sell it?
The flood council's work becomes undermined by their cost. People see there's all these highly educated people working on a plan that nobody's ever used. They see fat cats flying around to flood conferences, big flood taking a tax on everyone, and fearmongering whenever the flood council reminds people to be prepared.
So the flood eventually happens, people are drowned and the survivors starve.
One of the benefits of a state is that it does not need to operate like a business. It can and should maintain these refuges and keep them stocked. Perishables get replaced and consumed in the valley. A state has the ability to stand above current whims.
At the very least, contingency plans don’t go stale.
The second aspect is us facing the pandemic. Playing it down, calling it a hoax, refusing to wear a mask. Stomping around with guns. Making it a partisan issue. War rhetoric. It’s utterly insane. A few calm generations in the flood valley don’t quite explain this.
> At the very least, contingency plans don’t go stale.
They do if not maintained, especially when there are major changes in population size or spatial distribution, or changes in the infrastructure and its usage (e.g. hospital spinups and closures, traffic/transport).
To make it worse, Trump outright gutted the pandemic response team, and Germany hasn't done well in that regard either although we were quick to listen on experts, which mitigated that at least a bit.
> A few calm generations in the flood valley don’t quite explain this.
They do, actually. In the US, but also in parts of the EU, "science denial" has been moved from "whacko nutjob" territory to outright mainstream, with constant cuts in education funding doing the rest. Democracy requires a demos, especially a demos able (both intellectually and in terms of time) and willing to participate in the democratic process, to work.
That last word is the problem: there are many people, without a drop of sarcasm, irony, or smiling, who think government should indeed be run like a business.
A public information campaign on why that’s not the case certainly seems important to greatly reduce this idea’s popularity. Are there any groups doing this?
And even when the flood is actually occurring, people will shout it down as a hoax, or argue that any countermeasures have been a massive overreaction because only x people have drowned so far.
Any scientific work that produces an uncomfortable prediction will be written off as doom-mongering and any proposal that would impact people's personal comfort level will be declared as unworkable and unreasonable.
Imagine there are two societies like this. One invests in building huts and storing food, the other one doesn't. They don't have to maintain the food storage and huts. The labor is spent on something else that advances society. Let's say this gives them a 1% advantage in advancing society every year. After 100 years the 1% advantage turns into 1.001^100 = 2.7. The society that didn't invest in the disaster plan advanced much more.
When you tie up your resources you can't invest it into something else. Governments know this very well. That's why they borrow money to invest it into projects that will have a higher payoff than the interest.
At some point in disaster planning you need to ask what the impact of the preparation is vs the impact of the disaster itself. Obviously officials can't say after a disaster that the reason they didn't prepare was that they calculated that the cost to prepare was higher than the likelihood of the disaster times the cost of the disaster. If the officials admitted that then they would seem heartless. They say instead: "There was no way to see it coming."
If you think this line of thinking by officials is unreasonable, then I'd like to ask you: do you have a bomb shelter at home? Why not? The Swiss do: [0]
>"Every inhabitant must have a protected place that can be reached quickly from his place of residence".
>"Apartment block owners are required to construct and fit out shelters in all new dwellings".
>(Articles 45 and 46 of the Swiss Federal Law on Civil Protection).
Obviously this is an expensive law. The Swiss can afford it, because they're one if the richest countries in the world. In the case of disaster the Swiss are prepared. The rest of us are not.
Say Pandemic response preparation costs $10 billion a year, and the event occurs every hundred years. That means the total cost is $1T over 100 years.
Has the Pandemic caused more than $1T of damage to the United States? We've spent more than $1T just on the government bailout, which doesn't even come close to covering the damage to individuals and the economy as a whole. I'd say it easily exceeds $1T. Far more was spent on the Iraq war than on Covid preparation, yet the latter would have paid massive returns.
Frankly, pandemic response would be a rounding error compared to the defense budget. Even $2B a year in pandemic preparation might have saved us. That's only $200B per hundred years, far less than Covid has cost the US this year.
No. The direct cost at $10 billion a year might be $1T over 100 years. The opportunity cost, which is what I was talking about, is not $1T.
If you want to factor in opportunity cost you have to think of it like compound interest. $10 billion invested today could have a $1T payoff on its own over 100 years.
Inflation alone would make $10 billion in 1920 worth $128 billion today. And inflation doesn't account for any efficiency increases you can gain over time if you had invested the money otherwise.
> "... using the spare food ... Someone else will decide the flood huts are a waste"
Also, those politicians, get more votes — they can use the money they save when they sell the spare food, to lower the taxes or give people welfare money, and build and give away free houses in the valley.
Any politicians who want to keep the houses on the hills, are pretty powerless.
At the core, in a capitalist society, a company with no capital 'wasted' on distaster planning will out compete a company that has invested capital in disaster planning in the short term
And "short term" can mean quote long periods of time in practise. As a result we end up with this incredibly fragile system and society.
This can't be emphasised enough: capitalism is systemically biased against rational survival strategies.
It's fundamentally an irrational system which uses emotion and political leverage - with a bit of innovation - to maximise short-term individual gain.
But it has surrounded itself with a self-serving cloud of rhetoric about how it's "efficient" and "rational", when in fact it's astoundingly bad at dealing with planet-scale collective threats that could be easily handled with genuinely rational management.
I would say that anarchy, rather than capitalism, is biased in that way. I would not expect anarcho-capitalism to do any better or any worse than anarcho-communism.
Reason being, some rules just don’t make sense unless you have a deep understanding of the part of the world they interact with; and if you are free to flout those rules, it can be very tempting when you have no salient examples of the consequences of breaking them.
Lead was added to gasoline for improved performance, not to cause systemic increases in violence after 30 years of widespread use; CFCs were chosen because of their low toxicity, reactivity and flammability, not to catalytically destroy the ozone layer; antibiotics are used by meat farmers to increase growth rate and allow more intensive farming, not to trigger the evolution of MRSA. There are almost certainly other things which I could not even describe accurately that follow the same pattern.
I have no idea how to protect against disasters that only experts can comprehend without also allowing obsolete ideologies and standards organisations to crystallise against progress. But then, I’m only superficially familiar with political philosophy — I was about 30 when I learned of Chesterton’s Fence.
I think we can look at this differently; the problem isn't necessarily capitalism; it's that we don't live in a society that follows classically ideal capitalist dynamics anymore.
In a healthy capitalist system, you'd have enough competition to make this less of an issue. But healthy competition has been obliterated by our (politically condoned) race for short-term gains through economies of scale, and by the development of incorporation (hundreds of years ago by now, yet the conflicts with other social constructs like freedom of speech and capitalism have never really been addressed).
Any exact number is of course by definition flawed, but it's hard to imagine a stable capitalist system existing without much more vigorous competition - any firm with enough market share to significantly influence standards or think more about retaining users (i.e. lock-in) than about the competition is a problem; and much of our economy is made up of firms like that. At which size does that happen? Anything exceeding 1% market share?
Without sufficient variation and choice, the underlying dynamics (of capitalism) just don't work. In essence, we don't live in a classical capitalism with market forces converging on efficient solutions; but rather in an business or political world where barriers to entry and network effects form moats around inflexible fiefdoms in our society.
This isn't a problem that's easy to solve, because economies of scale work, and even if society at large would benefit from more dynamism, self-interest pulls individuals into corporations that are large enough to undermine competition. Furthermore, the rules we've invented surrounding incorporation strongly encourage this behavior, because it's a way to limit personal risk, and because a conceptual organization can choose to be many formal organizations, it's a way to for corporations to avoid bearing the costs of risks more generally than individuals can. Additionally, basic things like trademarks, patents and copyrights work in favor of centralization - and while I'm sure there are alternatives to those concepts, they're really deeply embedded in society, support well-connected vested interest with strong lobbies, have broad popular support, and in any case have a useful purpose too - replacing such concepts is essentially a non-starter, even if it would be beneficial in the long run.
So at best we can hope for reforms to increase resilience - those would be useful not just in catastrophic situations, but also to increase the effectiveness of capitalism in general. Reforms should limit the kind of exclusive control intellectual property offers (such that it's less suitable as a weapon to knock out competitors, and more suitable to earn income from those you cannot control yet use your innovations). We should have much stricter antitrust regulations, with fewer exceptions allowing large sizes (i.e. the default assumption should be that significant market share is harmful, and place the burden of proof the other way around to the way it is now) and smaller size limits before rules kick in. And we should reevalute the kind of protections corporations benefit from that do make sense for individuals; and perhaps to what extent incorporation can be used to shield owners from risks to encourage subsidiary-jungles less (or simply have a small tax on incorporation itself, much like individuals pay income tax - but on overall value, not profit, such that it's costly to have tons of layers of incorporation).
> I think we can look at this differently; the problem isn't necessarily capitalism; it's that we don't live in a society that follows classically ideal capitalist dynamics anymore.
When was that time supposed to be? In my years of studying history as a hobby, I've never encountered this mystical utopia of "true" free-market capitalism. In fact, as far as I know the ideology itself is mostly a product of the 20th century.
Oh definitely. We've never lived in an ideal anything ;-). Yet much of the assumptions about how capitalism will allocate resources efficiently rest on exactly the kind of properties we don't follow and are following increasingly poorly over the past decades. (Oh, I see I used the word "anymore" above. Well, that doesn't make sense, indeed).
As to the ideology: I blame the cold war for that; that shifted the debate firmly towards capitalism as an article of national identity, and the "more" the better (whatever that even means). To this day it's still common to hear the response that any criticism of capitalism is akin to communism - i.e. we're still identifying ourselves with this myth, even though communism (to the extent that that mystical utopia ever existed) has been defeated. And once something is a form of patriotic self-affirmation, it's too much to expect any kind of pragmatic, reasonable tuning to take place in politics (not that that's happening in politics currently regardless of topic, but I think that's a different matter).
I thought it was already obvious that extant economic systems necessitate hybridization.
Capitalism needs social and communal optimization and policy in order to not completely collapse, i.e. currently bailouts, but this can also be accomplished with effective policy and law. Communism needs capital wealth and free-market trading to not collapse into a material deficit.
Except it doesn't flood like a clockwork every 10 years. It's more like an annual dice roll. It can happen more often, but it can also happen less often. It's entirely within the scope of probability that kids are born and grow to be adults without a flood.
After a three decades, what has happened?
Someone will have the brilliant idea of using the spare food. Initially it will seem necessary, as hard times have arrived due to other circumstances. Eventually, people forget about filling it up.
Someone else will decide the flood huts are a waste, a bunch of empty homes with great views that nobody ever lives in. Why not sell it?
The flood council's work becomes undermined by their cost. People see there's all these highly educated people working on a plan that nobody's ever used. They see fat cats flying around to flood conferences, big flood taking a tax on everyone, and fearmongering whenever the flood council reminds people to be prepared.
So the flood eventually happens, people are drowned and the survivors starve.
"But there was no way to see it coming."