I like that term "“bug” in capitalism". I have always felt the "bug" is basically incorrectly pricing externalities. We don't properly charge you for the carbon you put into the atmosphere or the mental health strain you put on workers and so on. If societal costs were also real costs the allocation of resources could be more optimized.
It's an interesting of reasoning but comes with a caveat - Reducing externalities to a price figure allows you to trade them away on a balance sheet as nothing more than a price figure. This is fine if pricing accurately reflects value, but that's not the same as allowing a market to set the price. You lose a huge amount of detail in the process that can't simply be captured in a price signal moving up or down.
You may end up with things that have infinite price, at which point I think we're begging the question.
There's also a question of how commodified the things we're talking about here can actually be - If you can sell it one day and it's impossible to 'buy back' tomorrow at any price, then it's a fundamentally different kind of trade that doesn't really fit the framework as neatly as first appears.
Without pricing the externalities, we're basically taking on debt, a debt against the future number of years the planet is habitable. I imagine it probably started at 1M years of supporting human life. I wonder if that number is now down to 50000 left. And I feel like it went from 1M to 50K in the last 50 years.
Indeed, it seems the longer we run under the status quo the greater the cost in externalities, to the point we’re beginning to understand represents an existential threat globally.
However we also risk a self-fulfilling prophecy if we commodify those externalities and reduce them to lines on a balance sheet. I know that this is not quite what’s being argued for, but I am equally certain that is how it would land in practice.
I’m not convinced re-framing/codifying our social, environmental, and human capitals as financial instruments is any kind of progress towards salvation, rather it’s a doomed attempt to take everything that never fit inside the tidy box of capitalism and cram it inside of the box anyway. A try at making the world comprehensible to a mind accustomed to that manner of framing.
This problem needs novel thinking, more novel than finding a direct way to account for it within the existing framework. I regrettably don’t have a better idea.
Which social costs? Is it a social cost having too few kids? Or too many kids? Should we price that in? And what’s the cost we should price in? Who decides? Can we all agree on one price?
