The Next Economic Paradigm

Socialism, Capitalism, or Social Capitalism

Throughout history, technological change has also brought changes in the organization of society around the new ways to allocate resources.  The industrial revolution spawned the two prevailing economic theories of our time; Capitalism and Socialism.

The current wave of technological change will likely spawn new economic theories and social organization systems as well – it makes no sense to look to the past for reference to the future of anything.

Capitalism arose from feudalism and is roughly characterized by a merchant class that owns the factors of production (land, labor, and capital) and a working class whose physical toil adds value to natural resources.  The capitalist acting in their own best interest is ultimately acting in the best interest of society by creating jobs that employ people.

Then Karl Marx came along and noted the inherent conflict where the workers would seek to maximize their wages and the merchants would seek to minimize wages.  He argued that class struggle would ultimately result in a communist system replacing the capitalist system. The communist acting in the best interest of society is ultimately acting in their own best interest.  Socialism is widely regarded as the transitional stage between capitalism and communism.

But the struggle is really over the control of the means of production, or factors of production. “Are land, labor, and capital” private property or public property? Are these notions even relevant in the age of the Internet?

Today, computer enabled society engaged in an innovation economy presents an entirely new set of conditions.  What happens when the factors of production are social capital, creative capital, and intellectual capital?  How are these “means of production” going to be controlled and by whom?

This is a serious philosophical quandary that will be brought down upon us in the next generation of social media because neither socialism or capitalism are applicable in a traditional sense. Like Heisenberg’s theory of indeterminacy – the more control you have over one factor, the less control you have over the other.  This is not a condition related to the ability to control someone or something, rather, it is a condition related to the nature of the system itself.  That’s a big deal.

For the traditional Socialist: in order to control social capital, one must equalize society – as such, the system retains little innovation production value.  In order to control creative capital, one must standardize creativity – likewise, the system retains little innovation production value.  In order to control intellectual capital, one must control the intellectual development of another – again, the system retains little innovation production value.

Likewise for the traditional Capitalist: In your world is no ROI to curb global warming, there is no ROI to educate the poor, there is no ROI for human rights, and there is no ROI on the national debt, etc. As such, the system is constrained by the social burden to innovate – you can no longer scale.

There is, however, a business plan to liberate social capital, creative capital, and intellectual capital as tangible financial instruments in their own right, by definition, reflecting social priorities in an innovation economy.  This is where the next generation of social media is leading to – and it scales magnificently.  Have you noticed?

That is Social Capitalism.

Share this:

Previous

The Trojan Horse; A Classic Social Fraud

Next

Social Clipping and the Amazing Disappearing Economy

3 Comments

  1. Andumarius

    What do you mean by: There is no ROI to curb global warming, there is no ROI to educate the poor, there is no ROI for human rights, and there is no ROI on the national debt

    • Thanks for the comment. The point is that in a purely capitalist account balance sheet there is no way to calculate the return on investment (ROI) in curbing global warming, educating the poor, human rights, etc. The ROI calculation is enhanced instead when the capitalist exploits natural and human resources, etc. – until of course there is a collapse in these systems. This is not to say that Capitalism is bad, the point of the argument is that the underlying assets (land, labor, and fiat currency) may not be appropriate when the objective is to preserve the environment, advance civilization, and correct the money supply. Socialism has equivalent flaws as well so the idea of social capitalism is to consider social, creative, and intellectual capital of society as factors of production in a capitalist system. I hope that clears up your question, let me know if there is anything else I can answer.

  2. Transmediant

    Love your blog. Would love it more if you’d reference #p2p & #commons
    Check out @mbauwens & @technoshaman

Leave a Reply

Your email address will not be published. Required fields are marked *

Powered by WordPress & Theme by Anders Norén

css.php