Future of Globalization

Part IV: Upgrading Today’s Capitalism

Capitalism in its current form is neither fair nor sustainable.

(Credit: Gary Yim - Shutterstock.com)

Takeaways


  • Today’s form of capitalism is not compatible with our social and cultural value system.
  • We are quite far from having made the world a place where all people can live in dignity and unfold their talents.
  • Benefitting from money creation can no longer be the privilege of a few private persons and banks.
  • From a legal point of view, everyone should be equal, and hence this should also apply to money creation.

As today’s form of capitalism is not compatible with our social and cultural value system, sooner or later it will be damaging to the foundations of societies and the values they are built on.

Therefore, capitalism must be upgraded in a way that is compatible with societal and cultural values and with the fairness principle to provide equal opportunities.

Since a change of the world’s carrying capacity by 1% effectively decides over the lives and deaths of about 80 million people, it is unacceptable that innovations are obstructed or restricted to those that are compatible with current business models.

The survival of billions of people will depend on our ability to drastically increase innovation rates and to generate more pluralistic innovations.

In other words, it is morally imperative to enable mass innovation, as neither venture capitalism nor philanthropy nor other standard means of supporting innovation were sufficient to solve the existential problems of our planet.

We are quite far from having made it a place where all people can live in dignity and unfold their talents.

Inequality creates instability

For this and a number of other reasons, the monetary system needs urgent reform. The current system is not fair and creates serious distortions. It further promotes inequality, which creates political instability.

In fact, it tends to undermine the very basis of democracy and other institutions. The current monetary system implies existential and political dependence, which constrains individual and collective development.

Therefore, in the future, everyone shall have equal opportunities to unfold their talents and engagement. This shall also include the right to benefit from money generation.

From a legal point of view, everyone should be equal, and hence this should also apply to money creation.

Democratic capitalism

Benefitting from money creation can no longer be the privilege of a few private persons and banks.

Moreover, in times of digital, ecological and societal transformation, everyone should be able to experiment and discover new solutions.

Therefore, everyone shall soon get a universal investment premium. This money will not be provided from taxes, but by money generation.

The overall amount of money in circulation shall be kept at bay by a negative interest rate. The underlying idea is to take money out of the system that is not being used, because it is desirable for the economy and society that money is being invested.

The investment premium shall not be kept or spent by the person who receives it. It should rather be invested into the best ideas and projects engaging for social and environmental affairs, new technologies, improved neighbourhoods, etc.

Crowd funding for all

This “crowd funding for all” may be realized by a new kind of money. Its height shall make sure that the better half (or at least a third) of proposed projects can be realized.

People will be able to earn an additional income by winning projects and contributing to their realization, such that there is a mechanism encouraging innovation and engagement.

Project results realized with these investment premiums shall become open source and Creative Commons after a two-year time period, such that combinatorial innovation and as well as a participatory information, innovation, product and service system can emerge and thrive.

Everyone will benefit

Note that everyone would benefit from this approach, and it is not expected that this will be to the disadvantage of large companies.

The above described measures are intended to boost the massive, pluralistic innovation that will now be needed to solve the world’s existential problems collectively as soon as possible.

Within just a few years, half of the economy will have to be reinvented to make it sustainable and create new jobs in the wake of automation that it is now driven by Artificial Intelligence and Robotics.

This requires existential security, experimental opportunities and access to innovative and productive means.

If the above reforms are made, a redistribution of property from the rich to the poor may be avoidable – otherwise it will be inevitable.

In any case, property that is not actively used by the owner(s) for more than a year should be made accessible for use through a sharing economy platform that provides fair access to anyone who is qualified for use.

Private property that is not publicly registered shall be administered by the region where the property is located.

Likewise, services and products that have been discontinued, patents or business models that are not being used, shall become Creative Commons within two years’ time.

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About Dirk Helbing

Dirk Helbing is Professor of Computational Social Science at the Department of Humanities, Social and Political Sciences and affiliate of the Computer Science Department at ETH Zurich.

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