It seems to me that our view of the economy and the society under which it operates could be seen similar to the laws of physics in the sense that there are two sets of rules in play. Even though there is a concerted effort to find a single set of rules to describe the universe, there are at present two--one that describes the very small (quantum mechanics) and the very large (general relativity). The very small is extremely unpredictable and hard to understand; the very large is much simpler and extremely more predictable.
These rules are not set by us, of course. They are simply the laws we've discovered from testing and observation. When it comes to economics, though, we make the rules. The society we create may need to look at setting up rules that mimic the idea of two sets of rules instead of trying to force a single set of laws to work that clearly don't.
Unregulated capitalism is perhaps the most unstable economic system ever invented, despite claims to the contrary. Let alone, the system tends to move toward the concentration of wealth in a few large enterprises and the small groups of people who control them. It also creates a huge and permanent underclass that has virtually no power or wealth. Anti-trust legislation was enacted to stop this condition from perpetuating itself, but it has failed because the forces which push for globs of wealth and power to congeal in the hands of a few have resurfaced. Capitalist "invisible hand" theory depends on every "player" remaining small, on its own unable to provide much influence on the entire system. We know, however, that if regulations to keep things small are not enforced or disappear, we end up with the large and hugely powerful players that the theory depends on being absent and can no longer be called capitalism.
Strict controls on society from a heavy-handed government, on the other hand, create a very structured and much more predictable society. But, too much of this kind of thing means that forces required to test and enact improvements get stifled. Power still gets concentrated; it's just a different path to the same result. "Checks and balances" are absent and the human tendency to grab and exercise power over others rears its ugly head here, too.
It seems that there might be a solution that allows for rules that provide stability and individual creativity. With an underlying structure that can be depended upon to support the innovation we desire, the need for a "one size fits all" approach can be abandoned as the only method to consider.
We need a government that primarily sees itself as providing for a stable foundation through the guarantee of some of life's basic needs such as clean water, health care, and education. We could also consider a minimal amount of food and housing, if needed. If people can absolutely count on not starving or dying due to having no place to live and nothing to eat, then a person's energy and focus can be directed elsewhere and allow for those people who would otherwise not be able to take risks to go ahead and do so. Capitalist forces could then be used in the other parts of society that wouldn't result in the threat of death if they fail. The notoriously unstable and volatile world of capitalism would still have to be regulated in order to keep players small, so that the competitive forces that are the key to capitalist economic theory don't disappear.
This is purely and analogy, but if the world of physics has to live with separate rules that provide separate answers in two different realms, it can allow us to see how we don't need a winner-take-all approach to creating a happy and sustainable society. If physicists eventually do come up with a unified theory that explains everything, we can be sure it won't be from forcing one of the current sets of rules from one realm onto the other.
These rules are not set by us, of course. They are simply the laws we've discovered from testing and observation. When it comes to economics, though, we make the rules. The society we create may need to look at setting up rules that mimic the idea of two sets of rules instead of trying to force a single set of laws to work that clearly don't.
Unregulated capitalism is perhaps the most unstable economic system ever invented, despite claims to the contrary. Let alone, the system tends to move toward the concentration of wealth in a few large enterprises and the small groups of people who control them. It also creates a huge and permanent underclass that has virtually no power or wealth. Anti-trust legislation was enacted to stop this condition from perpetuating itself, but it has failed because the forces which push for globs of wealth and power to congeal in the hands of a few have resurfaced. Capitalist "invisible hand" theory depends on every "player" remaining small, on its own unable to provide much influence on the entire system. We know, however, that if regulations to keep things small are not enforced or disappear, we end up with the large and hugely powerful players that the theory depends on being absent and can no longer be called capitalism.
Strict controls on society from a heavy-handed government, on the other hand, create a very structured and much more predictable society. But, too much of this kind of thing means that forces required to test and enact improvements get stifled. Power still gets concentrated; it's just a different path to the same result. "Checks and balances" are absent and the human tendency to grab and exercise power over others rears its ugly head here, too.
It seems that there might be a solution that allows for rules that provide stability and individual creativity. With an underlying structure that can be depended upon to support the innovation we desire, the need for a "one size fits all" approach can be abandoned as the only method to consider.
We need a government that primarily sees itself as providing for a stable foundation through the guarantee of some of life's basic needs such as clean water, health care, and education. We could also consider a minimal amount of food and housing, if needed. If people can absolutely count on not starving or dying due to having no place to live and nothing to eat, then a person's energy and focus can be directed elsewhere and allow for those people who would otherwise not be able to take risks to go ahead and do so. Capitalist forces could then be used in the other parts of society that wouldn't result in the threat of death if they fail. The notoriously unstable and volatile world of capitalism would still have to be regulated in order to keep players small, so that the competitive forces that are the key to capitalist economic theory don't disappear.
This is purely and analogy, but if the world of physics has to live with separate rules that provide separate answers in two different realms, it can allow us to see how we don't need a winner-take-all approach to creating a happy and sustainable society. If physicists eventually do come up with a unified theory that explains everything, we can be sure it won't be from forcing one of the current sets of rules from one realm onto the other.
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