It may be useful to place the following, an economics manifesto started a decade ago, in context. It is from a white paper written for Clinton's reelection committee in 1996. It derived intellectually from my Western education (1980-1984) along the lines of industrial/organizational psychology, and experience prior to that education in the Vedantic tradition (1974-1980.) It was and is, therefore, derived from Eastern and Western traditions, and a sense of underlying unity that guided my work and life since.
It was written at a time, 1996, when I was winding up a prior decade of work, after university, partly in the alternative energy sector and mostly in the information sector. The latter was work I thought of as the first lane of the superinformation highway Al Gore described. That work was in providing satellite television communications particularly to Americans in rural areas who were almost completely shut out of the information loop provided by cable service in urban areas. That meant a large segment of the US population was left only with broadcast television - NBC, ABC, CBS, PBS, and an upstart called Fox - along with their small local newspapers for all of their information about what was going on in their nation and the world.
Setting up satellite ground stations for television reception from satellite broadcast provided rural US citizens with information access far beyond anything they'd known before. Even though most interest was in movie and entertainment channels, news and raw news footage from around the world was freely available to rural owners of these satellite TV systems. And, they were almost without exception intrigued by that part. Word got around, the market began to mushroom, and program providers such as HBO, Showtime, ESPN, CNN, and so on began to notice what was happening. So did city dwellers, who began buying satellite TV systems and canceling cable service. Program providers had to protect themselves, of course, and therefore began to scramble (encrypt) their programming so that a monthly fee was required to unscramble and view their products. That seemed fair, until they began charging satellite TV owners three times or more the cost of cable subscribers for the same products. Their secondary intention was to protect capital investment of cable networks, but cable networks were urban-only. Rural customers invested in satellite TV at $4000 per unit only because they had no other access - and then were told to pay three times the rate for the same information products as their urban counterparts. The real goal of the big players, colluding with cable companies, became evident: to crush the satellite TV communications industry, without regard to rural citizens being left out of the same information loop available otherwise only to urban citizens.
The satellite TV business became tantamount to guerilla warfare for information provision. Rather than give up on information equality, many of us in the rural satTV business took a different approach: we simply rewired and reprogrammed the encryption/decryption systems used to scramble programming to start with. The corporate side never came up with an encryption system that couldn't be broken. They realized it was impossible, and so did we. The larger corporate (we were also corporations, just smaller) side finally settled on fair programming prices for all owners of satellite TV systems, prices in fact a bit lower than cable customer prices. Rural consumers had to invest in their own equipment at thousands of dollars per unit, and we felt they had to have some consideration for their increased capital outlay to get what urbanites could get without such outlays. Moreover, it was evident that satTV delivered a far superior and more robust product - more channels than cable could carry, better video, superlative audio. It was a market to be reckoned with and embraced. The satTV market exploded as a result, technology improved, prices plummeted for equipment, dropping from $4000 or more in the mid 1980s to around $300 by 1995, with the advent of DirectTV, PrimeStar, and similar US operators.
It was in 1995 when, for quite different reasons, Clinton invited my participation to his reelection committee. At the same time, the Web was emerging due to something called a web browser from an upstart called Netscape. The information revolution was about to mushroom, that was clear, and I saw a Brave New World just ahead of us. I took a long, hard look while pondering Clinton's invitation. With the US Welfare Reform Act of 1996 about to hit the public in the fall of 1996, I became increasingly alarmed at what I was looking at: a new age of civilization running the risk of disenfranchising many people in the world who were outside of the emerging information world (and job sector skillsets), while at the same time the US was dismantling the only social safety net we had in exchange for God alone knew what might happen as a result. One thing was very clear, folks in ghettos and poverty weren't likely to be equipped to participate in infotech jobs any time soon, and that was anticipated to be the main new work ahead of us. Industrial jobs, the backbone of US middle class to that point, were set to disappear abroad via GATT and NAFTA treaties. That meant the middle class was in peril, the poverty class would be competing for jobs, and fewer jobs with prior pay scales should be expected in any case. Meltdown just ahead, it seemed.
At exactly the same time, I saw something else, something similar in spirit to my satTV days: the beginning of the Open Source movement. While Microsoft was conquering the world, a determined and growing lot of computer programmers were volunteering their time in producing freely available computer software, and even operating systems. That was familiar. It was clear that there were plenty of information warriors around. What I also suspected was that these people indicated a largely untapped segment and potential of humanity just waiting for an opportunity to help fellow humans. Where the satTV movement was one-way, receive-only information, the emerging Web was two-way communications. Imperfect, impersonal, but still two-say and enough to communicate ideas and issues. I didn't really know what to expect, but I had my suspicions - strong enough suspicions to sit down and write an economics manifesto, and in so doing accept Clinton's invitation by sending it to him when it was done in September 1996. This diary is a partial summary of a much longer white paper, with contemporary observations in part III.
Note: P-CED is People-Centered Economic Development. It was a term I adopted a few months after the paper, and I've used ever since. Also, "P-CED enterprise" refers not only to information technology - which is most critical - but also to an enterprise that has social objectives as the purpose of its capitalist/for-profit activities.
Towards a New Economics Manifesto
We are at the very beginning of a new type of society and civilization, the Information Age. Historically, this is only the third distinct age of civilization. We lived in an agricultural age for thousands of years, which gave way to the Industrial Revolution and Industrial Age during the last three hundred years. The Industrial Age is now giving way to the Information Revolution, which is giving rise to the Information Age. Understanding this, it is appropriate to be concerned with the impact this transition is having and will continue to have on the lives of all of us. In that it is a fundamental predicate of "people-centered" economic development that no person is disposable, it follows that close attention be paid to those in the waning Industrial Age who are not equipped and prepared to take active and productive roles in an Information Age. Many, in fact, are scared, angry, and deeply resentful that they are being left out, ignored, effectively disenfranchised, discarded, thrown away as human flotsam in the name of human and social progress. We have only to ask ourselves individually whether or not this is the sort of progress we want, where we accept consciously and intentionally that human progress allows for disposing of other human beings.
This is a tricky question. Except in the case of self-defense, if for any reason we answer "Yes", regardless of what that reason is, we are in effect agreeing with the proposition of disposing of human beings. Whether disposal be from deprivation or execution, the result is the same for the victim. If we agree that sometimes, for some reasons, it is acceptable and permissible to dispose of human beings, actively or passively, the next question is "Which people?" Of course I will never argue that one of them should be me, though perhaps it should be you. You respond in kind, it cannot be you, but maybe it should be me. Not only can it not be you, it also cannot be your spouse, your children, your mother or father, your friends, your neighbors, but, maybe someone else. Naturally I feel the same way. Maybe we come to an agreement that it shouldn't be either you or me, or our families and friends, that can be disposed of, but perhaps someone else. While we are debating this -- passionately and sincerely, no doubt -- a third party comes along and without warning disposes of the both of us, or our families, or our friends. And there is the trap we have fallen into, because whether or not we approve of our or our families' and friends' demise is irrelevant. It is fair because we accepted the principle of human disposability. We just didn't intend that it be us who are tossed, but if we or our families and friends die, it is in accordance with principles that we ourselves have accepted and so must live -- and die -- by.
We can actually engineer, very precisely and intentionally, a social system whereby human beings are not disposable, and then go about setting forward our social machinery with this requirement built-in as a part of our "social software", as it were. Or, we can decide not to do it. Either way, a decision is made as to the fate of those who would be dispossessed, unwanted, and in the way.
Listen: these people are not going to go quietly into the night. Once a person is intentionally cast aside, all prevailing social contracts which might pertain no longer apply and all previous bets are off. It becomes self-defense for the intended victim.
Once a nation or government puts people in the position of defending their own lives, or that of family and friends, and they all will die if they do nothing about it, at that point all laws, social contracts and covenants end. Laws, social contracts and covenants define civilization. Without them, there is no civilization at all, there is only the law of the jungle: kill, or be killed. This is where we started, tens of thousands of years ago.
By leaving people in poverty, at risk of their lives due to lack of basic living essentials, we have stepped across the boundary of civilization. We have conceded that these people do not matter, are not important. Allowing them to starve to death, freeze to death, die from deprivation, or simply shooting them, is in the end exactly the same thing. Inflicting or allowing poverty on a group of people or an entire country is a formula for disaster.
The greatest initial social and economic risk of the Information Age is in creating two distinctly different classes of people: the technological haves and have-nots. Those who have access to information and information technology have a reasonable expectation to survive and prosper. Those with limited or no access will be left out. This holds true for individuals as well as nations. The key to the future is access to free flow of information. To the extent that the free flow of information is restricted or diminished, people will be left to endure diminished prospects of prosperity and even survival.
In order for economic development to take place in any given location, the very first thing required, before anything else can possibly happen, is information. This information includes first and foremost where to look for the necessary resources to do anything. If new businesses are needed, knowing they are needed and finding funding for them are two very different things. The first step is to locate possible capital resources in order to move forward, and this step is no more and no less than information. Once resources are located, the next step is what terms and conditions are involved in obtaining those resources -- more information. Once this is known, paperwork must be completed, business plans made, market research and due diligence conducted, and all of this compiled and forwarded to the appropriate parties. Again, nothing more than information. In fact, most of the work involved between identifying a need and solving the problem is information acquisition and management: getting and developing information.
As Alvin Toffler predicted in Power Shift, where once violence and then wealth were dominant forms of power, information is now becoming the dominant power. Those nations with the greatest freedom of information and means of transmitting it have now become the most powerful and influential, and the strongest economically. Toffler also predicted the collapse of the Soviet Union would come about due primarily to its authoritarian control and limiting of information. Unfortunately for Russian citizens, this old habit has continued for them beyond the collapse of the former Soviet Union and will at the least make an interesting case study on the survivability of a once strong nation which still remains committed to limiting and controlling information.
By going with the normal flow of free-market enterprise and the emerging replacement of monetary capital with intellectual capital as the dominant form of basic enterprise capitalization, it becomes easier to set up new companies primarily on the basis of invested intellectual capital. (See Post-Capitalist Society, by Peter Drucker). In plain English, socially responsible and forward-thinking companies can be set up quickly and cheaply--and these companies have indefinite potential for earnings and localized, targeted economic development. The initial objective is to develop model enterprises and communities, then implement successful strategies from those models into surrounding communities region-wide or nationwide, as needed.
With an initial P-CED business enterprise set up in a given community, it becomes possible to bring people into the fold, so to speak, of the Information Age. No existing company need change anything whatsoever about how it does business. New web development, software development and information management enterprises, for example, can be set up quickly for extremely low seed capital outlays. Existing businesses who need web/software development and management services can have their business readily enhanced for costs that are relatively insignificant compared to increased viability and long-term profitability of entering into a much broader marketplace--without a brick being laid. The design firm wins, the existing business wins. Most importantly, the community-at-large wins by way of decreased poverty and unemployment, since the design firm's profits for the most part go back into the community--for adult education or retraining, high-tech head start programs for underprivileged children, seeding new small businesses, and social relief. Along the way, the design firm's employees benefit from good wages, profit sharing, and normal benefit packages. Well paid employees in effect produce, inevitably, highly desirable social and community outcomes. In short, everyone benefits. In that this new enterprise effectively becomes a primary node and locus of much-needed information for the community, it is appropriate to seek seed capital to start the enterprise from traditional development and aid funding sources. The result is a self-sustaining and self-perpetuating enterprise that feeds on the very need, or demand, for resources that hampered the community and its people to begin with.
With globally dispersed web sites deployed, the global resource base becomes available as a means for each community to best determine resource locations to meet its needs. Such a localized determination of needs, and connection into a global resource network that provides a means to actually address those needs, has not been possible prior to the onset of the Information Revolution and the emergence of the Internet and Web.
The direction and character of our new age of civilization can, for the first time in human history, be proactively determined, planned and managed for the global public good.
The predominant system of economics is, of course, capitalism. It is impossible, as far as I know, to plausibly argue that capitalism is other than the most powerful economic engine ever devised. Whether it is or isn't, however, isn't directly the point. In any case, it is a formidable economic force. Dismissing it out of hand is pointless, and belittling it terribly much can only serve to diminish any proposal for alternatives. So, there seems no possible advantage in doing other than acknowledging the powerful, and in many ways hugely beneficial, force that is capitalism.
That being said, serious flaws have shown up in the system over time. Wealth tends to concentrate in the hands of relatively few people at the expense of millions or billions of other people. Wealth is not an infinite commodity. Any finite system has a finite degree of wealth, i.e., material resources favorable to the continuation and support of life.
What person on this planet actually needs, say, a billion dollars to remain alive, raise a family, and have a safe, comfortable, secure life? The unspoken but obvious dream of the vast majority of "capitalists", however, seems to be just that: enormous wealth not only far in excess of what is needed for a decent life, but also sufficient to indulge any whim and fantasy. When one person has far more than they need, other people are necessarily going to be deprived. Capitalism is by its very nature amoral, without any inherent value other than making profit. Human beings become disposable commodities in such an enterprise because there are no hard rules in the system to the contrary. Workers work, owners profit, and when no longer needed, workers no longer have a job if profits dictate it.
Underlying this problem is how profits are measured: symbols of wealth - money - measured in numbers. Numbers may or may not even be real outside the human mind and imagination. Plato for one argued, unpersuasively, that numbers are real, representations of an ideal, abstract world manifest in human reality. Because this ideal world is itself unmanifest, there is no way to know if it really exists, or not. The reality of numbers is an article of faith and intellectualism, pro or con, without any possibility of determining their reality. Descartes took the question to its logical limit in his meditations, ultimately questioning the reality and existence of everything in the manifest world including himself. He concluded that something, somehow was necessarily required to be pondering such questions to begin with; there was no way such ruminations could occur without some conscious entity being involved. Even going so far as to posit an Evil Genius that might be tricking him from numerous angles, there was still no escaping the fact that something, somehow, was in reality pondering these questions, reflecting on them, arguing them in his mind, and therefore that one thing must necessarily exist, must be real. He came to the inescapable conclusion "Cogito, ergo sum" - "I think, therefore I am." Thus he demonstrated the reality of himself, and by extension the reality of human beings. No such demonstration of numbers was possible, however, as they could just as easily be figments of human imagination as not. There was not then, and there is not now, any way to know for sure. Mathematicians still debate this, but it is a question for which there is no possibility of solution any more than proving or not the existence of God.
Human beings were, and are, demonstrably real in at least that one argument, an argument that has held up over time but is still a favorite toy and puzzle for the philosophically afflicted. So we have a system of economics, which dominates the lives in one way or another of most people in the world, where the people themselves are demonstrably real but the controlling system is based on the imaginary. We can say that it isn't based on the imaginary only as article of faith, by arbitrarily claiming that numbers are real - which we cannot know for sure either way.
Given an imaginary device to control people and nations, that device is open to wild interpretations. And there is the central problem with capitalism, or any other system that uses numbers as the sole or primary measure to control people's lives. Money is based precisely on numbers, but numbers themselves are magical beasts, where almost anything can be attributed to them. That leaves the doors wide open for the cleverest among us to manipulate the imaginary, claim the results as good or bad depending only on their own personal characteristics as real human beings. Almost anything can be done, measured, or claimed as good by attaching an appropriate set of numbers and numerical measurements. It might even look good and sound good, but is always only a matter of spinning the ether to convince other people of one thing or another. The greatest trick so far has been to convince most of the world that billions of dollars worth of finite, material, manifest resources that real human beings need to survive are okay for a relative few to own, possess and control.
Reversing the situation reveals an interesting option. Accepting only two postulates, that people are real and numbers may or may not be real brings us to a hypothetical. What if economics were measured not simply in terms of numbers representing abstractions in the form of money which in turn represents resources we all need, but were instead measured in terms of human beings and simply observing the well-being or lack thereof of human beings? What if economics were measured in terms of people, rather than simply numbers? What would happen if we took economics, capitalism, down this path? What happens if the point of capitalist enterprise isn't simply profit for the sake of profit, but is taken one step further to a human bottom line rather than a purely numerical bottom line? It opens a whole host of questions and possibilities.
These possibilities are not new. People-centered enterprises - cooperatives, for just on example - have been around long enough to know that they work, but they had not previously been championed as a formal system of economics to seriously challenge and contrast "orthodox" capitalism. That has changed visibly and considerably over the past decade, under the general banner of "social enterprise." There is no commonly agreed definition on just exactly what a social enterprise is, but one commonality is that the purpose of such enterprises from their start is that they have a social objective. These loosely include non-profits, but non-profits are just that: non-profits. These are all fine and well, but are not the point. The point is specifically to make a profit in the traditional sense, but then utilize the profit for a specific social objective: community education, microenterprise funding, health care, any number of things. In that sense, new terms are cropping up such as "blended value", "profit for poverty", and "double bottom line", for examples. Non-profits typically need donations and outside funding to survive and fulfill their functions, whereas the newer trend is for social enterprise-type businesses to grow their own money under the normal rules and conditions of traditional capitalism. Where philanthropies and government doles have served in the past, "philanthropize thyself" is emerging. During the past few years, the US' main foreign funding arm USAID has come to require that most aid projects become self-sustaining. Philanthropies now have an eye toward projects that sustain themselves. Exceptions are such things as emergency situations stemming from natural disasters.
There are, in fact, no rules whatsoever in capitalism to dictate what, exactly, profits must be used for. People can use their own profits any way they wish, and there's nothing wrong with that. But, when finite resources pile up in the hands of relatively few people, or are squandered and wasted, millions of other people end up shortchanged and unnecessary suffering continues. At the same time, there are no rules to dictate that orthodox capitalists change their behavior as human beings. However, a door, an option, is open for anyone who wants to practice capitalism differently to do so. No one at all must change anything they're doing as capitalists, but there exists complete freedom for those who do want to change to do so.
Thus, repairing or modifying the capitalist engine is remarkably simple: just redirect the output for those who want to do it. There are far more people willing and able to do that than I ever would have imagined a decade ago. See for yourself, for just a very few of multitudes of examples: