In my last post, I suggested that philanthropism — giving away goods, services, and knowledge, rather than selling them — was a more ethical choice, and one which could be viable even in the modern capitalist world economy. Many thriving organizations — charities, non-profits, and open-source organizations — give away their work for free, subsisting only on donations of money and labor. And plenty of small, tribe-sized economies have existed without money or trade in the past. But could the whole modern world really run this way?
For the Love of the Work
Ultimately there would be no reason to have money in such a society. If you could just walk to the grocery store and grab whatever you wanted, there wouldn’t be much incentive for you to go to a job you didn’t like. So maybe everything would collapse. After all, why would anyone even operate a grocery store, when they could just sit at home watching TV?
Think about your own job. Would you turn up for work if you weren’t getting paid?
Actually, maybe you would. A lot of people do like their jobs, and show up for the sense of doing satisfying work, as well as a sense of loyalty to the people they work with and the people they work for. Some people even love their jobs, and feel like they’re doing the work they were born for.
Look what happens when rich people retire. Some of them travel, some of them watch a lot of TV (especially if their health is failing). But a lot of others do volunteering at church, at the local library or bookstore or soup kitchen… Work that gets them out, gets them involved, and isn’t too stressful. One retired couple I know is busier now than they’ve ever been — she with her new catering business, he with management consulting. They could just ease through life on his pension, but that, for them, wouldn’t really be living.
It’s true that many, many people are doing work they’d rather not be. But I also think that, given the choice, most people wouldn’t just sit in front of the TV all day. They’d want to do something. I bet a lot of the jobs out there would be filled, even if people weren’t getting paid.
The jobs that would go unfilled would be the unpleasant, stressful ones. Who’s going to collect our garbage, wait our tables, wash dishes our restaurants, exterminate our bugs, sit in our cubicles, and undertake our dead?
I think there are two possibilities.
Maybe no one would take care of these things. Maybe no one would take out our garbage or do the other unpleasant tasks that keep the middle-class standard of living so high. And… maybe that wouldn’t be such a bad thing.
Think about garbage specifically. Most people in America are able to pay people to insulate themselves from the mountains of garbage they create. If they couldn’t do that, maybe they’d wake up and start making less garbage. Imagine if every time you got anything with lots of packaging, you thought to yourself, “What am I going to do with all this plastic!?” Bury it in your yard? Burn it? Take it to a local dump yourself? Maybe you’d decide not to get it at all…
Or maybe people would design new ways to get these things done. Maybe everyone in the neighborhood would take turns collecting garbage. (A local retired woman here in Pittsburgh actually makes it her business to wander up the street every few weeks and pick up the garbage that doesn’t end up in the trash cans.) Maybe someone would create an automatic garbage-collecting machine, or develop a better way to incinerate or recycle locally.
It’s the same thing as happened again and again when the minimum wage gets raised. Human elevator operators, for example, were not replaced by automatic elevators until the minimum wage was rasied from 40 cents an hour to 75 cents an hour. At that point, you effectively couldn’t hire anyone to be an elevator operator (even if they were willing to do so), because the work wasn’t worth that much money. Now elevators operate themselves.
In other words, rich and middle-class Americans would have to figure out how to take care of these unpleasant things, or develop machines to do them, instead of underpaying someone else to do it. That is certainly a good thing.
Philanthropism is Not Communism
But what about the rest of the economy? Would philanthropism really be better than capitalism overall? And how does it compare to other alternatives, like communism or socialism (or ‘mixed economies’)?
Any system that involves top-down controls (such as communism) is a recipe for disaster. No central planners can organize economies properly, at least not on large scales (i.e. above, say, a small town). The information required to do so is just impossible to manage. This has been shown using information theory. The Soviet Union, for example, would do things like produce way too many nails one year, and not enough the next. This may seem silly, but too many nails means not enough of other things, like food; and people suffer unnecessarily. On the other hand, not enough nails means not enough of the things nails are essential for, like building homes. Mismanaged resources doesn’t just inconvenience people, it starves them, makes them homeless, and even kills those at the bottom of the economy. When the rich and powerful make mistakes, the poor and weak pay the consequences.
Mixed economies, used by most of the world’s countries today, are better, because a market exists alongside government controls, and the market provides information to the planners. If there are too many nails one year, the price of nails drops, and fewer nails are produced the next year. Simply by looking at the state of the market, central planners can figure out what industries or markets are doing well, and which are suffering, and tweak whatever they think needs tweaking. Whether they actually improve anything is up for debate, but at least they’re not operating in the dark. The bigger issue is whether these central planners are corruptible — because the temptation to tweak things in favor of your powerful, rich, industrial friends is necessarily considerable.
A Just Economy
If philanthropism is to be a viable replacement for capitalism, it should have the benefits of capitalism and solve at least some of capitalism’s problems. In my earlier post, I provided lists of capitalism’s pros and cons. I’m going to go over these items now, and compare them point by point with philanthropism.
Benefits of capitalism:
- Capitalism moves goods efficiently. Capitalism achieves this by lack of central planning (enabling bottom-up, local planning), and allows goods to flow where they’re needed most. Its main failing here is that if people are too poor to pay for the goods they need, they won’t get them. Philanthropism also lacks central planning, but doesn’t allow poverty to block the flow of goods.
- Capitalism provides incentives to create new products, create more options for existing products, and make production more efficient. In fact, capitalism can easily take this too far — the desire for wealth drives an endless cycle of market research and product diversification. Who really wants so many different kinds of coffee? Philanthropism easily accommodates innovators who are genuinely interested in creating new kinds of things and new ways of doing things, but doesn’t drive the process insanely.
- Capitalism is voluntary. Capitalism in its purest form involves no coercion: no one is forcing you to buy anything, or sell anything; all trades are of your own will. Philanthropism would work the same way.
Problems with capitalism:
- Capitalism’s efficient movement of goods fails if the folks in need are too poor. But as noted above, philanthropists don’t care whether you can pay.
- Capitalists take over the state apparatus. This is because capitalists have a huge incentive to tilt the playing field in their favor. But philanthropists have no such incentive.
- Buying something can give you a sense of entitlement — “I bought this, so I deserve to own it.” This isn’t true, because deserving something has nothing to do with how much money you have. But with philanthropism, you buy nothing, so you aren’t tempted by this hubris.
- In capitalism, discontent and depression increase because people value themselves by dollars. But under philanthropism, dollars can be done away with.
- Under capitalism, there is a huge incentive to provide things to the rich rather than to the poor, since they’ll pay more. Under philanthropism, there is no such incentive.
- The market exchange ignores ‘side effects’ for people not directly involved in the exchange. This is still true of philanthropism, since every decision you make effects everyone else. However, the general support structure of philanthropism — the fact that anyone can go and get what they need without having to trade away something — means that nothing you do will impact anyone else that badly. If you go and consistently get groceries from store A rather than store B, you won’t be putting store B out of business… just making the workers there lonely.
- Under capitalism, working — and working hard — is required, unless you’re rich. Under philanthropism, you work only as hard as you like.
- Capitalism encourages advertising everywhere, because unfortunately, advertising works. But philanthropists do not have a huge financial incentive to advertise. If you like working somewhere and you want to share what you do with people, it’s natural to at least put up a sign and maybe a few flyers. But ubiquitous, mind-twisting advertising would be pointless.
The End of Capitalism
Is there any chance of philanthropism eventually completely replacing capitalism?
I think so. It might even be inevitable. I don’t think Trade will ever be completely eliminated, any more than Theft has been eliminated. But philanthropism is the sort of activity that can grow and flourish alongside capitalism, and can move into areas where capitalism dares not go, and pick up the pieces when capitalism fails.
It will be slow progress, because businesses — for-profit and non-profit — require capital to get started; and capitalists are often reluctant to provide capital for non-profits. But once the secret gets out that you might actually make more money giving away your product for donations… Capitalism is finished.
It will happen first in the industries in which costs are low, and there is already heavy competition from non-profits. Capitalism in software is already fighting a losing battle, and the same will soon happen in publishing. CSA‘s will lead the way in food production. And have you heard of pay-what-you-can restaurants?
Ali’s awesome posts on the Myth of the Market show how the marketplace has moved into the space in people’s imaginations once reserved for gods and heroes. The Market brought order from chaos (with its Invisible Hand), distributes its manna from heaven (Money), is served by its cadre of priests (e.g. Greenspan) and prophets (Adam Smith), and is courted by kings and politicians. Even Marx, who decried the Market, believed in its essential character and said only that it was an evil god, not a false one.
Any true alternative to the Market has to appeal to the mythmaking mind of humanity as well as to the realities of economics. For now, anyone who challenges the Market, who does not believe in the Law of Supply and Demand, is considered naive or crazy.
But there is life beyond the market.
Above, I linked to a neat article about a restaurant in Denver called the SAME Cafe, in which customers pay what they can. Folks who pay more pick up the slack for folks who pay less. They’ve been in business for three years, and it’s actually working out.
But when the owners of SAME Cafe first applied for a business loan, they were told that they were crazy, insane. After all, it would be mad to question the Market, wouldn’t it? They ended up having to finance it with their savings, and loans from family. Those loans were paid off in less than a year.
But the point is that people worldwide will not accept philanthropy deep in their hearts unless the Market God is dethroned and replaced with something else. People need a myth that “explains” how stores that rely on charity can survive, flourish, and even out-compete sometimes. They need some new way of looking at the world that sees vulnerability as the strength it is, that values the individual above the market statistic, that draws its meaning from our interconnection.
This time, I’m not going to end with a promise to give the answer in the next post… I’m out of answers. But I want to end with a paraphrase of Odin’s description of Ragnarök from the story he told me a year and a half ago.
So the fault is mine that Love dies, as surely as it were my hand on the spear. I set myself to preserve the good in the world, to protect it from the evil; but I shall fail. And when my good son Love is placed on the pyre, I shall kneel at his side, and give him my sign of kingship, and whispering, beg his forgiveness. And last, when the new sun rises beyond Ragnarök, the world will go on without oaths, without promises. There will be no breaking apart, nor gathering together; the waters will mix with the fires and the good mix with the evil. Asgard shall stand with no walls. And yet, under Love, it shall stand.