Patrick (patrickwonders) wrote,

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On all-encompassing economic theories....

Two ends of a spectrum—total Marxist communism and total Randian (as in Ayn Rand) capitalism...

In order to believe pure communism could possibly work, one must fundamentally believe that people do, can be taught to do, or will come to do things with society's best interest in mind. “If everyone has their needs met and the balance is shared equally amongst the people, then there will be no need for police as there will be no need for crime.” There is any number of examples to suggest that people do not, by and large, base their decisions on what would be best for society (not even on a local level, let alone national or global). Thousands of years of The Golden Rule has not managed to teach this. And, I've seen no signs that some divine intervention will suddenly pop us into putting society near the top-end of our priority lists (...none of the divine interventions of the past have done it...).

On the other hand, in order to believe pure capitalism could possibly work, one must first believe either

  1. People/companies act in, can be taught to act in, or will come to act in their own best interest.
  2. Only people who act in their own best interest are worthy of consideration in an economic context.
There is any number of examples to suggest that people and companies do not act in their own best interest. It is unclear whether this is ignorance (not knowing which course of action is best), “irrational exuberance”, bureaucratic entrenchment, or some other force. But, regardless of the cause, it's pretty tough to deny the effect. And, I'm not ready to cast away all the people who don't act in their own best interest.

Every other economic outlook that I can think of (admittedly, I'm not all-that-well-read on the topic) is some blend of those two ends of the spectrum. Some systems really push incentives and things in attempt to satisfy the “can be taught to” clauses. Some systems really push the “safety nets” to try to make sure that people's needs are covered.

Well, I'm not sure at all that this is the right spectrum to be on in the first place. There seem to be two assumptions implicit the whole way along the spectrum:

  1. There is or will be some universally accepted way to prioritize.
  2. People do, can be taught to, or will act rationally (as defined by the above priority system).
Both of those assumptions seem inherently damaged.

I wonder if anyone has tried to formulate a cohesive social/economic structure that rejected the assumption that people can/will act rationally. I wonder how we'd get there from here.

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