This paper continues an earlier article (Part 1 available here) on the current economy and which suggests innovative solutions that may be introduced in the foreseeable future. Within its scope, I would like to elaborate on the most crucial topics and answer some of the questions that may have arisen while reading the initial article. I strongly recommend that the reader familiarize themselves with the first article before or after reading this paper.
Our current economic system is like a steam engine—it does the job but it does not offer the desired performance, it has to be maintained constantly, and it perpetually “stinks.” The constituents of the economy that bring together small, medium, and large companies are like grinding cogs, which offer a given level of efficiency—the one that we know nowadays and the one that more or less satisfies the needs of the majority of us. However, this economy is an old-fashioned machine that is full of flaws and is highly inefficient.
Even though the current capitalist economy is the most productive solution known to the humankind, it does not offer a sufficient efficiency and productivity to ensure a satisfactory quality of life for most people, it also has many critical side effects. I will start by discussing these problems and I will then present a more effective solution that would be better suited to meeting the needs of modern societies.
Each of the points that follow will highlight the origins of the need to transform the economy and change the way that we meet our material needs. They will also specify which solutions may be considered sufficient. At this point, I will dwell upon this briefly. Readers who are interested in more detailed information should check out a book entitled “Life After We Choose: The Way Beyond Capitalism.”
1. In capitalism, profit overshadows human life, needs, and values.
When money runs the economy, people’s needs are given a lower priority than profit. Everything has a price tag attached to it, including our health, life, and the environment. Profit combined with a need is the most common but the more distant the need, the more likely we are to choose profit. Meeting the needs of society may, and should be separated from the flow of capital and financial market regulations. Later on, I will discuss the practicalities of this solution.
2. Pace, volume, and the quality of production in the capitalist economy are all dependent on the “free market”—on millions of random situations. This is the reason why the system cannot guarantee a proper level of production that would meet the needs of the whole of society.
First, this means that the volume of production in a capitalist country will never be adjusted to the needs of its citizens because it is only perceived through the prism of the profitability of an investment. The reaction of the economy (supply) to the needs of society (demand) is always intermediary in nature, it is also very slow and does not reflect the proper needs of all of the population. Second, the free market also specifies a given price, which is based on the amount of goods available in the market. Therefore, with a limited production, there will always be people for whom the prices offered will be a barrier and this makes it impossible for them to meet all of their needs. Hence, if we want to “feed and dress” every citizen of a given country, then capitalism is certainly not the best choice.
3. In capitalism, production (and public service provision) is divided between individual units (companies) that do not coordinate their actions. This makes the process ineffective from the point of view of resources and workforce needed.
A thousand companies producing the same type of good will need more equipment, resources, space, and workload to meet the same production quotas that would otherwise be reached by just a few production halls. At the same time, these companies generate more waste (i.e., unused resources) and they use more energy. Similarly, the process of goods distribution is less efficient in the case of a large number of companies because supplies are uncoordinated. Consequently, capitalist production needs to use more transport, more workers, and it has to exploit more energy and fuel.
4. Capitalism offers no material security. Security acts as a “safety cushion”—if needs be, each and every person can be sure that their needs, and also the needs of their family will be provided for.
While touching upon this topic, several issues have to be pointed out:
a. In the current system, there is a risk of failing and experiencing a loss. Sometimes the road to failure is a long and winding one—an individual may make one improper decision after another due to being affected by unfavorable circumstances. Sometimes, loss may come quickly—such as through a bad investment or unsuccessful business. The loss of one’s habitable space is the biggest trauma but the current system allows it to happen on a daily basis.
In capitalism, well-being is not guaranteed. The distribution of goods, and the quality and quantity of production are all governed by the “free market” rather than through properly planned and organized actions.
This lack of security can be also seen in the typically followed form of managing a business undertaking. Company owners frequently risk their entire capital to open a business to provide the public with the goods and services that they require. If the business in question is not well-received by the market, then they may lose a large part of their wealth and have to look for a different source of maintenance. The system does not remunerate the entrepreneur for their losses and it does not support them in any other way.
b. The only security available in capitalist society is the benefit system. However, due to the fact that the benefit system operates within the framework of the capitalism system, it does not offer a sufficient volume of production and proper availability of foodstuffs and other goods, thus welfare allowances cannot ensure a proper level of material security. The level of “decent” existence may be higher or lower in particular countries, but no capitalist system can fully meet the needs of all of its citizens.
c. The lack of material security not only leads to the possibility of losing the opportunity to realize our material needs as a result of unfavorable circumstances (which usually affects only a small part of the society) but is also predominantly a psychological barrier and a cause of negative social mood. The lack of stability and a secure future naturally causes an individual to experience anxiety and stress.
Individuals who feel threatened are most prone to performing actions that are not accepted socially. When our well-being and life are in danger, the well-being and life of others become of minor importance. The feeling of threat and the possibility of experiencing a loss connected with rough living conditions are the causes of most of the crimes committed in modern societies.
5. Competition facilitates divisions, does not encourage empathy, and increases the likelihood of failure.
Each element of nature is characterized by a high level of coordination, which allows the maximum operational efficiency of all of its constituents. However, we now entrust that our needs will be met by divided, unorganized, and even hostile (or, as we call, competing) companies.
Competition is the extension of the concept of conflict—it always divides people into two groups. Naturally, rivalry may motivate companies to introduce changes and to develop. Competitive companies introduce new and cheaper solutions for society. However, in this “game”, the subject is our well-being and the possibility of meeting our material needs, which are threatened by competition because there must always be a winner and a loser. We cannot allow a part of our society to become losers in terms of meeting their needs. Competition and rivalry may be symptomatic of sports but when it comes to meeting human needs, it is uncalled for and does not serve society well. Rivalry may be present in more trivial walks of life but not in terms of satisfying basic and vital needs (e.g., competition may appear in the service sector meeting secondary needs of society). This is one of the humane aspects that our modern economy lacks.
Separate actions and the lack of material security strengthen our survival instinct, which means that we do not focus either on the well-being of others or on the environment because our key value is our own good. This state of affairs is the cause of many unwanted societal situations, and also causes negative moods and psychological disorders. If we want this situation to change, then the first thing to do should be to ensure that society provides the individual with some kind of material security and guarantees that their physical needs will be met.
The idea of competition and rivalry is not compatible with the concept of cooperation—if one of them becomes dominant, then the second cannot develop properly. However, even with the notable separation observable (i.e., division into companies and organizations), within such groups there are attempts to achieve the highest possible level of coordination and cooperation to reach optimal results. Increasing the efficiency of economy requires a wide range of undertakings to be coordinated nationally (or even within a group of nations, providing that they are relatively small).
6. Capitalism accumulates capital (money and resources) for a small group of people who have achieved “success” and who generate a remarkable income.
Because we are so accustomed to the current status quo, we do not see how irrational and detrimental for the interests of the society it is. For example, should a person who has found a way of generating significant amounts of money be granted more rights to realize their needs? This is a very important topic and is one of the main causes of the current international crisis.
Let us assume that a company offering a specific type of product is established. It may be computer hardware or software company, or it may supply medications, resources, fuel, and so on. Thanks to offering a proper idea at the right time and place, the company manages to make a name for itself on the market. In time, it develops by producing and selling more goods. This allows the company to gather funds for further investments, development, and to improve the production process. After some time, the company has developed to such an extent that its product is dominant in the market and no other enterprise can compete with it. This allows the company to make further investments and open a new company in a different field that at the same time supports the initial firm. For example, if such a business undertaking started from producing steel, it may then open a steel product factory, and later on invest in opening an iron ore mine, and so on.
This paradigm has been followed by many of the biggest players in the market. We choose to use their products because they realize one or more of our needs and make our lives easier. This scenario results in the flow of money being directed towards big companies. The higher the diversity of products, the more money flows their way. People make money and then spend it on goods. At the same time, producers multiply their capital. After some time, the producer invests in opening new businesses, building new factories, and offering even more products, which in turn helps them make even more money, which allows for further investments. Consequently, after many years, it turns out that 1% of the population owns approximately a half of the entire planet. This is not all about the money that the 1% have in their bank accounts, but it is about the land, buildings, and resources that they purchase, and also the impact they have on political choices and tendencies in particular countries. This is predominantly why the rich become richer and the rest of us have to share the constantly shrinking amount of goods. Are we willing to accept this situation?
Supplying society is a public service, so why should an ever-shrinking group of people who own companies gain a major profit from this service? I do not want to dwell here on the quality of goods and services, or on the prices set by the owners, which are not always acceptable for the society. Should one individual have greater opportunities than other people do (.e.g. because they were born earlier or has inherited these capabilities by birth)? And, should they have more rights to meet their needs? Let us consider the following scenario. Oil moguls extract our common resources by making holes in our common ground. They pollute the environment. They endanger our future, and the future of our children and the entire planet. And then they sell goods made out of our common resources and they generate income that is not shared with others.
The same goes for banks. Money is the blood of our system and it partially impacts the efficiency of a society with regard to the possibility of satisfying its needs. All of the operations connected with it are in fact public services, but we have entrusted the management of our funds to private banks that set their own rules and keep the income generated by our money for themselves. A question has to be asked here—are we out of our minds?
7. In the case of capitalism, profit is more important than the quality of goods and services.
This point is especially true for foodstuffs. The quality of goods on shop shelves is not defined by social usefulness, but rather by the profit margin. Each business undertaking should at least cover the costs of managing it and no one would choose quality over the benefit of their company. Therefore, we require a different solution to ensure the satisfactory quality of goods.
8. Capitalistic way of doing business negatively affects the environment and causes the depletion of natural resources.
This is a topic for a long and heated discussion, so I will touch upon it briefly here. The consequences of our actions on the planet Earth will force our children and grandchildren to adjust to new living conditions and urgently seek for solutions with regard to environment protection. There is no point in enumerating the damage caused to the global ecosystem. The list is long and it is difficult to stay calm while at the same time being fully aware of the current ecological condition of the planet.
As a society, we are merely beginners in terms of the environment and understanding the way in which technology, overpopulation, and our new lifestyle affects our surroundings. Some time will pass until our society learns the right approach. No doubt, we will make many mistakes on the way and we will have to fix many of them. When it comes to the environment, we still have a lot to understand and a lot will happen until we decide to adopt proper measures. Sooner or later, we will reach our destination. However, first we have to ask—where are we going? Towards a healthy environment or towards environmental hazards?
Capitalism was not invented with environmental protection in mind. Giving capital the highest priority, has forced the environment to play a secondary role. It is cheaper to bury waste in the ground than to sort it and transform it into a new resource. It is easier to pay money for a resource (such as wood) when a given company generates a remarkable income and it is difficult to say “no” to a producer who lacks funds. In economic equations, the environment is of the lowest value.
Furthermore, competition and the possibility of failing (i.e., the lack of material security) cause us to choose survival. A production company approaching the brink of bankruptcy will not focus on the environment if its owners and their families may lose their source of maintenance. The willingness to generate income no matter what is motivated by same fear of failing, ultimately because we are not offered any protection by the current system. As long as the environment does not threaten capital and our lives directly, the capitalist system will not be interested in taking proper care of it.
The capitalist method of producing goods—which is based on every company being responsible for the internal production processes, resource management, and waste disposal—results not only in using inadequate amounts of resources but also generates exceptional amounts of waste that pollute the soil, the atmosphere and the water supply. We do not control the amount of gases released to the atmosphere, which directly translates into poisoning the very air that we breathe. As long as the production process is divided into individual companies, we will not be able to focus on protection of the environment.
9. In the capitalist system, technological development serves mainly companies investing in them, while having a negative impact on society as people lose their jobs and their source of maintenance.
Work automation, the implementation of robotics, and technological development are all prerequisites for meeting human needs in a satisfactory manner. In theory, the citizens will have a greater sense of well-being when their country is more technologically advanced. New technologies may make human life easier by allowing us to perform certain tasks more quickly and in a more precise fashion.
After adopting new technologies, people should feel relieved and their working hours should be shortened without experiencing payment cuts because machines are capable of performing their tasks for them. However, in a system where everyone focuses on their own needs, automation only serves the interests of individual companies and does not change the quality of life in a given country.
10. The capitalist system creates seemingly necessary workplaces that are in fact not connected with any actual benefits for society.
This point especially relates to the finance, trade, and advertising sectors, which will be discussed briefly in this section.
The predominant task of money is to make the exchange of goods and services between people easier—it has no other vital tasks to fulfill. Nevertheless, money has become the subject of speculation, which has led to a myriad of side effects. It has become clear that financial operations are more profitable than work that is of actual value for society. That is the reason why 7% of the United Kingdom’s employment is now located in the financial sector (and why around 10 million US citizens work in this sector).
Money requires proper management for the rest of the society to be able to efficiency utilize it to meet their needs and preferences. However, the majority of positions in the financial sector are not connected with money management—they are rather created to supervise “external” financial operations that allow the bank to take a piece of the cake before money can have a real benefit for society.
The trade sector is another example of a seemingly necessary industry that provides no public benefit. Nowadays, it is not enough to produce goods—the key is to sell them. The constantly increasing division of national production (which is the result of new companies being created) is strictly connected with a fierce and unrelenting competition results, which makes selling a product an increasingly difficult task. This is why a remarkable part of the society is employed in the tradable sector, in many cases as sales representatives. These people are focused on winning the consumer’s interest, presenting the available options, and finalizing transactions.
Speculation is a natural part of the capitalist economy. However, how beneficial for the society is a person who purchases goods cheaper only to sell them for more money? How beneficial for the country are such operations when performed by thousands of people every single day? Hundreds of millions of hours per year are being wasted senselessly.
This is a process that we are all accustomed to, but it is not an effective one and it does not serve society. The tradable sector, similarly to its financial counterpart, offers virtually no benefits for a wider group of people. At the same time, people employed in this branch of industry utilize the actual products and services created by other people. Consequently, society has to work progressively longer (even though new technologies are implemented) to ensure an overall well-being in the new world in which more and more people choose job positions that are not beneficial for society as a whole. Currently, the topic of earning money via the Internet is popular, but it is not mentioned that the increasing numbers of people making a decision to start working in the tradable sector (including online sales) decreases the ability of a country to realize the material needs of its general population.
The advertising sector is a tool that allows a company to sell its goods, which makes it an extension of the tradable branch of industry.
It can be assumed that the creation of new job positions is beneficial for the society. However, it is beneficial only for people who have a job, not for society as such. Society is an integral system that consists of a set of elements affecting one another. Your salary, the amount of goods on the shelves, and what can you buy for your money are all aspects that are regulated entirely by the system. The priority in society is not to employ as many people as possible but to ensure that they work productively—the key is to produce an amount of goods that would cover the needs of society and ensure that the public have relatively easy access to them. Although some countries may have spectacular employment rates, the dominant part of its society may still find it difficult to satisfy their needs.
11. The wide variety of producers, standards, and assortment wastes resources and lowers the overall product quality.
We do not really need dozens or hundreds of various products of a given kind. This point relates to all of the things that we use, such as food preparations, health and hygiene products, tools, appliances, transportation and so on. In many cases, it is more than enough for just few of them to be available. The production of various models (both more and less advanced) costs the producer more because it requires the utilization of more resources and workforce. However, this diversity is the source of income in the capitalist system. Furthermore, a producer will never be interested in creating an ideal solution (and offering it for an affordable price) because it would mean that a buyer would not come back to buy yet another product in the foreseeable future. Consequently, we currently use remarkably more resources than needed to make everyday items and devices.
12. Time and resources are invested in advertising, the only aim of which is to encourage a client to make a purchase and has no factual impact on the quality of the offered goods.
The capitalist system requires a constant circulation of capital (in the form of money and goods). Breaks in operation typically lead to the bankruptcy of a company, which tells us a lot about the rough conditions that we have created for ourselves! Hence the need to advertise; that is, to make some goods stand out from the crowd of others. Advertising does not inform a client about a product’s actual features, but rather pulls the wool over their eyes. By lowering the assortment of available goods and improving their quality, it will be easier for consumers to choose from the available options and to inform the society about the available opportunities and their usefulness.
Packaging is the next issue requiring our focus because it makes up for the majority of our waste. Those colorful packages are nothing more than just wrappings for other wrappings in which the product itself is kept. There are numerous innovative solutions that would significantly decrease the amount of packaging used, which would in turn lower the use of resources and the volume of waste polluting our environment.
13. The capitalist system limits the capabilities of central bodies (e.g., the government and local authorities) when it comes to the realization of projects that would be useful for society.
The government, similar to any other organization operating within the framework of the current system, has to wait in a queue to receive money before it can realize a project that would help people. The government cannot print more money or send people to work because its capabilities are governed by the financial situation of the country. Consequently, some companies (alone or while working as a group) are able to do more than the government in many countries. This is why environmental hazards are such an issue nowadays—the governments are not in possession of the tools that would allow them to introduce vital changes.
14. Capitalism does not grant stability and it is not resistant to crises.
I would like to begin this point by highlighting two aspects of this problem:
a. The system operates from day to day, just as many people live from salary to salary. Capitalism is a system that is devoid of strategy, planning, automation, and coordination. It is in constant need of growth and is characterized by a low pace of development. For the capitalist economy to function and for its companies to operate, clients must come back for more goods and constantly buy something. If there is no circulation of capital, then the system stops satisfying the needs of people.
b. The capitalist system is stimulated by money and it is completely dependent on millions of random financial operations taking place every single day on the “free” market. Therefore, it should not be surprising that financial market anomalies, also known as financial crises, affect our quality of life, which we cannot do nothing about. It is not the market that should be free but it is the people who should be free from limiting market regulations. As long as money is the blood of the economy, we will not have full control over the ability to satisfy our material needs. While we cannot control the flow of money, we can control the process of production and distribution that affects our lives in a direct fashion.
15. The capitalist system does not have any control over population growth.
Two mature people plan on having a baby after taking into account all of the possible circumstances—it is both sensible and beneficial. Similarly, a mature society plans population growth to ensure that it is able to feed and dress everyone. In contrast, the capitalist economy requires the constant circulation of capital to be able to satisfy the needs of the people; therefore, every single additional customer is of exceptional value, whether or not the system is able to provide for all of the members of society.
Even though population growth in European countries is low or even negative, the growth of the world’s population is still one of the biggest challenges faced by the modern world. Consequently, birth planning and controlling the size of population to properly realize the needs of the citizens of a given country are simply crucial.
Before proceeding to discussing new solutions, let us first answer a very important question: what do we really want?
First, we want to be granted the possibility of meeting our material needs, such as regularly consuming meals, having our own habitable space, being able to live in a warm house or flat, and so on. Second, we want comfort and everything that is connected with it: we want items that would make our life easier and more enjoyable, we want a comfortable means of transportation, we want easy access to various services, and we want a proper job that would allow us to pay for it all. Third, we want some free time and the possibility of spending it as we wish (e.g., socializing, pursuing a hobby, travelling, entertainment, etc.). Our other needs are connected with our emotional and mental spheres, and their realization is highly dependent on our personality.
The goal of the economy is to meet human needs. It has no other function. If a given system does not fulfill the needs of the entire society (in both the long and the short term), then we have the right to and we should consider other alternatives. So far, I have enumerated a set of limitations that we all have to deal with. Even though we are not ready for far-reaching changes at the moment, because we have not laid proper foundations for them, it is surely the time to start at least considering innovative solutions and preparing for them.
How can new solutions give us what we need? How can we satisfy our material needs? Reach comfort? And be able to spend our free time as we please?
Satisfying material needs is possible thanks to physical goods. This relates to foodstuffs, hygienic items, and also everyday devices and products. For the needs of the society to be met in this regard, there should be enough goods in the shops. These products should also be available at prices which are affordable for every citizen. As can be easily observed, this situation is not as we would want it to be and poverty is still present in all countries, including the United Kingdom and the United States.
To properly satisfy the material needs of society, the volume and pace of production should be adjusted to the current requirements. In the capitalist system, the volume of production is regulated by the free market and is therefore outside our control. In this case, supply does not reflect the actual demand and is to a great extent governed by the producer’s interests. An amount of goods is produced to make a profit for the producers. This is why the needs of society cannot be met.
If we really want to ensure a proper level of material well-being, then the production process should be fully controlled for us to be able to exercise supervision over the pace, volume, and quality of production. This is only possible with centralized production within the borders of the entire country. One of the available possibilities is an integrated and coordinated production process that can be realized by companies already operating on the market—who would realize a prior agreed production plan. However, this solution does have some drawbacks. First, it would still offer low productivity. Thousands of small companies would perform the given tasks more slowly and would use more workforce, energy, and resources than a few big production halls, which would also manage to limit the amount of waste produced. Furthermore, automation—which is the prerequisite for quick and efficient production—cannot be used to advantage in small companies. Additionally, who would pay for this change? And, who would manage the profit generated? Third, small companies would perform the set tasks in their own way, which would make controlling the production process difficult.
Hence, a rather vital conclusion can be drawn: to ensure that production guarantees the realization of the needs of the entire nation, it should be centralized and based on the utilization of large production halls. Depending on the needs of society, a single hall may be used to make an individual product (one or more) or several production hubs may be located in various regions of the country, focusing on goods that are of key importance (e.g. baked foodstuffs). The same goes for the process of distributing the produced goods.
Income from selling the goods produced in these halls cannot be granted to individual companies. Supplying the nation is a public service and therefore all factories, resources, and production should be the property of the entire society. The government, together with its specialized units to manage the production and distribution processes, should specify the price of each and every product. This price should allow people to easily access the products.
It is difficult to imagine a situation where production halls are owned by individual companies that set their own terms with regard to the quality, price, and availability of products. Today, banks have this possibility because we have entrusted them with the management of our funds. They generate income from providing public services and they impose their own terms on us.
One of the possible solutions that I mention in my book is offering each and every citizen the so-called “basic package,” which would include a specific number of items including, among others, chosen household appliances and a set amount of money to meet their basic needs and to cover current expenses (electricity bills, water bills etc.). If a country itself specifies the production level and can work towards the realization of the plan by taking advantage of new technologies, then this solution seems to be both real and sensible. With time and with the increased national production-related capabilities, the basic package could include more goods and valuables, such as a flat or house. This package would be granted to any citizen of a given country, regardless of their circumstances and job position. The income from the job would be an additional profit that could be spent to meet their other needs and preferences.
If the capitalist system was able to fully satisfy the needs of every person in the country and all over the world, then we would quickly experience an environmental disaster. A centralized, planned, and coordinated production turns out to be the best solution because:
a) It would grant us a full control over the amount of resources utilized.
b) We would generate less waste in relation to the amount of resources used.
c) We would produce no more goods than needed (this might prove to be quite a challenge, but it is achievable).
d) We would lower the use of resources by limiting the assortment to the practical minimum, as well as creating more advanced and optimal solutions that would be useful for longer, while at the same time cutting down on the amount of waste generated.
e) We would utilize less energy to produce the same amount of goods.
f) We would have a total control over the waste generated by the production halls and distribution centers. This would allow us to sort the waste in the production process and introduce new ways of recycling.
g) We would improve and automate the process of recycling and reclaiming secondary raw materials, which would lower the utilization of primary resources.
h) By automating the production process and centralizing production in selected spots, we would limit the number of working hours while at the same time lowering the average weekly work time.
j) Centralized production would make it impossible for companies and private entities to manage resources and limit damage done to the environment.
In the case of a centralized economy, we would have a remarkable control over what we do, how much we do, and whom the goods reach. Centralization should be utilized in every walk of life that is connected with the realization of material human needs, including public services. The process of goods distribution also requires planning and centralized management. Entrusting the process of distribution to thousands of suppliers (as it is nowadays) is remarkably less efficient and requires more fuel/energy, work, and means of transport than managing supplies in a coordinated manner by a single institution that would have access to all of the available means of transportation. Furthermore, in the new system, it would be easier to implement new solutions that are currently unachievable for any individual company.
A centralized economy is nothing new. Some branches of industry, including education, healthcare, police, and army work already in a centralized manner, for a pretty obvious reason. Only a slight change in our consciousness is enough to notice the importance of utilizing the same approach in production, which is responsible for meeting our needs. Nowadays, we organize a survival-oriented form of competition and the fulfillment of our needs is dependent on our income, which is in turn affected by numerous random aspects of our everyday life and of the national economy.
Decisions on which branches of the economy should be centralized will require careful consideration and preparation, they may cover, among others: the entirety of industry, agriculture, breeding and fishing, as well as transportation and communication. This issue refers, among others, to fields that either use lots of resources and generate a remarkable amount of waste and/or may be automated (communication) and secured (transportation) better. One of the solutions could be to opt for a gradual centralization. These sectors of the economy may be centralized one after another in compliance with a prior agreed upon plan.
One of decisions that would have to be made would be strictly connected with services. The most logical and optimal solution seems to be to centralize all public services, whereas the remaining service (e.g. entertainment-related services, beauty parlors, odd construction jobs, hotel management, gardening, cleaning, online services, technical support, etc.) would remain a part of the free market. The fulfillment of material needs is a key requirement when it comes to decent living conditions and free market regulations are unable to ensuring the material security for the nation. The provision of services is not strongly connected with time and the capitalist solution is perfect for regulating the service sector.
People could freely exchange money for services, which would in no way affect their material safety because, regardless of the amount they would earn, their basic needs would be satisfied. This is why I have touched upon the usefulness of the “basic package”, which would allow the key needs of people to be met regardless of their living situation. There are many nuances connected with this topic but describing them would take too much space here. However, they constitute a logical whole with the main concept of the new solution.
Public services (e.g. road maintenance, waste disposal, road cleaning, building repairs, etc.) should be preferably provided by individual centralized units (one unit per field of operation). This would make it possible to maximally coordinate and automate these processes, utilize less resources and energy, while at the same time producing less waste, as well as giving better control over the quality of these services.
Manufacturing activities form the base of the pyramid of societal needs and offering a negligible amount of services may also remain a part of free market.
One of key tasks of the new solution is to make human needs independent from economic factors and individual circumstances, which would result in the fulfillment of basic human need. We are born with our human needs and we have no control over them. By properly organizing work, we may not only ensure an easier access to all the available goods but would also allow people to lead a more comfortable and satisfying life.
By manufacturing goods separately, we overpay for resources and energy, as well as devote much more time to their production. By combining production processes and coordinating them, we would be able to adjust production volume to set goals that reflect the needs of the entire society in a nationwide manner. At the same time, waste management and the ease of introducing new technologies in the country would make it possible to take advantage of the environment without posing a threat to its future.
Need for comfort.
Even though the keyword for the economy is productivity, each and every one of us consciously or unconsciously knows that the priority in life is a happiness and satisfaction. We perceive everything in life through the prism of our feelings and our actions are always focused on satisfying our inner needs. These are indispensable characteristics of our human nature and they have to be accounted for. Economics and politics are fundamentally nothing more than just tools to prolong our comfort.
The presence of comfort in our life depends on two things: the possibility of physically satisfying our preferences and our personal features, which frequently decide the extent to which we can satisfy them. Our mind is “inert,” which means that behavioral patterns acquired during adolescence are then taken advantage of in mature life, often without the ability to control their interpretation and choice. This is the reason why when we have the opportunity of giving ourselves more free time and comfort, we choose something that is in fact neither good nor pleasant for us. This is a separate topic, within the scope of this document, I would like to focus instead on the physical side of realization of our preferences.
There are many factors that may improve our well-being that are unconnected with items or money. However, to maintain our sense of comfort, we frequently need tools that will make our professional or domestic tasks easier. We require various types of items and devices, and we want to have the access to technological innovations. We want to use services provided by other people in such fields as health, beauty, entertainment, personal development, and so on. Catering has to be included in this category because we are not always willing to spend several hours a day in the kitchen to prepare a meal.
Meeting the needs of society in terms of devices and other items in the case of a centralized economy is a relatively easy task—it is much easier than ensuring a sufficient supply of food. This is predominantly caused by the fact that devices and items can be used for many years, whereas food is consumed every single day in large quantities.
Because the current production process is divided between competing companies, it requires more resources, energy, and worker’s time than it would be required in an optimal production-oriented environment. The free market also sets a price for the produced goods that is much higher than their actual value. A highly non-scientific approach to the production process causes the final product to be too expensive and unavailable to many. Consequently, the majority of society cannot purchase all of the goods that they would like to have at their disposal.
Fulfilling a nation’s needs with regard to foodstuffs is a greater challenge. However, when it comes to a centralized economy, it is just a matter of time to find a way to grow crops in an ecologic manner while at the same time granting the choice, quality, and quantity adjusted to the needs of the entire society. Some solutions are already available that can automate and improve the process of cultivation and harvesting, but many of them cannot be implemented because they are considered to be non-profitable in the current environment.
Catering offered by restaurants, cafes, canteens, and fast foods can also be developed and improved in many ways. Currently, companies offer the selection, quality, and price of meals that is adjusted to their capabilities. Similar services can also be made available in a centralized economy if they are deemed to be necessary, but it is also possible to simultaneously implement new solutions that will grant us more comfort and satisfaction when it comes to food consumption. For example, massive halls resembling modern malls and serving as “exclusive cafeterias”, where a client can order food via their smartphone by using an app and place an order either an hour or even a week in advance (by checking the available menu and daily schedule) would be a viable option. In the case of large meals, the constantly repeated processes can be automated, which is simply not possible in a small restaurant. Food in these halls could be prepared by machines supervised by chefs and qualified personnel. this would make it possible to prepare meals quickly, lower food prices, as well as efficiently manage resources and waste.
It also has to be added that this solution is achievable in the capitalist system, but that both price and quality are specified by the service provider and the service can only be offered when all of the technologies for a profitable business are available. In a centralized economy, a socially useful goal is set and pursued until it is reached.
The same goes for travel opportunities. Travel is one of our biggest attractions and pleasant experiences, but we can only afford to travel for leisure once or twice a year. Many children have never been on vacation. By centralizing the transportation-oriented branch of industry, it would be easier to introduce new solutions that would lower the amount of resources used and would in turn lead to lower travel costs.
Finally, it has to be added that the sense of comfort also includes the sense of security and stability. To meet our physical needs here and now is our priority, but if we are not sure whether or not they will be met in the future as well, then we may experience discomfort in the form of anxiety, stress, worry and so on. This is a signal of our psyche, to which every single one of us finds own reaction, but it is always connected with a discomfort that cannot be simply ignored. Even though the causes of stress and worries about the future have their roots predominantly in our personality (as well as are based on our worldview), unfavorable circumstances become a logical basis for their occurrence. Discomfort often serves as a motivation to introduce changes, so it should not be surprising that we look for ways to make our life easier.
More free time (away from work).
Let us consider a simple example. There are two fields and each of them is cultivated by a different person. However, cultivating both fields takes more time and is more difficult than mutual work performed by two people, who could afterwards divide the crops between themselves. If they worked together and supported one another if need be, then their lives would be easier, more pleasant, and safer.
If the “fields are cultivated” by entire families, then there is a sense of independence and autonomic nature of the undertaking, which causes new solutions not to be considered for quite some time. The Industrial Revolution changed the previous method of realizing the needs of society. By combining large quantities of people and machines in one place and at one time, set goals could be reached with a never-before-seen efficiency. Today, we have almost exhausted the possibilities granted by this production method and we have to face a new choice. Production divided between autonomic and independent companies resembles the division into families cultivating the fields that could be observed in the past.
Today, we are ready for yet another groundbreaking economic revolution, which will be made possible thanks to the coordination of all parts involved in production. This revolution is based on the concept of creating new mega-factories and warehouses utilizing state-of-the-art technological advancements where machines perform the majority of the work. People will then be needed just to maintain the machinery, control the quality, and manage the production.
In the capitalist system, new technological solutions are used within individual companies and serve their shareholders exclusively. In some scenarios, this translates into lower prices that are more appealing to customers, but at the same time many people lose their jobs and only source of income. In a coordinated and centrally managed economy, new solutions would translate into an improved quality of life for the whole of society. Each time that a machine replaces a human at work, the average weekly work time of society is shortened by 40 hours. When machines replace one-hundred thousand people, the entire country has four million spare hours per week. If the productiveness of the economy does not change and the people who have been made redundant find work in other sectors, then the saved hours may be divided between the members of society, which will lower the time spent at work while at the same time offering an unchanged salary.
New technological solutions would not be the only factor contributing to the desired change. In a centralized economy, where capital would serve to meet human needs and preferences, there would be no need for the numerous job positions that nowadays just push the system forwards, while not granting any real benefits for society. This is mainly the case in the financial, commercial, and advertising sectors.
Eight hours of work per day is more than we want to work. Even the most pleasant activities become dull and frustrating after eight hours straight. The type of job that we choose for ourselves and that we accept to perform greatly depends on our personality, worldview, and the extent to which we value our well-being. Nevertheless, it can be agreed that the current standard week is too long and spending the entire day at work is connected with a greater or lesser discomfort. The problem is at the same time a motivation to solve the encountered issue. In some circles, there are calls to shorten the workday. One of reasons for this is the lowered productivity during the second half of the workday.
In a centralized economy, together with the implementation of new solutions to replace human work, we would be able to slowly yet regularly shorten the standard weekly workload. At the beginning, it would be necessary to specify what hourly standard workday would have interest for us while taking into account the capabilities of the economy. The goal would then be broken down into smaller steps. If we decided that the preferred workday should last four hours, then the first task would be to shorten the working week to 30 hours.
As a result, either an average workday would have six hours or we would be able to introduce a work-free day, such as Wednesday. The nature of “unpleasant” Mondays is caused by the fact that we know that we have to work five entire days to enjoy some free time again. It is rather obvious that we live from weekend to weekend, waiting for the opportunity to focus on our favorite tasks. By making Wednesdays free, we would have a two-day “workweek”: two days of work, one day free (Wednesday), two days of work, two days free (weekend), and so on.
This would not be the end. If we managed to maintain the desired productivity level with a working week of 30 hours, then it would be possible to aim for 20 hours of work a week.
It is our life and this is our world, so we should we not have our say? If at least a half of the society thinks the same way and will be one day ready for change, then nothing should hold us back. We are limited by the fact that we are not accustomed to coordinating our actions and cooperating on a greater scale. We all discuss the existing issues, but there is no outcome of such conversations. The change of system from one driven by money to one driven by social usefulness would be beneficial in terms of shaping our cooperation and supporting our lifestyle.
Now, let us go back to the limitations of the capitalist economy that were discussed earlier and consider how the centralization of production processes and the public service sector would affect our lives.
1. In capitalism, profit overshadows human life, needs, and values.
In the new system, the driving force of the economy would be meeting the needs and preferences of society rather than the needs of capital, which can only ever partially supply human needs. This is the reason why when needs meets income, income becomes dominant and needs are left unmet.
It is also worth mentioning that in the capitalist system, we perform various actions to generate income (which is the main requirement to survive and lead a decent life) and not to do something that is socially useful. According to capitalist ideology, if a given economic activity is a success and people are willing to pay for a product or a service, then it must useful for people because they would otherwise not opt for it. Let us focus on this point for a while because it is one of the cases where it seems that the capitalist system does something well but is in fact the other way around.
If a group of people are locked away in a single room, then some of them will start providing services to others (depending on their capabilities). It follows then there that surely some will be willing to take advantage of them because they do not have any other valid alternative. Does this mean that the entire group should then focus on the available options? Or, should they instead look for ways of leaving the closed room to get other opportunities granted to them by life?
Within the framework of the capitalist system, the current solutions are valid but they are frequently inefficient and non-optimal from the point of view of the available possibilities and our human needs. Many useful solutions will never be realized because they are not connected with a measurable income.
2. Pace, volume, and the quality of production in the capitalist economy are all dependent on the “free market”—on millions of random situations. This is the reason why the system cannot guarantee a proper level of production that would meet the needs of the whole of society.
Currently, the free market specifies the volume and quality of the offered products, their price and—as a result—the availability of goods and services. It also regulates the way in which people affect the environment (which keeps us alive). In a centralized, planned economy, it would be known in advance how many goods should be produced and all the undertaken actions would be oriented towards completing the production plan and implementing key social projects.
The modern business scheme that is based on waiting for a client before earning money, which will then be spent on our needs and preferences is an old-fashioned strategy that is unsuitable for a large population. Money is an ideal tool of exchange, and that is its purpose. However, money currently specifies the way in which human needs can be satisfied. Therefore, a part of the society cannot satisfy their needs, while others meet their needs by means of excessive force, resources, and time. Both the financial system and the free market are governed by their own rules and they fail to properly address the needs of society.
A more suitable solution would be the direct realization of the needs of society—producing an amount of goods that would be needed and then, by using money, distributing (selling) the goods for a specified price instead of allowing money and the market to regulate the production volume, quality, and price.
In this scenario, money and the free market would not be the ones specifying the amount of available goods, but rather actual human needs would set supply. Furthermore, a price set in advance would allow all people to access the available products. However, when it comes to this topic, there are many technical aspects to consider, but they are of lesser importance and solutions to them can be found relatively easily. At first, it is vital to set priorities and focus on them. If the main aim is ensuring the material well-being of society without endangering the environment and our future, then we should abandon the free market, which does not give people what they need and instead puts capital above human needs and the environment.
The free market is a good solution for the service provision-oriented branch of industry (excluding public services). Private services are not connected with meeting our basic needs and they are not time-specific, so the sphere of services may be still based on the principles of free market. However, the income of people and companies providing these services should not impact the quality of meeting the needs of people engaged in these activities. Each and every person would receive the “basic package,” which would include specific goods and a set amount of money to cover current expenses.
The capitalist solution is not based on the conscious utilization of our mental potential and available capabilities to ensure a better quality of life, it is rather oriented towards distributing the available goods in proportions affected by social stratification. This is the reason why so many people were extremely poor before the age of mass production—because the system distributed the available goods between people (starting from the top of the social structure) in line with the principles of the free market. The contemporary organization of the economy and the way of fulfilling human needs are identical. We have more goods than the previous generations had but only because the level of production is higher and there are more goods to be distributed. The sensible approach is to specify what we need in life and find optimal solutions to reach them while at the same time taking into account the needs of the whole of society.
3. In capitalism, production (and public service provision) is divided between individual units (companies) that do not coordinate their actions. This makes the process ineffective from the point of view of resources and workforce needed.
A single production hall offering a production volume comparable to a hundred or a thousand small production units would produce the desired amount of goods more quickly (i.e. would require less workers), it would use less resources and less energy, while at the same time producing less waste.
A single distribution unit that has all of the means of transportation at its disposal would distribute the goods more efficiently than a hundred or a thousand companies providing identical services without coordination, the former would require less means of transportation, less workers, and would use less fuel and energy.
Let us consider the following example. I manage a bakery and I regularly supply shops with our goods. In terms of production quantity, the vehicle used for transportation is never fully loaded and it often returns to the bakery empty. Therefore, we waste the time of the driver (who would rather spend it with their family), the money of the employer (who would rather spend it differently), as well as resources (e.g. fuel and vehicle’s suspension) that do not generate any income. The stores are also provided with goods by five to ten other suppliers, which increases the costs, the number of hours worked, and the amount of resources used.
Let us now take into consideration the fact that in the case of chain shops, distribution is much swifter—fully loaded vehicles supply the shops with all of the goods that they may need. If small shops were to realize the same amount of sales, then they would become less efficient and would have to increase the price of their services. Therefore, there is a high level of coordination within a single chain shop. However, while looking at the issue from the point of view of the entire country, the diversity of producers, logistics companies, and shops drastically lowers efficiency. Consequently, we have high prices and an insufficient amount of goods supplied. This is the reason why by centralizing production, distribution, and some other sectors of economy, we would be able to achieve an optimal level of supply, while at the same time having control over the condition of the environment and being able to realize social projects that are currently too expensive to consider.
Two people working separately are less effective than they would be when working together. This is the reason why people try to find their soul mate—living with another person is much easier for a number of reasons. The efficiency of operation of a well-coordinated group is much higher than the efficiency of all its representatives working alone. While performing certain tasks as a group, it is possible to create new tools that will boost and facilitate work. This will enable us to focus on other tasks that may with time be simplified and automated. By working alone, it is not only impossible to create efficient tool but handling them will also turn out to be problematic. In addition, a given tool may be redundant for one person’s needs.
The situation would be the same while comparing a small group of people with a larger one. The small group is unable to create some tools. For example, it is impossible to automate working in a restaurant—it would not be profitable and may even turn out to be problematic due to the variety of meals offered. However, automation would be both possible and recommended in a large center servicing thousands of people per day.
It should be finally added that to supply an entire country, a complex solution is needed. When we send people into space, we use an intelligent and scientific approach. We focus on every detail and coordinate all of the processes connected with the undertaking. Meeting our physical needs in the world of limitations is not child’s play—it requires a similarly comprehensive approach. Scientists, engineers and business people should run the economy, not politicians or economists.
4. Lack of material security.
The feeling of security is one of psychological needs of every human being. In a family, we take care of our security, as well as of the safety of our beloved ones. In a society that provides us with money and vital goods, there are too many random aspects that are beyond our control.
This is the reason why we do not always find the grounds to feel fully safe. However, this does not change the fact that the lack of this ground negatively affects the quality of our life. Each of us looks for stability and the feeling of safety, but we still opt to maintain a system that does not grant us a proper foundation to achieve this aim.
Planned and coordinated production would allow us to fulfill the martial needs of all of the citizens of a given country, granting a solid foundation for the feeling of safety. It would not only improve social mood but would also eliminate the main cause of the majority of crimes.
Would we not like to live in a society where, regardless of our wrong decisions and mistakes, our human needs would be provided for and where there would no possibility of losing a house or means of providing for ourselves and our families? Material well-being is possible thanks to organization. Currently, production is in a complete mess—everyone does what he or she wants and how he or she wants to do it. If the actions are coordinated and the majority of production processes automated, then many new possibilities of providing supplies to society will become available.
5. Competition facilitates divisions, does not encourage empathy, and increases the likelihood of failure.
Within the framework of the new system, the process of production and supplying society with goods would be optimized and there would be no place for aspects that may lower its overall efficiency.
Rivalry, being a synonym of competition, is an indispensible part of our mentality. In the case of the proposed system, we would still be able to compete with one another; however, it is exceptionally important to note that rivalry with regard to satisfying material needs of people is not beneficial at all. Our mentality keeps changing and with time, more and more of us will start to understand the validity and usefulness of both cooperation and concurrence.
Capitalism is a perfect solution for societies where people are hostile or at least neutral towards one another. The economy should provide people with goods and services, and this is the reason why people have to work. However, the capitalist business model is only capable of doing so in an individual manner, with the major point of focus being put on one’s own interests only. The new solution would not only introduce a new method of running one’s business, but would also change attitudes by emphasizing the importance of cooperation and supporting one another.
6. Capitalism accumulates capital (money and resources) for a small group of people who have achieved “success” and who generate a remarkable income.
One of key benefits of the proposed solution would be ensuring the material well-being of all of society, which would be possible thanks to the increased production and efficient distribution of goods. At the same time, it would eliminate the possibility of losing one’s livelihood and failing financially, which would in turn grant proper material security to people.
In the case of a centralized economy, the distribution of goods in the society would be more balanced but its aim would not be to achieve an absolute equality because it would be both impossible and possibly detrimental. Our lives are not only affected by economic laws. Diversity can be observed in every walk of life—it should be accepted and prolonged. The only equality that we need and which we have not always had is based on being granted equal rights to satisfy our basic human needs, which can be ensured by an easy access to public products and services. All the other aspects of life should be subject to diversity.
The proposed system would still allow us to accumulate wealth but the drastic differences in wealth and well-being that can be seen today would be absent, which would remove one of the main sources of social dissatisfaction. No one would generate profit out of large-scale automated production undertakings that provide society with foodstuffs and other basic items. However, there would still be possibilities of undertaking various business actions in the sphere of (non-public) services. It is expected that the majority of society would be involved in providing such services, which would even increase the possibility of satisfying people’s secondary needs and preferences.
7. In the case of capitalism, profit is more important than the quality of goods and services.
By ensuring that production is planned and centralized, we could specify the quality level and control it in a regular manner.
8. Capitalistic way of doing business negatively affects the environment and causes the depletion of natural resources.
Only centralized, planned, and coordinated large-scale actions would allow us to fix the damage caused to the environment and create optimal living conditions. However, the aim is not just to fix the damage that we have done and protect ourselves against the limitations and tragedies the arise as the environment worsens, it is also about maintaining nature in its current state because its beauty and diversity are aesthetically pleasing and are one of key values in our lives. We do not necessarily need to do all that for nature because it is capable of recovering on its own after some time, but we have to understand that we cannot function and live our lives to the fullest without it. Environment protection is not an option, but an absolute must.
The topic of the environment is too vast to be discussed within this article, which is why I have decided to describe only the key changes that should be implemented. They relate to:
- Ways of managing our waste (e.g., properly sorting waste in our houses and workplaces, opting for new sorting-enhancement technologies, maximizing waste recycling, etc.). This would limit the pollution of water and soil, and also lower the use of basic resources.
- Ways of utilizing the available resources (e.g., optimizing production processes, changing packaging methods, introducing toll-free tool and various equipment rental points, specifying the limit of waste produced, introducing fees for exceeding said limit, etc.). The limits and fees would aim to decrease wastefulness, which would make it cheaper and easier to buy a product than to throw it away.
- Opting for renewable energy sources only and completely stopping the extraction of “fuel-like” resources. Even though this path requires us to follow a number of stages, it is the only sensible one to take.
- Fixing the damage that has already been caused (e.g., cleaning waters and coastal areas, opting for reforestation, cleaning waste dumps, ensuring better living conditions of animals, etc.).
9. In the capitalist system, technological development serves mainly companies investing in them, while having a negative impact on society as people lose their jobs and their source of maintenance.
Each and every one of us has some limited physical capabilities. Machines can be regularly improved, which may in turn positively impact the pace of production. If technological solutions allow us to produce, say, 1 billion products per month while at the same time engaging people to a minimal extent only, then increasing production by 50–100% is only a matter of time and technological improvement. If a person performs a given job, then increasing his or her productivity by 50–100% is simply impossible to achieve.
The automation of work increases the efficiency of the production process. After centralizing production and focusing it in specific places (instead of it being scattered all over the country and world), it would be possible to maximally automate it. This would allow us to shorten working hours while keeping wages at an unchanged level, which would consequently allow the working week to be shortened.
10. The capitalist system creates seemingly necessary workplaces that are in fact not connected with any actual benefits for society.
If the driving force of the system is not human need but rather money (which is used to satisfy a given need, just as it is nowadays), then the economy of the country is predominantly focused on generating money. This is the reason why both the trade and financial sectors are so developed and ensure the highest profit for all the individuals involved. However, even though these sectors serve the people that they employ, in the context of the entire country, they decrease the opportunities of members of society to satisfy their needs.
Only in a system where human needs rather than money specify the volume and quality of production can one specify what jobs should be performed, what people are needed to perform them, and what skills the country should focus on. When human needs are made a priority and production is planned, production and distribution processes can be made as efficient as possible.
11. The wide variety of producers, standards, and assortment wastes resources and lowers the overall product quality.
By producing a few products from each category to an optimal quality, we would not only limit the utilization of resources but also be able to produce goods that are currently too expensive for most of the population. This includes all kinds of devices, tools, everyday items, and foodstuffs. Unified production would also allow for easier maintenance of machinery and replace only those parts that are broken, which would limit the necessity of throwing away entire products.
A product that is optimal in terms of quality, such as a washing machine, TV, bicycle, or an item of clothing, would not result in any additional production costs in comparison with its standard variation. The excessive diversity of products that can be noted today is caused by the need to generate more money and ensure a constant circulation of goods. What is more important: a wide diversity of products from which we can finally select an item that is adjusted to our financial capabilities or, fewer items to choose from that are characterized by an optimal functionality and that we can obtain easily?
12. Time and resources are invested in advertising, the only aim of which is to encourage a client to make a purchase and has no factual impact on the quality of the offered goods.
By limiting the assortment of available goods and increasing their quality, it would be easier to select from the available options. It would also be easier to inform society about the available goods and their distinctive features. Consequently, goods would not need to be advertised. This is key to provide people with good products together with basic pieces of information, so that each and every consumer can make their own choice.
There are also several solutions for the problem of packaging. First, not all items have to be packed. Ultimately, packaging should protect the item and that is all. Packing an already packed product just to improve its aesthetic features should be avoided because it is wasteful. At the end of the day, all of this needless wrapping is thrown away. Second, wrapping should be unified and their number available on the market should be minimized to make sorting and recycling both easy and efficient. This may require a change to the material that the packaging is made of. Third, package sorting should be made easier. Every household should be equipped with more bins for various types of waste and there should be an indication on the package informing the consumer about which bin the packaging should be placed in.
Bins can be numbered and color-coded. For example, a colorful dot with a number could inform the consumer about which bin should be used for which packaging. Another solution would be to incorporate microchips inside wrapping, which would make it possible for robots to sort waste and would facilitate sorting at home because every bin could be equipped with sensors to detect the type of packaging.
Yet another solution worth considering is abandoning labels on foodstuffs (sold in plastic, glass, or metal packages). They can be replaced with a small sticker including the product’s name, barcode, and best-before date. In such a case, information about the product would be available on posters located next to the shop shelves containing particular items. If we want to obtain information on the product while being away from a given shop, we could use a phone app that uses the barcode to display the key data. Would such a solution be inconvenient? Maybe, but we have to look for compromises. Let me also point out here that we do not check the ingredients of foodstuffs in our fridge too often, do we?
13. The capitalist system limits the capabilities of central bodies (e.g., the government and local authorities) when it comes to the realization of projects that would be useful for society.
A planned economy specifies useful goals and sets their realization as a priority. Currently, social projects are realized thanks to taxes paid by companies and individuals. Therefore, there are millions of random economic events between the people and the realization of vital projects, as well as a quite complex and equivocal fiscal law. If we want to have something done, then certain projects must be given a priority. The realization of needs based on the circulation of money is inefficient and it often seems as if there are not enough funds to implement socially useful projects.
14. Capitalism does not grant stability and it is not resistant to crises.
Human needs are realized not by means of money but rather by means of particular goods and services. When the major goal of a given system is to generate money, which is then spent to fulfill one’s needs (instead of fulfilling them directly), the undertaken actions become less efficient and the system cannot meet all of the needs of society.
When an economy directly fulfills human needs, it can function in a proper and satisfactory manner, regardless of the amount of available funds and fluctuations on the financial markets.
The more centralized the production process, the more automatized it can become, which in turn makes it gradually less dependent on the workforce. Technological solutions can also be regularly improved, which is impossible when it comes to the efficiency of human work. This grants the possibility of developing and improving both the production process and the living conditions of people.
The capitalist system does not allow for an optimal automation because people have to earn money, so they have to keep their positions while at the same time performing their tasks with suboptimal efficiency. Together with the increase of resource cost (caused by their limited availability), as well as with the uncontrolled population growth and increasing needs of the society, the capitalist economy cannot offer the stability that is valued so highly by people.
With time, this new system will only require people to spend more time working to maintain its functionality. However, currently the level of production and the fulfillment of social needs are determined by the free market and are highly dependent on the biggest producers. Nevertheless, not matter how big, they cannot adjust the level of production to the needs of the entire country because it is simply not profitable for them. Within the scope of the economic mechanism, there is a minimal price ensuring at least a marginal profit. However, this price is too high for the individuals employed in the least profitable sectors of economy. If we truly want everyone to experience material well-being, then it is necessary to opt out of using money as the driving force of economy. It should serve as a means of exchange only.
15. The capitalist system has no control over population growth.
Birth control is not only a limitation but is also primarily an individual approach to each and every newborn baby. Children would receive much more support than is presently granted to them in the capitalist system. In the case of countries with the lowest birth rate, birth control would be almost unnoticeable. Still, the awareness of the needs of the society and the ability to adjust the production level to fulfill them are of utmost importance.
The greatest challenge and the main reason of social dissatisfaction is scarcity, which leads to the impossibility of fully satisfying one’s material needs. The solution is, however, remarkably simple and straightforward. The cause of scarcity is the inefficient work organization and the improper utilization of available resources. The first aspect directly translates into the limited availability of goods and long working hours. Our current methods of resource management are characterized by wastefulness, which makes it more difficult to access goods. The free market only reflects the availability of resources and goods for a specific price, which may not be affordable for many.
Capitalism was not created to fulfill the needs of the whole of society. Its predominant goal was to distribute responsibility with regard to the fulfillment of these needs in such a way that every person would be responsible for meeting his or her needs. Nevertheless, the economy operates as an integrated system. How can a factory worker, clerk, programmer, teacher, or any other person offering a particular type of good or service meet his or her material needs, which require a variety of goods and services? The system should operate in such a way to make it possible for every person performing his or her job to have a remarkably easy access to products and services offered by other people.
Sooner or later, we will reach the conclusion that capitalism simply cannot take proper care of the needs of a rapidly growing society because it cannot ensure a satisfactory production level. Currently, our needs are met by the free market and the movement of capital, which is dependent on millions of random events taking place every single day.
For example, if the owner of a company producing windows fails to sell a specific number of windows, then he or she will not be able to take a proper care of themselves or their family. How then is the demand for windows connected with the possibility of fulfilling the needs of company’s owner and their family? Furthermore, we fight over the same amount of money (due to competition), which will finally be won by a single company and spent on the fulfillment of their needs. From the point of view of the available possibilities, this is a very primitive method of maintaining society. Consequently, it should not be surprising that so many people have been stuck in the survival stage and have been desperately trying to earn the money that is needed to satisfy their basic needs.
It would be much more efficient to make a product of such a quality and in such a quantity to meet the needs of society without making them dependent on the flow of capital. Afterwards, the product should be made available to everyone for a reasonable price.
In a world where resources are limited and demand for them is growing, we cannot allow individual people or companies to make decisions concerning their exploitation. Although we could have done this some time ago, the increasing number of people and more complex needs to be satisfied, and the harmful impact of the current business model on the environment have all shown that we urgently need to take a different path. Sooner or later, it is essential, so there is no point in delaying.
While walking down the street, take a note of the shops and companies that you pass by. These may be grocery stores, clothing shops, cosmetics stores, toy shops, cafes, fast foods, small production companies, and so on. Their earnings are highly dependent on the location, competition, number, and attitude of their prospective customers, weather, season, and so on. Some of their earnings are returned to the state treasury via taxes because the government has no other way of covering the costs of the non-commercial sectors of economy (e.g., healthcare, education, security services, etc.). The remaining funds should be enough for the owners to meet their needs and the needs of their families.
If a business becomes successful and starts developing, then the funds that are earned will be enough to meet all of their needs. Nevertheless, in some cases, the income is only enough to cover their basic needs but the owners keep managing the business because they do not see a better alternative for themselves after closing the business. In many cases a new business is closed after just a few months of operation because it has turned out not to be profitable or well adjusted to the specificity of the market.
The quality of goods and products offered by the companies operating nowadays is strictly connected with their financial condition. Every single day their representatives wait for clients to earn some money, which will later be divided between the owners and the employees. Only after that can the employees satisfy their needs and preferences. The method of fulfilling human needs in the capitalist economy is indirect in character: the free market specifies the quantity of goods produced, their price, the availability of money in society, and also the process of distribution of the goods.
Financial operations performed within the free market are in most cases random events. While fulfilling our needs on the basis of the flow of money, we limit ourselves to a remarkable extent. This can be compared to waiting for sunny weather to meet our needs. Consequently, a large part of the society struggles to meet even its most basic needs. This shows that the total domestic production is lower than the needs of all the citizens of the country, which in turn causes the free market to increase the price of the available goods. Although we think that we lack money, but in fact there are not enough goods on the shop shelves. Production-oriented companies “feed and dress” the entire country, but from the point of view of the system and considering the costs imposed by the free market, it is not profitable for them to produce more goods.
If we want to boost the efficiency of the economy and take proper care of the needs of the whole of society, the production process should be controlled. It is important to not only make quantity and quality of production independent of the free market but we should also unify the production process itself.
Currently, our economic system works as follows: let us imagine a field on which solar panels have been installed for people to have access to electricity. Each and every household has done so on its own. They have used the panels that they could afford and they have installed them in their own way. As a result, there is a field filled to the brim with various solar panels installed in a chaotic manner. This system not only looks appalling but it also causes remarkable energy losses because a large part of the available energy is not used at all, whereas the maintenance costs apply to all households.
Today, we satisfy our physical needs similarly—we do it on our own and by incurring exceptional expenses. Going back to the example provided above, it would be much more sensible and efficient to create a single unit producing and installing solar panels. Unification in terms of panel dimensions, amount of power generated, utilization of the same system (instead of opting for a myriad of individual systems), as well as the installation of batteries storing the excess of power and sharing it with other households would not only increase the efficiency of the entire infrastructure but would also lower the maintenance costs.
What is next?
Is this solution the best one in the current situation? This solution is in fact an amalgamation of various solutions relating to various walks of life. Therefore, even if there are more optimal alternatives for some of the presented solutions, the rest of them are surely sensible and worth considering.
Let us start from simply taking new solutions into account. It is natural that a part of society should maintain the proper operation of the current system for it to take care of our needs as efficiently as possible. At the same time, we have to look for more optimal solutions going beyond the established and codified ways of perceiving reality.
If you have noticed the sense and logic of the presented solutions, then you can be sure that other people will also see its merits. Nevertheless, nationwide changes are slow to implement but if there is a proper foundation, then they become certain and irretrievable.
The very first and the most important element that has to be included in the process of transformation is information exchange. Everything starts with a small group of people believing in their idea. If the idea wins over both the minds and hearts of people, it can naturally develop, reaching more and more individuals interested in making the positive changes being introduced. When people start being vocal about something during meetings or while communicating via social media, they create a foundation allowing for actual changes to take place.
To end with, I would like to ask you a question that I have already answered for myself. Were all the most prominent and most intelligent people of the world gathered in one place and allowed to create their own country, what solution would they opt for: capitalism (offering as much as free market that is random in nature allows for, as well as stimulating competition in the process of meeting human needs) or the solution discussed within the scope of this article (offering a complex, automated, and easier way of meeting human needs and preferences, which can also be developed further in the future)?
Transformation of the economy - Part 1 here
Andrew Sinkevic