Everyone, who has played Monopoly, knows that the game stops when a single player has won so much wealth that the other players cannot afford to pay their rent. Now the real world has reached this point and we must rewrite the rules of the game, if we want our Planet to survive.
Huge fortunes are accumulating in the hands of a few extremely rich individuals and wage labour is gradually disappearing. If the trend is not reversed, the world’s population will be divided into a small group of hyper-rich capitalists and well paid experts, managers and creatives – plus a huge, possessionless precariat.
Such a capitalism is not sustainable, because there will be to few people to buy the goods.
The Social Contract
The rules of the real world monopoly-game are written in a social contract, which is the narrative that regulates the relationship between citizens, businesses and states.
In last century Scandinavia, the societal surplus was distributed equally between the class of capital owners and the class of wage earners. In return, the wage earners financed – via their income taxes – a state apparatus that secured the infrastructure, educated the workforce, covered social security, and paid for capitalism’s social costs negative externalities.
Now this contract is running out. The nation-states are unable to cope with the global challenges, the transnational companies are taking over and we are losing democratic and political control.
Our Social Handicap
We have a limited ability to socialize: Our brains are hardwired with mistrust of strangers and we are only capable of cooperating with approximately 150 people (Dunbar’s number) who we know personally and trust.
The human brain was fully developed around 50.000 years ago and has not grown since. We are therefore navigating the complex modern world with the brain of a hunter-gatherer – which of course result in a growing number of problems that must be compensated for.
To compensate for this social handicap, humanity has:
- developed a number of cultural layers and religious narratives to cover up the problem,
- created command & control systems enabling large numbers of people to work together in hierarchical organizations, and
- introduced a system of middlemen and intermediaries with the sole function of creating trust between people that don’t know each other.
Social Innovation
Another weakness is our tendency to see the future as a linear continuation of the past. In the real world, most processes – like technological innovation, global warming, and migration – develop exponentially. Therefore, governments are rather helpless faced with future challenges as long as the only responses, they can imagine, are bureaucratic measures in the form of more institutions, more employees and bigger budgets.
Technology alone is not going to solve the problems – our ability to respond must be innovated as well. The future is not made up of the same old institutions equipped with more powerful machines. There is a tendency for social systems to lag behind technology – so, our institutions – and the way we govern them – will have to undergo radical changes. Tech can push – but humans must pull harder.
The Decentralized Internet
Fortunately, we can look forward to a breakthrough in social innovation. “Distributed Ledger Technology” (DLT) and the “Decentralized Internet” will enable humans and corporations to collaborate at both local and global level without depending on nation-states and intermediaries.
When we lived in villages, and everyone knew each other, we didn’t have to write down agreements and deposit documents with third parties. Everyone knew what was agreed and who owned what. The decentralized Internet extends this model to the entire planet and turn it into one global village.
Capitalist Flaws
The capitalist form of production is a relatively primitive system. It is founded on inequality and private ownership to the means of production and is driven by incentives like greed and hunger: Greed incentivizes people to invest and hunger incentivizes them to work.
The system suffers from three very fundamental flaws:
- The social and environmental costs of capitalist production are not included in the price of the products. As a result, the planet’s resources have been plundered and our existence is threatened by global warming and loss of biodiversity.
- Capitalism promotes artificial scarcity, and monopolized platforms – like Google, Facebook, Amazon, Airbnb, Uber, and Netflix – stand in the way of truly free markets. The result is suboptimal production and unequal distribution of wealth.
- The capitalist system overcomes the lack of trust between humans via intermediaries like banks, public services, escrow agents, notaries, etc., who take a substantial cut of the produced value.
In future civilizations, we are more likely to be differentiated by education, social network and access to information, than by financial resources. Capital can be engineered to behave in a certain way and the private ownership to the means of production is likely to play a lesser role: Computing power and the main raw material – data – will be abundant (unless organizations like Google and Facebook succeed in monopolizing access to data).
The Left-Right Divide
Along the political ”Left-Right” axis, the ”Left” traditionally has been in favor of a strong state regulating businesses and taxing the rich to reduce inequality. The ”Right” normally prescripts less state and less regulation, lower taxes, more private business and stronger markets enforced by property rights. They believe, inequality will take care of itself.
The prescriptions of both the ”Left” and the ”Right” played an important role in the last century, but today they make little sense. The ”Left’s” tax base is disappearing and they depend on a bureaucratic elite disempowering the citizens. The ”Right” is based on a neoliberal doctrine that ignores the social prerequisites for a society to function.
Globalism vs Nationalism
People all over the planet are losing confidence in the political elite and their mistrust is used by opportunistic politicians to raise new nationalist movements that introduce protectionism and deny climate change. Global warming might however turn out to be the Achilles heel of nationalism, because their supporters are likely be among the first in the West to be hit by the climate effects.
With the aggravating climate crisis, the old ”Left-Right” divide is being replaced by an “Up-Down” divide between Globalism and Nationalism. On the “Left”, the climate-struggle is likely to replace the class-struggle and on the “Right,” the neoliberals will have the opportunity to resurrect as real liberals or even social-liberals much like the French President Macron did, when he was first elected.
The ”Left” will have to redefine their global profile as the climate crisis aggravates. They cannot continue to defend the national working and middle class at the expense of the planet and the global poor. Climate strategies like Nuclear Power? No thanks!, Degrowth and Organic Farming will likely prove to be inadequate at a planetary scale: nuclear power kills fewer people than coal, de-growth is only a strategy to pursue in highly developed countries, and organic farming is a rather expensive and extensive form of sustainable food production.
Climate change will require us to change the very subject of democracy. The subject is no longer today’s population, but all of future humanity. We must learn to think globally and long-term.
Global Warming and Inequity
Our Planet is facing a double challenge of global warming and inequity – but the solution is relatively simple:
Tax all greenhouse gas emissions with the full societal cost and distribute the revenue equally among the population.
Thereby, the innovation in green energy will explode, because it no longer would have to compete with subsidized fossil fuels.
Why Is Nothing Being Done?
But if the solution is so simple, why is nothing being done and why are emissions still growing?
The main reason is that nation-states cannot cooperate on a common goal and politicians fear that if they levy a tax on greenhouse gases they give rivaling nation-states a competitive advantage.
Furthermore, when the ”Right” is against letting producers pay for their emission, it is probably because a lot of existing businesses would be unprofitable if they did so. Many ”Left” parties are against, because voters with lower income would have to pay higher prices. We are in the unfortunate situation, that the only thing ”Left” and ”Right” can agree on, is not to use the most effective tool available to invert global warming.
Finally, solar and wind technologies have been used, not to combat global warming, but to to compensate for the closure of emission-free nuclear power plants in the richest countries. From the year 2000 to to the year 2018, nuclear power plants corresponding to 7% of the global energy production were shut down which corresponds exactly to the 7% growth in the wind and solar share.
The Short and the Long Run
The 10% richest people in the World are responsible for 50% of the greenhouse gas emissions. We – the rich – over consume, waste resources and destroy the Planet for everyone else. We risk reaching a tipping point after which it will be too late to reverse the trend. Science tells us that we have a maximum of 10 years. That can only happen through increased resource efficiency and radical change of our way of living, because there is no time to develop and implement new technological solutions.
The Swedish schoolgirl Greta Thunberg rightly blames politicians for trusting in technological solutions to the acute climate problems.
But that is the easy part. In the longer term, which this book is mostly about, we can expect an explosion in demand for goods and services from a growing middle class in low and middle income countries. The overall food demand, for example, is on course to increase by more than 50 percent, and demand for animal-based foods by nearly 70 percent by 2050 (source). The real challenge of this century is to satisfy these needs at the same time as reverting global warming.
The Global Civil War
Many compare the current era with the time between the two World Wars, and fear that history will repeat itself in the form of a third World War. Conventional wars, however, are unlikely, since data is the modern source of wealth and access to data cannot – unlike access to oil – be conquered by force.
Furthermore, aging populations are putting a damper on the desire to go to war (geriatric peace).
However, we live in a connected world and connecting people leads to ethnic conflicts. We are in the midst of aglobal civil war between religious groups, minorities and tribes. Nearly 100 civil wars are being fought around the world. It is not the return of the World Wars, but rather the return of the crusades.
The climate crisis, with rising temperatures, wildfires, rising sea levels and mass migration, may well play the role of an old-fashioned World War with the same kind of human suffering and destruction. It will probably kill millions of people (hopefully not billions!), devastate entire countries and destroy a lot of physical capital, and as a consequence, all forces will be concentrated on innovation and new technology in order to survive.
Disruption can initially be expected to hit the financial sector, followed by the energy sector, the automotive industry, the animal production, and the pharmaceutical industry. A lot of stranded assets are likely to become worthless as a consequence of access to cheap renewable energy, autonomous mobility services, and extreme computing power.
Reading Guide
The premise of the book is, that a capitalism based on private ownership to the means of production has no future – but markets have. For the medium term, markets will most likely remain the only way to govern the economy; moreover, market forces will allow capitalism to be programmed to pay taxes (see chapter 7). On the longer term – and beyond the scope of this book – markets may transition to an entirely different system – a kind of ”smart socialism” based on an algorithmic matching of goods, services and needs.
The book ”Radical Markets” by Eric A. Posner and E. Glen Weyl is recommended as background reading together with ”Sapiens” by Yuval Noah Harari, ” Factfulnes” by Hans Rosling, “Empty Planet” by Darrell Bricker and John Ibbitson, “Technological Revolutions and Financial Capital” by Carlota Perez, ”Think Like a Commoner” by David Bollie, “Post-Capitalist Entrepreneurship” by Boyd Cohen, “Postcapitalism: A Guide to our Future” by Paul Mason, Capitalism, Alone by Branco Milanovic, “Utopia for Realists” by Rutger Bregman, and “ Token Economy” by Shermin Voshmgir.