The five things that currently seem to cause us the most anxiety for our future are:
- Unemployment, Loss of wages, Poverty
- Automation, Loss of Control to AI
- Financial Instability
- Social Deterioration and Increasingly Acrimonious Partisan Politics
- Severe Environmental Deterioration
But, of all the concerns we have, the two most paralysing concerns are those which relate to poverty, and those which relate to environmental preservation. It’s hard to get excited about, and work concertedly towards, a sustainable future, if that sustainable future is filled with poor malnourished people, working themselves to the bone and living in wind-swept hovels, with leaking roofs, which are freezing cold at night. Conversely, it’s hard to get excited about eliminating poverty, if the long term result of doing so is vast amounts of death caused by a collapse in our agricultural system, along with infrastructure damage from extreme weather events and rising sea-levels.
One of the biggest hindrances to decisive political action against homelessness and sub-standard accommodation through the concerted construction of high-quality housing for everyone is a nebulous concern that we shouldn’t “build over nature” – even though this concern is completely baseless, given that 50% of the population live in cities that only cover 3% of the land surface of the Earth – and even cities have parks and gardens – so there’s ample space available to build everyone a home and still leave plenty of room for nature. Indeed, if we build houses with gardens and greenhouses on the roof, then high-quality housing would not deny nature any land at all.
Those who are torn between concern over poverty, and concern for the environment, should take heart that the economic and fiscal policies, that Socibuild will establish, shall promote a more efficient use of resources as well as a longer-term outlook which is conducive to both prosperity and environmental sustainability.
Socibuild Will Promote Self-Provision
I’ve written elsewhere on how Socibuild’s community income will promote the economic activity of self-provision and, by doing so, will bring an end to unemployment. What is also worth mentioning, is that self-provision also incentivises the efficient use of capital while reducing transport requirements. This is because self-provision is about using your labour to amplify the value of capital at the point of consumption. A system with high levels of specialisation and exchange is typically characterized by long supply lines and lots of transport, value is produced far away from where it is consumed and then transported, often thousands of miles, from producer to consumer. The more value gets produced at the point of consumption, the less transport is required. Value does not have to involve manufacturing something from scratch, value production can equally involve repairing something that would otherwise be thrown away. Furthermore, in general, the more human labour goes into producing value, the less energy is consumed when compared to automated processes.
The second feature of self-provision is that it strongly encourages capital conservation. If you receive a basic income of, say, £5,000 per year and use it to service a £200,000 loan at 2.5% interest to purchase materials to set up a homestead, them that’s your allocation of capital for life. This creates a strong incentive to conserve the finite capital you have as opposed to maximizing throughput – which is what businesses have to do to remain competitive and profitable. Capital conservation could involve using all your resources as efficiently as possible to meet your needs, whether pesticide, fertilizer, water use, or anything else. This is inherently environmentally-friendly.
As automation progresses, a larger and larger fraction of the population will engage in self-provision activities when compared to urban commerce, provided that a basic income exists to make this feasible. This could potentially have a very large and positive effect in reducing the environmental impact of our activities.
Socibuild Will Promote a Long-Term Outlook
Low interest rate loans facilitate a long-term outlook. When interests rates are low, you can acquire more capital resources today to save resource use in the long term. Whether it’s renewable energy generation systems, electric cars, heat-pumps, home insulation, or higher quality products that last for longer before they have to be thrown away, environmentally-friendly consumer choices are favoured by lower interest rates without exception.
The inverse of the interest rates is the planning time. At 10% interest we plan to reduce aggregate expenses over the course of 10 years. At 2% interest we plan to reduce aggregate expenses over the course of 50 years. Lower interest rates will enable us to live a higher quality of life with less environmental impact.
Socibuild’s land token banks will promote low interest rates.
Socibuild’s Business Model Can Fund The Creation of An Eco-friendly Culture
Advertising companies sell propaganda. You pay them money to influence culture in a particular way, and they’ll do it. A great deal of today’s materialistic culture is simply a by-product of the fact that many of the most profitable business models out there depend on manufacturing and, the more they manufacture, the more profits they make. These profitable manufacturers therefore have a lot of monetary fire power to pay advertisers to churn out propaganda with the intention of helping them sell more newly manufactured products. Hence, “this season’s fashion”, designed obsolescence, and the constant insistence that our cars, our furniture, and all our other possessions, must be brand new. Once upon a time, owning antiques was a sign of status, something to aspire to, the fact that antiques have become a niche interest is a creation of our manufacturer-funded advertising business.
Socibuild’s business model involves renting out real estate. For this reason, Socibuild does not need to constantly manufacture new things to make a profit, it can just continue to rent out the same thing and stay profitable as a company. A major aim of Socibuild is to “sell” customers an integrated eco-friendly lifestyle and to encourage them to move to our communities and rent places there to live a high-quality life in a friendly society without harming nature. If this business model becomes profitable it will be possible to pay advertising companies millions of pounds to persuade people to live frugal, environmentally-friendly lifestyles in Socibuild communities.
Once Socibuild becomes hugely profitable, it will be capable of out-bidding manufacturers, which promote waste, for access to advertising propaganda and – by doing so – transform advertising companies from promulgators of waste and extravagance, to the promoters of frugality and efficiency and, in the process, will reshape our entire cultural ethic to minimize our impact upon the environment at every level.
An example of this could be to fund a series of advertising campaigns which promote “second hand chic” and the like. Advertisements designed to persuade users that goods with a history, including a history of breakages and repairs, are more interesting, desirable, valuable and fashionable.
Socibuild Will Promote Pollution-free Economic Growth
At the very least, nominal economic growth is necessary for capitalism and without real growth also, the capitalist system runs into substantial problems. Nominal growth is necessary because, at present at least, all money is lent into existence at interest and, since all loans must be paid back, then if all money is lent into existence, the only thing you can use to pay back existing loans are new loans. Furthermore, because the old loans have interests due on them, to stabilize the system, each subsequent wave of lending must exceed the previous wave of lending by at least the interest rate due on the previous wave (minus the default rate).
Since the value of Socibuild House-Tokens will be rent-based, rather than lending based, and since rents will be redistributed as community income, in the form of newly-created house tokens, then, in principle at least, since community income will be a non-lending based form of house token creation, Socibuild’s proposed house-token economy will be able to function in steady state without going into a state of crisis – although this house token economy will also be capable of growth.
Beyond that, because most businesses start with investors wishing to get more money out of their business than their initial investment, in an economy without aggregate growth this becomes less likely. In principle, a few businesses could grow in an economy that was shrinking overall, yet in practice, a shrinking economy massively disincentivizes people from starting, or investing in, new businesses.
In both cases, an inflationary nominal growth environment with zero real growth might be stable under our current system. Under such circumstances, people would make loans, and invest money in the companies as a necessary measure to defend their purchasing power, and would not expect to increase it (although they would expect to increase their nominal worth – whose purchasing power was constantly eroding).
But, even with a nominally growing money supply, there is another issue with zero real economic growth: increasing production efficiency. If the quantity of goods and services remains constant, but producers continually innovate to succeed in producing those same services with less work, then the number of work hours required to produce all of our services will decline and the result will be increasing levels of unemployment.
Now, in principle, one could uniformly reduce everyone’s work hours. However, in practice, a great deal of increased production efficiency arises from the specialization of labour and the development of specialised expertise. To develop expertise you must put in a lot of training hours and getting a return from all those man-hours of training requires many man hours of work. For this reason, in practice, increases in production efficiency that occur in a steady-state economy would be unlikely to result in lower work hours for everyone and would almost certainly result in a continuous reduction in the number of jobs performed by a shrinking pool of increasingly specialised, highly-trained workers.
This means that increasingly large payments of some form of welfare will be absolutely necessary in a steady state economy as a response to increasing unemployment levels that occur due to increases in labour efficiency.
Our existing systems already pay social welfare to certain people. However, on a normative level, such payments are grudgingly doled out to people who are generally viewed – and portrayed – as useless, lazy, layabout, good-for-nothings who should be ashamed of themselves and “really ought to be working.” These welfare payments are generally perceived as unearned handouts to which the recipients are not morally entitled but are given to them nonetheless to avoid the greater evil of leaving them to die.
Although our current economic system pays welfare, we have yet to structurally incorporate it – including the precise amounts that individuals are morally entitled to be paid – into a rigorous economic framework that is generally accepted. While most people think some amount of welfare is necessary, there is still no consensus on how much we should pay and to whom. And there is a great deal of acrimonious disagreement on this topic.
Indeed, many people wish that unemployment would just go away, so we wouldn’t have to pay welfare to anyone.
But, in a steady state economy, unemployment will inevitably increase, and welfare of some kind will be a structurally essential tool to hold a steady-state economic system together
Indeed, any economic system without welfare will rapidly unravel the instant increases in labour efficiency exceed real economic growth as, once this occurs, a vicious cycle will then initiate where increased unemployment reduces aggregate purchasing power while a reduction in aggregate purchasing power increases levels of unemployment further.
For this reason, it is vital that the decision-makers, who run our banking system, make preparations for an automation-triggered recession in the near future, which will likely exacerbate this coming recession.
There is a lot of debate right now about how long it will take to automate away every job. Some think that it will happen in decades, others think it will take centuries, but the key issue is that an automation-triggered recession can occur long before every job gets automated away. All that is required to trigger an automation-driven recession is for the rate of labour productivity to exceed the rate of economic growth by too large a margin for our welfare system – or mandatory reductions in working hours – to cover the shortfall. With that in mind, there can be no doubt that there is currently a high risk that such an event will occur – indeed the COVID-19 lockdowns may have already triggered such a recession.
Unless we want to produce exponentially greater amounts of pollution, it is vital that general public become aware of the structurally essential role that welfare payments play to stabilise our economy, in order to ensure we are culturally prepared for welfare to play a much greater role in our future societies.
Community Income, a per capita redistribution of aggregate rents collected, will elegantly incorporate a source of income that does not rely on employment into every Socibuild community, and by promoting the economic activity of self-provision, we can ensure that all of our residents can still preserve their sense of dignity.
At a more philosophical level, we tend to cooperate with others to achieve ends which all cooperating parties perceive to be good. In a steady state economy, participants will no longer contribute to society to create a better future, but will, rather, contribute their efforts to society to keep things ticking along, or prevent them from getting worse. Stopping things from getting worse might be sufficient to form an acceptable social contract, but it is only likely that people would accept this proposition in a society with very few existing problems. People feeling the pain, living in substandard housing, being worked to the bone, with chronic medical conditions that are not being addressed would be unlikely to relish the prospect of accepting, and contributing to, a political system so that things can continue to go on as they currently are. Then again, if the kind of material conditions that the average inhabitant of a developed country enjoy were combined with economic security and more free time, that would, on the whole, be a pretty sweet deal for most people. The main issue, in developed countries at least, is to stop people from sinking to the bottom. By combining community income alongside self-provision, everyone capable of a normal day’s work, will be capable of securely attaining a normal standard of living.
At a more practical level, regardless of whether or not national economies can be run in steady state, profitable companies must continually grow and improve in order to deliver satisfactory returns to shareholders. The good news here is the primary business of Socibuild is the production of Social value through generating communities that are filled with rewarding, positive interactions and that we as a company can increase the quality of social interactions which people experience in our communities, and hence the value of any real estate we possess, without producing any pollution whatsoever.
Since social capital is pollution free…
Socibuild can maintain a healthy economic growth rate for the foreseeable future through creating Social Capital: valuable interpersonal relationships within the community. And the more desirable the social life within our communities are, the more people will want to live there. This will push up location values and generate a profit for our company.
Since social capital is pollution-free, Socibuild will usher in a new era of pollution-free economic growth…
…for the foreseeable future at least.
What do we want the future of economic growth to look like?
- A future with exponentially more trash?
- Or a future with exponentially better interpersonal relationships?
We at Socibuild believe in promoting the latter.
The Big Picture
Environmentalism tends to compartmentalize things into different crises like:
- Global Warming
- Ozone Layer Depletion
- Plastics in the Ocean
- Eutrophication
- Pesticides
- Colony Collapse Disorder/Insectageddon
- Soil Erosion
- Invasive Species
- Groundwater Depletion
- Deforestation in Primeval habitats
But, from an economic perspective, the root cause of all of this is capital depreciation: a failure to preserve things of value. We build things that decay quickly, then drawdown finite natural resources to replace them, while allowing the decaying products of depreciated capital to build up in our environment where they often disrupt the health of the ecosystem, and our own health, in various ways. And we feel the need to constantly do more of this in order to “top” the previous wave of products released into the market (which depreciate in price due to their accumulating abundance) to produce the next big thing that is “even more desirable” than what came before, yet is still scarce enough to command a price for its manufacturer.
The specific examples of the environmental damage that this general tendency gives rise to are numerous and complex, but the underlying cause of drawing down finite resources and allowing the waste products of depreciated capital to build up is the root economic cause behind practically every environmental problem.
While Socibuild cannot specifically solve every single environmental problem that currently plagues us – it can address and eliminate the root sociological driver of all environmental problems (and hopefully reduce the rate at which they get worse and make them more manageable) by simultaneously:
- Creating conditions conducive to capital preservation
- Encouraging self-provision and reducing transportation requirements
- Opening up a growth sector in social capital – that produces zero pollution
- Promoting a more frugal, less wasteful, culture
Socibuild, can hopefully address many of the root economic causes for the widespread environmental deterioration which currently afflicts us, while preserving the current growth paradigm.
