The Serious Failures of Current Socio-Economic Systems | Data Driven Investor
By: Peter Mcclard
Tags: Socialism, Economics, Society, Political Science, Capitalism

I don’t care a particular amount about any current Socio-economic System be it Capitalism, Socialism, Communism or whatever. They all seem somewhat flawed and none take into account all the things that would attract me and each seems more suited to a phase than a permanent solution. However, I would concede that some non-rigid, logical and humane hybrid of the three (and others) could be what I personally envision. My name for such a system is Lifism-a system that supports a High Quality Life for the most inhabitants.

I come to these conclusions after a lifetime of observing each form of Socio-economic Organization and Governmental System in action, myself having a wife that grew up in the now-defunct USSR. I’ve watched countries like China evolve to a sort of hybrid amalgam of Communism, Socialism and Capitalism. I’ve watched South American countries struggle into chaos and corruption and European countries swing from left to right in search of the perfect solution, or even survival. And of course, most of my observations are right here in the United States which is a crucible of economic policies and cultures, fighting it out for supremacy, and our own wild swings from left to right to center. As far as I’m concerned, none of it is working so below I try to identify the flaws in each system in hopes that someday we can correct these and create a Lifist System that is sustainable and pleasant to live within, for us and the other cohabitants of the Earth.

In each of the Systems listed below there are always Good things too and most start with good intentions for The People. Yes, there is a corresponding List of Successes. Success can be likened to health and failure can be likened to disease or even death. Some diseases are temporary and acute, but some are chronic and incurable.

In societies, a more primitive Human Nature often intervenes and the Bad things overtake the Good so it is the mission of Lifism to identify the Good things, protect them, enhance them and mitigate and protect against the Bad things, as much as possible, always incorporating the best ideas in a holistic, long-term way. It may turn out that the best system is designed to function in different Modes of Operation, as needed, at a given time. We already see examples of this with things like Emergency Acts and when taxes rise and fall according to the social mood or government needs. Some of these changes could be much more planned ahead to trigger, as needed, temporarily, and then revert to another mode when conditions change so that all forms of government were seamlessly connected in a big game of 4-dimensional chess. The real danger is in thinking we can create a one size fits all system that never changes and is inflexible because of entropy and chaos theory.

Failures of Capitalism

Capitalism can sort of work for some when well-regulated, but like any biological system, if left unchecked becomes parasitic and cancerous and even preys on itself irrationally. But checks on greed and ethics can’t come from our government alone. Those are only safeguards. The real checks must come from human behavior, the heart, education and moral standards, especially for those in positions of leadership. A free market sounds like a good thing because of the word free. It too often translates to dog eat dog, every man for himself or even greed is good. In practice, it devolves into an excuse to become more cynical, self-interested, insular and worst of all, miserable as a society.

This is not a comprehensive list of all that is wrong with modern capitalism but it does show gigantic flaws in our thinking which is now threatening life as we know it, perhaps even unto extinction. Misery grows by the day globally because:

Privatizing profits while socializing liabilities: In other words, many companies get to grab their gross profits and subtract only THEIR ledger costs for a net profit to be distributed to a few while the external costs of manufacturing, disposal, and usage of their products are paid for by society in the form of climate change, cancer, various illnesses, garbage collection and disposal, toxic cleanups and often even in ways that no amount of money can fix such as the introduction or “permanent” micro-toxins into the environment, brain damage, psychological, etc. Rewarding sociopath behavior: Ruthlessness is often considered a virtue in business and top CEO’s are often said to tend toward sociopathy. The ability to overlook ethics and only consider the “bottom line” in decision making can make a company profitable indeed, but at the expense of society. Civilization is dying by death from a thousand cuts because so often these decisions are only minor steps toward the ethical void. Terrible examples of people become role models for children who later perpetuate the meme. Increasing profits at any cost: Cost-cutting by using cheaper or worse materials, exploiting cheap labor, cutting benefits, increasing work hours, asking more from fewer workers, replacing workers with robots, shortcuts on safety, reducing environmental protections, using more artificial ingredients, maximizing tax dodges, sheltering money offshore, price gouging, superfluous increasing fees, fake reviews, deceptive advertising, bait and switch, lying to customers, recommending unnecessary services, etc. All of these things are anti-consumer and are forms of stealing hard-earned money from unwitting or trusting people, one nickel and dime at a time. Hyper-materialism: You can only eat so much in a day and wear only so many clothes, no matter how wealthy. Yet there are those who make millions of dollars per day and pool it up in great oceans of cash in the form of “investing,” real estate, art, gold, jewelry, and multiple bank accounts, etc., secluded away from the public, doing no good but increasing itself for no real purpose other than creating a permanent generational wealth passed on to endless progeny who then perpetuates the same behavior. Even worse than these abject personal goals, society tends to elevate this as a desired goal of living and trains children from an early age to focus on this goal over more important ones. Why more important? Because, no matter the wealth, your goals should be for happiness, mental health, lack of stress, and the well-being of others. Expecting endless growth: Look at nature. Very few things just keep growing out of control. Animals and plants all know when to stop growing and just live normally at a given proper size. Indeed, in animals, unchecked growth is found in unhealthy populations or in infections or cancer that lead to death. Yet, in modern capitalism we expect companies and profits to grow year over year, not reach homeostasis, a state of equilibrium and sustainability. Countries even measure their success by growth in GDP, regardless of costs to future generations or what was lost along the way. This is anathema to Nature. Over-advertising: Combining unfettered Capitalism with unfettered Free Speech protections leads to a jellyfish-like invasion of every nook and cranny of available media space in attempts to get our attention and to get us to buy things. Be it TV, radio, video interruptus, billboards, magazines, newspapers, websites, social media, search engines, spam, signage, sky writing, NASCARs, you name it, we are bombarded with up to 5,000 advertisements per day. This takes a huge toll on humanity in psychological damage, uglification and time-wasting. It’s pathetic grovelling made into an art. Over-prioritizing and compensating the top echelon: We all know a great manager and a visionary boss are hard to come by if not rare. We’ve admired the pioneers who founded companies and employed thousands. These are the folks at the top of the pyramid. Yet the fact remains that the top of the pyramid has nowhere to be without the much larger bottom foundation it was built on. Since there are only 24 hours in a day and most people work for 8–12 hours we can calculate the “wages” of each level of the pyramid and find absurd imbalances where someone much lower works many times harder while someone higher up attends a few meetings and fancy luncheons and magically earns thousands of times what the lower worker makes and decides their fate as interchangeable cogs in a money machine. Seeking ever more tax relief: It is a natural tendency to guard one’s possessions and territory as an evolutionary trait. However, it is a delusional idea that one’s gains belong solely to oneself and are only due to one’s direct actions when in fact society has enabled your success, protected it, paid for it as consumers and taxpayers and you merely took advantage of opportunities society gave you. In other words, you always owe a significant part of your earnings to society and to starve society of its share is to hurt oneself in the long run because you will be living in a run down, poor, disorderly, polluted world that can no longer support your enterprise or lifestyle. Creates artificial social imbalances: We’ve all witnessed talent and skills that don’t match the title or job held by a given person. Whether it’s a boss who is less educated, less intelligent or less skilled than his or her underlings or a worker who may be more brilliant and qualified than a manager above them. Oftimes it’s who you know or luck that leads people to the higher rungs of the corporate ladder and not skills. This is a natural imbalance, however because we place so much importance on our jobs and titles this can create resentments and issues of self-esteem or create situations where insecure bosses are threatened and use their power to hold back or otherwise suppress the careers of talented people due to their own insecurities. Seeking undue regulatory relief: Generally speaking, regulations evolve over time after many legal cases, mistakes and attempts to remedy inequities, reduce dangers, etc. In some cases, such regulations rightly place a greater burden on businesses and individuals to comply and to avoid the negative consequences that led to the regulations, such as increased cancer rates from dumping toxins in drinking water or endangering ecosystems. To seek continuous de-regulation is anathema to Nature which carefully regulates all of its connected systems including the human body. Monetizing politics: Since regulations and taxes are governed by legislation, it is a natural function of capitalism for people and businesses to support candidates and parties they believe will work in their interests and write laws that will be more favorable to their financial positions. Left unchecked, this has led to grotesque amounts of money required to even run a normal campaign these days to pay for ads and various mechanisms of campaigning. Therefore the voters’ interests are often overruled by a small wealthy donor class that manipulates messaging and media. Monetizing healthcare: Everyone understands that a human life can’t be given a monetary value. Also, everyone understands that conflicts of interest can arise between profits and treatments. For example, it could be more profitable to put someone on an expensive lifelong drug than to administer an inexpensive cure. Therefore it is best to eliminate this conflict and at the same time reduce healthcare burdens and costs. This is not to say doctors and nurses are paid too much but that we have introduced numerous middlemen who take a cut of each medical transaction. Monetizing justice: Justice is supposed to be blind, truthful and accurate as possible. Privatizing prison systems creates a conflict of interest between justice and business where it is more profitable to fill business-run-prisons regardless of the guilt or worthiness of imprisonment of a given subject. Many cases of abuse have been seen where minor offenses can lead to years of imprisonment and high profits for the business-prison system. This also includes over-monetizing and equipping and training Police with ever more paramilitary tools and methods which creates dangerous imbalances between citizens and those sworn to protect them. Monetizing the military: While it is normal to have private businesses develop weapons and equipment for our military, it is critical to eliminate all conflicts of interest between the People’s Defense and the use of the Military for any purposes related to profits. In other words, no weapons should be used or deployed based on any profit motives to: use up inventories, buy unnecessary equipment, overcharge, go around legal bidding procedures, curry favors or line the pockets of cronies.

Failures of Socialism

Socialism is generally thought to be a People-first System where business is used in the service of The People to fulfill the needs for food, shelter, goods, safety and general well-being of the public. Usually, under socialism, which comes in many forms and intensities, financial burdens are more fairly distributed. While it doesn’t necessarily mean that businesses are state-owned it does mean that they operate within stricter regulatory and less profit-driven guidelines. Even in a fully Capitalist society, certain aspects are already socialistic in nature in that taxes are collected to pay for public services such as defense, police, fire, roads, parks, sidewalks, etc. Socialist experiments have often failed for various reasons that are also common to many of Capitalism’s failures including:

Socializing profits but channeling them to those in power: When a state is given so much power, it is only as good as the people in charge. Being a socialist does not automatically confer ethical behavior. Lust for power and greed remain in operation. Therefore have we seen so many despotic socialists who use the military to lord power over the people in the name of the Social Good. Sanding down the individual: If a society becomes too obsessed with the Public interest to the point where the individual is marginalized, it runs the risk of destroying motivation and inspiration and creates a society of compliant sycophants afraid to raise up too far for fear of being pounded down. Talent and hard work should always be appreciated and rewarded in some appropriate measure. Over militarization: When your leader wears a military-style uniform, your society is lost because it has placed more value on the violent powers of the military than the gentle powers of Reason and Science. Essentially, any head of state in a uniform is a dictator. In such states, the military is usually overfunded and robs valuable resources from the Public in order to prop up the government and it becomes more difficult to displace such a leader the longer they are allowed to remain in power. Economic drain: In a nanny state that provides a comfortable safety net and compensation for all its citizens, it is possible to have a large group of unemployed freeloaders who live off the generosity of the state and those that do the work to make the things they get. We have seen such systems collapse under the weight by spreading themselves too thin and losing the economic engine to fuel itself such as in Greece or Venezuela and some weaker European nations with fewer means to start with. De-incentivize risk-takers: Becoming too dependent on state-regulated improvements and lessening the role of venture capital or investors willing to take chances on often far-fetched ideas can lead to a slower pace of progress or worse, good ideas dying on the vine, starved of resources. While a good social democratic society would allow this and then limit the outrageous profit-taking of such ventures, a balance could be struck where real wealth could be accrued, just not to preposterous levels. Creating a mono-culture: If the state is given too much regulatory power over the freedom of speech and starts to impede new ideas to maintain social uniformity then it could cut down on memetic diversity which leads to cultural stagnation. Over-reducing competition: By over socializing, the government can make it hard for new enterprises to compete with established state-sponsored conglomerates and thus discourage the natural evolution of ideas and products. It’s sort of like making Hussein Bolt wear weights on his feet to equalize the race so everyone crosses the finish line at the same time.

Failures of Communism

Communism is generally thought to be next-level Socialism where there is no Private Property and the State owns/runs all Enterprises regarding food production, resources, manufacturing, etc. Usually, under Communism, which comes in various forms and intensities, the State has absolute power and the individual serves the Public Good by serving the State. Every time a Non-Democratic system is allowed to strengthen, its grip on culture, propaganda, police, and the military makes it very difficult to dislodge and often falls into the control of a powerful Few or one Despotic leader with absolute power. Even when practiced on a smaller scale of say a hippie Commune, communism usually devolves because not everybody pulls their weight, and resentments and greed begin to take root. This is not to say that Communism is inherently a bad idea or has no merit but that it’s practice has failed for some of the following reasons:

Absolute power corrupts absolutely: By handing all power to an unelected or rubber-stamped, self-guarded bureaucracy we amplify the ability to dodge accountability and ruthlessly lord governmental power over the people. Those at the top tend to develop an infallible, cult-like power to control all messaging and media and become reluctant to give up such powers which eventually leads to failure, uprising, and overthrow. Losing the soul of the individual: Forcing everybody into a sort of ant-like efficiency for the “hive” loses one of the greatest resources of humanity-the will of the individual to rise above the usual, to express novelty, and push the boundaries of creativity. It would be easy to create a society that was super safe where everybody had a job and was fed “nutrition” enough but that was boring and uninspiring to live in, defeating the purpose of the whole enterprise. Creating an underground society: It is well known that in the Soviet Union people found ways to work around the state secretively, ways to live better lives by becoming accomplices in participating in “illegal” activities not approved by the state-the underground. When this goes on for too long, the culture develops a distrust for laws and a license to break them, even when they are good and it’s no surprise that some of the biggest pirates, hackers, and spammers are of Russian origin these days. Clamping down on progressives and intellectuals: There is no greater threat to autocratic rule than unruly thinkers and mavericks-those that envision changes great and small. As such, we saw huge purges of scholars and intellectuals in both the USSR and China which in effect dumbed down the gene pool, which is a terrible idea. Keeping foreign memes out: Besides threats from within, an autocratic Communist society has to work feverishly to keep foreign ideas from seeping into the public conscience and polluting the State propaganda with contrary ideas and glimpses of better lives being lived elsewhere. In today’s electronic world this becomes a nearly impossible task and is futile. Labor abuse: When the state has absolute power, they set the rules of work and the wages paid. If the state decides it wants more hours worked or faster production under penalty of harm, then the workers must comply, even though the usual origin of Communism is in the service of glorifying the laborer. After a certain amount of time and to remain competitive, the state will abuse this power, and labor will have little or no bargaining power. Over militarization of culture: Each form of government can be said to be guilty of this crime but Communists are the ones who hold the military parades of the People’s Army, goose-stepping through the square with tanks and missiles. This is used as a form of intimidation to anyone who would question the leaders’ power and it also is quite expensive as a portion of the National budget since the creation of the weapons are also a form of forced patriotic labor and the whole society becomes a military machine, wasting precious resources for no particular reason or worthy end goal. Lack of checks and balances: When allowed to gain enough power, a Centralized, Monolithic Government will have no possible checks against it and will destroy anything and anyone who goes against it. Since such a government is not compartmentalized into Co-equal Branches, it is left to run rampant for as long as the brainwashed masses allow it or some disaster occurs. Corruption permeates every level: Not only does the public create a significant underground, under-the-table way of doing things, but also officials such as local bureaucrats and police begin to accept bribes and favors to compensate for a paltry salary or to curry other favors from above. This leads to a corrosive, unethical spiral of lawlessness that only enhances the peoples’ disdain and distrust of government and laws at every level. Oligarchic property distribution upon dissolution: When a Communist system collapses, those in positions of power will tend to set themselves and their cronies up with extraordinary advantages as State Wealth is converted into Private Wealth. We see a perfect example of this in modern Russia.

Other Failed Systems for similar reasons that I do not go into here are not exempt from many of the same (and other) problems, including:

Monarchies

Oligarchies

Plutocracies

Anarchies

Mitigations

These are just a few concepts on ways we can mitigate against the failures of our system in the United States:

Privatizing profits while socializing liabilities: Enact legislation that requires certain products to be labeled with Life Cycle data very much like we have nutritional labels for food. Identify costs absorbed by the public and incorporate those into the taxation basis so that companies pay to clean up their own messes or even better, make fewer messes, which is the goal. Rewarding sociopath behavior: This is a cultural problem which can only be addressed through cultural emphasis on ethical behavior. Within corporate structures, we should reward ethical behavior and look for leadership that exhibits care and empathy, volunteerism and thoughtfulness. Promote nice people. Increasing profits at any cost: Pricing should be transparent where the public knows the causes of profitability of products and services and where cost savings come from such as: efficiency, labor, quality of materials and intellectual property. It is crucial to understand profits holistically and to not allow collusion, gouging, labor exploitation and other unethical practices to go unnoticed. Hyper-materialism: This cultural issue requires greater emphasis on mental, creative and spiritual achievements and less emphasis on consumption, money and lifestyles of the rich and famous. Expecting endless growth: This requires a de-emphasis of companies as mere mechanisms of investment. Return On Investment is an overused measure and we should celebrate companies that reach a sustainable homeostasis as well as those that experience spurts of growth. Use Nature as a guide. Learn to enjoy Enough. Over-advertising: Many more limitations on quantity and quality of advertising need to be instituted. Ban pharmaceutical advertising as it once was from commercial, consumer-facing media. Enact privacy protections that allow consumers to opt out of all tracking and targeting of ads. Have stricter regulations regarding Public outdoor advertising so that it doesn’t uglify the world. Over-prioritizing and compensating the top echelon: The ratio of top executive pay to rank and file pay should be disclosed and tax implications should be applied to executives above a certain multiplier. Consider implementing a Maximum Wage. Seeking ever more tax relief: It is essential to better understand the costs and benefits of operating within a society so that taxes are understood not as a penalty but a benefit. Paying taxes should be considered patriotic and humanistic. Creates artificial social imbalances: This cultural issue requires training children to support each other and not be given to petty jealousy when others exhibit natural talents and likewise not making those with lesser apparent talents feel unworthy. It’s really a mental health and self-esteem issue. Seeking undue regulatory relief: This requires proper prioritization of long-term goals with respect to justice, ecology and efficiency. Regulations should not be overly onerous nor should they be too weak to prevent serious damage. Monetizing politics: End Citizen’s United. Require full disclosure of all financing of political campaigns. Greater use of Public funds to make running for office more affordable for more qualified, less wealthy people. Reduce the length of Campaign seasons, thus reducing the cost. Monetizing healthcare: Universal Healthcare as a Right, not a privilege. Eliminate all conflicts of interest in Healthcare so that a cheap cure is not considered inferior to expensive chronic management or symptom relief. Monetizing justice: End privately run prisons and demilitarize police and pursue deeper social connections between police and communities. Make prisons into remedial schools instead of penal instruments. Reduce criminalization and penalties for many non-violent offenses. Monetizing the military: This long-term requires a beating of swords into plowshares mentality, converting the talent and knowledge of the Military Industrial Complex into more problem solvers for society at large, including the International Community. Reduce arms dealership perhaps through higher taxation on arms sales. Profit disclosures associated with military adventures should be known to the Public.

The Vision of Lifism