David Wertheim-Aymes: A (very) different way of looking at capitalism

06 Nov 2024, 11:56 by Editor BizNews · BizNews

In today’s economic landscape, the focus on shareholder wealth and fierce competition drives profit but often at the expense of society and the environment. This “False Economy” model prioritizes short-term gains, leading to wealth gaps, environmental degradation, and social mistrust. A shift toward a “Real Economy,” centered on meeting the material needs of others, could foster sustainability, predictability, and inclusivity. Such a change would reframe economic success as societal well-being over personal wealth.

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By David Wertheim-Aymes

Our relationship to the economic activities of today is based on some key concepts. Probably, at the foundation of this, are the concepts of shareholder wealth and competition.

People think they are in business to make money. The owners, or shareholders, get the majority of this wealth or money. The workers and staff get wages and salaries. They are asked to fulfil the roles determined for them by the shareholders and managers.

Competition is said to be the concept that drives innovation, efficiencies and profit.

The wealth to shareholders and managers is allocated and justified in this way because they take the risks of signing away their assets as security to the banks, they are the ones who can’t run away, and they are the ones who can think the whole activity much better than any others.

Also included in economic activity today is the trading of shares, futures, currencies, Crypto currencies and financing.

Under this conceptual umbrella we find things appearing like:

huge earning gaps,
extreme wealth and extreme poverty,
by-products that people discard because they don’t want to cover the true costs of cleaning up or rehabilitation,
shareholders getting wealth from products that have rights attached to them like beach front properties, mineral rights, and race or religious rights awarded to the ‘preferred’.
We see medical products, that can harm people legitimately because they have gone through an approved false testing process, being sold despite their dangerous side effects.
We see pesticides that harm our health and that of the land being used because they give short term shareholder wealth.
Competition really drives shareholders to focus on anything short term that will increase their ‘wealth’.

A person whose reality is entrenched in the conceptual world described above feels themself, if a shareholder, as clever, secure, entitled, a go-getter, modern, an achiever, an entrepreneur. They spend on holidays, their image, their cars and homes, their insurance, their medical, their security. They have after all taken life on and have managed it well. Their fellow humans are just less than they are.

Because of the above reality, when these very people buy things, they ask for discounts because they know that they cheat in their own dealings. By asking for discount, they try to buy at a price that gets rid of the cheating element in the price.

When customers meet us in our businesses today, we meet their mistrust, their assumption that the price is not fair, they consequently have little loyalty, they distribute to themselves all their extra cash in the name of shareholder wealth and then cannot get credit next time so as to retain their account, and so on. As a supplier this makes forecasting difficult, one is always pressed to sell at lower and lower prices which makes supply quality and consistency difficult. Many costs increase as consistency is difficult to achieve and commitment to staff, suppliers, and capacity is uncertain.

On a broader scale, eastern countries that have low levels of worker protection – workers can be ‘ab’used – can deliver products cheaper than western countries. Western countries allow the use of rights to drive costs up and give people an existence that approaches that of the wealthy primarily so that the wealthy don’t have to live with their guilt.

Let’s add some concepts to the above and see where this leads us. We are not taking away, rather we are adding. All the above we leave as valid.

Let’s add the definition of economy as ‘providing for the material needs of others’. Material and others are key words here. All materials come from Nature. We will therefore have to look after Nature to keep an economy going. Damaging the earth with nuclear waste, pesticides, farming that consumes the soil nutrients, waste that impacts our water quality, landfills are all activities that are tolerated in the current economy. If one does indeed define economy as providing for the material needs of others, then the above practices appear in need of focussed attention and care.

If one were to consider the concept of for others earnestly, then we would realise that I make this for you, and you make that for me. Suddenly we have a different view of things. Where does competition fit in here? We are making things for each other and should surely therefore be moral about how we do it. Where does ignoring Nature, the source of all materials required by the economic sphere, fit now? Where does personal wealth fit in if we are doing things for each other? Yes, the well known concept of differentiation of labour applies.

The Green movements are all pushing for legislation to protect our Nature. Surely the economic sphere should be putting their hands up first here. It is after all in their interest. But we find shareholder wealth, focussed on the short-term rewards, effectively trying to bypass a much bigger reality that applies to them. How are we going to do business without fertile soil, healthy people, and clean water?

They are also pushing for disclosure of true cost, being the cost of the product and rehabilitation of the environment and on people that their products affect. We can all see the staggering costs of health care and care for incapacitated people as a consequence of both our education systems and thoughts on medicine today. All kinds of statics are emerging of deaths from vaccines for example. These vaccines were supposed to keep us alive, not kill us.

How can the trading of shares, futures, currencies, Crypto currencies and financing be validly include under the concept of providing for the material needs of others? Surely these activities are for personal ‘needs’ of wealth. There is no material involved. They are all based on speculation and opinions.

Where is the solution to all this then?

Well, why not base economy on providing for the material needs of others?
Let go of competition and shareholder wealth at the same time.

What would appear under this ‘thought’ umbrella?

We’d care for Nature.
We’d acknowledge that we are all part of this collective that is making things for others.
We would share knowledge and skills in this process leading to reduced costs of research, training, and knowhow.
We’d share staff if necessary.
We’d organise the economy somewhat so that supply matches demand.
We’d find people wanting to come to work and contribute because there is a valid purpose behind each product being supplied.
The magnitude of the earnings gap would disappear.
People would not be asking for discounts as there would be trust of the foundations of economy.
The extent of protectionism laws would almost disappear.
The extent of taxes allocated to these complex laws and the rehabilitation of Nature and people would reduce in multiples.
All of this tax would be able to be spent on free education of a better quality than we get today, sustainable and eco-friendly infrastructure and more.

In short, we’d lose the consequential costs of the current paradigms that are extensive.

In summary, I’d like to call the current world view of economy and business False Economy. I’d call the latter suggestion Real Economy.

The table below highlights the differences of outcome.

Real economy: False economy:

Costs would go down Remains a very costly environment

Less wasted resources Extensive waste of resources

Fewer consequential costs Extensive consequential costs

Societal health Personal wealth for a few

Predictability Unpredictable cyclicity

Moral Immoral

Sustainable Not sustainable

Employ more Many jobless

Human ingenuity works with Nature products Human ingenuity works with speculation

Race, religion and sex are not a consideration Race, religion and sex are used to drive short term wealth

Are we prepared to adopt the real concept that economy is providing for the material needs of others?

Those hanging on to the ‘False’ economy way of existence will all argue that competition keeps mediocrity and laziness out of the system. Here are some abbreviated counters to this view:

(I have shared more on the human qualities that, if they are protected from the above, will, through their own morality, ensure that what they provide to others will not be mediocre and they will not exist in laziness. See www.themissinglinc.org for more.)

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