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Context : OnCapitalism

Quora Answer : Other than communism, what is the alternative to capitalism?

Feb 10, 2014


Seriously. Capitalism just means your world is run by an "investor class" of people who make their money by betting their capital on new companies.

In Capitalism these people are necessary because things like factories are expensive. You need a lot of money up-front for tooling, or building the infrastructure of your web-app. etc. The capitalist puts that money in, but then retains a share of the company and gets into competition with everyone else about how to divide the "economic rent". Often successfully grabbing the largest chunk of it.

Kickstarter, or crowdfunding in general, diminish the need for the injection of capital. When there's a compelling idea and a plausible team to make it happen, a startup can appeal directly to future customers for funding.

Of course, the current growth in crowd-funding is supported by two further trends :

  • technology which reduces the costs of tooling;
  • an increase in gift-economies

Software scales so beautifully that a small GiftEconomy - like a free-software project - can create the infrastructure that underpins tens of thousands of successful businesses. These gift economies are expanding to encompass open designs for electronic hardware and even fabrication machines like 3D printers.

The result of all this is to bring tooling costs for many potential businesses down dramatically so that the small amount of money the system still needs (salary for startup members, materials, some outsourced fabrication) can be covered by pre-selling products in batches.

OK. So today, this symbiosis of crowdfunding and intellectual commons is still tiny and not an alternative to capitalism. But it is growing VERY fast. And the technology is only going to get better : (printable electronics, mixed sintering of plastics and metals in the same machine). Small-scale on-demand fabrication will never be as cheap as mass production. But it will at some point attain parity in terms of build quality. And then all you hipsters will be buying artisanal mobile devices, your local garage will be making car part replacements on-site and things are going to get interesting.

So what does this anti-Capitalist or post-Capitalist economy look like?

  • Most things would be made by small companies, that have bootstrapped themselves to financial sustainability rather than taken investment.
  • They don't plan to go public and have no investors pushing for it. They exists as "life-style" businesses for their owners / employees.

Sometimes they do need to borrow money, but will do so from the public again, via sites like Zopa. Or the equivalent of mutual societies.

They operate by pre-selling small-runs of products via social media rather than advertising giant runs of products via mass media.

They fabricate either in their own workshops, or with contract manufacturers (who are also self-funded, high-tech SMEs).

These small companies are embedded in a wide-scale commons of open and shared software and design know-how.

Meanwhile, the niche for professional investors (from angels and VCs through to hedge-funds and banks) diminishes until they either disappear or become minor players.

I don't know if we'll get this anti / post -Capitalist economy. But I think it is feasible.

I know it's feasible because the entrenched elites are starting to attack it. They'll do so by re-orientating their privilege around "intellectual property" whose scope is being constantly redrawn and expanded in an attempt to lock up all ideas inside patents that belong to large corporations (or to patent-trolls that only corporations can afford to pay off).

Already the largest, wealthiest tech. corporations like Apple, Microsoft and Google owe their valuations mainly to their patent portfolios rather than earnings, profitability or assets. Linus Torvalds has nothing like the wealth of Bill Gates, and won't have, even when the number of computers running Android (which includes his Linux kernel) overtakes the number of computers running Windows. (Something which will probably happen in the next 5 years.) The difference between Torvalds and Gates is that Gates has IP ownership of the ideas his company have developed / acquired while Torvalds doesn't.

This is where Capitalism will make its stand and the real fight will take place. The creation of an "Information Economy" (which is the polite way of saying that some people want to own thoughts and charge you rent for them.)

Investors will be increasingly concerned with the IP potential of the companies they buy into. And will press their companies into procuring and supporting IP. They'll lobby governments for increasingly long-term IP protection. And tougher laws against violators of IP ("pirates", people who work against DRM and anyone who seeks to avoid the constant snooping that will increasingly be focussed on policing IP.)

"Anti-capitalists" in this world are anyone who wants to retain privacy and the right to control their own computers. Anyone who wants to start a life-style business which makes them and their friends an income to live on but doesn't want to be shaken down by the patent trolls. All hackers contributing to free software and open-source hardware, all makers, anyone going the crowdfunding route, anyone using crypto-currencies to have control their own payments etc.

Quora Answer : How can we "fix" capitalism and its high capacity to be abused without ever the need of resulting to a full Marxist socialism/communism?

Jul 29, 2020

I don't think we can fix "capitalism". What makes capitalism problematic - the unbalanced control of means of production by a privileged few - can't be eliminated without it no longer being capitalism.

But that doesn't mean that there aren't alternatives which are neither capitalism nor socialism / communism as most people understand them.

Mark Hoheisel talks about a kind of George-ism : a system in which the bounty of nature can't be privately owned, and must be distributed fairly, even if other means of production can be privately owned.

Elsewhere I point out that a purely crowdfunded economy without professional investors would be something other than capitalism, without being socialism or communism.

I personally support and advocate for us pursuing both these strategies :

  • transferring ALL the world's natural resources out of private ownership to some kind of trust in which everyone has an equal share.
  • AND manoeuvring our economy towards one composed only of many, small, crowdfunded enterprises, without large corporations. While changing company law to prevent large corporations or a professional shareholding class or excessive concentrations of wealth from arising again.

Because in this scenario there would still be markets and private property, even some private ownership of some means of production, some people might call it a "fixed" version of capitalism.

I don't. I think if you eliminate the capitalist / professional investor class, then you have successfully moved beyond capitalism to something else. Maybe a term like FreeMarketAntiCapitalism works. I'd even call it a kind of socialism if the activities of capital ownership and landlordism are sufficiently diffused within a single class that gets most of its income from a mix of work and their guaranteed share of the natural resource income.