Monday, March 11, 2013

The Rich Get Richer Part 2.: A More Fair And Natural System

This presumes you read part 1.

This is the second story mentioned in “The rich get richer” post. This one removes the forces of money, interest and capitalism. It instead focuses on the labor part of the equation. Where the version of the story concentrated on an auction outside the bakery, this time we concentrate on the inside workings of the bakery. It shows how, when that is removed, a more natural driving force of creativity and invention results. It is a much shorter story where charts won't be required. (But I could if you really want one.

Back at the bakery

So, we return to our bakery. The same set up as in the previous post. A baker makes bread for a community of 10 families. All 10 have a single provider, and require one loaf of bread a day. The 10 people are exactly the same in every way. In this case though, the baker needs 5 people to work for one feverish hour every day. The work is hard and draining, but everybody is capable of doing it. He pays a loaf of bread to every laborer who works. The baker has a short term memory problem and can never remember from day to day who worked for him. (This is to remove an prejudicial treatment or cronyism from the equation.) So every morning, he opens up the back door and has all 10 pick numbers from a hat. The first 5 come and work for their bread. The baker represents all the possible employment in the system. The bread represents the basic needs to have a socially acceptable “humble” lifestyle in the community. Those who are strong and motivated will get picked the next day or the next day, just so long as they are there.

Innovation in a capitalist system you say?

US style capitalism is great for solving a problem once. (Take a gas engine or A/C current for example.) After that, even if you come up with a better idea, the buy in is so overwhelming. People who are profiting from the old system are motivated to make that truth even more so. The options for powering our vehicles are numerous, the ability to power our house with wind and solar are available, but they are too costly from most people. Plus, we have been conditioned to believe using them makes us different, weird. “That guy is driving a hybrid.. what a pussy!” “I don't want to see my neighbors windmills from my house!” or “ you want to live in a smaller house or on a boat and work a few hours a week to provide your needs?” Capitalism will not suffer this mentality, It needs to germinate consumers and overly reward the competitors.

The “innovation” in a natural system comes from the people who didn't get picked. With an extra hour and an extra incentive, they distract themselves from their hungry belly. Or it comes from those who did, but with free time and a passion, they used the other 23 hours to invent an airplane, light source, telephone in their garage. They have their bread, they have their strength, they just need some meaning in their life. The community prospers, evolves, and moves forward as one.


Any inequality is provided by nature. It sucks, that is the reality, but if you are born with no arms, you are not going to be able to pick a number. You will probably remain a burden on your family or taken care of by the community for the duration of your life. That is a true disability. (In our culture the inability to contribute even with some normally crippling disadvantages has been reduced.) A just and fair culture will have to decide what to do with their physically and mentally disadvantaged. That is what makes us human and not like the other animals. Though I look around and wonder if that is true these days.

Welfare system for the unlucky, not the lazy.

Currently the capitalist welfare system rewards people for making bad decisions. Make no mistake that it is because places like Wal-Mart and McDonald's benefit from that situation. Likewise China is raking in the US wealth because of it. There wealthy have always found benefit in keeping slaves and indentured servants. It doesn't not (more do the people that opposed it) discern between the lazy and the unlucky. US capitalism does not recognize that a kid being born to a crack head mother in the projects has not the same advantages as the one born to a hotel chain mogul. It is one thing to allow nature to make sure that doesn't happen in the first place and provide disadvantages when it does, a completely different thing when the government encourages it with payment.

As in the disability system so is the welfare system geared towards what is natural. It is good to help you neighbor who has had a run of 3 or 4 days without bread. That is just unlucky in the context of this thought experiential. Bad luck is minimized by equality and humanized by compassion. So, it is good to help, but when you neighbor stop showing up and expecting you to just give him part of yours, that is immoral. The community will have to allow that family to suffer the consequences. Somebody recently said to me, “Starvation is a powerful motivator.” I tend to agree for the most part. If the human mind perceives no hope of getting out of a situation, it will resolve to starvation as a form of suicide.

Who controls the wealth disparity?

So who controls the wealth in this version? The baker? No, not really. If he gave less than a loaf, his community would starve and become too weak to help. Then he too would starve. They would either eventually turn on him or leave to find another baker. The individual laborers, do they set the gap? No, they just show up, and with a statistical advantage, they pick from the hat. But they have to show up. The natural system set the price. There is no need or use for bread beyond your basic needs. There is no way to get a second loaf. No way to extort the money for it from your neighbor. This version works more like a family. What was that thing they call a large family of people who support each other. I think the original inhabitants had such a community.

The perfect system is one that isn't perfect

In a perfect system, there would be a need for 10 laborers and 10 loafs of bread would be produced. But that is in contrast to human (or any living thing) nature. That would be stagnant. Another family would move in. Then slight unrest would begin this system as described. The reality is that it is healthy for a community to have just under its perfect amount of resources, as it will drive innovation. Just under is important. There needs to be hope, a way to envision making the system better, a way for a family who is unlucky to see a way out. Too much disparity (as shown in Part 1) causes “despair” and people just give up. There must be hope. Expecting the bread maker to make more or set up another bakery is silly. You are relying on his desire to take his excess time and solve something that isn't a problem to him. He might, sure. He has the knowledge, that is true. But that is only part of the equation.

“What isn't natural is artificial. What is artificial consumes finite resources. What isn't natural isn't sustainable. What isn't sustainable, eventually collapses. It has to.” - (Paraphrasing something said over a few different conversations with my buddy Pete Cammarata.)

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