Open Capitalist

The time for a redo on America’s governing system is long over-due.  I believe most people see this, but the only presented solutions you hear about are from the far left and far right.  I also believe neither of the extremes provide the correct solution.  Furthermore, I also see most people agreeing with me, I see most people in America as centrists.  I also see this as the silent majority, silent because they don’t really swing to the extremes but the system still requires you to pick one of two horses to win the race.

To give anecdotal evidence I did a google search for Democratic, Republican, and Centrist Blogs.  Democratic blog returned 33 million hits, Republican Bog returned 21 million hits, and Centrist Blog returned 0.5 million hits.

I know these results are not statistically relevant, but as anecdotal evidence it would indicate that the vast majority swing to the extremes.  If you routinely find yourself attending anarchist meetings or currently smell like patchouli you might be part of one of the extremes and anything else I have to say might not be of interest.  On the other hand, if by turning your head you can see any two of these three things – a gun, a bible, or Palin paraphernalia then this isn’t for you either.  For everyone else, for those in the center, I would like to present one possible way I see us getting out of this current situation.

First I will give you some idea of my view point.  Global warming does exist, it is man made, but it is reversible through technology and isn’t cause for excessive alarm.  I fully agree with capitalism as far as survival of the fittest, and automatic price controls is concerned.  I agree with the idea of safety nets and public works, but I don’t see our current government system as efficiently being able to create it.  I want small government and states’ rights; I would pick the libertarian horse if it didn’t already lose.  I believe in helping the less fortunate at the expense of the more fortunate.  I agree that people should help themselves and not rely on a welfare system.  I believe a combination of open source and capitalism can accomplish what the vast majority want.

What I want to take from the open source movement.

Change of motivations.  In our system everything is measured in dollars, the open source movement has risen above this as the prime mover.  We are lucky enough to live in a society which affords a lot of free time.  Many people have found contributing to open source projects a rewarding way to use this free time to create something rather than merely consume.  A very good video on motivation of employees, gives one possible idea as to why.  I personally like to think that humans are starting to realize that competition isn’t required to get what they want and are evolving new methods of existing in their society.  Regardless of the motive, there exists a large number of people willing to work on a given project without monetary reward.  Sorceforge is one of the largest and well known open source code repositories, taken from their website – “As of February, 2009, more than 230,000 software projects have been registered to use our services by more than 2 million registered users.”

Increased innovation.  Without a profit motive and bureaucracy, research and development is focused almost completely on product development.  Profit motive’s impact on research and development is most apparent in pharmaceuticals.  Instead of focusing on developing better cures the focus is on developing derivative products that extend patent protection, thus increasing profit without creating anything new or better.  Lack of bureaucracy allows the freedom to do whatever the designers want.  And being open source, if the design strays from what a particular designer wants/needs then they can take what they want from the current design and create a new project.

Cooperation vs. competition.  The importance of this shift cannot be overstated.  With an increase in automation we are entering a time when full employment will be impossible.  It simply won’t be required in order to provide for a given populations’ needs.  We can see the impact of this now with outsourcing as the analogy.  Why would a corporation that only has a profit motive hire a first world worker for 5-10 times the cost of overseas labor?  They have to outsource in-order to remain competitive because their competitors are outsourcing.  If you extrapolate that out and replace the outsourced labor with automation why would a company hire a person when a machine works for free?

What I want to take from capitalism.

Efficiency.  The theoretical capitalist system that includes competition automatically finds the most efficient distribution method.  This doesn’t happen in practice due to the natural effect of survival of the fittest but if it is paired with removal of profit motive then it will have the desired effect.  An example- assume I have an open source business selling widget X.  I become greedy and start to take a larger and larger profit.  Given that the entire method of producing Widget X is open source there is a natural limit to how much profit I can take before someone starts producing Widget X taking a lower profit and selling for less.

Money.  Open source software exists because the cost of distribution is effectively zero.  This is not the case for anything that has a cost of reproduction.  This necessitates selling for a profit.  We can’t automatically jump from where we are to where we should be.  Open Capitalist is merely a stepping stone.

Survival of the fittest.  This was touched on above but the aspect I am referring to is how well a project motivates its contributors and customers.  In a corporate environment contributors are employees and the main motive is a wage.  The customers’ motive is cost.  Given two comparable products at a store the one that is cheaper will generally win.  Given two projects looking for contributors the one that provides the most benefit will generate the most contributors.  If there were two equal projects looking for contributors and one offered that all profit would go to feed the hungry, and one offered nothing, which would survive, which would you contribute your time to?

What the main problem is.

In a nut shell it is my view that the separation of rich and poor coupled with the lack of upward socio-economic mobility is the biggest thing threatening our future.  In America the last time the separation has been as great as it is now was back in 1929.  The difference between now and then is that it was corrected after the Great Depression.  I don’t see any indication that this disparity will be corrected this time around.  For the history buffs out there please feel free to do your own research regarding how these things usually get corrected, this is something we should not want to repeat.

What the solution isn’t.

We have Government, Corporations, and NGOs to choose from.  None of these can be used by themselves to arrive at a solution. 

I feel most people reading this would agree that government is broken.  I lean left and feel the government benefits the rich at the expense of the poor.  If you lean right you might feel that government benefits the poor too much at the expense of the rich.  Regardless of where you are on the spectrum you would probably agree that government generally answers to special interests more than the general population.  I would hypothesize that nearly everybody views government as inefficient.

Corporations only have profit as a motive.  I should clarify by saying that public corporations are the only type I am referring to.  Publicly traded companies are legally bound to protect the interests of shareholders.  Given that lower paid employees exist in other countries why would any corporation pay to hire expensive first world workers?

NGOs are unsustainable.  Any organization that relies on donations is inherently unstable.  If these donations dry up then so does any benefit that arises from this NGO.  A better method to employ could be drawn from craigslist.org and newmansown.com.  Both of these provide a huge benefit to society and neither of them rely on donations.

One possible solution: Open Capitalist