As I begin to talk about a new potential economic system, I think it is important to start with a few disclaimers:
1) The fundamental assumption upon which this new economic system is predicated is that capitalism promotes resource inefficiency due to a faulty valuation practice.
2) Describing an entirely new economic system within the context of one blog obviously leaves a host of questions unanswered.
3) However, if the guiding principles sound intriguing, please help me to think of solutions to them rather than criticize as something “that will never work.”
Any new economic system ought to be based around principles of resource efficiency. We should be striving to obtain maximum utility per unit of raw material consumed. An economic system that does not value raw materials (fossil fuels, forests, water, etc.) based on the regenerative capacity of the Earth is inherently flawed from a sustainability perspective. We must pay for the replacement costs of raw materials in addition to the extraction costs. That makes one ask a question that the majority of us probably haven’t asked: How do YOU replace a barrel of oil?
It is possible to adjust the current economic model to be more sustainable – currently based on efficient allocation of capital - by imposing radical and drastic regulatory changes on the market. For example, we could take every raw commodity and calculate the replacement cost perhaps based on the amount of sunlight required to create it. This would make the price of fossil fuels skyrocket since their replacement costs are measured in millions of years. However, this feels a lot like trying to engineer a desired result through an indirect method. Capitalism uses this same indirect approach to engineer a high standard of living through the efficient allocation of capital. But is this the best approach?
In the short term, implementing regulatory changes like these will likely need to form a part of the transition plan to any new sustainable global economic system based on the core principle of efficient allocation of material resources. The fundamental societal shift that would need to occur would be to replace principles of “ownership” with those of “access”. Before you write me off as a communist, let me point out that a system based on “access” does not mean equal access.
Let’s imagine, for a moment, a hypothetical world without ownership. All property, land, assets, and natural resources now belong to all generations of humanity to be held in trust by the living generation. It sounds absurd to a Westerner. Ownership is the principle foundation upon which economics and law are based. Let’s ask ourselves, is utility derived from owning something or is it derived from using it? Do you want to own the Ferrari or drive the Ferrari? Do you want toown the shoes or wear the shoes? Do you want to own the music or listen to the music?
When you think about it, all the enjoyment from material things comes from using them, not owning them. Owning something requires you to clean, maintain, protect, replace, discard, buy, and sell it. Using something requires you to, well, use it and, of course, care for it while it is in your possession. It is far more enjoyable to use a friend’s jet ski after he or she bought, stored, maintained, hauled, docked, and fueled it. Ownership requires work and costs. Using things do not. So what is the fascination with owning things anyway?
Ownership is so old that it has become part of our culture. But what if we changed that culture and our economic system replaced ownership with access levels? An economic system based on access might be similar to playing a game at a fair where you accomplish a task to earn points (money or credits). By accumulating more points, you qualify for higher levels of rewards. In the real world, the reward translates to different levels of access for material goods and services. By working harder and contributing more to the betterment of society – defined by productive contributions to maximizing efficient use of resources towards better standards of living – one could achieve higher access levels.
Access level one might be the most basic level of access that all human beings would be entitled. It would consist of a community shelter with shared resources (shared rooms, bathrooms, clothes, etc.), basic nutritional food, access to education and basic medical care. People would receive this just for being human and would be engineered to be provided at the lowest possible resource cost to society. The opportunity exists to educate oneself in a pursuit that has been adopted by society as having potential to be beneficial to broader society. Based upon merit and contribution, an individual could receive higher access levels.
There could be an indefinite number of access levels and categories. Access level two might be an upgrade in the choice of food. Access level ten might be an upgrade to a basic individual apartment. Access level 100 could be a two-week vacation once per year, access to a car when needed, access to a boat at a local lake, and access to see a new movie once per month. If you are Bill Gates or Steve Jobs, you have the unlimited access card – you have access to anything whenever you want – a plane, the finest food, accommodation in any city, etc. One could customize their access level based upon their personal desires. However, no matter what access level you achieve, you cannot “own” or prohibit the use of any good while you are not using it. After the plane drops you off or you move to a new city, that plane or apartment is available for someone else with a similar access level for use.
If this concept seems foreign, consider that many products operate in this manner today. Whenever one rents something, they socialize the costs of maintenance, storage, protection, etc. to enjoy the benefits of using it. Renters have far higher rates of resource efficiency than owners – a rented DVD is watched far more times than a purchased DVD.
If properly configured, an economic system based on access and the efficient allocation of natural resources would maximize societal benefit per unit of natural resource. Products would be designed to be both durable and recyclable, since the product’s entire lifecycle would be controlled by the service provider. Access levels would allow humans to share resources efficiently and equitably and amongst a greater percentage of the world’s population. The incentive to gain higher access levels coupled with satisfying the natural human desire to belong and contribute could promote people to achieve their highest potential in a pursuit that society found desirable. Desirable pursuits might be based on both demand and importance coupled with the natural resource intensity of its production or service.
The criticism of access levels is likely to come from those who value “freedom” to do whatever you want. Some might day, “if I want to blow up a mountain that I ‘own’, I have the ‘right’ to do this.” If that is how one defines “freedom”, then this system will definitely impose on that “freedom”. The mountain has likely existed for hundreds of thousands of years; it is a mind-boggling thought that a human being that exists for a fraction of that time could “own” it and decide to destroy the mountain. However, access levels would not impose upon and would actually enable one’s freedom to education, basic healthcare, food, and shelter as well as an equal opportunity to make a better life for oneself. These are freedoms that the current economic system does not allocate evenly.
We live in a globally connected world. Burning gasoline in North America affects the climate in South Africa. Biodiversity loss along the equator has the potential to destroy natural cures from which all humanity could benefit. In a connected world, people do not have the “freedom” to do whatever they want. To maintain sustainability for current and future generations, present and future societies will have to make group decisions to guide the smartest use of limited natural resources towards our long term common goals. It is time we recognize that a system based on waste and inefficiency of resources will not deliver long term prosperity and begin to think about adapting to a new economic model for the future.