34

Capitalism does a pretty good job of incentivizing people to work on what's economically profitable, e.g., finance, law, tech, and what gives them power over others, e.g., becoming CEOs. Now let's assume for a moment that we lived in some kind of socialist utopia with a substantial UBI, an effective wealth tax, the land being owned by the people, and companies being run as worker cooperatives with a maximum pay gap and colleagues electing their bosses. With the financial and power incentives largely disabled, which alternative mechanisms might nudge people to work on the problems most pressing to society?*

My personal take is that what people really strive for is social recognition. Money and power in capitalism are a good proxy for both, which is why they work so well as incentives. So what one would need is an alternative mechanism to make people feel socially recognized if they work on important tasks.

*Note that "most pressing to society" != "economically profitable". Nurses, teachers, garbage men and small-scale farmers are a few examples that would arguably fall into the former but not the latter category.

  • 5
    Have you read about Maslow's Hierarchy? en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs – Paul Johnson Jul 10 at 11:11
  • 8
    Medals and honours have traditionally been used for this sort of thing in militaries and public service. hey both fit reasonably neatly into your social recognition hypothesis. – Alex Jul 10 at 11:23
  • 34
    "My personal take is that what people really strive for is social recognition." In my opinion that's a fundamentally bad assumption. Most people really only care what a small number of others think about them, and once a person's basic needs are taken care of, in my experience they tend to do what they WANT to do. A society that provides all basic needs "for free" better have enough excess production to support those who want to surf or play golf or video games all day every day. See psychologytoday.com/us/blog/evidence-based-living/201704/… – Just Me Jul 10 at 13:25
  • 12
    "My personal take is that what people really strive for is social recognition": some people, sure. But what about everyone else? – Steve Melnikoff Jul 10 at 16:04
  • 3
    “the land being owned by the people” What does this mean? Who controls it? – user76284 Jul 11 at 3:30

12 Answers 12

53

The trouble with plain "social recognition" is that it doesn't scale. Dunbar's Number is the number of people you can "know" in the sense of having stable social relationships with them; its about the number in the average Christmas card list, for example. Its generally thought to be around 150, although there is no doubt that some people can "know" many more. (Aside: that link is about face recognition, but face recognition is thought to be merely stage 1 in a processing pipeline that links the face to memories about the person).

In a community smaller than Dunbar's Number everyone knows everyone else, what they need, what they are doing etc, and so social esteem works well. In Socialist theory this is known as Primitive Communism. Social esteem translates into a "gift economy" where people readily share resources in the knowledge that everyone else is keeping a mental account and will be willing to do likewise in the future. Having a reputation for stinginess in such a community means you will find yourself excluded from future resources.

Once you get above Dunbar's Number this system breaks down; a member of such a society is going to encounter people they don't know and therefore cannot be sure how much the community owes them; likewise being generous with an unknown person may not lead to communal reciprocity because not everyone will know about your good behaviour. So at that point the social esteem relationship breaks down and the community has to find another way of tracking who has done what to benefit others. The immediate response is barter, followed almost immediately by the adoption of some handy commodity as a general medium of exchange, which then evolves into money.

This is of course an oversimplified "just so story" version. The reality was slower, messier, and frequently more bloody. But it seems to have been the route followed when stone age tribes (smaller than Dunbar's Number) evolved into Bronze Age kingdoms and empires.

Money can be seen as a special case of a wider class of schemes to track communal benefit and award people accordingly. The problem is to come up with something that accurately tracks communal benefit without being subject "gaming the system". This is a hard problem. The most robust and flexible decentralised system found so far seems to be money. You are welcome to try to invent something better, but I'm not holding my breath.

| improve this answer | |
  • Charles Stross has a similar (partial) system in part of Accelerando. It sort-of ends up subverted by his cat. – simon at rcl Jul 10 at 13:46
  • 1
    That's a good answer. Social recognition may work only on small scales, but the theory of complex systems shows that global patterns can emerge from local behaviors. During the coronavirus crisis, we have seen essential workers (nurses, supermarket employees, garbage men,...) continue their work, despite strong incentives to withdraw (health risk, children to take care of, increased workload,...). A nurse will continue her work by fear of (local) public shame/will to be helpful to her community; if most employees in a company/hospital/etc continue to work, it is harder for one to withdraw. – Taladris Jul 13 at 2:38
  • (2) Social experiments tend to show that we base our behavior on the observation of the people around us. For example, people wash their hands more frequently and for longer times when there are other people in a bathroom. – Taladris Jul 13 at 2:41
  • 2
    @Taladris True, but such pressures work both ways. If defectors are seen to get away with it, defection spreads. – Paul Johnson Jul 13 at 6:23
29

Modern production requires enormous coordination and incentivization across cultural, technological, temporal, and geographic barriers ("scale"), often even within a single country much less across the global trade network. Money has proven to be really good at coordinating that activity because of some very specific desirable properties as e.g. a medium of exchange, and once you've added those to something else you've just turned it into another form of money.

The Color of Money

  1. Money is fungible, there is one standard unit of value for exchanging. "How many cows is a pig worth?" is a question that money makes much easier to answer.
  2. Money is purely instrumental: there's no inherent moral judgement attached to money, unlike say status.
  3. Money is effectively timeless, it can be used to store value. Real estate also frequently serves this function, but is illiquid and non-fungible.

Although one can bang on a social recognition system until it seems to replace money in those roles, it's a contrivance: they don't necessarily naturally slot into those (and are definitionally out on #2). I can't take my good standing with Bob and trade it for goodwill from Alice, my standing fades over time as the things that generated it move out of current memory, etc.

Social Systems Currently in Play:

There are already systems that are by-and-large isolated from the rough and tumble state-of-nature competitiveness of markets, usually by design. Two that come to mind are government, and academia. Neither is generally upheld as a paragon of a way to run things. Then again, neither are markets, but the point is that it probably won't be a simple thing to fix.

A Digression on why this Rarely Works:

I know since this is a stack exchange site a lot of the readers are programmers, so a programming analogy: hand assembly vs. your favorite Fortran or C compiler.

Back in the day, people wrote directly in assembly for particular machine architectures. Even well after compilers were invented, and even after they became mainstream, people would still do so, generally for performance. But then we reached a tipping point: suddenly hand-crafted assembly programs could no longer reliably beat the best compilers. And it wasn't just that compilers let you push out features faster as a tradeoff for perf, the way that using a higher level language over C does today: the compiled programs actually ran faster too.

Of course, assembly language programmers didn't want to admit it. So they looked at the instructions generated by those compilers, and sure enough there were plenty of missed opportunities for optimization, so they howled that they were still superior to the compiler.

So how did the compiled programs run faster, if even a normal assembly language programmer could notice places where they were sub-optimal?

Because global optimizations trump local ones.

It was relatively easy for a programmer to notice a place where the compiler could have done a better job, but it was nigh impossible to hold the whole program in your head well enough to notice that the loop you spent hours optimizing better than a compiler ever could have wasn't even needed in the first place.

And this is the situation we find ourselves in today with capitalism. Even a complete idiot can identify situations where capitalism produces sub-optimal outcomes. But it's extremely difficult to design a system that does better than it at producing material progress at a society-wide scale.

That Doesn't Mean We Shouldn't Soften the Blow

People still write some critical path sections of code in hand written assembly today, because it's still possible to beat the compiler in the small. And so should we be with capitalism: we should be a lot more willing to twiddle with the outcomes than with the mechanisms. You may not be able to coordinate a country's production as well by other means, but that doesn't mean that capitalism produces the best of all possible worlds for every person at all times, or that the outcomes it generates have some sort of inherent morality.

But as for using social recognition, well, you wouldn't be the first to try. You can (and should) try to take the sting out of having less money and power than you might want, but money and power will always exist (a rose by any other name...).

| improve this answer | |
  • I see that if something has properties 1-3, it would be equivalent to money. But why would a mechanism for providing social recognition need to have those properties? I seem to be missing an important step of the argument here. – jhin Jul 10 at 18:37
  • 2
    Sure, worker co-operatives can work; The Co-operative Movement was founded in the UK, and John Lewis is another UK example (though Mondragon's growth seems to have been a special case). However they exist within a basically capitalist system and do not solve fundamental issues in the abolition of capitalism, including the mode of transfer of goods between co-ops, allocation of workers to co-ops, formation of new co-ops (what if I want to be a co-op all on my own?), adoption of new technology and what to do with unproductive co-ops. I could go on I'm but out of space. – Paul Johnson Jul 11 at 16:58
  • I have to disagree with your use of the programming analogy, because it IS perfectly possible to hold a whole program in your head and do global optimization on it. (I make a good living doing just that :-)) OTOH, compilers don't generally do much global optimization, beyond individual compilation units. – jamesqf Jul 12 at 16:25
  • 1
    @jamesqf at what scale? And I mean that in at least two senses of scale: how big of a program and percentage of programmers who could replicate the feat (we can't just put you in charge of everything). For the political analogy, for a given form of coordination how robust is it against some yahoo coming along and screwing it up? But yeah, no analogy is perfect, some are helpful. – Jared Smith Jul 12 at 18:46
  • @Jared Smith: Obviously very large programs can be written - I woudn't want to try writing my own browser, for instance. I'm just saying that IN GENERAL the analogy fails, and it often does in the domain where I work (scientific/engineering modelling), which happens to be one where optimization is quite important. – jamesqf Jul 13 at 23:36
16

I'm surprised no one's picked up yet how self-referential to StackExchange this question is. Or to Open Source, sharing economy in general. People will do things for reputation, if their other immediate needs are already covered.

Now, whether that would scale up, or rather scale down is an entirely different thing. Open source works because there is match between the small minority of people making it and those using it, because code or information, once created can be duplicated at will and because the raw materials are, largely, just knowledge based. And, because to a whole lot of people who work in that field, it's just fun.

Rather than trying to shoot a whole bunch of holes into reputation/sharing as an alternative mechanism, I'll quote something else which struck me as a fallacy once I read it in Race Against the Machine, a book about AIs taking over most jobs.

The authors, who did not repudiate the idea of money, basically said that anyone can be a content creator and live a meaningful life. That's kinda silly. Sure, a minority of people can become a famous YouTuber or create an app with 10 million users. That's their position and their message of hope, even as they claim that AI will take out a lot of basic knowledge work. But, letting alone the question of ability, mathematically not everyone can have 10 million users unless everyone is also a customer to 10 million people.

So it's important as you look at new economic models to ascertain whether they can truly scale up or not. Marx never quite got that right. I am somewhat dubious about a no-money society, with likely a lot of manufacturing automation added in, magically engaging everyone in useful behavior. Yes, in theory, we'd like to see it end up as Star Trek or Ian Banks' Culture. It's quite possible it would end up more as Idiocracy or Wall-E's passengers. Or Elois and Morlocks.

A model to look at might be tribal hunter-gatherer societies, with their long leisure times, but even those operate under a clear external pressure: you'll starve if you don't do anything. And, are these societies as a whole creative and innovative, or do they just do the same things every day and stop inventing/discovering, i.e. are they a model we really ought to try to emulate?

I won't repeat the argument that the whole case against money is somewhat besides the point, an argument better made by @Jared Smith and @Paul Johnson, but I subscribe to it as well: people are upset about the effects of money, but sometimes fail to recognize that anything else that replaces it in terms of scarcity/fungibility will have the risk of similar side effects.

That said, I doubt any of us miss the 13-14 hour workdays reputed to take place at the start of the Industrial Revolution and precisely what inspired Dickens and Marx.

| improve this answer | |
  • 1
    The Ian Banks "Culture" series is interesting here because its clear that the vast majority of humans are basically drones who care only about parties, sex, and art (often all at the same time). The Culture is basically run by the Minds, who see the human population as something between pets and wards. – Paul Johnson Jul 11 at 8:30
  • "the 13-14 hour workdays reputed to take place at the start of the Industrial Revolution". In 1929 John Maynard Keynes predicted that by now we would all be working 15 hours per week. – Paul Johnson Jul 11 at 8:40
  • 1
    @PaulJohnson Oh, I know that. But Culture is often cited as a post-scarcity Utopian ideal, by people who don't look much at the details. Actually, I have a bigger objection to Culture than your criticism of hedonism: Banks' society only shows the jet set of human over-achievers within the Culture - the 99% of everyone else is always off-stage and we are never told what they contribute, how they spend their days and how they perceive the system. I loved the early books, but they're really quite one-dimensional as a social model/exploration. – Italian Philosophers 4 Monica Jul 11 at 17:44
  • I see two slight issues with this answer: First, you write: "Or to Open Source, sharing economy in general. People will do things for reputation, if their other immediate needs are already covered." - if I understand correctly, this insinuates reputation is the one driving force for people to contribute to open source projects, which I don't think is evident. Second, you state that "not everyone can have 10 million users unless everyone is also a customer to 10 million people". While that is correct in and of itself, and it may indeed be what the referenced book (that I have not read) ... – O. R. Mapper Jul 12 at 12:53
  • 1
    @O. R. Mapper: Do most people who contribute to open source projects do so for reputation, or because they want to use the output of the project? – jamesqf Jul 14 at 17:15
12

One incentive which immediately springs to mind is the concept of a social score, like that used by the Social Credit System developed by the CPC in China. Full details of this system are hard to come by, but the general idea is that details about an individual's social behaviour, for example, insurance fraud, cheating in exams, or even anti-social behaviour on public transport (sources in Chinese), are used to give each individual a numerical social credit score. Scores can also be increased; according to the Brookings Institute:

For example, a traffic ticket is -5 points, an "exemplary city level heroic act" is +30 points, and donating to charity or blood banks equates to points depending on the amount given.

In China, incentives primarily appear to be negative in nature. Examples include universities rejecting one's children, or being denied access to public transport. The Atlantic reports that "A citizen can lose the right to travel if he is caught jaywalking or playing music too loud."

There do, however, also appear to be rewards for positive behaviour; The Nanjinger reports that "individuals with good credit will receive preferential treatment, in areas such as transportation, cultural and tourism consumption, financial credit, public parking and medical treatment". Interestingly, the Chinese dating app Baihe allows users to display their social credit score, matching up with your idea of social recognition being a possible incentive. The database of individuals' and companies' scores also appears to be publicly available.

While this system may seem fairly authoritarian, similar systems which provide negative incentives are already in use in the USA; for example insurance companies may use evidence of behaviour on social media to increase premiums, while applications such as Uber have announced a policy to block users who develop a below-average rating.

| improve this answer | |
  • 1
    This is quite interesting! I read about the Chinese system a while ago; back then much less was known (and possibly also implemented). I didn't know it's so far-reaching - definitely an important reference for this question. One might argue about including this in a utopian vision, though... – jhin Jul 10 at 10:44
  • 16
    The Chinese system is designed to be centralised and authoritarian, so there is no guarantee that merits and demerits will be awarded in a way that reflects communal benefit rather than sucking up to the boss (c/f the UK Honours system in imdb.com/title/tt0751808). I've tried to figure out a way of doing this democratically, but everything I can come up with either has too many ways to game the system or else is isomorphic to money. – Paul Johnson Jul 10 at 13:47
  • @PaulJohnson Thanks, now I'm off on an internet rabbit hole about decentralized democratic reputation systems; might be back in a few months... ;) – jhin Jul 10 at 19:45
  • 1
    From my point of view, at least, the fundamental flaw to a system like this is that it absolutely eliminates all personal privacy. Money is pretty well private, at least after you pay taxes. – jamesqf Jul 11 at 20:37
  • 5
    @PaulJohnson, the same could be said about money. Jobs that directly benefit the community like teachers and nurses are severely underpaid, while programming tools for stock trading would pay me well. Money is largely allocated by people who want to extract more money from the system, so this is prioritized by the economy, while public services are tax funded (i.e. the government needs to step in and force redistribution of money to benefit society). – Simon Richter Jul 13 at 9:01
6

There may not necessarily be a need for an artificial incentive; while you can certainly spend your days watching every movie & show on Netflix or playing through Ubisoft's entire library you won't be fulfilled and happy as a result.

People want to do something meaningful, something that makes them feel useful; whether it's helping their communities or just keeping busy. This would fall under "Esteem needs" and "Self actualisation" of Maslow's hierarchy of needs.

It's not uncommon for baby boomers to continue to work well into their 60s, 70s or even 80s. Some people decide to continue working because they need the money, while others love what they do and can't imagine not doing it anymore or just need to stay busy.

Never Retire: Why People Are Still Working in Their 70s and 80s

Doing nothing is not healthy; both physically and mentally. Most people who don't work suffer under problems which they should receive help for.

It is also crucial that a non-capitalistic system can convince the population that it works, just like capitalism cannot work if the people do not trust that they can buy things of equal value with their money.

| improve this answer | |
  • 1
    Welcome to the site! :-) am completely on your side that people would not stop doing productive things! However, my question was how to align people's activities with what's needed for society. There are quite a few jobs that may be considered as not very pleasant to work in, and chances are that too few people would opt for them if there was universal, significant UBI etc. – jhin Jul 10 at 20:39
  • 2
    Welcome! I agree with jhin. The problem isn't that people would stop doing things: is that people might not do what is needed for society. Even people who feel the need to do something to be validated may not necessarily help the community or volunteer, they may do jobs that - while productive - may not be what society needs. Many necessary jobs maybe so dangerous or weird that even the most altruistic would do them regularly without incentive. – Tyler Mc Jul 10 at 20:46
  • 2
    @jhin Presumably, the most fulfilled person in your universe is the dictator who decides "what is needed for society" and forces everyone else to agree :) (I'm reminded of the story of a hereditary monarchy where a teenager who became the monarch complained bitterly "what is the point of being King, if I'm not allowed to kill all the people I don't like?") – alephzero Jul 11 at 4:08
  • @alephzero Well, ideally it would not be a dictator but a democratic process. ;-) – jhin Jul 11 at 9:16
  • "...you won't be fulfilled and happy as a result.": some people won't...and some people might. Can you back up this claim with any numbers? "People want to do something meaningful": some people find creating interesting things in Minecraft meaningful; does that count as something useful for society? – Steve Melnikoff Jul 11 at 16:14
5

According to psychologists, humans are motivated in two ways:

Extrinsic Motivation

...is motivation that comes from outside the individual. If is basically "carrot and stick" motivation. People do things that make them feel good (carrot) and avoid things that make them feel bad (stick).

This type of motivation works well for repetitive, relatively mindless. "follow the rules"-type tasks like sweeping roads and operating basic machinery.

Money is an example of an extrinsic motivator. People work for money because it allows them to purchase things that make them feel good, and avoid the things that make life miserable.

Intrinsic Motivation

The other type of motivation is Intrinsic. It comes from within. Tasks that are intrinsically motivating are those that result in Mastery, Autonomy, and Purpose. In other words, they involve increasing skill over time, they meet our need to be self-determining, and they are meaningful to us. These type of tasks tend to involve craftsmanship, judgement, and human ingenuity.

Many of the problems "most pressing to society" are heuristic in nature, rather than algorithmic. In other words, they are problems that involve professional skills and judgement rather than repetitive rule-following. As long as people's basic needs are met, they aren't micro-managed, etc. these types of problem have a great deal of appeal to people, irrespective of financial rewards.

The above explains why people work on open-source software in their own time, why people ay sport and video games, why UK nurses (whose wages can be relatively poor) often work significantly more hours than they are paid to work, and why we answer questions here on this web site.

In the society described by the OP, it wouldn't be especially difficult to get people to work in jobs like teaching and nursing. Your real challenge would be the ordinary, boring stuff. Garbage men and (to a lesser extent) farmers would be much harder to find.

| improve this answer | |
3

Frame challenge: it's not necessarily true that in such a society, financial incentives would be largely disabled (nor power incentives either, possibly). I think it is a common misconception that monetary, market-based societies can only coexist with capitalism and not other kinds of power structures. For instance, the recent book Radical Markets explores the power of market competition in non-capitalist settings.

The first example from the book is the COST: Common Ownership Self-Assessed Tax. The idea is that all land, nay, all property, is owned collectively by the People (just as in your premise). But how do we decide who gets to use different land or property at different times? We allow folks to pay to rent it from the People for a limited time, say 1 year at a time. The amount they pay to rent a parcel of land or a T-shirt or whatever is set by an interesting auction-like scheme but we don't need to go into it here.

Markets and social ownership. A narrow distinction between capitalism and socialism is simply who owns and collects rents from certain kinds of property (especially economically useful property i.e. "the means of production"). So a "socialist utopia" like you describe could be totally compatible with the market economies that you see in e.g. the USA today, except that profits would be going to certain collective groups rather than individuals or shareholders. But you could still have a market-based economy where richer people get to buy more things and where jobs' incentives are largely financial -- and power too, because if you work at a company then you'd have a say in what decisions it makes, which gives you some power. (However, I'll note that a capitalist may argue that incentives to be an entrepreneur are diminished, so there would be less innovation and productivity.)

Markets and safetynets. A different aspect of what people call socialism, which you also include, are strong social safety nets including universal basic income. This is also strongly compatible with money-based market economies. If we guarantee everyone a certain size studio apartment, a certain amount of rice and water, a certain amount of income, and a certain level of health coverage, this does not generally remove their desire to get more or better quality things. Maybe they want a bigger house, or a nicer car, or to eat a lot of expensive steaks or go on lavish vacations. Then they are incentivized to earn more money and work to get those things. Similarly, companies that operate as worker co-ops could still participate in a labor market where different jobs are paid different amounts.

In fact, I have an argument that money works better with strong safetynets. The First Welfare Theorem makes a very weak claim that markets are Pareto-Optimal (which is nothing to brag about), but microeconomic mechanisms like auctions are often promoted as maximizing social welfare. This would be big if true, but it's generally untrue because rich people have less value for money than poor people, so markets tend to favor welfare of rich over poor. Social safetynets and UBI tend to raise the minimum standard and equalize the playing field, so in theory, markets should work better and be more efficient than they are with more poverty.

The teacher-pay problem. A really interesting part of your question is the tension between jobs that are "valuable to society" versus "paid well and actually valued highly". Unfortunately, many jobs that are the most critical also have a high ratio of supply (people able and willing to do them) to demand (number of jobs needed), which tends to mean they pay low wages. Nothing I wrote would change that -- it's a markets thing, not a capitalism thing. Although a strong safetynet could be considered a drastic change, but still e.g. teachers would probably be paid less than lawyers. How that could change, even in theory, sounds like a very hard question.

| improve this answer | |
  • 1
    Re "certain collective groups rather than [...] shareholders": This looks like it would benefit from further clarification. Do shareholders not also make up a collective group? – njuffa Jul 12 at 2:56
  • @njuffa, I agree that they do. I was thinking of other collective groups, which would usually be either the workers, or the public (i.e. the government which has nationalized the company). – usul Jul 12 at 19:33
3

Money Works

The problem isn't money, per se. As others have noted, money is a very effective mechanism for exchanging labor and goods. The real problem with capitalism is the flows of money. As you observe, there is a mismatch between what a capitalist society spends its money on, and what the citizens of that society believes are important. For instance, everyone thinks that teachers are important, but nobody wants to pay more taxes to increase teacher pay. Many people likely believe that social workers are helpful members of society, but nobody wants to pay higher taxes to pay them more than minimum wage.

Money Creation

The first problem is: where does money come from? You mention UBI, which is the first step in the right direction. Traditionally, UBI would be funded via tax revenues. You mention a wealth tax, and so I presume that your society would fund UBI via taxes as well. Capitalism creates money during the loan origination process (central banks also create money, but broad money is the bulk of money in a society, and this comes from private banks). And thus, bankers decide what economic activity is valuable and should be funded. On top of that, investors further decide what is important. And how is that working for us?

Well, we have widespread poverty, massive inequality, weak infrastructure and social services, etc. So perhaps the difference between modern capitalism and your utopia is that capital is not deployed efficiently. And yet, that is clearly not true. Capital is deployed efficiently, which is why we have trillion dollar corporations. We have filthy stinking rich companies and people. Capitalism clearly works. It just doesn't work for everyone.

What if you took the money creation function away from bankers and investors and put it in the hands of the public at large? The problem with bankers is that they need to turn a profit. And investors are just looking to line their pockets. The capitalist assumption is that these incentives will lead to optimal social outcomes, but the reality is far from it. Instead of funding services via taxes, what if you simply created the money for them out of thin air? Then, you just need to decide how and when to do so.

What if public services were funded by public contracts which are proposed and voted on democratically? The way the funding could be adjusted is that each service is also rated by the public on the quality of delivery, efficiency, etc. Sectors with low ratings would get increased funding, and sectors with high ratings would have stabilized funding.

Money Destruction

Of course, you can't just print money forever. You will inflate your economy out of existence. Most people will say you just can't print money as I've suggested above at all. It won't work. But that's not true. You just need to destroy money as quickly as you create it (on average). You mention communal ownership of property, and this is a convenient place to send money back into the aether. Nobody can "own" land; they only rent it. But if nobody owns it, who does the rent go to? Well, it goes into the aether! In this way, the total rents across society can balance the rate of money creation via public goods and services. If inflation starts to take hold, just raise rents across the board. If deflation becomes a risk, then lower rents.

Framed this way, it is easy to see that rents are a kind of hidden tax. And yet, they are a tax that most people would be happy to pay, because they are already used to paying rent. And, clearly, land and buildings are an exclusive resource that can only be used by a few people at a time. There must be a deconfliction strategy for land use, and rents are a perfectly good mechanism.

But how to set the rent, if nobody actually owns the land? Well, just let potential renters bid on lots via auction. The market can set the price. Then, when money destruction needs to increase, then all rents go up by some proportion, on top of the contractual winning bid (or, if necessary, they increase progressively). Renters are definitely exposed to rent increase risk, but presumably they can recover it by raising prices, which causes more money to flow into the burn pit.

Social Justice

This system works better for the simple reason that it distributes economic power across all of society, rather than concentrating it in the hands of the financial sector. Society can literally choose to spend money on anything it deems to be "socially valuable" or "pro-social", regardless of its profit potential. Of course, people who have amassed wealth are still free to start businesses with their own capital. But if someone wants to start an organization whose purpose is not to make money, but to do good, then society can support and perpetuate that organization simply by designating money to that cause. Such grants can be time-limited (like 1-2 year funding at a time) so that when the organization fails to live up to its charter, the public can shut them down unceremoniously.

This kind of system allows each person to achieve their potential by following their passions, so long as their passion aligns with the rest of society either by: 1. producing a product/service that customers want to buy, at a profit, or 2. producing a product/service that a majority of citizens believe is worthy to be funded via a public grant. Since this system allows the same kinds of corporations which capitalism produces, it should produce an economy/society with strictly greater degrees of freedom than capitalism. It also allows people to succeed by chasing virtue rather than mere profit, while not condemning profit to a moral backwater.

| improve this answer | |
  • 2
    The money creation/destruction part of this is basically a Land Value Tax (just recycle the money as government revenue rather than creating/destroying it). en.wikipedia.org/wiki/Land_value_tax . The big headache is deciding what the ground is worth as opposed to the buildings currently on top of it. – Paul Johnson Jul 11 at 8:14
  • 1
    "public contracts which are proposed and voted on democratically". Having an intelligent and informed opinion about any such contract is going to require hours of systematic and diligent study. Any vote made without that is just a random guess, or at best a proxy for the voter's preferred soundbite. Technocracy vs Democracy is a hard problem that is not solved merely by holding more votes. – Paul Johnson Jul 11 at 8:21
  • Following up on Paul Johnson's comment, what exactly distinguishes your proposal from our current system + a bite more direct democracy [occasionally voting on projects] + a land value tax? – jhin Jul 11 at 14:47
  • 1
    @jhin Well, our current system is limited by how capitalists choose to deploy capital. Which means that nobody who lacks capital gets to say which corporations or projects are funded. This makes capitalism devolve into oligarchy. Second, gov'ts are limited by tax receipts. Therefore, the amount of new economic activity is gated by the amount of existing activity. Creating money from nothing has no such restraints. The rents follow the spend, not lead. Taxes (theoretically) lead (and limit) the public spend. – Lawnmower Man Jul 11 at 19:36
  • @PaulJohnson the full system of contracts I imagine is too big for a comment, but the basic idea is that all contracts have a "poll test" based only on statements within the contract to verify that anyone voting on it has an essential understanding of what it requests. A vote is weighted by the score on this test, which should self-select individuals who are interested and qualified to assess such contracts. Although the contracts are theoretically perfectly democratic, in practice, you mostly want experts choosing to vote, without explicitly designating who an "expert" is. – Lawnmower Man Jul 11 at 19:43
3

I would say your social recognition would play part, but also intrinsic motivation - like working on something that's fun or that scratches a personal itch. Beyond these, there will be some kind of rationing mechanism that incentivizes work that society needs to have done. If everything turns out well, or the society is an abundance economy, then social recognition and intrinsic motivation can do the lifting all on their own. But if people don't want to work on what they need to work on, the fallback comes into play.

In simple terms, society has some tasks it needs to have done in order to continue its own existence. If resources are abundant, those tasks are insignificant compared to everything else, so anyone's free to spend his life partying or living on the holodeck. But if not, society may prod its members to work on what's needed rather than what's wanted.

The typical rationing mechanism is money (economic power) in capitalism. Some of the perceived absurdity comes not just from that there's such inequality of economic power, but also that what capitalism deems necessary is not actually necessary (as in your example of teachers). Society, as a whole, has to decide what's needed, and capitalism in certain cases don't seem to do that job very well.

But it may be possible to make a rationing mechanism much less heavy-handed. Since you tagged your post "socialism", the example that comes first to mind is Cottrell and Cockshott's Towards a New Socialism. Its rationing mechanism works like this:

  • Everybody gets paid a (non-transferable) labor token per unit time (say hour) worked, no matter the job. They then spend their tokens in shops, at market-clearing prices.

  • Organizations that provide jobs are expanded or contracted based on the relative demand for their products. An organization whose products fetch more labor tokens than labor time it takes to produce those products eventually gets scaled up by society. (The organization does not see, nor can it personally accumulate, this excess in the form of money; society does the investment based on the organization's expansion plans.) Similarly, an organization whose products fetch less will eventually be scaled down.

  • There's full (voluntary) employment.

  • Work rationing is based on availability. Suppose there are two types of work: unpleasant and pleasant. The people who are good at the pleasant job get preferentially employed there, which leaves the unpleasant jobs for the rest. But whether in a pleasant or unpleasant job, the wage is still the same.

  • People thus sort themselves into different jobs based on intrinsic motivation (going for the fun jobs since everything pays the same) and social recognition (being able to tell others they're doing something worthwhile). But if people don't want what society wants, someone will have to take the unpleasant jobs.

Once you add UBI, there's the possibility that some jobs are so unpleasant that people would prefer not working to taking them, which would lead to some amount of unemployment, and some work that won't get done. Since society can't compensate the workers by giving them more tokens, it would instead have to compensate them by making the job less unpleasant, if possible. (Social recognition could possibly pick up some of the slack: choosing dangerous dirty job X might be considered a brave/unselfish thing to do.) In the longer run, that kind of job should be a prime candidate for automation, so that nobody would have to be thus convinced.

This kind of society, if feasible, would be significantly more equal, though it still employs economic power as a fallback. To the degree that society manages to align people's desires for recognition and fulfillment with what needs to be done, the economic rationing mechanism is just there; and the more abundance there is, the less it needs to intervene.

| improve this answer | |
1

In Civilization and Its Discontents Sigmund Freud, the founder of psychoanalysis, examines motivation using the tools of ethical philosophy. Freud describes the ego as that which is conscious within the organism and which also makes efforts to govern action in the sensory context. As an ethical philosopher Freud argues, in essence, that the biological source of inner drives, called the id, drives the ego to strive to become happy in society. The evidence for this assumption is that the majority of persons strive to become happy and to avoid suffering when making efforts to govern action in the world. Freud argues that love makes the ego happy and failure to cooperate in society via useful work makes the ego suffer via disabilities and other modes of persistent pain. So Freud, the ethical philosopher, argues that the ego should desire to expand bonds of love in society and to engage in prosocial work. Another way to state this, as an ethical philosophy, is that the body recognizes efforts to love and work in society as the means to cause the good.

Freud in essence next wonders why prudence, or efforts to govern action by the use of reason, does not manifest in a small or large group as universal love and modes of cooperative work? On the contrary societies produce individuals who are aggressive and/or unhappy and/or unproductive in cooperative modes of work.

According to his model of the psyche there are only three sources of cause of ego experience. These are the source of inner drives called the id; the ego itself; and external reality. But the ego splits into ego and superego functions. The superego observes behavior patterns, compares them to an ideal ego called the ego ideal, and forms a social conscience. Freud identifies the ego as the seat of reason. Only the ego can make prudent efforts to govern action. The ego of the typical adult is more prudent then the ego of the typical child. However the drive for money, fame, status, and power is not that of a sensible animal ego, because animals and very young children have no such drive. Therefore the ego ideal of humanity drives the striving for money, fame, status, and power as attributes of adults in the memories of former children. A utopian society must transcend the ego ideal.

PS - I can't comment yet due to lack of reputation (social status) in this community. However I wonder why social recognition must scale like money to operate as an incentive or motivation? When I am seventeen my psychology teacher asks, "Why do professional basketball players make millions of dollars?" The answer is infantile tribal psychology plus modern broadcasting plus modern legal systems gives the gifted athlete a windfall profit in modern capitalist society. Money is an expression of social recognition that scales due to the common experience of an ego ideal in a money culture.

| improve this answer | |
  • 1
    RE your postscript: social recognition would have to scale like money because for our economic activity we need something that can act as.a medium of exchange (can I exchange my status with Bob for goodwill with Alice?), something that acts as a unit of account (will everyone recognize/honor this value?) and a store of value (can I stockpile this against the vagaries of life?), just to name three things. It is unclear how a social recognition system could fulfill those needs. Those are generally the kind of properties we use to define what money is. – Jared Smith Jul 11 at 2:51
  • The original question is stated tersely as follows: "Which alternative mechanisms might nudge (motivate) people to work on the most pressing problems of society?" Then one motivation is social recognition and this perhaps would not foster political-economic transactions between strangers who are not motivated to exchange goods for money. However social recognition would still provide motivation and incentive to love and work in small groups and that scales to humanity via the same abstract reasoning as money and finance scale. – SystemTheory Jul 11 at 5:44
  • 2
    "why social recognition must scale like money to operate as an incentive or motivation?" The term "scale" here refers to the ability to work in a civilization of billions of people. There are lots of things that work fine for a few hundred people living in isolation but which won't work for a nation of a few million, let alone the 7.5 billion currently on Earth. We say that those solutions "don't scale". – Paul Johnson Jul 11 at 8:46
  • 2
    @SystemTheory modern production requires enormous coordination across cultural, technological, temporal, and geographic barriers ("scale"), often even within a single country (e.g. the United States, Russia) much less across the global trade network. Money has proven to be really good at coordinating that activity, for the reasons I stated. Anything that you come up with to replace money in that role needs to have those properties to do the same job, and once it does it's just money under a different name. As for social recognition, "how does that cross those boundaries?" is the $64k question. – Jared Smith Jul 11 at 10:42
  • Human will provides the enormous coordination required for money to scale. We assume or infer that incentives and motivations drive expressions of will. Does money provide the coordination or does the will of individuals in small or large network groups provide the social value of the money? If you assert that money provides the motivation I will assert that a more primary human motivation, aim, or goal provides the money. There is no money in the wilderness and no money units in the laws of thermodynamics. Human drives and abilities generate finance relations for good or ill. – SystemTheory Jul 11 at 16:00
1

The problem with social recognition, as mentioned above, is that Dunbar's Number shows that once you get to over 150 people, other humans have trouble having close social relationships with other members of the community or care enough about others to want to do certain jobs. Combine that with the fact that only 25% of adults currently volunteer (with volunteering meaning helping someone voluntary without pay at least once in a year),6.2% of adults (or about one in sixteen) have Narcissistic Personality Disorder & about 3% have Antisocial Personality Disorder (meaning a portion of your workforce may lack the empathy to do hard work out of anything other than personal reward or selfish mutual need) , and the fact that many jobs are more likely to be lethal than others & you have a system where it hard to get people to want to work hard out of social recognition alone. Plus, the most important societal jobs don't necessarily get you as much social recognition (i.e. some cleaning sewer lines or fixing power lines probably won't get as much recognition as a pretty actress or soldier). This isn't saying such a system would be impossible on a large scale. It means you would have to switch motivational alternatives to:

  • Social Credit System: a representational system similar to the system in China where the reputation of a person is measured as some objective number that can be seen by those who don't know you personally, with benefits and punishments based on what you do as a person. Even the most selfish person would, in theory at least, be motivated to do certain jobs and help in order to raise this score & let people trust you based on this number.
  • Personal Property: Similar to traditional money, you have some type of items you can trade for value. Unlike current fiat or paper money in many market capitalist countries, said money can either be simply traded for or take the form of items of personal property a person can get in return for their labor. This idea exists in the idea of Marxist socialism and is borrowed from Trotsky based on a idea called "each according to his contribution". While you don't get private property or traditional money with large-scale market value, you get an IOU or some items of personal property in correlation to how much labor you perform.
| improve this answer | |
-1

I think the answer is simpler than it seems. What would cause you to strive to work extra in a socialist economy? I don't think there is an easy answer for that.

I give you an example from my country: here tax rates increase as income/wages rise. When wages rise past a certain amount, it is not beneficial to be paid such a sum because if I pay you less you will get more. This is why big companies give other benefits for compensation.

Most people reach or pass this limit and don't try improve because they "can't get better".

I think in a utopian socialist setting there aren't enough benefits to work extra.

| improve this answer | |
  • 2
    This is more of a general comment on socialism than an answer to the question. – Paul Johnson Jul 11 at 8:22
  • 2
    Also, Vldi does not understand tax brackets. – user253751 Jul 12 at 14:18
  • @user253751 can you explain it then. Why should country limit the amount that the company wants to pay here employees. – Vlad Barkanass Jul 12 at 19:30
  • @VladBarkanass countries don't. That's why I say you don't understand them. – user253751 Oct 26 at 13:56

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .