[PUBLIC] A half-baked contemplation on economics
So, as frequently happens to me when I'm in a half-asleep state, my mind started wandering into the realm of what's wrong with modern society, and how it got that way. After some discussions of the past several days, last night it drifted into the area of economics, where it quickly flooded with a deluge of disjointed thoughts, which somewhat pulled themselves together into a semi-coherent babble.
I started with the lament about how sad it is that a person's right to exist has become tied to their financial value, effectively negating all other measures of a person's worth. To be honest, the idea of comparing one person's worth to another AT ALL is troubling to me, because I am of the belief that a life is inherently of immeasurable value, and should not be ordered as one more valuable than another, but for the moment, I'm specifically addressing the issue of money as the primary (or, in many cases sole) measure of a person's worth.
If we begin with an examination of how the monetary value of a service (whether it takes the abstract form of what we generally think of as 'services', or the tangible form of what we call 'goods'), it seems to be generally agreed that value is driven by supply and demand. My contention is that there is an additional force at work that is neglected by the supply and demand model: a concept which I will call (for lack of a better term) 'social responsibility'. To illustrate this concept most clearly, I will use extreme hyperbole: Suppose that there is an imminent looming disaster that threatens to wipe out the entire population, and you are the only person in the world with the ability to prevent it. By a pure supply and demand model, the value of your service is infinite (you are the sole supplier, and the demand for it is infinite); however, unless you are an extreme sociopath, you will do what needs to be done, EVEN IF YOU ARE NOT PAID AT ALL FOR IT. That is the invisible factor that is ignored in a supply and demand model: the ability to hold the service hostage during a negotiation phase, effectively applying a form of extortion.
This ignored factor goes a long way toward explaining several of the inequities that develop in a free market economy. When it is generally realized that there are services that will be performed out of a simple sense of moral obligation and social responsibility, and not held hostage for compensation, those services are devalued by the free market, and no matter how high the demand, or how low the supply, the rate of pay for those services will be held to a minimum - providing only just enough to allow those who offer such services to continue providing them, if even that much. This has been the fate of traditional 'women's work', which has led to countless generations of under-compensation (or even total lack of compensation) for tasks that are critical to the maintenance and continuation of society (most notably homemaking and child care, but it applies to many other tasks and services as well). As we have moved forward to a time when women began to enter the competitive workforce, outside of the 'traditional' (unpaid but necessary and valuable) tasks, the assumption has continued that a woman will simply do what needs to be done, rather than hold her skills hostage to negotiate for fair compensation - thus women, who have generally been raised to be compassionate and provide for others, are still consistently offered a lower rate of pay than men, who have been raised to demand something more in return. As for the question of WHY the expectation of compassionate contribution to society has been expected of women but not of men, that lies beyond the scope of this essay.
The effect of this phenomenon goes beyond the simple matter of wage inequity between men and women in the workplace, though. It completely unbalances the entire model of supply and demand, tying value instead to the strength (combination of skill and circumstance) of the negotiating position of the supplier. If a supplier feels morally compelled to provide an essential service, it weakens that negotiating position and drives down the price; this accounts for low salaries in such fields as education, as one example: teachers tend to recognize that holding out for a more equitable compensation will do damage to society as a whole, and so are more inclined to settle for less rather than create more extensive suffering than necessary. Further (and slightly tangentially), if a supplier is being held hostage to the price of an essential service, it weakens the negotiating position; this accounts (in part - another factor is the difficulty in conceptualizing a larger income) for poorer members of the working class accepting wages far below what they could otherwise negotiate if they were not pressed for survival.
The logical progression of such a model is that those who provide essential services for society will fall into two basic categories: first, there will be those who do so out of a sense of social responsibility, who will be grossly underpaid for what they do; the other would be those who are willing to withhold those services as hostage for a 'fair' compensation (defined by pure supply and demand). The former will eventually be driven out of the market, as they progressively lose the ability to meet the cost of other needs, and are forced to perform other work which they feel no such ethical qualms against refusing to provide; the latter will develop an increasing sphere of influence, thus exerting more and more control over supply, while continuing to face inelastic demand, allowing them to inflate the price of survival. As this continues, an inevitable link develops between a person's ability to survive and their economic value (essentially, how much money one has - although it applies equally well in a pure barter system). From there, it's only a very small step before we start perceiving a person's right to survive as being tied to how much money they earn, which is disturbingly close to a state where the sole measure of someone's value as a person being how much money they have.
I contend that this situation has arisen from a lack of social responsibility. There appears to be a cultural axiom in western society that the only reason why a person would work at all is for personal gain at the expense of others. While that is certainly a strong motivating factor, I would like to point out that it is far from the only one, and a society can theoretically be built on mutually beneficial activity, in which people provide for each other simply because the advancement of the whole of society is beneficial for everyone, rather than focusing on the advancement of the individual at the expense of the whole. Certainly the individual who begins from a powerful negotiating position can advance further and faster at the expense of others through a judicious application of selfish greed, but if one advances at the cost of one's humanity, is it truly worth it? Unfortunately, once a system allows for anyone to behave in this way, it becomes necessary for all to follow suit in order to survive in any meaningful way, hence the belief that there is no other viable alternative model. I contend that a preferable solution is to devise a system by which such behavior is discouraged rather than rewarded. The question is how to implement such a system without those who are driven by selfishness and greed seizing control of the entire structure and corrupting it for their own benefit, as has happened in every historical case where such a system was attempted on a larger scale than a tribal community; the answer is unclear, but likely would require us to evolve beyond the 'monkeysphere' and recognize that everyone is equally worthy of the right to exist, rather than just those closest to us, and that nobody deserves to be excluded or othered because of differences in skills, culture, or other circumstances.
I started with the lament about how sad it is that a person's right to exist has become tied to their financial value, effectively negating all other measures of a person's worth. To be honest, the idea of comparing one person's worth to another AT ALL is troubling to me, because I am of the belief that a life is inherently of immeasurable value, and should not be ordered as one more valuable than another, but for the moment, I'm specifically addressing the issue of money as the primary (or, in many cases sole) measure of a person's worth.
If we begin with an examination of how the monetary value of a service (whether it takes the abstract form of what we generally think of as 'services', or the tangible form of what we call 'goods'), it seems to be generally agreed that value is driven by supply and demand. My contention is that there is an additional force at work that is neglected by the supply and demand model: a concept which I will call (for lack of a better term) 'social responsibility'. To illustrate this concept most clearly, I will use extreme hyperbole: Suppose that there is an imminent looming disaster that threatens to wipe out the entire population, and you are the only person in the world with the ability to prevent it. By a pure supply and demand model, the value of your service is infinite (you are the sole supplier, and the demand for it is infinite); however, unless you are an extreme sociopath, you will do what needs to be done, EVEN IF YOU ARE NOT PAID AT ALL FOR IT. That is the invisible factor that is ignored in a supply and demand model: the ability to hold the service hostage during a negotiation phase, effectively applying a form of extortion.
This ignored factor goes a long way toward explaining several of the inequities that develop in a free market economy. When it is generally realized that there are services that will be performed out of a simple sense of moral obligation and social responsibility, and not held hostage for compensation, those services are devalued by the free market, and no matter how high the demand, or how low the supply, the rate of pay for those services will be held to a minimum - providing only just enough to allow those who offer such services to continue providing them, if even that much. This has been the fate of traditional 'women's work', which has led to countless generations of under-compensation (or even total lack of compensation) for tasks that are critical to the maintenance and continuation of society (most notably homemaking and child care, but it applies to many other tasks and services as well). As we have moved forward to a time when women began to enter the competitive workforce, outside of the 'traditional' (unpaid but necessary and valuable) tasks, the assumption has continued that a woman will simply do what needs to be done, rather than hold her skills hostage to negotiate for fair compensation - thus women, who have generally been raised to be compassionate and provide for others, are still consistently offered a lower rate of pay than men, who have been raised to demand something more in return. As for the question of WHY the expectation of compassionate contribution to society has been expected of women but not of men, that lies beyond the scope of this essay.
The effect of this phenomenon goes beyond the simple matter of wage inequity between men and women in the workplace, though. It completely unbalances the entire model of supply and demand, tying value instead to the strength (combination of skill and circumstance) of the negotiating position of the supplier. If a supplier feels morally compelled to provide an essential service, it weakens that negotiating position and drives down the price; this accounts for low salaries in such fields as education, as one example: teachers tend to recognize that holding out for a more equitable compensation will do damage to society as a whole, and so are more inclined to settle for less rather than create more extensive suffering than necessary. Further (and slightly tangentially), if a supplier is being held hostage to the price of an essential service, it weakens the negotiating position; this accounts (in part - another factor is the difficulty in conceptualizing a larger income) for poorer members of the working class accepting wages far below what they could otherwise negotiate if they were not pressed for survival.
The logical progression of such a model is that those who provide essential services for society will fall into two basic categories: first, there will be those who do so out of a sense of social responsibility, who will be grossly underpaid for what they do; the other would be those who are willing to withhold those services as hostage for a 'fair' compensation (defined by pure supply and demand). The former will eventually be driven out of the market, as they progressively lose the ability to meet the cost of other needs, and are forced to perform other work which they feel no such ethical qualms against refusing to provide; the latter will develop an increasing sphere of influence, thus exerting more and more control over supply, while continuing to face inelastic demand, allowing them to inflate the price of survival. As this continues, an inevitable link develops between a person's ability to survive and their economic value (essentially, how much money one has - although it applies equally well in a pure barter system). From there, it's only a very small step before we start perceiving a person's right to survive as being tied to how much money they earn, which is disturbingly close to a state where the sole measure of someone's value as a person being how much money they have.
I contend that this situation has arisen from a lack of social responsibility. There appears to be a cultural axiom in western society that the only reason why a person would work at all is for personal gain at the expense of others. While that is certainly a strong motivating factor, I would like to point out that it is far from the only one, and a society can theoretically be built on mutually beneficial activity, in which people provide for each other simply because the advancement of the whole of society is beneficial for everyone, rather than focusing on the advancement of the individual at the expense of the whole. Certainly the individual who begins from a powerful negotiating position can advance further and faster at the expense of others through a judicious application of selfish greed, but if one advances at the cost of one's humanity, is it truly worth it? Unfortunately, once a system allows for anyone to behave in this way, it becomes necessary for all to follow suit in order to survive in any meaningful way, hence the belief that there is no other viable alternative model. I contend that a preferable solution is to devise a system by which such behavior is discouraged rather than rewarded. The question is how to implement such a system without those who are driven by selfishness and greed seizing control of the entire structure and corrupting it for their own benefit, as has happened in every historical case where such a system was attempted on a larger scale than a tribal community; the answer is unclear, but likely would require us to evolve beyond the 'monkeysphere' and recognize that everyone is equally worthy of the right to exist, rather than just those closest to us, and that nobody deserves to be excluded or othered because of differences in skills, culture, or other circumstances.