Saturday, October 5, 2013

Economic Football

We are breaking precedent by publishing more than one post this week. The reason is that we are always searching for new ways to explain why multiple currencies really are necessary. Here we will try the sports metaphor. (At the same time, do not forget to see our "regular" post this week: Non Sequestitur II:  Fair Play.)

Think of any sport that you are familiar with, a team sport or an individual sport. Some people are just better at it than others. That is a natural consequence of human diversity. We celebrate this diversity because it is such a pleasure to watch the best players play at their best.

Now think of all the diverse sports there are.  Those who are professional level in one sport may be -- they probably are -- just amateurs in another sport.  For example, Michael Jordan was arguably the best player and team leader of his time in NBA basketball, but he failed in his attempt to play professional baseball.

Then there is diversity by age, level of development, and experience. We find the best players by introducing sports to children in grades K-12. Then we groom the best of them and give them experience in environments that gradually become more and more competitive.  It takes years to develop the top professionals in any sport.

Later, when the top professionals lose their edge because of age, health, or injury, they either retire from serious competition or play in "senior" tournaments.

Contrast our sports world with our economics. In our capitalist economy, there is no gradual progression of competitive environments to help learners survive while they learn to play. There is only one game and everyone has to play it. The game never stops and there is no escape. There is only one kind of ball, the dollar, and there is only one kind of playing field.  Unless you have someone playing on your behalf, like a parent taking care of a child, there is no protection. Young and old, educated and uneducated, pros and novices, strong and weak -- we are all thrown together to see who comes out on top. This is barbaric and crazy. It makes the sports world seem perfectly sane.

If we have Pop Warner football for kids, we should have Pop Warner markets for them, too. If we have junior high, high school, and college teams, then we should have different levels of markets, too.  The key is that the teams at the "higher" levels are excluded from playing against the teams at the "lower" levels. The reason is that games should be competitive rather than destructive. There is no point in allowing the high school kids to regularly "destroy" the junior highs.  Yet that is exactly what we do in our economic system.

Our capitalist system is destructive rather than competitive.  It will remain that way until we can prevent the rich from exploiting the poor. You do not lose your house when you lose a sports game, but it is easy to lose your house when you make a mistake in our economic system. In fact, in a sense that is what the financial pros try to profit by -- making other people lose their houses. We need to stop trying to ruin one another, yet that is "fair play" according to the rules of capitalist markets.

That seems like a reason to eliminate capitalist markets, but we at tosoc.org do not see it that way.  History shows that there have been many such attempts, but they have all failed.  What might work instead is to separate the rich and the poor into different markets in order to mitigate the advantages of the rich.  Different exclusive currencies are also needed because it is so much easier to keep the rich out of the the markets for the poor if they do not have any currency to use in them.

As long as rich people have dollars, we cannot keep them from screwing up our dollar markets. That is because markets and their currencies are tightly linked. Anyone who has the right currencies can buy and sell in those markets. Currencies must be exclusive in order to control where the rich can trade.


The way capitalism should be.

Socialism for the socialists and capitalism for the capitalists.

TheOtherSideOfCapitalism (admin@tosoc.org)



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