Organization for Universal Safety and Prosperity (OUSP)

We believe that in the world’s dominant economic models from the past and present, not enough attention has been paid to achieving the ideal outcome of economics - global prosperity at acceptable level of long-term risk. We believe it matters what outcomes we seek.

The purpose of OUSP therefore is to investigate what global prosperity could look like in reality, and how we could, in the spirit of protopianism, move toward achieving it one step at a time. In the short term, doing better over time would count as acceptable progress.

We believe that the greatest obstacle to the maximization and safeguarding of this kind of progress has been the shared core failure of all existing economic models - the inability to solve or properly address the question of value. Here is our best analysis.

The Problem of Value

Let’s start with our overview and critiques of the main historical economic ideas of value that had major influence on large economies or at least the nature of modern economic thought. In order, these ideas included:

1) Mercantilism

What is most valuable: Precious resources and military dominance

Main goals of economics: Self-sufficiency and imperial zero-sum game

In this economic mode, nations tried to conquer other nations and steal their resources, like gold or spices, while protecting own exports and putting tariffs on imports. The overall result was a state of constant war and colonialism, which not only didn’t ensure global prosperity, but produced needless suffering and overall decrease of economic value in the world. This mode also prevented globalization.

As it turns out, win-win positive sum games are possible in real-world economics. Free trade was later shown to be much better at creating new value in the world, through peaceful cooperation, for the world as a whole, if not every single party at any particular time. Free trade still has local winners and losers, it is fundamentally competitive, but a globally trading world is richer overall than an imperial one.

To give a specific example, a world were pirates and empire-sponsored privateers constantly attack global shipping is a world of much lower economic value than a world where peace is enforced on the oceans. Peaceful oceans allow for a much higher volume of global trade at much lower cost, as greater risks to shipping require more expensive insurance. Not to mention that war burns through resources, destroys capital, wastes lives, and ruins quality of life.

It’s very hard to argue that a world with more military conflict in it is a world of greater value. There is a small minority of profiteers in every conflict, like arms manufacturers and mercenaries, but the whole point of arms is to literally cause destruction, the closest thing there is to the absolute opposite of production.

Even when the war is cold and the stockpiled arms remain unused, the best thing the arms can do in economic terms is depreciate. This is why the peaceful period following the end of the cold war was called a “peace dividend”. Not having to invest into military is a net gain in value, as investments elsewhere in the economy are pretty much guaranteed to be more productive, if the risk of conflict is low.

Another holdover from this era was the idea of the gold standard, or that currencies should be backed by some kind of limited precious resource. The current model of “fiat” currency that’s not backed by anything limited has its own potential issues, but there were good reasons why the United States had abandoned the gold standard as the issuer of the global reserve currency all the way back in 1945.

To put it simply, the main problem that results from “pegging” a currency to a limited resource is that it artificially limits the growth of the currency’s supply. When a society has a reasonable expectation that it could create more value if only there was more money circulating in the economy, but it specifically can’t find more gold, how is the lack of more gold a good reason for not issuing more money?

The most primitive, original form of mercantilism, or at least its predecessor, was called “bullionism”, and it was basically a belief in the inherent economic value of hoarding precious metals like gold or silver. It was this ideology that motivated Spain to steal as much gold as possible from the Americas. Unfortunately for Spain and all bullionists, gold, by itself, simply isn’t that valuable. Let’s look at the value of gold specifically, as an exercise in assessing real or ultimate value.

What is the value of gold? It has some aesthetic value (it’s shiny), but there are many other shiny things in the world. It has some uses in technology, but not more significantly than most other rare metals or earths. Arguably, common silicon has much more technological value. We could find some technology in the future for which gold is essential, or enter a situation in which some gold-based technology becomes essential, but gold certainly didn’t help Spain industrialize better.

As for our real needs, we can live without gold. In terms of elements responsible for feeding us, nitrogen and phosphorus are the most valuable. We also need oxygen to breathe and water (H2O) to drink. Carbon compounds are still responsible for most of our energy production. Carbon is also likely to be essential in the future for nanofibers and nanobatteries. Spending food, water, and fuel on mining gold, not to mention labor, just to create more money, makes for very expensive money.

This high real cost of money is the same for every limited resource because it always needs to be “mined” in some sense with gradually increasing difficulty. Even when the resource and its mining are virtual, as it is with Bitcoin, more and more energy and time need to be expended the rarer the remaining instances of the resource are. In the absence of abundant clean energy, the mining process is eventually going to become unsustainable even before the resource runs out.

Which begs the question, if this is such a costly way to produce not much real value, why did the ancient people, who were struggling to feed themselves, choose gold as a store of value? It’s hard to say exactly with absolute certainty, but gold is a very malleable metal and a great material for coinage in particular.

An ideal material for currency in the form of coins needs to fulfill certain criteria. Most of all, it must be very durable, resistant to wear and corrosion, ideally without changing appearance. The material must also be at least somewhat rare or hard to obtain, not so common that it would be easy for anyone to create their own counterfeit money. Historically, metals like gold and silver were a good fit for this.

Today, there’s arguably little to no need to have any physical money at all, let alone metal coins. For those who feel sentimental about the idea of gold as a symbol of wealth, we could visualize a real world currency the same way most computer games do, as gold coins, while keeping the currency digital. In any case, gold simply isn’t needed anymore as a store of value. As economist Cahal Moran from Unlearning Economics would put it, we can ditch the golden training wheels.

As for the principle of pegging a digital currency to an artificially scarce resource, like some kind of math, if the environmental damage of the mining could be made negligible, perhaps there could be a use for it on a free market of currencies. Even so, we find it likely that other aspects of digital currencies than mining-based scarcity would be the main sources of new benefits, like a transparent distributed ledger (blockchain), or the ability of anyone to issue a currency.

2) Physiocracy

What is most valuable: Land and nature in general

Main goals of economics: Maximizing agricultural and energy production

This idea is simultaneously very old and very new again - that all value ultimately comes from nature. In its original form at the dawn of the modern era, physiocracy was mainly about agriculture. As the main concern throughout most of human history was feeding the population, this approach has some obvious merit.

Given its connection to traditional human values, the overall value system behind physiocracy is shared by many indigenous peoples. As the famous Cree tribe proverb goes, “Only when the last tree has died and the last river been poisoned and the last fish been caught will we realize we cannot eat money.”

The economic problem with this approach is that there’s a good chance that we can do much better than just feed ourselves. Okay, so we aim to develop land and agricultural output to a point when all of us will be fed. Great. What then? What do we do after that to develop economy, grow value, even further?

At the time when most of the physiocrats lived (18th century), there were real concerns about the continued ability of humanity to feed an exponentially growing number of people. While not exactly a physiocrat himself, Malthus has (in)famously predicted that population growth will outpace food supply.

This has not happened so far, and there are good reasons to suspect it may never happen, unless the other core physiocratic concept catches up with us - the need to respect the laws and limitations of nature. If we’re not careful, our ability to use technology to grow more and more food can destabilize the planetary environment.

While the original physiocrats had no reasons to be concerned yet with the environment, it is a logical extension of their line of reasoning. Today, to the extent that any economists are physiocratically inclined, their main concerns revolve around environmental sustainability, which actually ties more into energy production than agricultural output. The real natural bottleneck is energy.

For this reason, some environmentalists who are physiocrat-like economic thinkers suggest various forms of de-growth, or solving the problem by curbing our demand for energy. We see this as more of a surrender than solution, however, since this is hardly a road to maximum prosperity. The real solution would be a better, meaning more powerful and cleaner, source of energy, like nuclear fusion.

Let’s focus on energy. Food is a stored form of energy. Solar energy, to be precise, just like oil is. According to a contemporary version of physiocracy, a sustainable planetary economy needs to be able to manage its energy flows in a way that doesn’t destabilize the planetary environment. From this point of view, oil is just a temporary boost or fix, as it is a limited resource that warms the atmosphere.

What’s interesting in relation to economics and oil is that after ditching the gold standard, the United States had tied the global reserve currency to oil, creating something called “petrodollar”. The U.S. did so not by pegging the currency to the amount of oil there is in the world, but by pushing most oil producers in the world to trade oil exclusively in dollars, mainly to help stabilize the currency.

The logic behind this system is that since oil is the most traded commodity in the world, with volumes of the trade reaching trillions of dollars each year, the increased demand for dollars reduces the inflation of the currency. Which is mainly good for the U.S. And that’s a big problem, or a source of a number of avoidable global problems. Firstly, this is still partially mercantilist and imperial.

A currency that serves as a global store of value helping one geopolitical player at the expense of most other parts of the world is a recipe for resentment and a constant reason for imperial conflict. Secondly, if the whole system of global trade is based on a limited resource that destabilizes the climate, its days were numbered from the start, and the incentive to maintain it at all costs is perverse.

There are many people in the world, including some expert insider witnesses from the intelligence community, who suspect that the existence of the petrodollar is why we still haven’t developed, or implemented, a much cleaner global energy generation system. This suspicion may not be true, but it’s already bad enough that a dominant financial system gives good reason for this kind of suspicion to exist.

And let’s be clear, there are good reasons to suspect that there are real secret patents that include at least highly efficient versions of conventional energy generation technologies. The process of stifling such technologies is called “secretization”, is documented with declassified information, and is allegedly performed in the interest of “national security” of the U.S. Or its dominance.

This is a clear example of one area where physiocracy enters into direct conflict with imperial mercantilism, and where physiocracy almost certainly has the right answer. A world with an abundant clean energy source is a world of infinitely more value than a world where nations fight wars over a limited energy resource, or where the winner of these wars artificially maintains the scarcity of energy.

This can also be illustrated using an analogy between energy and food. Imagine we could produce enough food for everyone in the world. Which shouldn’t be hard, as we basically can do that today. Then imagine that the most militarily powerful nation in the world forced the rest of the world to trade all food in its currency, which would then be the basis for the stability of its whole economic system.

Now imagine that someone in that powerful country invented a new technology that would allow everyone to easily grow enough food for themselves, without the need for fertilizers or anything else limited or polluting. A food that’s even more nutritious and healthier. Then that inventor would submit a patent application for this technology to that country’s patent office, controlled by military intelligence.

What do you think would happen with that patent, or the inventor, for that matter? Self-interested rational logic says nothing good. Almost certainly, the main thing is what wouldn’t happen - that patent wouldn’t end up being public or applied globally. This reasoning is actually related to the fact that almost all modern famines are artificially created for political reasons. Artificial resource limitation backed by military force is one way how to wield power over a population.

But let’s assume that despite all of the geopolitical resistance and natural limitations, we will develop a functionally infinite and absolutely clean source of energy tomorrow. What then? What do we do after that to develop economy, grow value, even further? The same limitation of physiocratic thinking remains. This is a good approach to create a solid economic foundation, but there are inifinitely more questions left to answer after one is able to sustain oneself.

3) Labor theory of value

What is most valuable: Human labor

Main goals of economics: Adding value through human labor and compensating it

This is a school of thought shared by all classical modern economic thinkers from Adam Smith to Karl Marx. And you, probably, whenever you have to do work for someone else. However, depending on their personal politics, the different classical thinkers, as well as you, may not necessarily draw the same conclusions from the idea that human labor is a means of adding value to things.

In order to be fair to even the most ardent Marxists, it’s important to note that, as economist Richard Wolff would put it, Marx was well aware that there are other valuable things besides labor. The main concern of the proponents of the labor theory of value appears to be appropriate worker compensation. What that should mean exactly, well, there’s a lot of disagreement there to sort out.

On its face, this idea isn’t very complicated. Labor, as in work, especially productive, hard, physical work, is something that’s often necessary to maintain a society, but also something that most people would prefer not to have to do. This gives labor inherent value, as without the labor being done, bad things will happen to everyone, and with more labor being done, a society can literally produce more of anything.

A big economic problem here is that given the choice, most people would probably choose leisure over labor most of the time. Which means activities or even work that are fun and fulfilling, but unnecessary, and not necessarily productive in any tangible way. While people can produce value by pursuing leisure, the un-fun labor still needs to be done. This begs a number of important economic questions.

How should we select who will do the necessary labor, or motivate people to want to do more labor instead of leisure? How should the people who do the labor be compensated, or in other words, how should the fruits of labor be distributed? How should labor be organized or managed? This is where the politics come in.

Throughout history, one of the common solutions to these types of problems was slavery, or finding some other people somewhere else and using violence to force them to do the labor we need, while giving them the absolute minimum of stuff to just keep them going. Fortunately, this practice is now generally frowned upon.

Unfortunately, there are still prisoners being forced to work today even in some developed countries, as well as contractual practices that in effect amount to indentured servitude. From our perspective, abuses like these simply need to be stopped with appropriate legislation, so let’s move on to the critiques of work relations that can be reasonably argued to be morally and economically justified.

The basic model of normal labor relations goes like this. There are employers and employees. Employers create jobs by using capital to create businesses. That’s why one could refer to the employer class as “capitalists”. Employees do the labor and get compensated for it with wages. In the absence of regulations imposed by the government, it is up to the employers, and the labor market, to set the wages.

This basic setup already conjures about a million problems to solve. For starters, market-based wages don’t have to be in any relationship with the inherent value of labor. Intuitively, one would expect that the harder one works, the more valuable (or costly) the work is, and should be rewarded more. This cost of work and the market price of work don’t translate, which is called “the transformation problem”.

The best objective proxy of effort that we have come up with so far is time spent working, which is the basis for most wages. But this type of arrangement leads to competing perverse incentives - the employer’s incentive is to pay as little wages as possible, while the workers’ incentive is to do the work as slowly, and therefore unproductively, as possible. This means that a difficult balance must be struck between the exploitation of employees by the employer, and overpaid work.

Beyond the costing and pricing issues, a bigger problem might actually be the adversarial nature of such work relations. Employers and employees don’t work together, they struggle against each other. Trying to solve this issue politically therefore tends to be a crapshoot. Often, a pro-employer party or coalition wins, resulting in a shift toward a kind of neo-feudalism, or a worker revolution happens, destroying a lot of capital and enterprise and reducing real productivity of labor.

The politically charged nature of this issue also makes many common criticisms and “discussions” of it revolve around objectively unimportant moralizing or egotistical arguments. It’s essentially pointless, and unproductively agitating, to debate whether people who are smarter are more valuable than the people who work harder, or who takes more risk between employers and employees, or just how morally reprehensible it is to be lazy. We intend to stick to constructive debates.

On the basic level, we conclude that labor indeed is a form of real value that ought to be fairly compensated. But since market-based price doesn’t equal the real cost of labor, the valuation of labor cannot be just left to the market to decide. We also conclude that the model of normal work relations needs to be restructured to remove as much of the counterproductive adversarial element as possible.

We’ll get to our ideas on work valuation and work relations restructuring shortly, but first, we find it more important to stress again the difference between labor and leisure. Not all work, as in potentially productive human activity, is labor, because not all work is necessary. One of the most easily solvable philosophical problems with the labor theory of value is the current “problem” of work automation.

As it turns out, some ideas, manifested in the form of technological capital, can in effect do labor instead of human beings. This isn’t a problem, this is the dream of the techno-futurists of old. Using better ideas and new technologies, we have been dramatically increasing the productivity of human labor ever since the onset of the industrial revolution. And yet, the work week has remained constant for decades.

There’s every possibility that labor will lose most of its real value in the near future, both manual and intellectual labor, freeing all human beings to spend most of their time doing leisure. Remember, leisure can be productive. Technically unnecessary activities include learning, research, and all kinds of creative pursuits which often produce new, better ideas, if nothing else. Leisure being “rewarded”, or enabled, by something like a universal basic income (UBI) can make good economic sense.

Let’s ask the simple question again - which world is a world with more value in it? A world were people have to toil doing labor, or a world where people are free to pursue leisure? The world of leisure, inarguably. To the extent to which necessary, or mandatory, human work can be eliminated, we fully support that. To the extent to which some labor will still remain necessary in the future, let’s return to our ideas on how it would be best to value labor and how to restructure work relations.

Let’s start with the critical perspective. Regarding the question of proper work compensation, this is all nonsense talk according to the liberal economic theory. Theoretically, all governmental interventions or regulations in the labor market, like minimum wages, unions, or UBI, should make things more costly and less productive. No work is worth more than the least amount for which someone is willing to do it. A free labor market will reach an optimal equilibrium.

If working harder isn’t helping a worker to make more money in their field, then it is a market signal that working smarter is the answer, or “up-skilling”, or requalifying and changing the field. If it’s more profitable for a capitalist to fire the workers and invest into machines instead, then that’s what’s best for the economy in terms of the efficiency of allocating resources. If an individual simply can’t figure it out and is unable to find an acceptable job that offers a living wage in the market, well, tough luck. Maybe they should try to be less dumb, useless, lazy, or unlucky.

The main problems with this type of reasoning, as we see them, are the emphasis on theory, and the lack of empathy. As it turns out, the most liberal of economists, like many of the proponents of the Austrian school in particular, seem to be almost fundamentalist in their emphasis on perfect theory. To a point of wholly rejecting any empirical, data-driven, experimental approaches. Neither Marxism nor liberal economic theory are actually predictive. Not at a truly scientific level.

Most empirical economic research of policy effects is done by the proponents of some sort of governmental intervention or regulation, or macro-economics (top-down approach) as such. There have been a number of studies showing that in practice, the outcomes don’t always agree with the perfect ideal economic theory. The counter-intuitive results of such studies included positive effects of minimum wage on overall employment, or limited UBI trials not leading to idleness.

From our point of view, when a perfectly logical theory isn’t predictive, strongly verified with systematic empirical research, or falsifiable, it’s not much more than a philosophy. Which still can have a lot of merit, but that’s where the lack of empathy within this theory becomes problematic. On the level of moral and political philosophy, this “economism”, as Cahal Moran calls it, is in favor of the virtues of individualism, rationality, and frugality (being “economical”), but maybe to a fault.

Whenever the ideal market forces punish an individual, instead of identifying it as a failure of the theory (which would make it effectively falsifiable), many economists tend to frame that as a moral failure of the affected individual. In our view, which includes empathy for every human being, that’s just not a productive line of reasoning. We seek continual improvement of outcomes, not apologies and excuses. If we can’t afford to save everyone, that’s one thing. But what if we can?

From both the methodological and moral perspectives, we find the empirical approach that aims to build an actually predictive theory over time to be more viable. Particularly in the area of finding ways how to ensure, at a minimum possible cost, that no individual is fully left behind by the economic system. Our simple question applies here as well - which world has more value in it? A world where millions of people are set up to fail, or a world where no one is?

We find this type of ethics to actually be the core of the value that the labor theory perspective adds to an economy - a world built on empathy is a more valuable world. We agree with Mahatma Gandhi’s maxim that “The true measure of any society can be found in how it treats its most vulnerable members.” The objective economic usefulness of any person as a worker is in large part a genetic accident. Judging and punishing the naturally disadvantaged for their failings is unfair.

One could correctly argue that being moral is often economically inefficient or costly according to the law of supply and demand. But in this regard, every society simply has a decision to make about where it will draw the line. It is cheaper and thus more efficient to use slaves or child labor rather than reasonably paid adult employees. We could probably profit greatly from allowing experimentation on unwilling human subjects. We are affording a lot of morality already, rightfully.

In terms of economic priorities, we do value virtues like individual choice, economic efficiency, and work ethic, but we don’t believe they trump all other values. While the more extreme versions of the labor theory of value can be collectivist and wasteful to a fault in the opposite direction, we believe that in essence, the labor-focused approach isn’t wrong about worker exploitation being real and wrong.

In that spirit, are there any known, effective ways of reducing worker exploitation that aren’t counterproductive or costly to a point that they would cripple or bankrupt economies? To our knowledge, there are many developed market-based economies that have implemented for example minimum wages and unions without it resulting in an economic collapse. These and similar approaches fall under the general model of the modern welfare state which is common mainly in the European Union.

Apart from worker and consumer protections, this type of state also tends to guarantee universal healthcare and education, as well as some sort of basic social safety net. The reasoning behind this portfolio of regulations is that some social investments have high returns in terms of increasing overall productivity of all workers and mitigating greater future costs in terms of treatment or unrest.

The main downside of this type of economic arrangement is that somebody has to pay for all this, including individuals who wouldn’t freely choose to do so. Which is more a question of political philosophy than economic science. From our philosophical perspective, someone will always have to make some kind of involuntary sacrifice, so the question is which system actually minimizes overall harms associated with the necessary sacrifices, while being sustainably functional.

The crux of this philosophical clash between the proponents of labor and the proponents of capital lies in the question of acceptable or desirable inequality. All other things being equal, more regulation should lead to greater equality, while less regulation should lead to greater inequality. Too much inequality is bad, because it foments unrest, but too much equality is also bad, because it stifles enterprise.

In more objective, less arguable terms, this can be viewed as a balance between growth and stability. It’s entirely possible that a highly moral economy will provide great long-term stability, but at a cost of needlessly reduced dynamism. At which point, the real question is that of the opportunity cost - even if multiple models would lead to prosperity, which one would lead to the greatest prosperity?

Given the absence of empirically validated, sufficiently predictive economic science, we don’t believe any school of thought has satisfactory answers here. Moral philosophy can inform our decisions, but only up to a point - revealing who we are, more than providing us with a guarantee of success. Assuming we choose to not be heartless, how much equality can we truly afford? Let’s test some policies and find out. As far as research into equality exists, it does offer some insights.

The main research-based indication that we find potentially useful is in the area of how to (re)structure work relations. While the question of how much we can afford to compensate the workers is still fairly open, there’s a mounting body of research that suggests there would be no downsides to shifting the standard model of work toward more democratic and egalitarian organizations like cooperatives, or co-ops.

There are multiple different types of co-ops, the most democratic and egalitarian of which is when the company is co-owned equally by all the workers, who make all of the company’s decisions democratically. Including about how much everyone will be paid, which in this kind of structure tends to gravitate toward equal pay between all workers, or fair proportional rewards based on each individual’s impact on the overall company’s profits. Details may vary, but fair egalitarianism is the key bias.

While the existing research doesn’t prove beyond all doubt that co-ops always have better results than traditional companies, there’s a striking absence of any evidence that co-ops underperform. The main problems or shortcomings unique to co-ops are more situational, like a greater difficulty in getting funding from traditional financial institutions that are skeptical of them, or better suitability of the model in some industries as opposed to others. The main shortcoming of true co-ops on the level of principle is some difficulty in scaling up the workplace democracy.

Considering all the available evidence, we see little to lose and a lot to gain by making whatever work remains necessary in the future more democratic and egalitarian. If the workers would become more involved in the decisions of their companies, chances are that counterproductive executive excesses would be minimized and that workers would be more motivated and able to retain a sense of dignity. If the cost of this type of work culture shift would only be fewer billionaires in the world, we find it hard to argue against trying to make it happen.

4) Subjective theory of value

What is most valuable: Whatever is most demanded

Main goals of economics: Maximizing profits in all markets

Finally, let’s discuss the dominant modern paradigm of economic value - the market price. How much is anything worth? As much as someone is willing to pay for it. Period. This approach certainly has a catchy simplicity to it, even though the related math in the real world gets so complex that no actual predictions can be made regarding the future evolution of any real market. As we mentioned before a number of times, free market-ism is really more of an economic philosophy.

Let’s take a closer look at the major underpinnings of this philosophy. When taken to the extreme for example by the Austrians, the most important principle here is that no one ever has the right to dictate to me what I have to do with my money. After all, in most places, one isn’t even legally required to save a drowning person as a bystander. So, why is it justifiable to force one to pay the taxes, any amount of which can be used to fund something that the taxpayer would find objectionable?

Beyond the moral evil of states using effectively the threat of violence to force individuals to help others, there’s the idea that the market decisions of individuals together amount to an economy that’s better-informed than any economy commanded from the top down. This much seems to be evidently true, or at least it was evidently true before the development of advanced information technology. When people can’t decide freely how to spend their money, then the economy isn’t able to respond to the actual demand, not dynamically in real time.

The socialist command economies of the 20th century had famously struggled with basic questions like which consumer goods should be produced, what should be their features, how much of each good needs to be produced at any particular time or in any particular area, and so on. At the same time, however, it could be argued that the same regimes were pretty effective at overall modernization, including universal electrification, housing and infrastructure projects, and industrialization.

In our view, it is evident that the general free market approach has a reasonably ethical underpinning and that historically, it has been reasonably effective. However, that doesn’t necessarily make it the most ethical or effective type of economic system in every single circumstance or for every single purpose. Which is why it isn’t helpful that the free market proponents tend to respond to anything that looks a like a free market failure using one of three flawed arguments:

a) The failing example wasn’t a real free market anyway.

Technically, in our world, there’s always been some government involved in every single economy that’s existed. So, yes, theoretically, everything going bad with any market could have always been caused by something a government did, however minimal its involvement was. This isn’t a constructive defense, it’s the no true Scotsman fallacy. The best we can do is to compare the performance between economies based on the degree to which they resemble a perfect free market.

b) Just give it more time and the free market will fix itself.

If this type of response always involved a prediction of the specific amount of time it will take for any specific market issue to resolve itself, and those predictions were statistically reliable, that would be useful. That’s not what tends to happen. And even in the hypothetical world in which we were able to reliably predict such market dynamics, the fact that a system allows for fluctuations that can cost people their lives would make it worse than systems that can negate such risks.

c) However bad the failure was, all alternatives would have been worse.

How exactly can we know that, for a fact, especially in the absence of extensive systematic empirical observation and testing? Free market proponents tend to repeat that this claim follows from their perfect logic inevitably, and therefore doesn’t need to be put to the test. Or they tend to cherry pick anecdotal examples that appear to support the claim, while vehemently disputing any anecdotal examples that could be counter-cherry picked. This is how “science” was done in the 19th century by the original rationalists, but science has moved on since then.

When taken together, these typical defenses of the free market-ism amount to a rejection of falsifiability. If one considers the free market system to be logically perfect and therefore the best, then there’s no such thing as a “market failure”, by definition. This is a problem because for humanity to be able to make any scientific progress whatsoever in the field of economics, we need to have a solid conception of what it would mean for an economy to be in a state of failure.

To give a recent example, the global free market system has decided that the most efficient way to manage supply chains is without any buffer or spare capacity. When the global pandemic hit, this made the global supply chains fragile and resulted in their disruption. To use our simple economic question again, is there more value in a world with fragile supply chains that will be critically disrupted every time a crisis happens, or in a world with redundant, resilient supply chains?

A proponent of free market-ism could argue that this was a necessary learning moment, making the pain we felt a signal that identified what’s needed. Okay, how was it not a market failure anyway, one that wouldn’t have occurred in a number of other types of economic systems? Furthermore, wasn’t it possible to know this earlier through other means, avoiding all unnecessary pain? Why do we have to wait for predictable disasters to happen first? In any case, wouldn’t it be now prudent to put global regulations in place to prevent this type of market failure from repeating?

Much like there’s no such thing as market failure according to free market-ists, there’s also no such thing as reasonable regulation, if it wasn’t decided on by the free market itself. Are some people in a society okay with children smoking or working? Then it’s fine. Are some people willing to go to work in needlessly hazardous work environments? Then those work environments are good enough. It doesn’t matter that all of these harms are completely preventable, occurring in large part because many individuals simply don’t know any better, or get swindled or addicted. Such harms are a part of the same “learning process”, after all.

Since we believe in the effectiveness of science, we believe that at least sometimes, we can, as a humanity, know better. We don’t believe that an economy is particularly prosperous where many individuals are reduced to a preventable self-destructive existence, or where they’re allowed to be preyed upon. We believe that our systems should help people to not end up in preventable terrible states in which, to quote IT Crowd, they’d believe they “have it how they like it”. Especially if evidence shows they’d indeed enjoy an objectively better life more, if they had it.

Let’s reframe this as a direct philosophical question. Would you raise your own children this way - relentlessly trying to trick them, maximally exploit them, and under-reward them every chance you get, to teach them to be more economically rational? If not, why not? How is it okay to treat anyone this way? What would it say about you if this is how you treated other people? What does it say about a society that decides to be governed by this principle? We’re more than happy to concede sovereignty is a good thing, but what about the golden rule, or the greater good?

If not enough people in a society decide to do the right thing, is it worse to let extremely bad things happen to the innocent, or to constrain those who don’t want to do the right thing somewhat? Whatever you think the correct answer is to this philosophical question, it isn’t a trivial question. A society can certainly debate what the right thing to do is in any particular situation, but a free market is purposely agnostic to all of the philosophical goods, except for self-interest. This means it isn’t even unbiased. Only something random could be that, and probably only some Batman villains would lobby for a system that assigns value randomly.

To identify what it may mean for a free market to fail, or what reasonable regulations of the free market may look like in practice, we find it useful to think about subjectively-driven economies in terms of personal psychology. This is an approach used by the qualitative economist Tomáš Sedláček. In his analysis, much like you’d try to help a person you know who’s mentally unstable or self-destructive, we should try to regulate any unstable or destructive behaviors of our markets by curtailing the psychological pathologies that are driving them.

For example, Sedláček diagnoses the typical economic boom-and-bust cycle as analogous to the bipolar disorder. Which is an issue that requires mood stabilization, not infinite boosting or only suppression of the manic phase. Regardless of whether this particular diagnosis is correct, personalization of markets really brings the nature of healthy regulation into perspective. Ask yourself, would you be better off if you were never denied anything? Do you really want to live in a world where you’re personally responsible for defending yourself and the people you care about from every conceivable harm all the time?

An ideal unregulated free market is a group of people who are getting only what they’re asking for, and everything they can get away with. It’s a group of people who only take care of issues that they’re directly concerned with, and who are protected only from the harms they recognize and actively worry about. These people are of course free to band together to form any safety nets they want, but some of these people at some times and in some places will not do that. Charities will take care of some unlucky or helpless people in need, but their coverage won’t be universal.

At best, psychologically speaking, it appears that a pure free market system is the ideal system for smart, aware, able-bodied people who can handle temptation. Arguably, it’s probably especially good for such gifted people who also happen to be of questionable ethics, or in other words, those who find it okay to exploit the vulnerable. This isn’t a moral judgment, it’s an argument that can be reasonably made within the framework of psychoanalysis. Such analysis can be disputed, but free market-ists often embrace such “ethical egoism”, like Randian objectivists do.

From our point of view of trying to achieve global prosperity, even if we agreed that “greed is good” and that the most ruthless people deserve to be better off than their inferiors in some sort of moral or eugenic sense; even if we agreed that an unregulated free market has objectively the best economic performance of all the systems; one key issue would still remain - some people will always be left behind in a free market system, just because of bad luck. Often young people, with whom we’re leaving behind their future economic potential. We find that unjustifiable. Specifically, less justifiable than a mild inconvenience forced on the more lucky.

On a more technical level, using the same principle - market price - for the valuation of both profits and costs presents one additional problem: how can we tell what is a profit, and what is a cost? Or in other words, is every number going up in someone’s ledger a net gain for the economy as a whole? Is every income equally productive, equally valuable, equally earned? Free market-ists say yes. Common sense, and a growing number of heterodox economists, say no. Let’s explore this.

According to the classical economists and physiocrats, the whole point of capitalism was to serve as a counter to feudalism. Specifically, productive capitalists were supposed to supplant the “sterile” class of rentiers and landlords, the great wealth extractors of the time. In the modern paradigm, it doesn’t matter whether the profits come from a new factory, or from an increase in rents or bank fees. Both will contribute to the GDP equally. Does both help the economy equally?

Let’s think about it in futuristic terms. In the interpretation of some economists, printing or loaning money into existence is like borrowing it from the future. The question is, what would it mean to repay that money to the future? Are there ways of using that money that would represent not paying it back? The key to answering such questions is the realization that money isn’t a thing of value, it’s a means of purchasing things of value. Money is more valuable the more it can purchase.

In this sense, if the money “borrowed from the future” is used to generate greater supply in the future, then the future was repaid. This is how classical capitalism is supposed to be productive - through investment into new production and related innovation. In comparison, if the money borrowed is just used for consumption, the future supply is decreased. The future is robbed. Typically, this is used as an argument against any public spending, but it applies the most when the borrowed money is used to just pay higher rents, fees, and mark-ups - when it’s extracted.

When money is “being made” in a free market system from the dismantling of industries, the slashing of services, the lack of maintenance of crucial infrastructure, and the evictions and impoverishment of the general population, by financial institutions and the few wealthiest individuals, how is the future being repaid? What “productivity” is taking place, let alone increasing? How is someone’s mere act of existing while already being wealthy “earning” them income?

If we accept that the feudalism of old was relatively unproductive, in comparison to production-oriented capitalism that supplanted it, then we have to accept that the main reason as to why feudalism was unproductive was that feudal economies were predominantly based on wealth extraction by the wealthiest elites. Based on their god-given birthright. Or, as many ancient civilizations and belief systems saw it, their pathological, insatiable wealth addiction. In our view, we ought to learn from this history instead of repeating it - a free market is only productive if it produces.

The most extreme of free-marketists like the Austrians are actually against any “borrowing from the future”. They generally argue for financial austerity, for balanced budgets, and for a free market of currencies backed by limited resources like gold, or limited math like Bitcoin. In response to that, modern monetary theorists would argue that that would be overly austerian. Considering observable financial dynamics, what the economy appears to need to be balanced against isn’t the deficit, it’s the inflation. Or, again, the underlying deficiency of future supply.

What deficit means is simply that more money was spent than a government has collected in taxes, at present. If the government then just continued to spend the money without investing it into increasing future supply, then yes, a hyperinflation, or the lack of real purchasing power, would eventually set in.

Assuming the government instead listens to the free market, the part of it that reflects the true demand of the population, the spending of the money can stimulate the right industries and productive capacities, resulting in no disruption of the economy. Following this logic, exports are more of a cost than this - having stuff is value, not having stuff is a lack of value. Money is a means to an end.

After weighing all of these factors, we find it clear that some kind of reasonably regulated free market has to be the part of any prosperous future; that while we don’t want to leave anyone behind, special care needs to be taken to make any infringements on individual sovereignty minimal; and that the economic system needs to be safeguarded from those expressions of human subjectivity that are unhealthy and purely exploitative. Or in other words, that we need to listen to our wants and needs, while protecting ourselves from our own worst impulses.

Economic Value in the Future

Following our analysis of the available theories of value, we offer the following recommendations to help increase global prosperity over time:

1. We need to stop treating civilization as a zero-sum game.

2. Clean, abundant energy must be pursued.

3. Work should be depolarized and shifted from labor to leisure.

4. No one must be left behind.

5. Production must be decoupled from extraction.

Policy suggestion - Liberal resource-based economy / “Generocracy”

Following our best analysis, the type of system we decided to recommend to be implemented in the future is one based on a liberal re-tooling of the old concept of “resource-based economy” (RBE). We propose that in a word, such a regime could be called “generocracy”, as its focus is on being generative, while its ethical imperative is generosity. Let’s start by establishing the typical RBE idea.

RBE is the most popular economic concept associated with modern physiocratic thinking, and science fiction. The most well-known version of RBE is Jacque Fresco’s Venus Project, which would essentially be a scientifically controlled command economy. Visions of future societies like this one are common all across science fiction of the last couple of centuries, but in the context of what happened during the 20th century, this vision feels already outdated - it’s a retro-future.

Consider the USSR. It actually had some aspects of a scientifically controlled command economy. It did manage to make significant advances in some areas of science and technology, like military technology and space exploration, but the key economic question to ask is at what cost. The general consensus among (non-Marxist) economists is that if the USSR had much more of a free market, it would have spent all that money instead on things that its people needed more.

According to any liberal economic theory, the big problem between science and economics isn’t so much whether a society can solve a technological problem or make technological advances, but to which technological pursuits it should allocate its limited resources. A dictator can command the economy to focus on military technology, or space technology, or power, or medicine, or any other area, and make it work. But how will the dictator know which bet or bets to make?

Without using a free market to make that determination, the scientific commander simply doesn’t have enough information or processing capacity to make a truly informed calculation. Well, this was at least the case in the 20th century. Maybe if the USSR had bet on information technology instead, as the free market-informed West did, it could have developed an AI capable of central planning. As the true potential of AI is still unclear, we don’t know yet whether AI could do the planning.

In the absence of a sufficiently advanced AI, or sufficient certainty that it can be developed, we can only ponder whether there is any type of rational scientific long-term planning that humans are capable of. We believe that the answer is yes. To give one example, modern science is capable of foreseeing many avoidable disasters and harms, and offers possible means of avoiding or mitigating them, as it most successfully did with lead and PFCs, and is currently trying to do with CO2.

This does seem to be something of a blind spot of the free market of the type that’s dominant in the world today. Our markets have a tendency to only respond to disasters after they happen, as well as to gladly accept higher than necessary levels of risk and to externalize damage caused, only to increase corporate profits. To use a couple of current market failures as examples, scientifically speaking, we can have planes, trains, and ships that barely ever crash. We can plan for that.

A free market economist could counter-argue that forcing such regulations wouldn’t be efficient, or that the market forces would work them out in time themselves. However, even if we grant all that, it’s really a question of priorities - how much extra cost, that we can afford, is it worth to have only planes that basically don’t crash? Or only non-toxic homes? Or in other words, a scientifically achievable universal guarantee of generally acceptable levels of risk everywhere.

We believe that this aspect of our capabilities at least merits serious discussion. Particularly in the area of anthropogenic climate change, including regulations around CO2 emissions and the related concerns in energy production and agriculture. To the extent to which the discussion would be about the environment, see our Global Environmental Protection Board (GEPB); to the extent to which the discussion would be about the risks associated with new technologies, see the Society for the Global Ethical Application of Revolutionary Sciences (SGEARS).

Beyond merely anticipating negative outcomes, the most developed conceptualization of economic thinking that aims to solve solvable problems using what our scientists and engineers are able to determine is the so-called “mission-driven economy”, a term popularized by Mariana Mazzucato. Her main example is the mission to the Moon. As that historical example proves, functioning governments are perfectly capable of deciding to take on and then fulfilling missions in which the markets see insufficient economic value (and thus wouldn’t even attempt them). Assuming the needed science and resources are there.

A liberal economist would argue that such “missions” are still wasteful, even if they end up being successful in their stated goals, as long as the decisions aren’t being made by the markets. But that only brings up the question of why markets find some objectively impressive accomplishments a waste of resources.

Let’s imagine that in the latter half of the 20th century, the free market would have decided to pour all the money into Hollywood movies instead of space exploration. Would more movies back then be more valuable than us now having GPS and communication satellites? Have we not had enough Hollywood movies back then, or since then? Can something like this even be compared?

We’d argue that the issue here is one of imagination, or informed market choice. While modern free market systems are inherently much more technologically progressive than the feudal systems which preceded them, an argument can be made they’re still quite technologically conservative, all things considered.

There’s only so much disruption that the dominant players are willing to tolerate in a free market, and no one is going to put their money into fanciful advances. The main proponent of this line of reasoning is the astronomer and science popularizer Neil deGrasse Tyson, especially regarding the utility of the space program.

Tyson’s main argument is that science-based government funding is needed for frontier-expanding endeavors, or missions as Mazzucato would put it. The reason for that is that until something is proven to be possible and worthwhile to do with low enough risk, like a space program, businesses have no good reason to pursue it. The expanding of the frontiers will always be very costly and inefficient, and such proofs of concept, if extremely expensive, have to be done first as missions.

After a mission is successful, then the free market will take the dramatically reduced risk levels into account and figure out the most cost-effective, efficient ways of developing the newly unlocked opportunities. The free market very much has a role here, just not as the thing that sets our missions. Note that during the mission to the Moon initiative, USA didn’t turn into a command economy. Even the U.S. military industrial complex followed a state mission to defeat the Nazis.

The mission may not always be successful, of course, particularly when there are multiple players competing at it. The USSR did eventually lose the space race. However, humanity as a whole, including the USSR’s successor state Russia, is now capable of going into space with such reliability, that there now is a burgeoning global competition of private space programs. Similarly, it can be argued that a code-breaking mission unlocked computers, and later a nuclear war survival mission unlocked the internet. Would it be better to not have these techs, or have them decades or centuries later, “more efficiently” or “more cost-effectively”?

What economists like Mazzucato and scientists like Tyson argue is that our scientists and engineers have a reasonable grasp of what can or cannot be achieved. Whenever a market decides for example against something like universal healthcare coverage or any universal housing solution, then if the scientists and engineers say that we can cover everyone because we have the technology, what does it mean that the free market says no? It’s clearly not saying it’s impossible.

If the market is only saying in a particular situation that it would require some kind of economic sacrifice to achieve a particular mission, then let’s first figure out what it is roughly that we would be sacrificing or trading off, and then let whatever the government is to decide whether or not we want to do the mission anyway. To accept the sacrifice, while using the free market to do the mission as efficiently as possible. As JFK would put it, sometimes you gotta do things because they’re hard.

Overall, despite this form of RBE logic being fairly new, and by no means dominant in mainstream economic thinking, anyone who’s ever played a computer strategy game should be pretty familiar with it. You start with an outcome, a mission, that you want to accomplish, and then you manage whatever you can manage in the economy to achieve that mission.

If your command power is extreme, the mission is usually something all-or-nothing, like survival or victory. In a more relaxed, democratic setting, you’d at most set an ordering of priorities to which the resources should be allocated, or simply let your citizens determine the mission priorities, while doing whatever you can to maximize the basics like total resource generation, productive capacity, safety, and efficiency.

Why would you do anything else, unless your goal would be to lose, to fail? The answer to this question is conceptualized in the Terra Invicta game with the “spoils” economic priority - one can simply aim to efficiently extract resources from an economy, ruining its productive capacity and political stability in the long term. This is the only mission that’s antithetical to the whole idea of a resource-based economy. If the main thing that an economy is optimized for is resource and product extraction, then from the point of view of RBE thinking, it is irrational.

In summary, in the most up-to-date version of an RBE, there should be a free market and a democracy, but they should both be a) placed on a foundation of abundant clean energy and technologically maximized productive capacity, and b) listening to the scientists and engineers in the process of choosing which missions ought to be undertaken. While acknowledging that a mission being hard and involving some sacrifices isn’t argument enough against it, particularly if long-term survival is at stake. When done right, a liberal RBE is the closest to Star Trek that we can get.

OUSP Charter

This charter represents the founding principles and guidelines for the Organization for Universal Safety and Prosperity (OUSP). By adhering to these principles, OUSP seeks to promote a world where every individual enjoys their Basic Human Rights and experiences freedom, safety, and prosperity, while receiving necessary assistance during times of crises and disasters. OUSP endeavors to foster global cooperation and unity in order to achieve these goals, striving towards a more just and secure world for all.

Title I. Name and Purpose

Article 1. The name of this organization shall be the Organization for Universal Safety and Prosperity (OUSP).

Article 2. The purpose of OUSP is to promote and protect prosperity for all humanity by maximizing freedom and safety for all individuals on Earth. OUSP aims to establish standardized and protected Basic Human Rights while providing relief from natural and man-made disasters of all kinds.

Title II. Goals and Objectives

Article 3. Promotion of Basic Human Rights: OUSP shall actively work toward the recognition, standardization, and protection of Basic Human Rights for every individual, regardless of race, gender, nationality, or social status. These rights include the right to life, liberty, security, equality, education, and healthcare.

Article 4. Freedom and Democracy: OUSP shall support and advocate for democratic systems that enable the free expression of ideas, protect individual liberties, and ensure equal participation in decision-making processes at all levels of society.

Article 5. Safety and Security: OUSP shall work to enhance global safety and security by developing strategies, sharing best practices, and promoting cooperation among nations and relevant stakeholders to prevent and respond effectively to natural disasters, conflicts, terrorism, and other threats.

Article 6. Prosperity and Sustainable Development: OUSP shall promote sustainable economic growth, equitable distribution of resources, and access to opportunities for all individuals, fostering conditions that enable prosperity, eradicate poverty, and reduce socio-economic inequalities.

Article 7. Education and Empowerment: OUSP shall emphasize the importance of education and empowerment as fundamental tools for personal development, critical thinking, and the advancement of societies, striving for universal access to quality education and lifelong learning opportunities.

Article 8. Humanitarian Assistance and Disaster Relief: OUSP shall establish mechanisms to provide timely and effective humanitarian assistance and disaster relief in the face of natural and man-made crises, working in coordination with national and international entities.

Title III. Organizational Structure

Article 9. General Assembly: OUSP shall be governed by a General Assembly composed of representatives from member nations, each having equal voting rights.

Article 10. Executive Committee: The Executive Committee, elected by the General Assembly, shall oversee the organization's operations, implement decisions, and ensure accountability.

Article 11. Secretariat: The Secretariat, headed by a Secretary-General appointed by the Executive Committee, shall manage the day-to-day affairs, coordinate activities, and serve as the central hub for information exchange.

Article 12. Regional Offices: OUSP shall establish regional offices to facilitate local engagement, adapt programs to specific contexts, and ensure efficient implementation of initiatives.

Title IV. Funding

Article 13. OUSP shall rely on a combination of voluntary contributions from member nations, partnerships with international organizations, and funding from philanthropic entities.

Article 14. Financial transparency and accountability shall be the core principles of OUSP, with regular audits and reports to ensure responsible resource management.

Title V. Membership

Article 15. OUSP shall invite nations to become members based on their commitment to the organization's mission, values, and objectives.

Article 16. Member nations shall uphold the principles of democratic governance, respect for human rights, and their obligations towards global safety, security, and prosperity.

Title VI. Amendments

Article 17. This charter may be amended by a two-thirds majority vote of the General Assembly, provided notice of proposed changes has been given to all member nations.

Title VII. Dissolution

Article 18. In the event of dissolution, any remaining assets shall be transferred to international organizations or initiatives that align with the mission and objectives of OUPS, as determined by the General Assembly.