“Capitalism Doesn’t Work”
As a culture of retail customers we’ve been conditioned to believe it’s possible to “rip and replace” systems that are no longer considered functional.
“That toaster isn’t working; I need a new one.”
The difference between a toaster and “capitalism“ is substantial; one is a simple tool for making toast, the other a complex economic engine.
Additionally, it’s not accurate to say “capitalism doesn’t work.”
Indeed, as an “engine,” capitalism is able to deliver outcomes in exchange for resources.
Now, do I believe that “capitalism as an engine“ is running well? Of course not.
I attended technical school when I was 19, and became certified as a diesel and gasoline mechanic, so I know a thing or two about how engines function.
Diesel engines use diesel oil for combustion (the thing that happens when you press the gas pedal), AND they use diesel oil as engine lubrication.
And so it’s theoretically possible for the governance of a Diesel engine’s distribution of oil to starve itself of sufficient lubrication, resulting in diminished engine performance.
So let’s pretend that “money” is diesel oil used for combustion and lubrication within “capitalism as an economic engine.”
In modern parlance: let’s say that capitalism is a transactional engine with a built-in gamification model that rewards certain types of performance, and for a moment, let’s pretend that the distribution of diesel oil serves as a reward mechanism within the “engine” of capitalism.
Historically, the “engine” of capitalism rewards those who deliver economic solutions that extract more resources that they deliver, within an model that’s described as “profitable.”
If you spend any time in the private sector, you will recognize this language as common.
“Next year‘s campaign will focus on the St. Louis market, which we project will cost us $250,000, resulting in $11 million in retail profits.”
When you remove more resources than you deliver, the model is called extractive, and in the parlance of economics, this phenomenon is referred to as “fiscal leakage.”
These “extractive economic models” have a legacy in the era of colonization, but as they starve “target markets” of liquidity, they begin to starve the engine of sufficient lubrication, resulting in disruption to predictable systemic performance.
As the “engine of capitalism” runs its course within certain geographies, more of the “engine lubricant” is consolidated within centralized repositories, and the system is starved of lubrication.
And that’s the rub: “rewarding certain types of performance” becomes the issue many of us discuss without much consideration of how to repair the engine while it’s still on the road.
These arguments pertain to the “governance” of how the system is managed, but too few comprehend the metaphor, even “experts” who have been formally-credentialed for their memorization of nomenclature, leading them to false conclusions as they sit at the intersection of ignorance and arrogance.
“I have my PhD in economics,” says a person who might not actually have any intuition on how the engine functions, even if they have done a good job of memorizing the words that are used.
And it’s in this manner that “experts” argue for the wholesale replacement of one engine for another, based upon the engine’s color and labeling.
“Oh, I like the blue one. It’s much more sleek and appealing than the green one.”
“My professor says the red one is way better, because it’s completely different under the hood, and they have come to that conclusion because the words are different, and because he’s a professor.”
As a culture of retail consumers who no longer understand how things work, we’ve been conditioned to believe that replacement is easier than repair, so we entertain the fantasy that replacing the engine is simple.
I’ve actually done that: I’ve pulled an engine and replaced it with another. It’s a pain in the ass, and in this context I’m talking about an automobile.
This article is talking about systems that are vastly more complicated, and guess what? Your professor is full of shit: the “different engines” are actually shockingly similar once you get under the hood.
When you remove the smokescreen of language designed to obscure function, you begin to recognize that engines are engines, are engines.
Turns out: the red one still relies upon a hell of a lot of capitalism that sure resembles colonization.
The red engine offers “generous loans” to unsuitable clients, and their assets are seized when payments cannot be made, and the red one extracts more resources than it delivers.
An engine is an engine.
And so if we seek to improve the performance of “capitalism as an engine,” we will probably need to eventually turn our back to childish escapism and return to the practical issues of governance, and the judicious distribution of reward mechanisms designed to keep the machine running, and running well.
This is why I frequently speak of key performance indicators, in industry parlance: KPI.
I think it’s possible to come up with an augmented portfolio of performance indicators designed to effect a remediation and systemic repair where it needs most attention: out at the “last mile.”
And I’ve come to that conclusion thanks to a variety of lived experiences, inclusive to the management of complex business and technology operations in the context mergers and acquisitions.
When somebody puts a company up for sale, it’s probably because that company is in bad shape, and so when it’s acquired by a larger company, frequently its product and attendant operations are unhealthy.
Private equity firms and experienced M&A professionals make use of key performance indicators (KPI) designed to quantify and qualify performance, rewarding that which most quickly and efficiently brings about systemic improvements.
Using this methodology to effect a repair to “capitalism as an engine,” this would be something like instrumenting systems at “the last mile“ so we can measure health and performance with a greater level of precision, enabling programs of repair and remediation to be nimbly pursued where it’s most needed.
It seems logical that this remediation program would be directed “from the top,” but this conclusion is illogical when one considers the following:
The engine itself is built to reward for consolidation “at the top,” and would be therefore systemically disinclined to focus upon “the last mile.”
In other words: one of the dominant features of this particular “capitalistic engine“ is that its operating system is substantially disinclined to focus upon those out at “the last mile.“
Fans of the red toaster claim that this is one of its substantial features: that it focuses entirely upon those at “the last mile,” to which I say: bullshit. That’s just more naïvety and escapism, which runs counter to historical performance.
And you will notice that when pressed to provide proof for their outsized claims, fans of the red toaster are quick to simply say “to the wall,” which is a non-subtle way of indicating their intention to kill anybody who gets in the way of them acquiring their beloved red toaster.
(Which is why the red toaster people have killed so many anarchists by the way, and why we recoil when they speak sweet words of solidarity).
Glass half full: we will be able to use innovative approaches borrowed generously from mainstream use within the private and public sector to repair the “capitalism as an engine” while it’s still on the road.
Glass half empty: the “capitalistic engine” has been so substantially damaged that there will be wholesale failure “at the last mile,” leaving tens of millions of people in a lurch and in a de facto refugee status.
I like to hope for the best, while preparing for the worst.
I think it’s possible to come up with innovative models which might be evaluated from a safe distance by those at the top, and adopted at a later time by an the “economic engine.”
I think that those responsible for governance for “capitalism as an engine” are systemically allergic to risk-taking, and that means innovation is going to occur in micro-laboratories out at “the last mile.”
That’s actually how innovation occurs, by the way, and pretty much every single time.
People believe that innovation begins in huge, well-funded laboratories, but that’s bullshit.
Places like Xerox are famous for stumbling upon innovations that they subsequently try to suffocate, because large organizations are risk-averse, which is why innovations find alternative paths to market, within smaller, more nimble “engines” that are better-suited for the task.
Liberals are fond of talking about huge government-funded endeavors like the New Deal, but this is escapism; as an engine, we no longer have the chops to pull this off, so we need to focus upon practical reality and take a break from NPR.
It’s my contention that if you hope to effect change within the “economic engine” of capitalism, you need to launch, sustain, and fine-tune a large quantity of bite-sized pilot projects, designed to quantitatively and qualitatively demonstrate how a portfolio of augmented key performance indicators (KPI) might re-introduce systemic “lubrication” out at “the last mile,” in an effort to improve broader systemic performance.
Of course, most people don’t know how to do that. It’s more fun to go snowboarding while talking shit about Donald Trump.
Most people are conditioned to believe that if you want a new toaster, you go to Target and buy one.
They believe that the red toaster is better, because somebody told them that behind the scenes: the red toaster is completely different than the yellow one.
For those who understand the metaphor, (and are therefore able to see through the subterfuge of obfuscating nomenclature), we can recognize how to improve the red toaster as well, and have every intention of testing these innovations wherever and whenever we see fit, because there’s substantial autonomy out at “the last mile.”
A child whistles as he walks the forest, the grasslands, and the taiga, striking matches and dropping them with each step.
All the fuel necessary is already present; all that’s required are sufficient conditions and a suitable catalyst.