Posts Tagged ‘ecology’

The Organic Nature of Capitalism

Thursday, November 3rd, 2011

Dear Friends,

It seems to me, the primary reason the market system works so well, is that a market based economy is organic in nature. In any ecological system there is a great diversity of inhabitants. The one thing they all have in common is fitness to survive. Evolution sometimes give an advantage and that organism makes the most of it. (Like an entrepreneur). Business work the exact same way. Under a lasses fair economic system, (lasses faire, but one that has, and enforces, standards), our material quality of life would be drastically improved.

Diversity in an ecosystem, is how a such a system, is able to maintain itself. In an ecosystem the many species all taking a niche, work together, one eating the other’s excrement, creating a circle for nutrients to travel. In an economic system there is a great number of different firms taking up various niches. The diversity of firms enables the flow of capital, services and goods in an economy to circle. As in the worker/business/saver/bank money circle. Capital flows through an economic system just as nutrients flow through an ecosystem.

In any ecosystem the fitness to survive is the utmost incentive. Those who are unfit are quickly done away with. Ecosystems have no heart and only seek efficiency. Economies that are run lasses faire are similar. If businesses are allowed to start easily and end easily then there will be a great deal of diversity in firms. This diversity will quickly cull any flawed business plans from the economy. Flaws such as stupid capitalism would be shown in stark detail.

Evolution can give this or that species an advantage over their neighbors. They have some advantage and they take advantage. In the short term the ecosystem is unbalanced. But in the long term even the most invasive species is tamed to a greater or lesser extent and the ecosystem is improved by it. Like when an entrepreneur implements a new idea. The idea gives their business an advantage and they take advantage. They grow their businesses until the economy comes up with a way of balancing. Another firm will open competing with them or another product that renders the old one outdated comes on the market. Creative destruction in action.

In the case of a country’s economy most of the diversity is small and medium businesses. They fill most of the economic niches. The larger the diversity of small and medium sized businesses the greater the resiliency of a country’s economy. Like a pond that has a fully filled out ecosystem can weather a drought, better than a mono culture pond can, an economy that has a fully filled out private sector can better withstand an economic downturn. Perhaps more importantly a natural pond and an economy with a large diversity in firms can bounce back far faster when conditions improve.

Oligarchal economic system are like mono culture ponds. Any introduction of a new virus will wipe out the mono culture leaving the pond dead. This can and has happened to many economies over the years. It has only been the countries that have allowed their economies the ability to evolve to meet the new needs of society that have succeeded. Governments that seek to protect local firms always harm small and medium businesses. Regulation to protect the golden haired firms, necessarily makes it hard to compete with them, or even start a business.

Socialist or planned economic systems consider a country’s economy as a fish tank. But, no matter how well a fish tank is kept, it must be cleaned sometime. Moreover, unless there is an outside source of food, a fish tank will die. It cannot sustain itself. There are some species that can manage to survive in such conditions but surviving is not thriving. Take those gold fish from the filthy tank and put them in an open pond and watch them thrive. Socialist economies must control every aspect of our lives, to hold down the necessary cleanings and they must have a source of outside funds, else they quickly fall into famine. Under socialism people don’t thrive and only few survive.

The analogy goes far beyond this. I have simply run out of space in this blog format. Economic systems mimic organic systems so closely it is spooky. Similarities are everywhere… if you only look. From micro economics to macro economic cycles, economic systems act and react, just as ecosystems. Consider the Mom and Pop Store as a micro organism, and GM as a T Rex, with every other business filling a different niche in between. Consider the way a business works, with inputs and outputs, cash flow and outlay, to any biological organism’s metabolic processes… The conclusion is; that market systems are organic in nature.

So, the only question remains, where would you rather live? An open pond, a mono culture pond or a fish tank? Others are choosing for you so you better choose fast.

Markets as Ecology

Sunday, August 1st, 2010

Dear Friends,

It seems to me that the ultimate example of capitalism is nature. Does the flower address the bee’s charity? No… the flower addresses the bee’s self interest. In that way the bee gets a need met and the flower gets a need met. A basic capitalist exchange.

Nature is filled with other examples of capitalist exchanges throughout. From ants protecting a fig tree to people planting cucumbers that is the way the ecosystem has grown. One species of fauna eating a species of flora and thus spreads the seeds of it’s preferred food. Small Wins adding up to a great win for the ecosystem.

There are examples of fraud in the natural world, (corpse flowers and pitcher plants are a few) as there are examples of monopoly (miles of forest… all one aspen tree, duplicated over and over, monopolizing the habitat). The environment around us is rife with examples of the market economy complete with division of labor. (Our little self interested bee handle’s the pollinating segment of the tomato production process).

On a meta scale plants produce sugars and oxygen, and animals use those sugars and oxygen to produce locomotion to move plant‘s seeds and pollen. On a personal scale soy produces oil, sheep-wool, dogs-protection, apple trees-apples… the list is endless. The division of labor in nature is there for anyone to see… if they only open their eyes and look. Marx pointed out that capitalism (the market system) is dynamic. As is nature.

The term capitalist and markets are human words created to explain a phenomenon. There is nothing unnatural at all about exchanging one thing for another or specializing in a job. That is what separated cats from dogs millions of years ago. There is something unnatural about demanding charity from individuals in the form of slavery to government. Benign or otherwise.

I have never heard a complaint about how the flower exploit’s the bee‘s labor. In fact if someone did complain that the flowers were exploiting the bee’s labor and getting rich doing it I suspect people would give the argument the weight it deserves…. None. When we look at a phenomenon from a distance we have perspective. We can see the big picture. But an attribute of perspective is that the closer we get to something the less of it we can see. Like the story of the three blind men describing an elephant.

I can imagine a bee flying into a hive. Tired and frazzled. Birds tried to eat her all day. The flowers were picked over. Her wings are tired and her stinger is sore. She lands with a paltry amount of pollen and nectar for the receivers. They complain she must be slacking off to have so little nectar… It would be easy to convince her that the flowers were exploiting her labor. Then further to convince her the flowers need to be controlled and many would have to be killed in the revolution. In the long term… Would it be in the bee’s best interest to follow, and kill many of the flowers? Does it make a diffrence if the flowers trying to convince the worker bee that other flowers care nothing and do nothing to help the bee cope with, Verona mite, tracheal mite or even the dreaded colony collapse disease?

Today most people know what would happen if we allowed an open river of effluent to run down our streets. We also know what would happen if vermin lived too close to us… Black Plague. Or some other deadly disease. By not taking care to have a full waste cycle we open opportunities for the smallest players in the ecological market to exploit the niche. They will step in and use the nutrients available to them with devastating results for other larger players in the ecological market.

Government policies that restrict supply or demand for a service or thing forces inefficiency into the system. This drives capital into the streets so to speak. This inefficiency is like effluent running down the streets. The wasted capital (effluent) becomes a source of funding (nutrients) for the underground economy. Government policies directly incentivize the underground economy. With the negative externalities that all underground economies have.

Ironically in some countries people are more virtuous to each other in underground economies than they are in the open markets. Because in the underground economies participants are held to their actions. If someone lies or cheats, if they are not executed, they will be ostracized. In the open market they are protected by government policies. Unenlightened policies that are tantamount to flushing effluent into the open streets.

But as with Tracheal mites, it is better to keep the hive free, than to use menthol to control them.