What is wrong with the world today? That can be a daunting question, and peeling through the various layers of it can be incredibly frustrating and time-consuming. Not only does staying current with the constant influx of new information prove difficult, but with a plethora of disinformation out there, putting it into proper context can be even harder.
A good place to start might be values and incentives. A value is the regard that something is held to deserve; the importance, worth, or usefulness of something. An incentive is something that motivates someone to do something or to work harder. If society is to thrive like it can, it is essential that its highest values be properly incentivized. That is, “People are motivated to work hard for the things that matter.” So how does this apply to society?
Topping the list of a recent Gallup Poll, 33% of Americans believe the econo
my to be the most important issue facing the country today. First, let’s define the purpose of an economy. The economy is a tool used by society, just like police are a tool to keep the peace. Its purpose can’t be job creation, because jobs are just a means to consume, not an end in themselves. It’s not increasing wages, because what are good wages if there are terrible products to buy. It’s not increased production because production without demand is pointless and wasteful. Therefore, the only logical purpose of the economy is to allocate resources in a way that maximizes society’s happiness.
To measure the economy’s value, economists often look at GDP (Gross Domestic Product). It’s calculated as the sum of all consumer spending, government spending, business spending, and net exports. Economists and politicians often boast when GDP increases, claiming that standards of living and social well-being are rising. So the incentive must be to increase GDP because GDP increases happiness, right? Not so fast, there are many fallacies that arise from this theory.
One problem is it requires a continuous cycle of consumption. If everyone started consuming less, or even just consuming smarter, it would actually make GDP decrease. Equally, the more that is consumed, the higher the growth in GDP. This creates an incentive to stimulate “artificial demand” for consumption. In fact, the United States alone is expected to spend an estimated 197 billion dollars on advertising in 2017, that’s roughly 135 billion more than the next country. This explains why public spaces, the Internet, and television are constantly littered with more and more advertisements. Profits depend on continuous consumption.
This can come at a cost in certain sectors of the economy. Look no further than the pharmaceutical industry, where nine out of ten Big Pharma companies spend more, sometimes twice as much, on marketing than research. It begs the question as to whether pharmaceutical companies want to cure or draw out treatment for profit? If one is cured, then there is no longer demand for the product after its initial use, and their long-term profits suffer. However, if they draw out treatment, even if it’s not needed, short-term profits increase. It’s not that all pharmaceutical companies are intentionally out to get people, but it puts businesses in a juggling act between making profits and society’s happiness. Truly solving this issue comes down to identifying the root causes of the problem, such as diet and lifestyle, but this is not as profitable and hurts the bottom line of pharmaceutical companies. Drugs can be important to medical treatment, but the need to make money always takes precedent, and valuable resources that could potentially be used for research and investment are diverted to marketing and lobbying. These companies have to stimulate continuous artificial demand and consumption to satisfy short and long-term profit goals of stockholders. If the real goal is to maximize the health and well-being of the American people, then removing the privatized profit from the industry should free up pharmaceutical companies to pursue what should be their true objective.
GDP also fails to take into account, who the money is flowing too. If GDP continues to rise, but a large percentage is funneling disproportionately to one section of society, is it really a good indicator of the countries happiness as a whole?
For example, from the late 1940’s to the early 1970’s, the economy grew and family incomes across all income levels increased at about the same rate. However, since 1979 real average income rose: 44% for the bottom 20% of the population, 42% for the middle 60%, 73% for the next 19%, but a whopping 314% for the top 1%. Obviously, those who choose to work harder should be rewarded in kind, but one has to wonder whether there are structural flaws allowing resources to be allocated disproportionately to one section of society?
Another major issue with GDP is it doesn’t take into account the caring capacity of the planet. The Earth is not an infinitely growing entity. It has a finite supply of resources and environmental limits. For-profit companies have strong incentives to plunder more and more resources from the Earth because of its profitability, but this is not sustainable. If consumption is not balanced with the regenerative capacity of the planet, then logically, it’s unsustainable for future generations. It comes at a rather urgent time as well. Statistics show that the rate of species extinction is substantially higher than natural background rates and rising. Human activities are wiping out many species and it’s been known for some time that the human race is increasing the rate of species extinction. Whether you agree with climate change or not, it’s reasonable to say that clean water, fresh air, and biodiversity are of dire importance to society and must be properly incentivized.
This is where the government comes into play. According to the same Gallup Poll American’s 2nd biggest problem is its own government. Again, lets define the purpose of the government? The government is yet another tool of society, designed to be a representational extension of the people to set and enforce laws that maximize happiness. In a democracy, the majority chooses these laws indirectly or directly through free elections, while courts, police, and military enforce them. The United States has state and local governments as well as three branches of federal government (executive, judicial, and legislative) that all set and enforce laws.
When assessing the value of government, there are two parts to consider: the individual and the whole. On the individual level, it is important that all people have basic civil rights and civil liberties. In the United States, these are listed in the Constitution, the Bill of rights and through judicial interpretations. It’s also necessary for people to have the freedom to be in control of their own lives. This has always been evident throughout history. The only stipulation is that it cannot come at the expense of the whole. For this reason, it’s important in a democracy that everyone has an equal opportunity to participate in the development of laws. This is where today’s incentives might be misplaced.
With the 2016 presidential election drawing near, brothers Charles and David Koch are expected to spend a ridiculous 889 MILLION DOLLARS on the election cycle. That’s more then the Republican Party spent on the whole 2012 presidential campaign; and those are just two of the many large donors/interest groups expected to “contribute.” To think that these donations don’t have a corroding influence on candidates, would be utterly naïve. In fact, 91% of the time the candidate with the most money wins the election, according to the Washington Post. These campaign donations are usually not given out of the kindness of one’s hearts, but instead, are “donations” to politicians in exchange for policy legislation favors while in office. It is essentially legal bribery and has a clear effect on politics.
First, it creates strong incentives for candidates to spend a lot of time on fundraising instead of policy work. In a leaked snippet from a PowerPoint presentation by the Democratic Congressional Campaign Committee to incoming freshman, the committee urged the representatives to spend four hours a day on fundraising; that’s almost 40% of the day. It also makes candidates highly susceptible to accept large donations because their long-term job security depends on it. The real blow to the democratic process is that it discourages many potentially good and honest candidates from running because they lack the start-up capital or connections needed to get off the ground.
Then there is lobbying; a paid activity to well-connected individuals to advocate for legislation of special interests. It’s understandable to see why lobbying exists, as people/groups need a medium in which to express their concerns to their appointed representatives. However, only 10% of firms participate in this billion-dollar industry, and they roughly consist of large corporations or groups. Smaller groups lack the resources and high fixed costs to participate, and therefore are under-represented.
It’s all too common place in the current political system for politicians, who were initially funded by special interest, to pass legislation in favor of special interest, then become highly paid lobbyists for similar special interests after leaving office; exploiting their new political connections. This allows for massive conflicts of interests with little separation of powers. A cozy relationship exists currently between government, big business/special interest, and lobbying. This is referred to as the revolving door. This collusion of power has made government and economic interests one in the same. The government has morphed from an extension of the people to an extension of profit maximization for special interest. This disconnect is becoming increasingly apparent as Americans continue to lose confidence in all areas of government; with approval ratings for the Supreme Court at 30%, President Obama at 29% and Congress at a pitiful 7%, according to a June 2014 Gallup poll.
Behind all these, lies the fundamental incentive problem of society; the need for profit. Capital only goes where it is profitable. In some areas of the economy maximizing profit maximizes happiness, but in most areas this not the case for the general population. These are areas the government is supposed to deal with, but if their incentives lie with representing special interest profits then issues will be ignored. This disproportionately affects the bottom rungs of society, as investments in key areas don’t flow into these rungs because they are not profitable. It creates a problem because these areas are indeed valuable to society. This is very troublesome in areas that are closely linked to survival, like housing, food, health, war, and policing. How is it logical that incentives such as going to war, prescribing extra medication, and writing unnecessary tickets, exist and make money? The need to separate for-profit sectors from not for-profit sectors is crucial and must be addressed immediately through a separation of economy and government. Though they can only be addressed by putting the power of the government back into the people’s hands.
Still the question remains, “How does one change the course of a moving train?”
Look at Wolf-Pac, a grassroots organization made up nearly 20,000 volunteers from all 50 states. The group’s goal is to get money out of politics by pressuring state legislators to pass legislation. If 2/3’s of the states pass legislation, then a convention is called where ¾’s of the states must ratify the Free and Fair Elections amendment, adding a 28th amendment to the Constitution without going through the Federal Government. It has already passed in four states and is halfway there in three others. Getting money out of politics is an important step in making sure the government works for the people over the temptations of large donors.
The important thing is that people start participating in the process by getting involved in local communities, joining grassroots organizations, doing individual research, and simply spreading the information. It will never change if no one talks about it. This is becoming a very common mindset with the current dissatisfaction and general lack of trust the American people have their government, and it is time to unite the many. This is the civil rights struggle of the 21st century. If the power of the government is to be restored back into the hands of the people then it’s up to the people to act upon it. The more the people act, the more incentive politicians have to change. In fact, it’s the only time they do.
There are no excuses. It is an exciting time to be alive. The Internet allows for ideas and movements to be easily found and spread; more so than any other time in human history. We have the technology to feed, cloth, and house everyone; plus much more. Solutions are within reach and the human brain (as far as we know) is the pinnacle of evolution. It’s time American’s choose to use it, and start designing political and economic structures that incentivize happiness over economic profit maximization, especially in areas key to survival.
Before this shift can begin, change must occur within each individual. One must gauge the value of making this change for the betterment of the entire world. Instead of ignoring the problem and blaming everyone else, “be the change you wish to see in the world.” Maximize the value of life by overlapping your greatest gifts and skill sets with the world’s greatest needs. The interconnections one feels within mutually beneficial relationships such as this are called love. It’s one of the highest human values. Once this love is found, one can begin to plant its seeds all over the world so that all life can flourish for generations to come. And the beauty of this path is that it doesn’t even require an incentive, for each individual is already born with it. It’s now just a matter of awakening it. One love.
