Exuberance and scarcity

An extract from Chapter 8 of the book Transcending Politics:

8. Exuberance and scarcity

Let’s set aside for the time being the subject of the previous chapter, namely the threat of an environmental meltdown triggered by reckless human activity. Instead, to start this chapter, let’s consider a different kind of meltdown, in which financial systems cease working around the world.

In such a scenario, ordinary citizens might try to withdraw cash from bank teller machines, sometime in the next few years, only to find they’ve all stopped working. The funds in savings accounts may be significantly reduced overnight. Payment requests using credit cards may be declined, causing chaos in shops and restaurants. In an atmosphere of profound uncertainty, corporations will avoid taking risks. Business contracts will be cancelled, with growing numbers of employees being made redundant. Supermarket shelves will become bare. Populist politicians and newspapers will be quick to blame bankers, businessmen, overseas cabals, the so-called “elites”, reds-under-the-bed, or whoever. Tempers everywhere will flare. Soon, people will be trying to take matters into their own hands. The few “survivalists” who have been able to hoard scarce resources will find their stashes under attack. It won’t be long until law and order breaks down.

That’s a possible disturbing future which has echoes in many past upheavals. History bears witness to a long series of financial crashes, each ugly in their own way. Simpler times saw simpler kinds of crashes, but the effects were still often catastrophic for the individuals involved.

In this chapter, I’ll explore the likely effect on future financial stability from the trend that underpins all the others discussed in this book, namely the acceleration of technological innovation. Should that acceleration make us more apprehensive about forthcoming financial crises? Or will it instead diminish the importance of money? Indeed, if economics is the study of the allocation of scarce resources, and accelerating technology delivers a sustainable abundance of all the basic necessities of life, where will that leave economics? Will the displacement of scarcity by abundance transform the so-called “dismal science” (economics) into an unnecessary science?

To give my answer in advance: that’s not going to happen any time soon, contrary to the apparent expectation of various techno-utopians. Technological innovation, by itself, isn’t going to free society from the risk of financial meltdowns. Instead, we’re going to need better politics: technoprogressive politics.

Lost fortunes over the centuries

One example from each of the last four centuries will set the scene for the question of: what next?

The South Sea Bubble investment craze of 1720 saw thousands of investors losing huge chunks of their personal fortunes…

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Recent Posts

A reliability index for politicians?

Reliability calcuator

Imagine there’s a reliability index (R) for what a politician says.

An R value of 100 would mean that a politician has an excellent track record: there is no evidence of them having said anything false.

An R value of 0 would mean that nothing they said can be trusted.

Imagine that R values are updated regularly, and are published in real-time by a process that is transparent, pulling together diverse sets of data from multiple spheres of discourse, using criteria agreed by people from all sides of politics.

Then, next time we hear a politician passing on some claim – some statistic about past spending, about economic performance, about homelessness, about their voting record, or about what they have previously said – we could use their current R value as a guide to whether to take the claim seriously.

Ideally, R values would also be calculated for political commentators too.

My view is that truth matters. A world where lies win, and where politicians are expected to bend the truth on regular occasions, is a world in which we are all worse off. Much worse off.

Far better is a world where politicians no longer manufacture or pass on claims, just because these claims cause consternation to their opponents, sow confusion, and distract attention. Far better if any time a politician did such a thing, their R value would visibly drop. Far better if politicians cared much more than at present about always telling the truth.

Some comparisons

R values would play roles broadly similar to what already happens with credit scores. If someone is known to be a bad credit risk, there should be more barriers for them to receive financial loans.

Another comparison is with the “page rank” idea at the heart of online searches. The pages that have incoming links from other pages that are already believed to be important, grow in importance in turn.

Consider also the Klout score, which is (sometimes) used as the measure of influence of social media users or brands.

Some questions

Evidently, many questions arise. Would a reliability index be possible? Is the reliability of a politician’s statements a single quantity, or should it vary from subject to subject? How should the influence of older statements decline over time? How could the index avoid being gamed? How should satire be accommodated?

Then there are questions not just over practicality but also over desirability. Will the reliability index result in better politics, or a worse politics? Would it impede honest conversation, or usher in new types of implicit censorship? Would the “cure” be worse than the “disease”?

Next steps

My view is that a good reliability index will be hard to achieve, but it’s by no means impossible. It will require clarity of thinking, an amalgamation of insights from multiple perspectives, and a great deal of focus and diligence. It will presumably need to evolve over time, from simpler beginnings into a more rounded calculation. That’s a project we should all be willing to get behind.

The reliability index will need to be created outside of any commercial framework. It deserves to be funded by public funds in a non-political way, akin to the operation of judges and juries. It will need to be resistant to howls of outrage from those politicians (and journalists) whose R values plummet on account of exposure of their untruths and distortions.

If done well, I believe the reliability index would soon have a positive impact upon political discourse. It will help ensure discussions are objective and open-minded, rather than being dominated by loud, powerful voices. It’s part of what I see as the better politics that is possible in the not-so-distant future.

There’s a lot more to say about the topic, but for now, I’ll finish with just one more question. Has such a proposal been pursued before?

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