This piece is a continuation of my views on efficiency with respect to civilisation and inter-group interactions. I am explicitly setting out capitalism as an inescapable framework that dynamically regulates the extent of cooperation and of competition between entities living in a system. In this context, socialism, for instance, is simply a subset of capitalist strategies that assigns more weight to cooperation as opposed to libertarianism which will allocate more weight to the competition side of the spectrum.
One concept that has recently attracted quite a bit of attention is capitalist realism which posits that modern society has rooted itself so deeply in capitalism that it cannot imagine life outside a capitalist framework. My view, conversely, is that capitalism exists in objective reality and is not emergent from human interactions. With this framework in mind, we can relatively easily dissociate and classify entities by virtue of their intent and their interactions with other entities.
Another vital part of this system is the recognition of influence as the only currency of exchange between entities and that all other means of exchange are simply derivations of influence. There are two ways of storing such a currency — inter-subjective belief systems and monopolies of violence. Material currencies such as money or property are, therefore, simply derivations engineered to make one’s stores of influence more visible and hence more effective at delivering value.
In terms of the hierarchy of entities, I can see four distinct levels — the individual, the family unit, small groups and large groups such as corporations and states. It is important to note that these entities are not mutually exclusive and that one entity can belong partly or wholly to one or more other entities. This is why capitalism is not simply about competition but also about cooperation. How an entity decides to allocate time to cooperation or competition is a function of the complex relationship between that entity’s sense of purpose and the collective sense of purpose of adjacent entities.
The success of a group depends on the mix of cooperation/competition strategies deployed by the group in situations where the group has an obstacle in common with other groups and in situations where other groups are actually the obstacle. For instance, in the family unit under the constant control of the “selfish gene”, cooperation between family members is an entrenched setting. Since the family is battling for genetic supremacy against other families, whether consciously or not, the members of a given family have to cooperate. In higher-level groups, we break away from the subliminal control of genetics and fall into the grasp of the inter-subjective realm and the contemporary values of interest.
States and corporations are the highest levels of entities and they have the largest reserves of influence and monopolies of violence. States and corporations can have very similar constitutions and they seamlessly blend in and out of each other. In other words, states and corporations are the same type of entity — the nation-corporate complex. However, they are ultimately made up of individuals and the dynamics of these constituents can affect the effectiveness of the whole complex. The balance between competition and cooperation that the complex imposes on individuals determines how nimble and innovative the complex will evolve to be.
Logic dictates that nation-corporate complexes with a more dynamic allocation system, rather than a dogmatically socialistic or libertarian outlook would be better suited to capitalise and prosper. When policy-makers ponder on concepts such as inequality, long-term versus short-term goal selection in society, it is important to keep in mind the sustainability of their selected strategy to achieve their goals. If they run out of influence before they achieve their goal, that would have been because of the selection of a sub-optimal route.
The path of least resistance for promoting certain traits amongst entities in a capitalist system, therefore, revolves around finding ways to increase or decrease competition and cooperation rather than other cruder arbitrary interventions. In the case of inequality, for instance, states should think about how to increase competition amongst the top so that trickle-down actually happens. Sometimes that requires counter-intuitive steps like reducing the income tax rate so as to increase the disposable capital of non-wealthy high-earners to allow them to create start-ups to compete with the existing corporates and setting the dividends and capital-gains taxes at the same level as income tax to level the playing field for the competition.
Ultimately, capitalists have to be efficient in the way they choose to accrue and spend influence. There is an essential understanding that the balance of good-will and the monopoly of violence is what allows sustained existence. Exhaustion of good-will reduces one’s ability to hold on to the monopoly of violence and, in such a situation, one can expect to go the way of Marie-Antoinette.