NOTE: Today’s excerpt from World After Capital rounds out the section on limits of capitalism. We already saw the issue of missing prices, the problem of power laws and today talks about how the self-conservation of capitalism through the political system keeps attention trapped in the job loop.
Self-Conservation
Toward the end of the Agrarian Age, when land was scarce, the political elites came from land ownership. Their influence really wasn’t substantially diminished until after World War II. Now we are at the end of the scarcity of capital, but the political elites largely represent the interests of capital. In some countries, such as China, this is the case outright. Senior political leaders and their families own large parts of industry. In other countries, such as the United States, politicians are influenced by the owners of capital because of the constant need to fundraise.
A study conducted at Princeton analyzes how much public support for a policy influences the likelihood of that policy being enacted [51] in the United States. It turns out that for the bottom 90% of the population their preferences have no influence on outcomes. Only the preferences of the wealthiest 10% of the population matter. Even within the 10% whose preferences matter, there is a huge concentration. For instance, over a 5 year period the 200 most politically active companies alone spent nearly $6 Billion on lobbying.
Individual and corporate lobbying results in policies favorable to owners of capital, such as low capital gains tax rates (or in the case of venture capital and buyout funds the taxation of General Partner profits as capital gains instead of income). Low corporate tax rates with lots of loopholes, including the accumulation of corporate cash in low tax countries is also favorable to owners of capital. So in 2018 we are finding ourselves with some of the lowest corporate tax rates, the highest stock prices and the highest share of profits in national income.
In addition to preserving and creating benefits for owners of capital there are also outright attacks on the sharing and creation of knowledge. I have written more about these in the chapter on Informational Freedom, but want to give one example now. Corporations lobbied heavily over the years to lengthen copyright and strengthen copyright protections. Scientific publishers such as Elsevier have used these protections to make access to knowledge so expensive that even universities as wealthy as Harvard can no longer afford the subscriptions. [52]
The existing political and economic system thus acts to conserve the scarcity of capital past its expiration date. As long as that is the case we will not be able to solve the attention allocation problem outlined above. We will heavily over-allocate attention to the job loop (work and consumption) and under-allocate attention to the individual need for purpose and the collective growth of knowledge.
How then do we overcome these limitations? That is the subject of Parts Three and Four of World After Capital. But first we will take closer look at the power of knowledge and the promise of the digital knowledge loop.
