Lately I’ve been thinking about the themes that tie together the various interests I’ve been pursuing over the last year. What is the connection between science fiction and communism? Between horror and capitalism? Between religion, myth, and cities?
Francis Spufford’s Red Plenty is an example of historical fiction that illustrates the potential between political alternatives and science fiction. What in essence is proposed is that the problem of allocation of resources – the primary concern of any economy, be it capitalist or socialist – is resolved through the use of computer algorithm; an early kind of cybernetics. As it plays out in the novel, the Soviet leadership is happy just to keep things marginally operable under current conditions (which contributed to numerous supply problems and eventual collapse), and so the scientific breakthrough is never applied to the actual management of the Soviet economy.
What is striking in thinking about this general issue is that it highlights how ridiculous the current economic model is, and how poorly it matches resources to need. Following Piketty’s r>g argument (that return on capital outpaces that of labour), market-based societies are increasingly subject to a minority monopolizes its share of wealth to maximize future returns, while the overwhelming majority is left with little.
What Red Plenty highlights is that economic models are historically contingent and contextual (not natural, self-regulating, etc.) and subject to political and sometimes democratic forces. The novel puts the question how should we allocate resources without reflectively defaulting to capitalism-is-necessary, there-is-no-alternative, leaving the only option to tinker with modern capitalism, offer technocratic solutions to a technical problem (capitalism isn’t running smoothly enough!), etc.
Instead, what Red Plenty suggests is a world in which economic systems and models can be considered on their merits. Remember, of course, that the fact that resources get matched to needs at all in capitalism is the result of a happy accident: as formulated by Adam Smith and others, it’s the fact that everyone’s looking to get rich that drives capitalism first and foremost, with the accidental result that people happen to get what they need (sometimes). This result, by the way – that resources are allocated to need – is exactly what Smith means by the “invisible hand.”
If you listen to free-marketeers (I’m thinking Greenspan and Hayek but I’m sure it’s easy to find), the reasoning behind the superiority of markets to other alternatives is their ability to function as information machines that rapidly correct and respond to changes. Whereas in central planning a committee has to meet and consider the figures about declining rates of certain crops and then determine appropriate allocations of resources, a market simply estimates supply/demand and matches a price point accordingly. The complex derivaties and risk-analysis methods highlighted during the 2007-8 housing crisis and recession are simply financial technology created to more precisely price various kinds of assets. Rather than fret about the arcane nature of complex derivatives and contrast the FIRE sector to ‘productive economies,’ the problem should really be assessed as such: how was this system matching needs to resources? Specifically, how did this system match people who need housing to actual houses? The answer is that it did, kind of, through fudging some risk assessments, misinforming people about adjustable-rate mortgages, and financing the whole operation by looking at the risk/debt that individuals signed up for as a potential asset for future revenue (with variable risk attached). Note how circuitous the whole affair is: the conditions necessary for matching people to housing involved being able to essentially speculate and gamble on how fast (or if!) they would be able to repay their mortgage. The only reason that people got matched with housing in the first place is because someone (banks) found a way to get rich while doing it. The fact that people actually got to live in houses for a while is a happy accident of the whole enterprise.
Since Big Data has been making leaps and bounds over the last few years, with disturbing consequences for policing and intelligence-gathering as evidenced by the Snowden leaks, it’s become evident that the processing, computing, and information-gathering capability of our society is increasingly detailed and granular. Rather than have computers monitor our every move, read our email and profile us for future thought-crimes, couldn’t we instead get computers to crunch data about the best way to match needs to resources? And maybe bypass the silly condition that someone has to get rich while doing it?