A Foundational Approach to Economic Anxiety

Capitalism is vulnerable. What will replace it, and how can you be happier?

Posted Sep 22, 2015

Ralph Chaplin, Public Domain
Source: Ralph Chaplin, Public Domain

I see a growing number of people who are anxious about their economic situation.

I've devoted many previous posts to how to do well in the current system: how to land a good job in a world of ever fewer ones, for example, Job Hunting Reinvented.

Today, I'll focus on how you can more foundationally deal with the problem. It would be unfair of me to ask you to consider the practical solutions I'll raise without first explicating the thinking behind it.

Why we will need to radically change our approach to work, money, and things

Sure, the government-reported "unemployment rate" is low but that doesn't consider all the people who are working near the minimum wage or who have stopped looking for work and so aren't counted.

The problem is that many people's jobs can be automated or outsourced for a wage that is unlivable in the U.S. (e.g., $3 to $10 an hour, no benefits). And if an employer has to hire an American, because it's so easy to find workers on the Internet, unless you have an uncommon and in-demand skill set, the employer can pay you poorly and offer only project rather than stable work, with minimal benefits. Or they make it a low or no-pay "internship," or a low-paying writing "opportunity to market yourself," etc.

In much of the world, the seams are already breaking: Greece leads a conga line of countries insisting on loan forgiveness plus cash from richer countries. There's mass migration from poorer to richer countries. Riots in the U.S. after police shootings have focused as much on economic inequality as on claims of police brutality. The French poor protest inequality with fire-bombing riots at the same time as, sans firebombs. the U.S. Occupy movement focused on income inequality plus the great disparity between what universities charge and the meager benefits a college education now yields.

The growing alienation of middle-income and lower-income people has spawned the popularity of socialist U.S. presidential candidate Bernie Sanders and the media's embracing of Pope Francis' indictment of capitalism and trip to Cuba. Earlier, Francis called unbridled capitalism, with remarkably un-popelike crudeness, "the dung of the devil."

I think it's inevitable that capitalism will be replaced by something but will it be full-on socialism like Sweden? Full-on communism like the old Soviet Union? A mixed-economy like the U.S's that moves ever leftward? My guess is that it will be the following new hybrid:

Where I think we're headed

The government will provide a basic living wage, health care, and other benefits to everyone. Raising taxes on the wealthy will not come close to providing sufficient revenue to pay for that because the top 10% already pay 68% of the federal income tax. Nor can raising corporate taxes pay for much of it.The U.S. corporate tax rate (a double-taxation) is the highest among the 34 OECD (developed) nations. If corporate taxes are raised too much, corporations will pack up and domicile elsewhere.

Providing a basic living for the--in my opinion--majority of people who will not be able to find sustainable, decent-paying jobs on their own, will require dramatic increases in taxing of the current middle class. The result, of course, is that most people will be forced to live at or modestly above a humane level of basic existence. Of course, that dramatic reduction between rich and poor is socialism's foundational goal.

I think political pressure to soak corporations will cause many to close or to leave the country. The most likely survivors will be prestigious companies that provide unquestionable value to the broad populus and whose products impose relatively small environmental costs, for example, Google, Apple, 3M, Procter & Gamble, Whirlpool, and General Electric.

The power of banks will decline, not just because of increased taxation and regulation but by The People's growing acceptance of alternative currencies that shut-out the banks such as Bitcoin.

I believe the trend toward very small businesses will continue, offering simple necessities and pleasures affordable by people of modest income, for example: cafes, artisan bakeries, laundromats, walking tours, hand-made practical craft items and low-cost courses marketed on websites such as Udemy, Udacity, and MeetUp.org.

The lower income of most people will spur the continued expansion of The Sharing Economy, for example, longer-term sharing of housing, cars, equipment, and labor, that is, barter. More people will leave not-needed items on the curb for others to take. They'll post other giveaway and low-cost used items on ultra-local websites.

I believe people will be forced to find their pleasure in the simple, non-material: creative output, nature, sex, and volunteer work—not just helping the troubled but online volunteerism such as writing Amazon reviews, posting videos on YouTube, editing Wikipedia entries, writing for free for websites and blogs, and providing solutions to posted computer problems on websites such as StackOverflow.com.

I believe the socialist, equalist, zeitgeist will spur additional immigration from poorer to wealthier nations until the quality of life in all nations are similar enough that it won't be worth the effort to migrate. It may well be that the ultimate outcome of this will be one-world government. The shallowness of patriotism to a state rather than to the world will become more apparent.

After a one-world government becomes hegemonic, small entities, even states, will emerge but these will remain relatively small threats to one-world government.

What you might do today

Of course, these are mere conjectures and, worse, conjectures by a career counselor not an economist, and so they must be taken with many grains of salt. Probably the scenario presented here deserves no more attention than as one of many projections about our future and how to prepare.

But perhaps you agree that some variant of the scenario presented here is likely to occur. Or maybe you'd like to live a simpler life even if it doesn't become hegemonic. You might, for example, consider such a life ethical or simply an antidote to your economic anxiety. If so, might you want to do one or more of these?

  • Replace material goals with non-material ones. Would you like to spend more time pursuing one of the non-materialistic rewards I list above?
  • Would you like to leave the job you view as unimportant for a more soul-fulfilling one?
  • Would you like to teach your children and other family members values different from those in the dominant society?
  • Would you like to be more activist in your workplace: demanding more merit-based treatment of workers?
  • Would you like to vote for political candidates that hold post-capitalist views?
  • Would you like to become an activist volunteer for an organization that fights for post-capitalist policies?
  • Would you like to learn how to better manage money: be a wiser consumer, budgeter, and investor?
  • Or do you hold a very different world view, for example, that capitalism, despite its flaws, does more good for humankind than any other system. Some say that our achievements, from refrigeration to smartphones, would not have occurred or would have occurred much later if not for capitalism. As former British Prime Minister Margaret Thatcher said, "Socialist governments traditionally do make a financial mess. They always run out of other people's money."

Marty Nemko's bio is in Wikipedia.