The Fairest Societies are the richest
When the Black Death swept through Europe in in the mid 14th century, serfdom and villeinage were prevalent. Common people were thralls, tied to their manor by law, as they had been since the Colonial Edicts of Diocletian, a millenia prior.
The plague changed this long-held balance. It attacked indiscriminately, thinning out a proportion of every echelon. The loss in population lead to an increase in the value of labor, and increased bargaining power, whilst creating gaps and loopholes that enabled bold and lucky folk to gain in social rank. Nouveau Riche burghers applied their wealth and influence to advance culture and learning, founding universities, and boosting the nascent renaissance and encouraging the Age of Discovery.
Europe had suffered massively from the ruthless Mongol Invasions, desperate sieges, the start of a Little Ice Age, popular revolts, a great number of wars, and a long, drawn-out terrible famine. The plague, which took the lives of perhaps half the population, was the coup de grace on a long line of catastrophes. It seems surprising that the scrappy and beleaguered European civilization survived at all, let alone that it arrived at a favorable outcome at the end of such tumult, and would rise to global pre-eminence shortly thereafter.
In many ways, this period in history can be viewed as a eucatastrophe, a terrible journey that somehow turned out favorably for the sufferers in the end. It seems especially strange given how this kind of devastating war+plague combination lead to very different, devastating outcomes for other civilizations, such as the Inca and Aztec.
In our time, our global civilization faces mounting pressures: Climate change, ‘forever’ pollutants such as endocrine disruptors, tremendous systemic risks from long supply chains, rampant financialization, enormous public debt, along with the omnipresent threat of nuclear annihilation. The pandemic which has emerged in 2019 will not be the last unmanageable infection which stresses our civilization either.
Will these stressors finish us off for our hubris, or will we emerge anew? Can we find eustress in the midst of our difficulties? Will be fall under, or shall we snatch a eucatastrophe from the jaws of perdition?
The Triangle Shirtwaist Factory fire in 1911 killed dozens of workers in a factory 8 to 10 stories up. The factory employed desperate and hard-working young women in difficult conditions. A common practice at the time was to lock the doors so that workers couldn’t take breaks.
Thus, when fire broke out, being trapped by locked door, and without a fire escape on the exterior, and with no centralised alarm to alert everyone, many of the factory workers were doomed. Suffering smoke inhalation and desperate for a breath, 62 people leapt or fell into the street below. One appalled onlooker was Frances Perkins, who was inspired by the horrible scene to champion reforms of employee safety.
A long campaign by Frances and many others eventually resulted in workplace safety legislation and injury compensation schemes that still exists today. One aspect of this was mandatory exterior fire escapes, which made such tragedies far less common.
Though tragic at the time, the disaster of the fire brought forth a new and improved relationship between employer and employee. These hard-won battles have enabled a safer and more equitable society not only for workers, but for everyone.
However, there are still many necessary reforms yet unaddressed. In these times, it is appalling that managers can threaten to sanction workers for exercising a natural right to protect their health with their own PPE, perhaps even paying for the consequences of this with their lives. This is especially unfair to those workers already at greater risk of infection, or prisoners exploited for such dangerous labor. We must urgently enshrine the right to self-protection for workers who believe that they are at risk.
I believe that these incidents highlight a co-dependent relationship between employers and employees. I am dismayed that a manager feels that they have authority (or even a duty) to jeopardise someone’s else’s health in such a way. We have come far from the era of serfdom and villeinage, but elements of it remain today in at-will employment, particularly that which is non-unionised.
When there is a greater likelihood of dying in a meat packing plant or a municipal bus than a battlefield, then incentivisation is way off balance. At least soldiers can get a pension and medical care, maybe even a medal.
Legislation can help with cases like these, but it shouldn’t be necessary to codify in regulations. The greater fault is an inequitable shielding of liability.
There have been attempts to create jurisprudence for corporate manslaughter, as a corporation is a legal person in most respects. However, this has largely been unsuccessful thus far, and therefore companies can escape the consequences of gross negligence with a fine instead of termination of management appointments, or even their prosecution and incarceration.
Despite progressing as far as we have, there are still fundamental roadblocks to a fairer society.
Civilization depends upon people investing energy in it, whether in the form of attention, money, or belief. We lounge under trees on a sunny day at the park that were planted by people who knew they would never live to enjoy their shade. Civilization is a gift to the future.
Unfortunately, things seem to have turned in recent years. As our world has increased in pace thanks to technology, our time horizons have typically become much shorter, especially those in business, compensated with bonuses for short term gains at the expense of long term value creation.
Benefits are being enjoyed without being adequately paid for, whilst we borrow from the future to enjoy ourselves today. We see this in unsustainable debt, in the destruction of our environment and the species within it, and in escapism towards junk food and junk infotainment. These are a symptoms of wider problems in society, perhaps the single greatest root cause of suffering in the world today: the poor accounting of shifted costs.
Shifted costs – negative externalities in economics terms – are what happens when someone does something which affects an unrelated third party in a negative way, who does not adequately make redress for the trespass.
Many economists tend to shrug somewhat at shifted costs; they are considered too difficult to account for, and so are largely ignored, written off as a sad inevitability of capitalism. Only the most gross and obvious of externalities get noticed and policed, the rest in a great long tail go unaccounted for.
Essentially, our entire civilization is constructed from mechanisms by which costs are shifted to be borne by others, whether as a cost to the environment and public health from pollution, or a cost to personal and social wellbeing by operating systems which are efficient yet not conductive to human fulfillment.
Exploitation happens at all layers of society. To some degree we are all guilty of it, whether we are exploiting nature, or the agency or non-human animals, or enjoying cheap goods produced in places where labor is cheap due to lack of regulation of concern. Exploitation involves turning a blind eye to the shifted cost, whether as a producer, or a consumer (though sometimes such costs are obfuscated).
Sometimes costs can be to society itself, for example through enjoying the efficiencies of globalization but without paying for the associated greater fragility that comes with it. Without down payments to a crisis management fund, when the inevitable disasters do occur, it’s out of our control.
Another form of exploitation can stem from the misallocation of shifted benefits (positive externalities), whereby someone creates a benefit for others but does not profit from it. For example, unpaid personal care work generates tremendous value to society which would otherwise bear enormous social and economic costs in their vacuum.
A lack of accounting for shifted costs is the yoke by which modern equivalents of serfdom operate, and only by resolving this issue can we resolve the great failures of our age. It serves the interests of those with power to obfuscate shifted costs and benefits, as by doing so they can point the finger elsewhere. Thus we have a dire lack of education in society about shifted costs. People aren’t equipped to think of society in terms of externality tradeoffs, and thus easily get swayed by some ideology or other that has a correct observation on a small scale, but misses the big picture. An ideological lens works well as a microscope, and poorly as a telescope.
However, this can be changed. By properly accounting for costs, we can account for damage to nature, damage to the sanctity of the family, damage to freedom, damage to purity of health-giving food, damage to societal trust and cohesion, damage to workers from unpaid costs of labor.
Accounting for shifted costs is the central issue that underpins the core values of every ideology and creed, for multipolar cross-partisan support, if framed in a way that can be understood. It can create a lingua franca between movements, to better communicate why a certain policy or approach is unjust, and to move past the bemused opacity to the views of others than reinforced polarization.
Accounting for shifted costs may be the answer to the failures of our society, socially and economically. We have an opportunity to bring this into being using a blend of emerging technologies and established law. We can understand and account for shifted costs through Artificial Intelligence, the Internet of Things, Distributed Public Ledgers, and Machine Ethics.
Machine Intelligence. Helps us make sense of situations that appear to be too chaotic to control, and enables us to automate the ineffable – that which cannot be adequately expressed in words or mathematics, but which we know when we experience. This is a fantastic resource for making predictions, generating improved solutions to difficult problems, and optimising very complex variables. Recent research developments also hint at new formulae that could be applied to assist externality tracking systems.
Machine Economics. Blockchain, distributed hash tables, and associated cryptographic technologies enable decentralized mechanisms to align incentives, create a permanent public record, and guarantee escrow in an affordable, trustworthy, and (mostly) scalable manner.
Machine Ethics. We can instill prosocial behaviours and values into machine intelligence by collecting examples from multiple cultures, demographics, and geographies, informing the artificial intelligence of our general preferences on an individual and societal level.
Internet of Things (IOT). Sensors are becoming more affordable and powerful all the time. Soon, they may even be commonly embedded within consumer electronics.
These elements combined enable us to detect, track, tokenize cost shifting, to account for its effects, and to understand which parties may benefit from an action, and which parties lose out.
Once a general understanding of the true cost of a decision or transaction starts being known, one can then seek redress through standard litigation for damages, on an individual or class basis, with claims and depositions, which can be quickly administered through increasingly automated interfaces.
However, outside of civil tort, there are also fiduciary issues. Once the externalised costs are known with relative certainty, to not account for it creates mens rea, as it is essentially a form of fraud. Thus, a corporation (and in a just world its officers) are liable not only for true costs, but also for errors of conduct for having ignored them.
Before long, with a few costly cases being won, externality costs or usufructs will start to be negotiated up-front, instead of retroactively. Governments will use cost-shifting analyses to vet policies, to ensure that the effects of a policy are not unfairly born upon specific demographics, with the results of analyses publicly available information that they are accountable for.
If we are to find our eucatastrophe, I dearly hope that we not only discover how interdependent we truly are, but also take this opportunity to strike the root causes of our present societal failure to manage shifted costs, and their offspring – systemic risks. We must refuse to mutually divert the trolley onto each others tracks for our assured collective doom. True and proper accounting of shifted costs is the best path towards lasting justice in a complex yet sustainable and enduring civilization.
I have begun to collect some ideas at www.pacha.org around these new opportunities to handle shifted costs in our economy, a concept I describe as Automated Externality Accounting.
The internet once required one to connect to a single server at a time. It took the World Wide Web to enable us to surf between silos of information in a fast and user-friendly manner. Similarly, the elements to made the management of shifted costs already exist, they just need the right protocol and an interface to bring them all together. Repositories of pollution tracking, and the actions of bad actors exist today.
If we can wrap these in a protocol that facilitates the validation, integrity, and tokenization of this information, then we have an opportunity to transform our economy the 2020s to the degree that we have transformed access to information in the 1990s. That might even change our world to an even greater degree.