Readercon 25: Dystopian Economies
Jul. 19th, 2014 05:28 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
rinue[This is the outline of the talk I gave at Readercon 25 about Dystopian Economies. I am currently in talks with glyphpress to expand this and some other writings into a sourcebook for gamebuilders and GMs that use the Shock system (and for anybody interested in inventing fictional but reality-influenced futureworlds). You can download the original Shock: Social Science Fiction here, or buy the follow up, Human Contact, here. ]
INTRO:
I'm going to start with a personal anecdote. When 9/11 happened, I was a senior in college.
- changed majors late (operations engineering; program folded)
- taking all econ classes
- in-class experiments. You play games as a teaching device.
a) prisoner's dilemma
b) deciding how to split money
c) choosing to give $5 to class or $1 to self
- 9/11 "broke" the games.
a) always a little broken; people not perfectly selfish even "Best" of times
b) measurably more generous with each other
c) similar effect across country
d) has happened after other national tragedies
- after a year or so, tapers off, like our response to Katrina, Boston Marathon. Back to "normal."
My point is: you don't make people better by changing the game. By which I mean:
- incentives are important, as are penalties
- but behavior is too complicated to "fix" with conditioning tricks
a) don't get rid of criminals by making perfect laws
b) don't get rid of kindness in concentration camps
- I say this even though there's a sub-field, econometrics
a) tries to quantify, predict, measure effects of policy change
b) Psychohistory
c) CBO, Fed - if futurist, be following their press releases
d) econ like weather forecasting
i. real science
ii. better than random chance
iii. but a lot of chaos
I don't believe an economic utopia is possible.
- not a SYSTEM which fixes the problem independent of PEOPLE
I do think you could get to a kind of utopia even in a very compromised system
- it's the goofiest thing in the world, but the answer really is LOVE
- family, social bonds
- seeing yourself as part of something bigger than you, something noble
So I'm going to talk about economics, and what I'm going to say is mostly about the bad actors
- because antagonists are good for stories
- and I trust you all know how to be good guys
- RIGHT? (laugh line)
Anyway, keep in mind when I talk about EVIL corporations it's because I'm talking about EVIL corporations.
- "not all men"
- yes, I know.
- OK….
CLASSIC CORPORATE DYSTOPIA - CORPORATOCRACY
Definition: political system controlled by corporations or corporate interests
- In SF:
a) all over William Gibson, Phillip K Dick, Shadowrun
b) possibility of stateless "company town" space colonies
- arguably what the US is now
a) according to most Marxists on your tumblr feed
b) according to mainstream economist Jeffrey Sacks
i. major player in transitioning ex-soviet states
ii. helped break Brazil out of hyperinflation
iii. special advisor to the UN, Millennium Development Goals
c) as evidenced by bank bailouts, CEO pay, Citizens United
- if it isn't, is in PLACES, such as oil fields, brothels
So what we're really looking at is:
- how to get to really bad from kinda bad (nasty thunderstorm to world is flooding)
- some of the nitty gritty of what's bad
a) oppression is not just
- jackboot thugs at your door
- being "sorted" into worker category
- forced labor
b) although sometimes it's also that.
THE COLNOIZING MULTINATIONAL:
Ground Zero: East India Company (I'm assuming you know what that is.)
- has colonies
- has military
- has monopolies based on govt contracts
- isn't restricted to any particular industry
This last point is important.
Usually, we think of companies (even large companies) as being in AN INDUSTRY
- e.g. oil companies, steel companies, publishing houses
- most companies dabble outside their own area, for various reasons
a) as a hedge.
- You're an airline, you care about oil price.
- want investment in wind farm to offset
b) exposure to opportunity
- I'm already running cargo ships back and forth
- might as well rent out extra space
c) surprise R&D development
- trying to make a super strong industrial adhesive
- instead invented post its
c) Fidelity's cattle herd (taxes)
d) synergies in media conglomerates
- Disney has theme parks
- but when they get too diverse, tend to split
a) Time Warner (recent) - split off magazines
b) Monsanto through various mergers and spin offs:
- Pharmacia (medicines)
- Solutia (chemicals and fibers)
- sold animal research divisions to Eli Lily and Newsham Genetics
- is now pretty exclusively a seed company
c) economies of scale stay - in one business
- focus on your strengths
- manage your risk
- don't want to make stupid choices out of ignorance
- and probably got into this business because you like THIS business
- let's not forget corporate boards are Soylent Green:
a) seemingly faceless
b) made of people
c) varying degrees of heavily regulated
However, we're talking EVIL.
We're talking bank holding companies.
- not really in an industry
- their industry is literally anything that makes money
Their business is looking for efficiencies and undervaluing
- anything they think they could sell for more than they bought it for
- to put it benignly
a) kind of like house-flipping
b) kind of like salvage operations
c) kind of like cutting out the middleman
d) or inserting yourself as middleman
e) but with EVERYTHING
- since they're not in AN industry, they're in EVERY industry
a) own the port
b) also own the ships
c) own the warehouses
d) own the stuff in the warehouses
-To give you some idea:
- could delay your delivery by port telling ship it can't dock yet
- refund the shipping cost
- make it up by charging you for the extra day of storage
- also port fees
And because of let's call them regulatory slip-ups they're almost entirely unregulated
a) bad law writing
- competence issue; outside the experience of congressmen
- people whose eyes glaze over when numbers are mentioned
- deliberate obfuscation by lobbyist "explainers"
- bankers really are representatives' friends, are nice guys
b) some ideologically-based deregulation by free market zealots
c) some "emergency" save the economy stuff
- Lehman Bros collapse the banking equivalent of 9/11
- laws passed analogous to Patriot Act (just sign, work it out later)
We haven't seen this stuff since Teddy Roosevelt's trust busting. Rockefeller and Vanderbilt stuff.
- which sounds all romantic and fun "gilded age"
- but remember East India Company
Progressives didn't bust up the trusts because they were jealous
- in gaming terms, these guys are mini-maxers
a) exploits
b) game-breaking
- also so BIG they're ABOVE THE LAW. With bank holding companies:
a) we can't enforce the regulations we have
b) "too big to fail"
c) armies of lawyers
d) oversight boards with conflicts of interest
e) also SO big it's not clear which agency has jurisdiction
- like going after Jack the Ripper
- Metropolitan Police or City of London Police? [MP is Scotland yard]
- Not even entirely clear which COUNTRY has jurisdiction
US banking regulators have actually been kind of spectacular lately
- major settlements last few weeks
a) Credit Suisse - $3.6 bil for hiding US assets from IRS
b) BNP Paribas (French) - $8.9 bil for violating Iran sanctions
c) and lots of other banks similarly. these companies are not even American
- US can do this because THE FED
a) bank of last resort
b) other banks' bank
c) can literally print money
- in a standoff of who has the most money? The fed.
- scorched earth devalue your money? The fed.
d) is the gold standard of transparency
- China is a huge consumer market
- but we don't trust them to be honest
- markets don’t like uncertainty
- someone can mess with your dollars? That's a pretty BIG STICK
However, big fines are not throwing someone in jail.
- could be seen as cost of doing business, like a tax or gratuity
- could be less than what you made doing the bad thing
- don't be blinded by big numbers.
a) BNP Paribas market cap (value of all publicly traded stock) around $60 billion
- not what they COULD make
- what, right now, they are holding, debts excluded
- and not even all of it
b) my total assets (bank account, car) around $4 thousand
- $100 speeding ticket 10 miles over limit
- I am paying more than BNP Paribas
But this is science fiction. How could regulation get WORSE?
- We could lose the big stick
- Take away the Fed's control of the money supply
a) statutorily
- those free market zealots hate it, long history
- actual bills that never pass, brought up by republicans at stupid in the evening
- insist printing money is cheating
1) devaluing saving
2) allowing govt to spend profligately
b) tying to gold standard or similar
c) another currency becomes standard, not US (unlikely; uncertainty bad, fed trusted)
d) cryptocurrency
Yes, it's time to talk about BITCOINS
- or dogecoins, ripple, peercoin
- I don't actually think Bitcoins are a thing
a) they're currency-like, like airline miles or World of Warcraft money
b) but they're a commodity; they're NOT money
c) [demonstration dollar] If you have a dollar bill on you, you can take it out right now
- right here is the great seal of the US
- right here it says "this note is legal tender for all debts, public and private
d) in other words, BY LAW you have to accept this dollar if I want to pay you with it
- otherwise I don't owe you money
- police and army back me up
e) nobody has to accept my bitcoins
- just like they can choose whether to take food stamps
- or in most cases my credit card
- but even moreso:
1) have you ever tried to pay a US bill with pesos? Euros?
2) the denomination hassle
- which means currency conversion
- which means fees to middleman
3) and those are low-risk to take
- backed by central banks and international law
f) in other words the promise of cryptocurrency (statelessness, feeless) also its fatal flaw
- as an aside, I do think there are potential non-currency uses
a) good cryptograpy could bring down wire transfer fees
b) but again there's insurance issue, plus getting it OUT into local currency
c) and just being recognized around the world
d) and do I want to take on that level of volatility? (hyperinflation-like problems)
COMPANY SCRIP:
If you are a company with colonies, some of the problems of cryptocurrency GO AWAY.
- You decide what the payment infrastructure is
- These colonies don't have to be off planet or even offshore
- Company towns (oil fields, brothels, resorts, cruise ships)
- These colonies don't even have to be colonies
a) for instance Walmart was taken to court in Mexico for paying with Walmart vouchers
b) in the US, had to be reminded
- (along with Home Depot, McDonalds, others)
- illegal to require employees to take debit cards as payment
- cheaper for Walmart (because vertical integration)
- but fees to convert to cash (therefore wage theft)
c) proposed getting around it by not REQUIRING
- but giving a bonus if paid in Walmart gift cards
- which can only be spent at Walmart
- which stacks with your employee discount!
- so efficient for EVERYONE
d) didn't happen; backlash. this is the banality of evil, folks
e) incidentally, Walmart is looking at taking bitcoins
- which would save them credit card fees
WAGE SLAVERY
OK, so in this world we've imagined, you're owned by your company
- maybe not technically, but you can't take your money elsewhere
- you leave, you have nothing
- and that's IF you can leave.
a) there might not be anywhere to go to
b) either because you physically can't leave
- SO BIG
- offworld
- middle of a desert
c) or because of collusion
- blacklists (you leave, we'll put it around and you'll be hired by no one)
- noncompete agreements
1) these are variably legal depending on state courts
2) doesn't stop companies from trying to stretch the law
3) if you're an information worker
- which increasingly we are
- and is more true if robots
- the company gets you to sign NDAs
- they own some of what's in your head
- they can argue they still own what you make after you leave
- agreements try to bar you from working in the same industry
a) the one where you have experience and training
b) at least for a certain amount of time
c) so after they're not paying you, you're still theirs
d) although not enforceable unless severance pkg
4) but also peer-to-peer (company-to-company)
- Silicon Valley mess
- everybody except FACEBOOK, basically
(and when they're the good guys…)
d) and remember, it's not just that you can only spend your money with the company
- the company also knows EXACTLY how much you make
- and maybe some things get priced accordingly, so you can never save up
So that sucks for you. Makes you vulnerable to all kinds of abuse.
totalitarianism on a company-by-company level
-corp state as a communist country that really can choose its population
-see also health insurance
-not doing it to be evil; seems totally reasonable
But what about the people who are unemployed?
-unemployed person becomes equivalent of a stateless person
a) working on a space station
b) you get fired
c) and it would be expensive to bring you home.
d) what happens?
- not just the people who are between jobs
- not just people who can't get jobs
a) skills mismatch
b) overt discrimination
c) criminal past
d) oversupply of worker category
- people who aren't part of the labor force
a) crippling health problems
b) young children
d) the people caring for young children
Do we have a right to survive?
- neoliberalism
a) theory underlying libertarianism
b) where we're all individual market actors
has not come up with an answer other than "charity" and "family unit" (outside the system)
- Basically, neoliberalism says no, we don't have the right to survive
a) See Detroit water shut off
b) which we will note did NOT shut off to businesses
- Notion of human "rights" built into democracies (thanks Declaration of Independence)
a) but not foundational corporate documents.
b) Because not founded as states.
c) like asking a really successful pirate ship to run your navy. It's not what they do
ENTER THE DRAGON
How do you fight a state whose main objective is not to crush you, but to make money, which may require crushing you?
You have a money battle.
WAY ONE: We like tech, so SF-ing it up: smartphones
- information sharing as weapon against price discrimination BUT
- internet as both anonymizer and panopticon (information aggregation, not illegal)
- gaming the system with hidden cost (shipping, fees)
WAY TWO: Gaining leverage: being able to wait longer. Staring contest.
- in a market, the person with the most urgency loses
a) you might have the least urgency because you have control of a lot of capital
b) house always wins (casinos, Amazon, "angel investors" cornering the market)
c) Piketty. If you were hoping I'd summarize that 700 page book, there it is.
- you might have the least urgency because your counterparty can't timeshift value
a) bananas v. wheat (banana republics)
b) human lifespan v. corporate lifespan
c) emergency purchases, one-time events
- BUT you might also have the least urgency because you have less opportunity cost
a) civil rights marches, Gandhi, Occupy
b) "an hour of my valuable time"
c) this is the economics explanation of the power of social pressure
d) social media campaigns "bad PR" leverage this
- death by ant bite, odds against you, but it's something
BEST MEDICINE IS PREVENTION
Obviously, it's better if we can just stop corporations from getting that big and evil, make structural barriers.
People have wondered whether this problem goes away in a post-scarcity economy
- fancy term for when there's more than enough to go around
- combined with free rider "problem"
a) you can't fill a room with enough air for you and stop me breathing it
- imagined future when it's not WORTH keeping something away from people
a) to some degree the present; social safety net
b) which tells you it doesn't go away
c) has it gone away? Do you not need money anymore?
- why not? There are food pantries, clinics
- you could sleep in your car, somebody's couch
There's a thing called lifestyle creep
a) economists talk about something called inferior goods
- something you buy less of when you make more money
- classic example: ramen noodles
- you trade up
b) from the point of view of luxury goods, normal goods are inferior
c) not even conspicuous consumption, wanting to show off
d) humans are adaptable, used to what we have
- It becomes normal
- rich is whatever that stuff is we still can't afford
e) and this shows up in apes, too. It's deep brain stuff.
Thus no sustained utopian economy is possible: only possibility is to disrupt dystopia (the fight against entropy). And there will always be cheaters if it's not a closed system (offshoring, tax shelters, no communism possible unless world is communist). The tools you have:
-progressive taxes
-bankruptcy
-year of jubilee
-wage floors/ceilings
-guaranteed minimum income
-(all can be avoided or limited)
Best tool: social pressure?
- Like I said, this is brain stuff
- and corporations are made up of people
- What do people ultimately want?
- to feel good about themselves. To feel elite/special.
We are actually ethical/communal as a species; we don't like cheaters.
- however studying finance/econ is dehumanizing and tells you you're a chump to be human
- it is like being economically militarized
- working not as self but as company proxy emotionally distancing
- complicated emotional relationship with money
a) how often have you heard "the money made me do it"?
b) "it was too good to pass up"?
- Recovery program for financiers, like re-integrating veterans?
- Affiliating them with population rather than "prison guard" mentality
Meanwhile, we can work on that deep brain stuff that says there's scarcity, build rituals into society to make us grateful for what we have. THIS HAS BEEN DONE BEFORE. It's in a lot of religious practices because it is ADAPTIVE and helps societies SURVIVE. It can be used for evil (being content with oppression) but also for good.
Another bit of social engineering we can work on is the problem of debt (by which I mean guilt over debt. Debt is not bad. Debt as a moral issue is a problem. Why does owing someone else money - who has plenty of money - make you a bad person? Why is that worse than having money and not giving it to someone who has NO money?)
And as a writer, you can be a part of this
- we agreed at the beginning that we're all good guys here.
- pick your heroes wisely
- make your villains disgusting.
THANK YOU
A FOOTNOTE (Things I would have included at various points if I'd had time)
Getting rid of money: Prestige economies and patronage - reinforce social norms. We don't like creativity (we think we do, but we find it threatening or ridiculous - what's the point); we have trouble recognizing when people are smarter than we are; we have in-group biases (see again Silicon Valley, old boy networks, idea that main value of women is sexual, idea that darker skinned people feel less pain-princess and the pea, people on company boards invited to more company boards)
Corporate personhood
Robots v globalized contractor workforce (how long are you going to make the same thing?)
When one side of the market has the advantage (the uneven distribution of the future): Price Discrimination
Collusion (noncompete agreements in Silicon Valley, price fixing by AMT)
2. Price fixing is a conspiracy to manipulate prices
a. like a cartel, like OPEC
b. illegal in US, Europe, Australia, South Korea, Japan, Canada. (Trust busting!) Otherwise, pretty normal.
c. game theory.
Even without direct collusion…
1. Price discrimination is selling the same good to different people based on the maximum each individual will pay
a. examples: airline tickets, cars
b. note this only works long-term when goods can't be re-sold (arbitraged), or where there is a monopoly
c. not necessarily evil - student discounts, rent subsidies, coupons - can provide access.
-But we're talking about dystopias.
d. essentially, The Evil Communism, but also attractive to capitalists, because if you're the central planner you get all the money
e. and your employer knows exactly how much you make.
f. company towns (can set prices based on knowing how much employees earn) - shadowrun arcologies, brothels
2. Wages are not goods
a. unions don't "price fix,"
i. you can't scale your own labor up and work a 30 hour day; you can't produce more labor
ii. non-union labor could be brought in if too onerous
iii. mnemonic device: you can think of this like "reverse racism" - you need institutional power
b. however, price discrimination applies to wages (you can do an identical job and be paid radically differently)
3. as an individual (relate to "real life": Open Auctions v Best offer)
a. open auction
i. don't think southeby's jewelry and art masterpieces
ii. think cattle, police impound, OG ebay
iii. price discrimination limited because you don't know the maximum someone would pay, only who would pay MOST
iv. seller protected by reserve price (price floor)
v. buyer protected by being able to see other bidders (wisdom of crowds)
b. best offer
i. "closed envelope"
ii. bidders can't see each other
iii. "overpayment"
iv. remind you of salary negotiations?
(no subject)
Date: 2014-07-21 03:12 am (UTC)