Milton Friedman
We also defined the ecological base for economics, and this is a much more accurate model in predicting observed results in a capitalist system (a class of economic systems). This is because the competition in an ecosystem operates at the level of the individual entrepreneur, so that the individual reacts to and attempts to adjust to the conditions and competitors. At this level of competition it is the survival of the fittest individual entrepreneur or corporation, not the fittest set of genes in a group of entrepreneurs. The strategy of capitalism is to use the capital assets of a number of entrepreneurs to dominate the market by controlling the production and distribution of products so that the entrepreneurs can engage in an exchange of wealth. This strategy in an ecosystem model leads to the most successful corporations becoming larger either at the expense of others or by acquiring them or by merging with them. Fairly quickly, if there are no controls, only a few very large and generalized corporations will control most of the production and distribution in the entire econosystem. The rest will be small specialized lucrespecies that operate as specialist support or parasitic species on the giants or smaller very narrow niche operators. This can be a stable econosystem for some time. The main instability will be caused by the fact that capitalist lucrespecies reduce the number of labour positions with machinery or cheaper distant labour supplies. In historical terms this has led to revolts of various kinds and severity.
In a stable situation like this what happens if the conditions change? Let’s look into the future by examining what is happening right now in the econosystems in temperate regions with well endowed infrastructures. The Internet is a new infrastructure that allows faster communication which is nice, but the key change in conditions that allows the smaller lucrespecies to compete with the large lucrespecies, is that the Internet provides new access to raw materials, production, and distribution channels that the larger competitors can not sequester away from the little guys (at least not yet). Individual entrepreneurs are competing directly with the large corporation. The first inkling that this was happening was in the print business. Individual authors previously had only one choice — a large publishing house. Now they can do it themselves or use a small publishing house with equal production and distribution capabilities. The pre-existing lucrespecies of the small publishing operations were pre-adapted to step up and use the new resource — a new economic matrix. This same effect has been felt in the music and movie industries with the major corporations either in disarray or going bankrupt.
The econosystem had a lot more in it than just the capitalist model. There were subsistence and bartering systems. No doubt illicit parasitic systems were in operation. and underground economies no doubt all were where the pre-adapted entrepreneurs were struggling for survival. A new set of conditions has opened up the econosystem for a greater diversity of species, and we would predict a greater division of the resources resulting in higher productivity. All based on survival of the fittest in an ecological metaphor, not an evolutionary metaphor.
In centrally planned econosystems, everyone is theoretically accounted for in the planning. If this is done well (difficult but not impossible), everyone feels safe and able to live without worry about where the food will come from and if they will have a place to live and raise a family. Industry tends to be relatively well-ordered and typically these are middle income, relatively productive systems. Several problems are inherent with these systems. It is fairly easy for an oligopy to want greater wealth than the masses. If this is taken to extreme, people become stressed for food and shelter, especially if the population is allowed to continue to rise. Taken to the opposite extreme, (the ideals of Karl Marx) leads to an egalitarian sharing of wealth and in this no one, not even the current leader has individual wealth. Variations in human behaviour make this egalitarian sharing difficult to maintain.
Thomas Hobbes philosophical position is opposed John Locke’s. Locke felt there was a natural law wherein each person had the right to life, health, liberty, and property. Centrally controlled ruler-based systems instead tend to follow Thomas Hobbes thesis which is that a state or ruler has the right to do whatever he wants as long as he has the power to make it happen. In Hobbes mind there are individual rights, but the ruler owns the property and lives of all the people who serve him. A well-planned system with this centralized power over labour, raw material, resources, production, distribution and exchange of wealth has the potential to be a powerful and efficient system. Human survival needs however, must not be compromised if this is to stay together. As with any biological species, over use of the base resource (in this case people) leads inevitably to major change or collapse of the system.
In a capitalist system John Locke’s philosophy is that every person has the right to defend the main rights bestowed (in his theory) by natural law. Governments are not needed, but can be implemented by agreement with the people to assist in defending those individual rights. Friedman’s “free-market” concepts underscore this approach and advocate minimum government to protect the state and build basic infrastructure. Locke missed one of the natural law rights, however, and that is the right to reproduce. Had he included this in the concept of capitalism, the model might have worked better, but unfortunately he did not include it. Thus, capitalism essentially omits people from the model except as entrepreneurs or as a resource for labour. The bulk of the population falls into the labour category so is expendable as far as the capitalist corporations are concerned. Entrepreneurs by contrast are inside the equation. They stand or fall as business entities just as individuals in an ecosystem stand or fall based on their abilities to gather sufficient resources to survive and reproduce. Both species and lucrespecies gain or lose ascendancy of population numbers by how well the individuals in each capture or sequester resources into primary production or consumption without overusing the resource base for that species or lucrespecies.
This sounds good, but the consequences of potentially omitting many and eventually the majority of people from the model is a problem. In nature, the excess people would just die. Perhaps that is acceptable to some of the entrepreneurs or rulers, but in a real-life model, the people are not totally passive resources. One of the reasons democracies spring into existence in capitalist systems is to ameliorate the potentially lethal error in the capitalist model. In a democracy, the labour force exerts its voice either in voting or in legalizing unions to demand concessions from the entrepreneurs such as minimum wages, acceptable working conditions, and a share of the wealth (which normally would stay in the entrepreneurs’ hands) devoted to assisting with health, better infrastructure, protection from voracious predatory entrepreneurs who would violate the “natural laws”. This modified capitalistic system has been labelled social capitalism or socialism. And despite the doomsayers in Republican rhetoric it does not lead to communism, which is in a completely different class of economic system with no private corporations allowed. Social capitalism has many variations of course, as do all the other major econosystems.
One other type of lucrespecies that is not readily apparent in statistics about countries is the criminal gang and the individual criminal entrepreneur. They operate entirely within the Thomas Hobbes philosophy and use the same techniques as would be found in a free-market system but with no externally imposed rules. In a criminal gang, the leader becomes a ruler or the equivalent of a CEO of a corporation in the very large gangs that operate semi-legitimate businesses. The entire focus of the gang is to gather as much of the available resource as is possible, excluding others from the production and distribution and especially the exchange of wealth. Both within the gang structure and also individual criminals often honestly feel that once the property has been successfully stolen and brought back to the warehouse, the ownership of the property has been transferred because the thief “earned” it with actual work. Gangs develop naturally of course, within any system. Current day Somalia is probably as close to a complete free-market capitalist system with no rules that we have in the world today. Gangs compete for resources, but live by a Hobbes philosophy so the leader can do whatever he has the power to do.
When an ecosystem or an econosystem collapses, it almost never recovers to the same econosystem, because the base conditions are no longer the same. Depending on the cause of the collapse, the recovery can be quick, or very slow. If unique infrastructure is destroyed in the collapse, the results are very long-lasting. But the prediction of what will replace the original is possible only in the most general terms and can be based on the econome within which it is found and the specific physical, biological and lucreclass that surrounds the fallen econosystem.