Outcompeting Capitalism
Ending wage labor by outcompeting it
Economic systems possess a sort of inevitability.
Despite all it’s strength, power, and violence, feudalism could not resist the creeping power of capitalism outcompeting it and coming to dominate the landscape. No amount of government violence has been able to eradicate black markets. The great centrally controlled economies of the world have gradually privatized large sectors which have become quickly dominated by capitalism.
As a system, capitalism has been powerful and dominant, adaptable beyond many of the cataclysms that have faced it over time, often at the expense of the freedom, time, and prosperity of the subjects of the global order.
However, capitalism has two fundamental weaknesses, a core cause of inefficiency at satisfying market goals:
The need for profit by an owning entity that is not necessary for laborers directly interacting in the market
The drive for growth beyond market saturation must come out of quality of consumer experience or of worker experience
Therefore, any system which can replace the utility of capitalist institutions without the need to take an increasing share off the top of other’s labor, and which allows workers freedom in their execution of their work, fair compensation, and consumers high quality goods and services, will inevitably replace capitalism.
This might sound like a wild hope but imagine if instead of going to an office to work strict hours you, at your leisure, designed a refrigerator, optimizing on previous designs and putting care into durability, efficiency, and customer experience. You upload the design, collect royalties on it as it is built and sold while you work on other designs, or perform support work for manufacturers on the design, advancements you are paid for. Meanwhile assemblers at a co-op get paid fully for their labor and labor efficiencies rather than an external group taking most off the top, the order comes in, parts come in, they put it together, test it, send it to the logistics co-op that delivers/installs it. As a customer, you get a durable, high quality product built to consumer demand rather than a planned obsolescence unit with inbuilt annoyances to encourage you to buy the next unit without those annoyances but with new and different ones. We all spend much less time building things to put in landfills, get to live more comfortable and satisfying lives with more free time, and get to take pride and find purpose in our work.
Suddenly it’s pretty easy to see why anyone would chose products from, or work for, a system like this over the abuse and exploitation of the office or corporate factory floor.
So now the questions becomes: What is the current utility of capitalist institutions? and What tools could effectively and durably replace this utility?
The Utility of Capitalist Institutions
Markets behave similarly to other complex systems, such as evolution. A major trend in economic history is that companies operating in certain market sectors in certain ways tend to take on similar features and appearances. The same way many things evolve into the body plan of a crab, many “department store” and “drive through fast food diner” pop up and converge on similar features over time. Each new innovation in structure, each new niche in the environment, each new strategy of existing in the market, represents a structure through which labor is eventually connected with consumers.
Thus, we can look at the major strategies which corporations have taken up and what is involved in accomplishing these strategies, in order to understand how to outcompete them.
The Platform Monopoly
Low Hanging Fruit
The latest, fastest, and most profitable strategy of capitalism yet has been that of the digital platform monopoly. This consists of organizing a market or content in a single location on a single platform, and then charging a large overhead for access to the marketplace, from both sellers and buyers of goods and services.
Amazon, Ebay, Etsy, AirBnB, Youtube, Facebook, Twitter, Nextdoor, Instagram, Google Play Store, Apple’s Appstore, Uber, Lyft, are all examples of this.
These services control over the markets put immense pressure on creators, on the labor that earns the platforms their money. You can find endless videos of burnt out Youtube creators trying to please the great algorithm and you can find the same exact rants from Etsy producers, meanwhile Uber and Lyft rake in billions as those who earn money for the platforms labor in relative poverty. The imposition of editorial control, of censorship, and the precarity of a platform that you live at the whims of, is a serious downside of these services. But the convenience and centrality gives them immense utility.
Data collection and analysis from this platform gives them an asymmetric information relationship with sellers and buyers which they can leverage to expand profits at all users expense, but also to adjust to the market over time, such as Amazon cloning it’s users best selling products with Amazon basics.
What would it take to replace the utility of these institutions without their potential downsides?
Core to the problem is the central control of the application, of the platform. The owners can adjust the terms as they see fit. If instead, the platform was built by individual participants using it, on a decentralized basis, then there is no central player or control over the evolution of the market, it truly becomes a matter of relations between individuals.
The Holochain project is building a distributed, decentralized hosting service. Apps can use this network to host linking maps to direct people to where content is hosted, to locally hosted web shop storefronts.
To make this alternative system viable, we need the following modules:
Identity/profile
Short posts (similar to tweets)
Video hosting
Image hosting
Music hosting
Article hosting
Ad server
Hierarchical Tree Tagging server
Storefront example
Network trawler for usage analysis across the board with public reporting
Customizable content “feeds”
Groups with customizable discussion formats
If these modules are built to be interoperable and connected, then the Hierarchical tree tagging server can use user tags and micropayments for tagging approaching public agreement, can be used to justify the effectiveness of an ad server. This ad server can be used to pay for content hosting and enables scaling based on use - the more it’s used the more revenue it generates to sustain itself.
With a built in self-sustaining amount of ads that can be suppressed with a direct payment to cover hosting costs, which are minimal for most content, these platforms without a central server should scale easily with usage, with creators setting their ad settings as per their choices in relation to their audience.
The interoperable storefronts joining an ad hoc marketplace creates an amazon like “everything in one place” without a central platform at any point having control over individual stores. I will get to warehousing and logistics down the line.
Overall this small set of tools would likely take a couple dozen programmers a handful of months to build to a usable, viable level, perhaps a year to full public release. This is the low hanging fruit, where we can immediately liberate a large number of creators from central censorship, from oppressive algorithms, and would provide a way to earn a living divorced from wage labor. I’m sure the grateful donations of the massive user base of such decentralized platforms would make every programmer involved in the project able to retire early.
Enabling the Bigger Things
So far we haven’t needed much physical capital yet. A handful of people hosting on an already existing holochain network, installing the apps, and a bit of work from programmers and sharing among content creators. Outcompeting capitalism beyond this requires more tools. Specifically, it requires a tool for managing and raising capital, for workers and worker owned institutions to invest in building better supply chains, superior product designs, into research and development, into the buildings and equipment to add locations to a co-op or to acquire land. This is the most sensitive and difficult part of the process, as we have to be careful to build a structure which capitalists can not capture, and which does not become a form of capitalism.
So here we should ask difficult questions about what we want out of investment, and what we want out of the institutions that require it, and what we want the institutions created by it to look like. If the end goal is a worker owned, sustainable organization, then we have to consider what that looks like and how we get there.
Per Marx’s Kapital, and the books of any business, we can see that the capital to continue operations of a company and purchase the resources required to produce outputs come out of revenues before profit or labor. Individual business units, such as co-ops, or individuals, should build up out of revenues a fund sufficient to maintain/replace their physical capital, purchase resources necessary to continue, a cushion to weather difficult periods, and invest in developing sources and market share, as in normal business units, with surplus value dispersed into pay rather than accumulated by a central player.
The median US worker produces almost $40/hour, and is paid around $17/hour. At first our costs will likely be higher than what corporations face, so let’s say we’ve got around $15 in surplus value/hour to work with over and above current wages - my suggestion would be to split the difference between pay and paying down the investor until a fixed amount relative to the original investment is paid out, on a suggested time table, the specific payback ratio and portion of surplus value determined by any folks willing to contribute a rigorous economic analysis of where this line would make sense to be.
The “Low hanging fruit” category provides a wide range of people with the ability to earn very well, and at scale. If we can convince and work with this group to fund these investment vehicles, we can build out more of these tools and more physical capital for organizations.
Once co-ops have started and are regularly profitable, we can culturally recommend they reinvest half of their surplus value over a living wage on expanding to replace corporate franchises and department stores along their own lines until they’ve saturated the space. Once saturated, they can turn investments into improving the supply chain, making it more sustainable, investing in society, or enjoying very prosperous lives, or some combination of these things.
Without this reinvestment structure to combat capitalist institutions, we run the risk of failing to grow and failing to capture economies of scale, which we must capture to outcompete capitalism. Without this solidarity, we can not win.
Guilds & Mentorships
Along the same lines as co-ops and union run shops self expanding along these lines, groups of people who work as independent, owning their own tools and laboring directly to the consumer, we should work to build groups of people who are good at these jobs, who share advice, methods, and solidarity. More experienced members capable and willing to do more complex jobs can take them on, and can mentor people new to the job, pass on pieces of equipment and tools as they upgrade, help the new establish themselves.
These guilds acting as a sort of co-op of their own on the markets can help move people out of exploitative situations with smaller businesses that are exploitative and from which a person can not build up their own practice.
The Commodity Co-Op
This could be a picture of any exit in America from anywhere along any American highway. In every single city in our nation, large franchise chains operate a series of regular businesses, of species of businesses like dollar stores, fast food joints, gas stations, department stores, auto service stations, nail salons. Consumers get a regular, predictable experience, consistent quality, and the products sold and services provided are generally simple, well understood, commodities.
While fast food in many countries is a living wage, on which you can support your family, in the US it’s not uncommon to see the franchise owner with 2 McDonald’s drive up in a Ferrari while the workers survive on food stamps and roommates. There are a lot of margins that can be eaten into here in order to outcompete these institutions, but it is far more difficult in this case than the silicon valley platform monopolies.
The capitalist institutions behind these franchises provide certain benefits, such as brand recognition, logistics/sourcing networks, marketing, data analytics, demand forecasting, automation & productivity enhancements.
At first this looks like a pretty insurmountable boundary to creating worker owned versions of these institutions, but logistics itself has many of the same properties as these franchises.
The Logistics/Warehousing Co-Op
The backbone enabling a worker owned means of production
Behind most major corporations dealing in goods, especially commodities of all kinds, warehousing and logistics is an essential technology that enables individual locations to be run profitably. Their access to data and data analytics allows them to have resources where they are needed, when they are needed, and they either employ truckers directly or contract out to for profit freight services.
Warehouses are well known for being low wage jobs, that require intense labor under poor conditions with terrible treatment by management. At the same time, companies whose primary strength is logistics and warehousing are among the most wealthy and profitable in the nation, look at the rate at which Jeff Bezos wealth has expanded, for example. Freight and delivery drivers are often exploited, regulations barely getting them enough sleep between stretches of road and leaving them peeing in bottles and shitting in bags.
From above, our open, distributed markets already have aggregated public information on what is demanded where, when. If the suppliers that serve the commodities which the commodity franchise set up store fronts on this platform, a warehousing co-op can predict demand on an automated basis and move goods and services as necessary to meet demand. A small adaptation of the replacement for uber can cover moving loads and performing deliveries, but with no central corporate overhead, workers in delivery and freight can set their own hours, follow market demand, and earn fair compensation without the massive overhead of capitalist institutions.
That leaves one major obstacle: the capital. The warehouse, forklifts, pallet wrappers. As soon as we leave the digital world, this becomes a persistent problem, and requires a fundraising solution to enable these worker owned institutions to be built. Once built, they can easily sustain themselves off of their own revenues. I will come back to this obstacle.
Lastly, the software to manage inventory within warehouses that could be linked to storefronts would connect up this technology.
Commodity Co-Op Strategy
Once funding has been achieved (I’ll come back to it), a commodity co-op in a community has a large advantage in both prices and working conditions, and there is large support for worker owned business. This presents a great opportunity as far as marketing goes, workers can go around town, spread the word, do simple, cheap ads emphasizing local ownership and how it keeps the money in the community.
Pushing boycotts of exploitative workplaces, recruiting workers from their desperate conditions, developing community drives to crush capitalist competition on a store by store, region by region basis is going to be a necessity to making this plan work.
Opening Bottlenecks - Taking on Monopoly Middle Men
So we’ve established the tools and process to replace the digital platform monopolies, to take over the co-ops, to free people from bad bosses on a small local level, to replace a lot awful jobs with decent livings. We do the steps above, our institutions should be sustainable, should be growing, and should be working up to providing a solid support network for a wide range of wage labor a lot of society engages in, should have cash to invest in further development. With the basic support structures in place, we can start digging into outcompeting the cash cows of capitalism before the platform monopolies made their way: the supply chain step bottleneck of the traditional monopoly or near monopoly.
Take for example food processing - this industry turns corn and other inputs at record low prices into food pushing record prices, this is true for most of agriculture and animal husbandry in America and to a growing extent, globally. A lot of commodity production occurs in firms like this, often produced in a small number of factories by a small number of players that each run near capacity at all times. This makes the supply chain inflexible to demand fluctuation, and threatens national supply of various goods when single storms or damaging natural disasters or terrorist attacks or pandemics disrupt these facilities. And the profits are immense.
Bottlenecks such as this exist in many industries, from automation equipment/supplies to medical equipment to seed, farm equipment, and bog down the entire system, raise our cost of living on a massive collective basis, and are so profitable that they represent enormous opportunity for building collective wealth if we could end the exploitation happening within them, of both workers and consumers.
However, replacing these bottlenecks requires the most support yet, the most of the above work done to begin to accomplish.
Leveraging our collective knowledge and work
Breaking the Industrial Complexes
These industrial bottlenecks are highly automated, and require automated systems to replace. One highly promising approach to this is semi bulk production and small scale automation. Instead of 2-5 factories covering the nation, we are talking about 1-2 small shops per major city. This is far more robust to demand fluctuations and far more robust to supply chain interruptions, but automating each of these individually is expensive and requires a great deal of engineering time.
I noticed at my first job, and in those since, that there is a limited number of appliances and devices that most of us need and use and this applies all the way up to automation equipment, we mostly just need standard designs that we improve on and fix over time. However, working for competing companies our efforts are wasted on duplication, and in consolidated industry our efforts are guided towards planned obsolescence or cost saving over usefulness and consumer experience. When consolidated producers have high prices, it raises the prices all down the line. More expensive farm equipment and automation parts mean more expensive food and slower waits in fast food lines.
What if instead, we could effectively utilize our collective knowledge and labor to innovate per what we want, per what consumer data suggests, rather than what is most profitable or contributes to the growth of the company in a saturated market?
The Open Source community asked this question and has tried for decades, with extremely limited and slow success on only it’s most prolific projects, mostly because corporations contribute labor to the projects that many of them use. This is clearly not a license structure that can support a full worker owned means of production. I’ve always personally wanted to contribute to open source engineering projects, but that is a lot of labor for no money, and I have bills that I struggle to pay as is, I can’t afford the energy of free labor, I need to be compensated for my work, just like any other worker. Right now open source is largely free labor that benefits mostly corporations, this is definitely not a structure that’s going to workers over time.
So in addition to our open, distributed markets, our support applications, our investment tools, we need just two more tools to complete the set and outcompete capitalism, we need an intellectual property licensing structure.
A distributed, linked database of designs similar to github but built on a decentralized platform like holochain, including part designs, appliance designs, machine designs, production designs, sound samples, stock images, stock video, digital models, plugins and modules, production methods, chemical processes, recipes and formulae, all of these need a way to be developed by us collectively, make those who contribute work a living.
I propose some license tiers:
development - artists, engineers, etc. can download, view documentation on, develop, improve, expand, fork, etc. designs in a similar fashion as git but with some democratic attributes, and can do so freely
non-commercial use - archivists, historians, educators low to no cost use
commercial use - royalty on production which declines over time or stops after a certain payout to become a public good, but which is sufficient to provide a prosperous living to those advancing our collective intellectual property
Companies today spend a trivially small amount of money on product development that is genuinely advancing the quality or nature of the product or it’s production, so even royalties which give the creators excellent returns and prosperous lives should not have a meaningfully difficult impact on the prices of goods and services made from these designs.
With this license tool, it becomes possible for co-op groceries to invest in the development of designs for small scale food processing equipment/factory set ups that would erase the bottlenecks that inflate their own prices and reduce their own wages. Not just them, but fast food workers to get automated equipment to serve customers faster and with less intense labor, and for that matter every single co-op that sells commodities, as well as the co-ops that run the food processing equipment. Replacing almost all wage labor across industry is possible with this set of tools, if we can build them.
Exploring the world through a child’s eyes
The nail in capitalism’s coffin
So in review, if we do everything above, then we will have a robust worker owned means of production fully capable of production and advancing production and replacing and outcompeting wage labor in all of the kinds of places that we work. With very limited overhead just enough to advance the infrastructure of the worker owned means of production which improves over time and is robust against censorship, centralized attempts to influence, and various methods of exploitation. At this point we would be building out our co-ops, our shops, our individuals who can make it on their own, more tools to support them, better software to create with, better tools to improve our productivity and do our jobs, and sky high wages, while being free to work the amount we choose, and in many cases the hours we choose, when not reliant on a production line. We are self scaling and recruiting, gaining market share via the methods and tools outlined above.
Great. That leaves us one final hurdle to finally outcompeting any capitalist institution today: research and development, stewardship of resources.
The world around us is finite, it’s resources finite, and it’s ecosystems only capable of so much abuse. Our understanding of how to survive without destroying too much nature and ourselves in the process, how we can efficiently and effectively take care of our resources can always improve. We can find new ways to recycle, develop more biodegradable, less harmful ways to make and package goods, we can develop better plants and drugs, safer chemicals with better processes, but this takes research, and it takes investment in our resources. The advances from the pointy edges of science fuel some of the most profitable industries. TSMC, the dominant producer of silicon chips globally, produces something on the order of $17 million USD per worker per year in combined growth and profit. Bayer/Monsanto has been advancing corn yields and robustness per plant for decades, discovering new features and integrating them into products. Pharma companies have been advancing our ability to combat disease and disability. This is where the profits are most high, where the gains are near infinite, where the advances made pay off enormously. If we use these structures and consciously invest more of our collective surplus production into R&D than capitalists do (and they invest a record low share of returns into R&D in recent decades, especially in recent years), then we can build a prosperous future for all that nobody can capture, nobody can hold over our heads, that nobody can exploit another using, but where we have options to learn and grow over our lives, to follow our passions and dreams and to be free from the coercion and force over our labor that corporations apply to us.
We do not need the capitalists. We can outcompete them. But we have a lot of building to do.
Notes on the difficulties we face
Economic domination is not the only struggle we face if we are to engage in this process. Local zoning laws throughout the US have been heavily influenced to favor corporations, as have our regulations, and our regulators often have close, corrupt relationships with these corporations. Often, even our legislators are in the pockets of these capitalists. This problem is so severe that even a corporation with the wealth and power of Google found it nearly impossible to penetrate the market for internet service providers, despite the clear economic case for competition, stalling and collapsing with it’s Google Fiber project.
Undoubtedly, through every step of this process, corporations will try to regulate our tools and support structures out of existence, they will bring in propaganda and mass advertising money to undermine our investments in physical infrastructure, they will threaten us, they will hurt us, they will kill some of us, undoubtedly. We will face infiltration, propaganda, attempts at capture, and at every step we must have the necessary solidarity and power of will to carry this fight through to the end.
The only way we can do any of this, is if we build solidarity with our fellow workers, whether they are genetics researchers or coal miners or fast food fry cooks, if we build solidarity between our blue collar workers and our workers developing the tools, supports, and intellectual property, if we have relationships and friendships with our neighbors and a strong sense of community, than we can engage in things like penny auctions, in boycotts, in strikes. We can bring protest to the offices and if necessary the homes of corrupt politicians, hold them to account, bring them down in our local level and work on process oriented, open and transparent politics that takes all of our reasonable fears and concerns into account and which iteratively develops policy and messaging over time. We not only have to outcompete capitalism on an economic level, but on a cultural level, on a moral level, and by providing a sense of living and of empowerment, of community and solidarity, that capitalism is fundamentally incapable of providing.
The road ahead is long and difficult, but every step we take upon the path frees enormous masses of people from capitalism and wage labor, and success would mean the end of 500 years of ruthless exploitation and the denial of purpose, passion, beauty, and time in which to live.
I can not imagine a more worthy project.
Where to begin:
For the past year I’ve worked for a start up, and I’ve been unable to gather together the resources on this project, I realize now that I can not do this myself, fund this myself, run this myself, and I need help. For now, I’ve created a space for us to start mapping out the business architectures, business plans, application storyboards, and begin the work of building out this set of tools, which I am calling “Meta-Work” for now on the open project management site Hylo, at https://www.hylo.com/groups/meta-work
If you have better places to compile information, to perform this labor, etc. please do not hesitate to comment or share.
While we do this, it wouldn’t hurt to look into the Strong Towns movement, City Beautiful, Not Just Bikes, and similar approaches to zoning and infrastructure reform that will help make all of this possible.