The Future of Economics
The market economy is considered the most productive because it brings the greatest benefits to society. Employers offer jobs on the free market, and workers provide their skills and labour. By definition, the labour market involves employers and workers collaborating for mutual benefits that should optimally satisfy their needs. In practice, it does not happen this way because unemployment puts employers in a privileged position in which they exploit workers.
A good economy requires a balance between supply and demand for work, and this will be achieved by creating as many jobs as there are workers. Full employment will be achieved by reducing work hours in proportion to the rate of unemployment. It will increase the demand for workers in the free market and bring more justice to the economy.
However, nobody in today’s world thinks most problems in today’s market economy stem primarily from the underdevelopment of the market economy. The main problem of today’s market economy is not too much market, but rather, not enough market.
Workers in capitalism have jobs protected by laws and unions, which means these jobs are privileged, although to a lesser extent than in socialism. A more productive worker cannot apply for a work position already taken by another worker. That is why the division of work in capitalism cannot allocate labour most efficiently or achieve the maximum possible productivity. Privileges are the main mistakes of every society. One should protect workers' existence, not jobs.
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A better future of humankind necessarily requires that workers become subjects with equal rights in the process of production. This will be achieved when all the workers have equal opportunities to choose any job they want in public companies. We need to establish a standard for selecting workers, and history has shown that no principle of employment is more socially justified than hiring the best available worker for each position.
Capitalism teaches people to love competition, and winning brings enormous satisfaction. People do not hesitate to exert an extreme effort to reach such a goal. Why don't we open competitions for every public workplace at all times? Realizing this idea is a technical problem, but it would bring enormous benefits to society.
To achieve such an economic system, we need to find an efficient way to evaluate the productivity of work offers, define job responsibilities, and harmonize rewards for work at any time. In short, workers who offer the highest productivity and accountability and demand the lowest salary should be given any public job at any time. It would be nothing but a developed labour market. However, the job market would need time to develop sufficiently and be accepted by people.
Competition in the job market will incentivize workers far more than capitalism can through wages. Workers would never be endangered because every worker would be able to find a job in a fully employed environment. It would establish such a rigid form for workers’ responsibility that no one would dare to offer work proposals they could not meet. The market will also regulate workers’ salaries as objectively as possible. The living standards for all people will increase in an unprecedented way. People will be thrilled with living in such a system. The following text defines the developed market of work.
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No division of labour is fairer or better than competing workers based on their labour productivity in any workplace at any time. Productivity would be measured by money earned, the amount and quality of goods produced, or by consumer ratings of workers’ productivity. A worker who offers higher profits, more manufactured goods, and cleaner, cheaper production will get the desired job. Comparing workers' productivity may be complex, but it can also be very simple.
Such division of labour seems impossible because it has never existed. Such a division of work has never existed because nobody believed it was possible and did not invest effort in developing the idea. Aleksandar Šarović has considered the potential problems that such a division of work might bring and devised solutions to address them. Once people accept such a division of labour, it will bring considerable economic benefits to all.
Of course, this division of work will apply only to public companies, because applying it to private enterprises would practically mean a seizure of private property. Private companies will continue their businesses as they do today.
We will need to regulate and democratically accept a new division of labour in public companies through legal means. One day, society will accept a proposed division of work because it is the best possible. The principles of such a division of labour are natural and straightforward.
A worker who offers the highest productivity for any workplace at any time immediately becomes a prime candidate for that position, regardless of whether the position is occupied. If an employed worker at such a workplace does not want to leave their job, they must accept the productivity offered by competitors to keep their position. If they cannot take on the new responsibilities or do not want them, they will immediately leave the workplace and let the competitor take the position.
Workers' existential security is necessary for societal stability, and society will therefore guarantee it. In the proposed system, all workers will automatically be economically secured after leaving any job. Losing a job will not create income stress, and workers will quickly find a new one in a full-employment environment.
This security will remove the widespread fear of unemployment. Capitalism finds its primary motivation for work in workers' fear of economic survival, which is why it does not provide enough financial security to people. The new system will build motivation for work through free choice and the satisfaction it brings.
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The advantages of such a division of work will be enormous. The best worker in every workplace ensures maximum productivity for companies and satisfies people’s needs. Thus, such a division of labour is justified.
Besides, the labour market will give people the freedom to choose jobs they love, and therefore, they will enjoy work far more than they do today. Work will become valuable in itself.
Furthermore, the open labour market will eliminate privileges. Today, people might lose privileges, which can be a significant inconvenience. However, privileges are one of the leading causes of problems in society. Eliminating privileges means reducing, if not removing, corruption, immorality and destructive issues in today’s society.
With time, people will realize that losing privileges could significantly increase the likelihood of finding work that enhances workers’ personal productive power. The power of being fosters creativity and provides a stable satisfaction that privilege cannot achieve. That is why the proposed labour market will eventually be accepted and bring virtually unlimited benefits across society.
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The labour market will regulate the price of labour. This will be achieved by giving jobs with limited productivity to the worker who demands the lowest price for the work and, consequently, a lower income. The cost of ongoing work will be one factor that determines workers' income. In this regard, the job market will ensure that suitable jobs offer lower salaries, while inconvenient jobs will be compensated with higher payments. In this way, a developed job market will establish an objective price for labour and balance the interests of all jobs.
Because workers will determine their own income, they will also be most satisfied with their earnings. Unions, as mediators between employers and employees, will no longer be required.
The work must become easily accessible to all. To balance labour supply and demand, it will be necessary to match the number of jobs with the number of workers. Otherwise, there could be an unnecessary struggle for jobs. If creating new jobs is not necessary, full employment can be achieved by reducing working hours in proportion to the unemployment rate. This policy must apply to both the public and private companies. This measure will achieve full employment. In addition, it will reduce employers' exploitation of workers until it is abolished and enable an acceptable distribution of income for all workers. Such a measure will finally establish general stability in society.
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The system would have no meaning without efficient regulation of workers’ responsibilities. If workers enhance their competitive power by offering productivity they cannot achieve, their irresponsibility will cause the system to collapse. Today, for example, politicians do precisely that, and this is one of the leading causes of immorality and disappointment in society.
The new economy will establish a highly efficient method of accountability for the productivity workers deliver, ensuring they do not propose productivity they cannot achieve. It will be realized so that workers guarantee the productivity they provide through a new value called “the productive value of a worker.”
The productive value of workers numerically represents each person’s contribution to creating value in society. It will be similar to corporate shares. These shares will provide workers with a regular income that, among other things, will be proportional to the value of their past work. People will also inherit these values from their ancestors.
By leveraging the value of past work, one could develop an effective system to manage the workers’ responsibilities for achieving the desired productivity in the manufacturing process. If workers do not meet the proposed productivity, they will take responsibility by losing the value of their past work proportionally to the unrealized productivity. It would also apply to any damage people may cause to society. It sounds complicated, but implementing such responsibility may be very straightforward with the help of democratic anarchy, which is explained later. The possible loss of the value representing workers' productive power will prevent them from achieving the productivity they cannot otherwise deliver.
Workers will determine the scope of their responsibilities in the production processes of public companies. The more accountabilities workers offer for the desired workplace, the greater their right to work will be.
If the company’s revenue increases, workers in publicly owned companies will share the profit proportionally to the responsibilities assigned to their work. Such gain will be expressed in a value that presents the workers’ productive power. And vice versa, in the case of production losses, workers who assume greater responsibility for their work will experience more significant declines in values representing their productive power.
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Finally, one should ask whether formal education is necessary for work. Could workers compete for work positions regardless of their level of education? Alternatively, can a person who knows mechanics compete for the job of a dentist? Of course not, but one should also not condition employment on having diplomas. Firstly, a degree does not guarantee skillfulness. Secondly, conditioning work on diplomas unnecessarily reduces access to desired jobs. The limitation of employment based on the possession of a degree has become so absurd that it restricts the freedom of labour to a great extent.
Besides, the vast volume of knowledge that the education system imposes usually has no connection with people’s professions. It serves authorities by ensuring the survival of an authoritarian system and creates an unnecessary burden that alienates students from reality. In this regard, we should remove education as a bureaucratic requirement for the right to work.
The new system will assign significant responsibility to workers for the jobs they perform, so they will not dare to apply for jobs if they do not have enough knowledge. This means formal education will still be welcome but not necessary, as knowledge can be acquired independently or, ideally, through work experience.
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No economy can be more productive than one where the best available worker gets each job. Therefore, public companies will become significantly more productive than private ones. Under the competitive pressures of public companies, private companies' owners will try to increase productivity as public companies do. Still, they could not go far enough because they lacked the operational capabilities to compete with public companies. Since workers in private companies lack the freedom and profit-sharing opportunities of those in public companies, they will be less interested in working for private companies.
Some regions of the world will one day accept open work competition because a better division of labour cannot exist. The higher productivity of public companies will force private-company owners to join them. In exchange for their firms, private-company owners will receive an equivalent value reflecting their productive power, which will proportionately increase their incomes in public companies.
Also, owners of private companies will find that large companies respond more stably to economic changes, which will ensure greater stability in the economy and the values they possess. When private company owners have the opportunity to join such a company, they would most likely do so, as it would preserve more of their capital value.
One can expect that, by the time all companies in a region merge into one public company, it will operate like a large corporation. The company will have central leadership to coordinate work effectively. It will open job positions where they are most needed and close those that are less needed. This economic organization will reduce market competition between companies, but it will improve production efficiency by limiting competition to the job level.
The high responsibility required by the new system of work division will compel manufacturers to avoid economic losses in an unpredictable market by organizing production according to consumer demand. People will democratically determine tax levels and directly allocate tax funds for various consumer groups and collective consumption. People will directly determine their joint consumption, forming the basis of a democratically planned market economy. Furthermore, individual consumers will be increasingly required to order their expensive needs in advance. Production based on consumer orders presents the planned economy. It is the most stable production possible.
Furthermore, great responsibility in the production process will compel workers to base their mutual relations more on cooperation than competition at all levels, thereby contributing to society's productive development. The free growth of the market economy will, therefore, develop a democratically planned economy.
The complete implementation of equal human rights in the economy should be called socialism. Nothing else deserves this name. Socialism will come spontaneously as the final result of full employment.
This is just a basic idea about the future of economics. You can better understand it by reading and analyzing my book “Humanism,” available free of charge here: Table of Contents.
February 12, 2010