Comment on Why capitalism?

Mon, 04 May 2015 12:40:38 GMT

One of the reasons that capitalism is considered to be the best economic paradigm rather than the Commons was because of an influential paper written about half a century ago called the tragedy of the commons.

The main reason why capitalism is considered to be good is that it works in practice. It's not about a single paper.

If you argue that efficiency of battery production isn't important, than that corresponds to waste. Not using economies of scale to produce chips and batteries means wasting resources.

I don't even argue that every commons problem should be solved by markets.

Having electricity priced by the market allows entrepreneurs to do things with electricity that 99% of the population consider a waste of energy. It's enough that the entrepreneur believes that he can make a profit with investing energy that way.

If you had social rules preventing energy waste, that's not possible. The social rules prevent the entrepreneur from doing his project. The prevent innovation that most people consider to be crazy.

SpaceX needed to get special laws passed because it couldn't simply buy the usage rights for a public beach. At the scale at which SpaceX operates that's okay. It's okay for them to go to the legislators and ask them to pass a law that gives them special rights. In a lot of cases it's not that easy for entrepreneurs to get special usage right to a public good.

It's okay that our society uses different paradigms to solve different issues.

I like David Ronfeld's IN SEARCH OF HOW SOCIETIES WORK. It illustrates how we use different paradigms of markets, hierarchies, tribes and networks to solve different issues.

It's a much better intellectual framework then to think in the Marxist terms of capitalism vs, socialism.

If I remember rightly, its estimated that around 2025 it will become the dominant construction technique.

Could you link to source for that estimate?

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