This work deals with the conceptual structure of economic freedom and its integration with economic democracy. It includes no ideological considerations or influence. It is based on the unicist approach to complexity science, which uses a pragmatic, structural and functionalist framework.
There are prejudices and fallacious myths installed in the world dealing with the concept of economic freedom.
Unfortunately, no literature could be found that approached economic freedom based on its concept to define its nature (the “stem cell” of economic freedom).
The existing approaches are strongly influenced by ideological positions.
This introduction, based on an excerpt from the book “The Future of Democracy and Capitalism” by Peter Belohlavek, provides a conceptual approach to capitalism, going beyond the beliefs deposited on facts by people to understand the nature and dynamics that define the present and future of Capitalism.
It can be said that Greece was the origin of political democracy in the West but was not an economic democracy because in those times the expansion of cultures was driven by military actions.
It can also be said that the United States of America are a paradigmatic example of evolutionary democracy that integrates social democracy, economic democracy and political democracy to manage the domestic affairs.
As an evolutionary democracy, the United States of America could be taken as a paradigmatic example of Economic Freedom and Capitalism. But Economic Freedom and Capitalism cannot be imported or exported. The unique structure of values that are implicit in a culture’s archetype are the demonstration that it is meaningless to copy any model to a foreign culture that has different structural values.
The understanding of the nature of economic democracy and capitalism allow defining the particular way in which a country can deal with economics and economic democracy considering its own characteristics.
This complete document includes:
- Economic Democracy Ethics
- The Structure of Capitalism
- The Nature of Justice: The Catalyst and Entropy Inhibitor of Capitalism
- The Future of Capitalism
- Annex 1: The Nature of Economic Democracy
- Annex 2: Corruption: The Anti-concept of Capitalism
Economic Democracy Ethics
Ethics defines the accepted rules of an environment. These rules satisfy the functional needs, the morality that is accepted in the environment and the ideology that underlies this ethics.
- The Statism
- The Protectionism / Dirigisme
- The Pre-capitalism
- The Capitalism
The ontogenesis of these ethics is homologous to the phylogeny of the human growth processes. This is to say that Statism implies the childhood of economic behavior, protectionism / dirigisme is its adolescence, Pre-capitalism is its youth and Capitalism is its maturity.
Anarchy is the stage previous to these ethics. It implies that individuals develop their economic activities eluding the rules of the environment.
Economic Statism is based on using the drivers of rational morality to guide economic actions. As economic or materialistic behaviors belong to the field of individualistic attitudes, Statism necessarily needs to make others responsible for the results to be achieved.
It is a low productivity economic ethics, in which the fulfillment of the established rules prevails over the achievement of results. Statism installs economic behavior in the rules of childhood, which means that the “family” prevails over the individual desires. It achieves a superior level of productivity in environments that have a superior ethics driven collective intelligence and are highly disciplined.
This is not the case when dealing with the social aspects of Statism. Statism in economic behavior requires authoritarian dirigisme in order to define what needs to be done and is driven by the need to make people align in an environment where the property belongs to others.
Protectionism / Dirigisme
Economic protectionism / dirigisme is based on installing autonomous entities that live based on the exchange with other protected entities in order to survive and provide adequate living conditions for the members.
Protectionism is a typical adolescent organization that corresponds to an economic stage where the environment has not been organized as a democratic entity.
It is based on the self-sufficiency of the productive entities that cannot deal in an adapted way with the environment because the control on their protected organization prevails over the productivity that can be achieved.
As there is a need to be self-sufficient, there is no possibility of introducing innovations or adapting to the change of the external environment. Their productivity suffices for survival and their horizon is limited to the reality of their “private” entity. Economic protectionism achieves a superior level of productivity when it is driven by a superior ethics driven ideology.
The economic pre-capitalism ethics implies that private property prevails over any other consideration in economic behavior.
Pre-capitalism implies, on the one hand, that the private initiative should prevail over governmental or State interventions and that all that hinders economic freewill is dysfunctional.
It is naturally the capitalist logic of non-democratic environments and, paradoxically, it represents the prejudices that non-democratic and non-developed countries have about capitalism.
Pre-capitalism is homologous to the behavior in youth where the voluntarism, omnipotence and energy prevail over a rational use of resources. It is a typical model for primary industry driven countries that have not known the meaning of a true democracy.
The productivity of pre-capitalism is based on the power of transferring costs to the participants of the economic activity.
Capitalism is the ethics that corresponds to a superior economic democracy, which is natural in democratic countries and not natural in countries that are developing towards a democratic environment.
Economic capitalism implies, on the one hand, the existence of a social economy where the society participates in the ownership of the productive entities through the stock market and, on the other hand, the existence of a newcomer’s place in which pre-capitalist rules apply within the general rules of capitalism
Capitalism is sustained by justice, which is the catalyst and entropy inhibitor of the system. Without a functional judicial system, capitalism degrades towards a pre-capitalist ethics.
The level of productivity in capitalism is catalyzed by the need to integrate shareholders and clients within the entities. Thus, those who achieve an adequate level of productivity succeed and those who do not, disappear.
The educational system is the driver to provide the necessary resources for R&D to maintain the competition at a superior level.
Unicist Future Research Lab
NOTE: The Unicist Research Institute was the pioneer in using the unicist logical approach in complexity science research and became a private global decentralized leading research organization in the field of human adaptive systems. It has an academic arm and a business arm.