Skip Navigation Change.gov: The Obama-Biden Transition Team
 

Citizen's Briefing Book Component

FIND AN ISSUE YOU CARE ABOUT



MORE CATEGORIES

Content Starts Here

Idea Detail

400
Points

Easing the Transition to an Alternative Economy

If we want to replace the present centralized economy of waste production and planned obsolescence, it's an inescapable fact that a great deal of excess manufacturing capacity cannot be saved.  In my opinion it's a mistake to try to prop it up through expedients like the Detroit bailout.

Corporate capitalism has been plagued from its late-19th century beginnings with chronic crises of overaccumulation and overproduction, which would probably have destroyed it in the Great Depression (despite the New Deal) had WWII not postponed the crisis for a generation by helpfully blowing up most of the plant and equipment in the world outside the U.S. and creating a permanent war economy for absorbing surplus output. But Europe and Japan rebuilt their industrial capital by 1970, and since then the chronic crises have been back with a vengeance. Before the current downturn, America's overbuilt industry couldn't dispose of its full output running at capacity, even with everybody tapping into home equity and maxing out their credit cards to replace everything they owned every five years. And we'll never see those levels again. So there's no escaping the fact that much of our plant and equipment, in a few years, will be rust.

The goal should be a shift from the present system of overaccumulated, centralized, oligopoly industry, and its business model of planned obsolescence and "push" distribution, to a decentralized economy of small-scale manufacturing for local markets.  This means, among other things, a switch from capital-intensive production methods based on product-specific machinery, to production with small-scale, general purpose machinery.  It means, in place of the old Sloanist production model, something like the present-day economy of Italy's Emilia-Romagna region:  networked small manufacturers producing for the local market, with a high degree of cooperative ownership.  Such an economy, based on a "pull" distribution model with production geared to demand on a just-in-time basis, will be insulated from the boom-bust cycles of the old national "push" economies.  And we need a new model of user-friendly, modular product design aimed at cheap and easy repairability and recycling.

Your main focus, in my opinion, should be to ease the transition by eliminating present policies (market-distorting subsidies, privileges, and cartelizing regulations) that impede it and protect the old economy from the new one.

This means, for one thing, eliminating differential tax exemptions that favor firms engaged in centralized, large-scale, capital-intensive production:  e.g., the depreciation allowance, the R&D credit, the deductability of interest on corporate debt, and the exemption of stock transactions involved in mergers and acquisitions from capital gains tax).  Then lower the corporate income tax enough to be revenue-neutral.

It means, especially, eliminating the biggest subsidy to economic centralization, and to artificially large market area and firm size: i.e., subsidies to long-distance transportation.  The Interstate should be funded entirely by weight-based user fees on trucking, which causes virtually all of the roadbed damage.  All subsidies to new airports or to expanding old ones should be eliminated, including all federal guarantees of local bond issues.

Perhaps most important of all, it requires radically scaling back the present strong "intellectual property" regime.  IP (through patent pooling and exchange, monopolies on current production technologies, etc.) is probably the single most powerful cartelizing force, which enables each industry to be concentrated in the hands of a few players.  It impedes the transfer of skills and new technology from the old manufacturing dinosaurs to the kinds of small, local producers we need.  It also serves as a powerful bulwark to planned obsolescence, imposing legal restrictions on the manufacture of cheap generic replacement parts.

Scaling back IP law (a good start would be repealing the DMCA, the WIPO Copyright Treaty, and the Uruguay Round's TRIPS accord) would eliminate the barriers to the diffusion of skill and technology that currently prop up the old corporate dinosaurs of the software and entertainment industries, and facilitate their replacement by networked production on an open source model.  Please cut loose the MPAA, RIAA, and Bill Gates, and do so yesterday!

Finally, we need to eliminate all subsidies to large-scale agribusiness.  The result will be a flourishing sector of community-supported agriculture, replacing the old agribusiness dinosaurs as fast as new ground can be cultivated.
1 Comment  »  Posted by Kevin Carson on 1/15/2009 12:12 AM

Comments

 
Davet
1/15/2009 3:23 AM
I particularly agree with Kevin on the importance of scaling back the commercial aspects of the present over-strong intellectual property law, like copyright extended to 70 years after the death of the author to allow publishers to maximise their profits.  This should not be a fixed term but a norm: on the death of immediate dependents.   Honorary recognition of authorship should however remain protected and plagiarism banned.   The fact, though, is that intellectual work is never saleable, only its publication is, so as of now valuable scientific work has become both dependent on patronage and priced out of reach of those who could benefit from it.   Far better to give authors and the inventors of Kevin's patents a decent living directly, and prizes for significant work, than to allow publishing monopolists and buyers of patents to tie up information that should be available in every locality.   
Subscribe to ideas