Tag: Utopia

Cyclists. By FaceMePLS from The Hague, The Netherlands - Buitenleven / Country Life. Wikmedia Commons. CC BY 2.0.

Something Went Wrong Somewhere

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The bullshit economy

Today, few people produce all that we need. The remainder have found bullshit jobs in the bullshit economy. In several advanced economies, 1-3% of the population works in agriculture. Previously, it was over 90%. Those 90% produced barely enough to meet their own needs, so that ancient societies could waste only 10% on merchants, governments, and other frivolous activities, such as jesters. Now these few per cent grow the food for everyone, and more people suffer from obesity than famine, while the world’s population has increased from a few million to over eight billion. The efficiency increase is astounding. But when a few people produce all that we need, the rest of us transform energy and resources into waste and pollution by producing non-essential goods and services. These activities may appear useful because they satisfy desires.

Economists have built an entire science around doing useless things to satisfy our desires. For most of history, nearly everyone was dirt poor, and many children died of diseases, and economics explains why that is no longer the case. Economic activities generate profits for investors or serve bureaucratic aims. You can’t simply terminate these activities and expect us to do all right. The economic system comprises parts and relationships. Actions have consequences, many of which we can’t foresee. But humanity has to adopt a sustainable path and live in harmony with nature, which means reducing consumption and population growth, which means cutting the bullshit. It is hard to say precisely what the bullshit economy comprises. Economists categorise economic sectors as follows:

  • food production and the extraction of raw materials;
  • manufacturing, utilities such as electricity and water, and construction;
  • retail, healthcare, banking, education, tourism, and entertainment;
  • software, scientific research, data analytics, and consultancy.

The degree of bullshit increases from top to bottom, but scientific research can improve food production, so it is not that simple, but overall, the rule applies. The same goes for the distinction between needs and desires. Psychoanalysis may seem like bullshit, but some people really need it. Still, people in the past survived without it, and poor people still have to. Psychoanalysis, however, requires little energy and resources, as you could do it sitting under a tree, nor does it generate pollution. That makes psychoanalysis a luxury we can afford. Yet, bullshit generates demand for bullshit. Smartphones and social media cause a lot of distress, so terminating them can solve a lot of psychological problems.

In current economic thinking, the debate often centres around the roles of governments and markets. Yet, governments and markets are the two main parts of the system. And framing the issue this way diverts attention from wasteful production and consumption, which, together with population levels and growth, are at the core of unsustainability. In ‘advanced’ economies, bullshit generates more than 50% of GDP, and it might be as much as 75%. And so a banker once noted,

A cyclist is a disaster for the country’s economy. He doesn’t buy cars and doesn’t borrow money to buy. He doesn’t pay for insurance policies. He doesn’t buy fuel or pay for maintenance and repairs. He doesn’t use paid parking. He doesn’t require multi-lane highways. He doesn’t get fat. Healthy people are neither needed nor beneficial for the economy. They don’t buy medicine. They don’t go to hospitals or doctors. Nothing gets added to the country’s gross domestic product. On the contrary, every new McDonald’s restaurant creates at least 30 jobs: 10 cardiologists, 10 dentists, 10 dietitians and nutritionists, and, obviously, people who work at the restaurant itself.

That is how the bullshit economy works. It is about making money, not providing needs. Returns in agriculture are meagre compared to those of tech giants. We could survive without tech giants, but not without food. And that is a most serious defect, as we waste energy and resources on non-essential items like social media while endangering the food supply. To illustrate the money-generating power of bullshit, you can compare the returns on an investment in the Chinese stock markets versus the US stock markets. If you had invested $1,000 in the MSCI China in 2011, in a real economy that produces things, you would have had $1,670 by November 2025.

Had you instead put your money in the S&P 500, in a bullshit economy of social media, lawsuits, unaffordable healthcare, Hollywood, finance, vampire capital scams, marketing and sales, you would have had $6,700. And that was the timeframe during which China caught up to, or even overtook, the United States. At least, the rich are doing fine. The latest hype is artificial intelligence. Soon, capitalists may no longer need workers. That vision of a coming capitalist paradise seems to keep the stock market going.

In the Financial Times, a fellow named Tek Parikh enthusiastically claimed that fifty years ago, the assets held by the top 500 US companies were mainly tangible, such as factories, equipment, and inventory. Today, most of their assets are intangible, including intellectual property, brand value, and marketing networks. In the US, spending on intangible assets has surpassed spending on tangible investments as a share of GDP since the late 1990s. The gap has widened ever since. These intangibles drive US productivity growth. Parikh excitedly asserts that this transformation helps explain the high concentration, exceptionalism, and bubble-like valuations in the US stock market.

Information technology unlocks value, a marketing term for marketing more senseless items or intensifying competition. Buying a widget for €10 and selling it for €20 because you own a brand generates more wealth than producing it for €8 and selling it for €10. A brand is capital that makes dirt look like gold to people willing to pay the price of gold for it, which you make them do by building a brand, so it is intangible, not a factory. Coca-Cola sells the same soda for five times the price to suckers who buy a ‘Coca-Cola feeling.’ And a brand owner can squeeze producers, make them compete to the death, so many brands do not produce their own items. They hire an advertising agency that hires a celebrity to tout the brand’s exclusiveness, and then they rake in the money. It may cost only a few euros to produce a Gucci bag that sells for €2,500.

Social networks, retail and financial services depend on physical infrastructure, such as roads and electricity grids. Without concrete, copper and fibre optics, there would be no data centres, no electricity, no internet, and no parcel deliveries. The bullshit economy still depends on physical labour and infrastructure. Yet the money is not in physical labour and infrastructure. A few mega corporations, such as NVIDIA, Microsoft, Apple, Google, and Amazon, reap the benefits, while nothing they do is something anyone needed fifty years ago. Bullshit is where the money is. In this sense, the US economy has become one of the most ‘advanced,’ leaving Europe to bite the dust.

And so, yet another Wall Street wiz kid developed the Degenerate Economy Index, which tracks companies enabling gambling, day trading, and memecoin speculation. By October 2025, it had returned 130% since its inception in May 2023. The index includes 13 public companies providing computing power, mobile devices, cloud services, and social networks, as well as Bitcoin. The 130% return over 18 months occurred during a period of market uncertainty, rising interest rates, the collapse of regional banks, and the flailing commercial real estate market. Bullshit is where the money is.1

The current economic organisation squeezes producers of necessities to employ more people in the bullshit economy to make money for investors from transforming natural resources and energy into waste and pollution. Economists call it efficient and wealth creation. Genetic engineering may increase crop yields, benefiting farmers, but competition in farming keeps average returns low. The profits are for the corporations engineering the crops. In a typical bullshit economy, migrants do the hard labour at low wages, while the native population occupies itself with value-creating activities in the bullshit economy.

No limits to our desires

As an ancient Persian story goes, the inventor of chess once presented the game to the country’s ruler. The king, much impressed by the game, offered the inventor any reward he desired. If there were ever to be a top three stupidest promises in the history of humankind, any reward someone wants will surely make it on that list. The inventor asked for a single grain of rice for the first square of the chessboard. Then, two grains for the second, four for the third, until the last square. The ruler, baffled by this seemingly small price, agreed. His treasurer later made the calculation and regretfully informed him that it was impossible to pay the inventor. There wasn’t enough rice in the world. The ruler then did the only sensible thing and ordered this man executed for his greed.

Humans don’t lack desires. The Bible tells that Eve and Adam wished to acquire the knowledge of the gods. And there are no limits. Otherwise, we wouldn’t live in someone’s personal fantasy world. When we have enough, we want more. It could be a larger home, a sports car, or an adventurous trip. Had that not been the case, we could have worked a few hours daily, had all we needed, and been content with what we had. Instead of living happily in a utopian society, we work hard to turn Earth into a wasteland by converting energy and raw materials into waste and pollution until we can’t keep up, and robots and artificial intelligence will replace us. On the bright side, that already happened, and artificial intelligence has generated this world, including us. That opens up new possibilities.

More material wealth and new inventions haven’t made us happier, yet we still hope that they will. Between 1970 and 2024, income per person in the US rose a whopping 265%.2 Still, about 40% of Americans can’t make ends meet. Many feel more miserable than their grandparents did fifty years ago. It is also a lifestyle problem that economic growth can’t fix. What was once a luxury or didn’t even exist has now become a necessity. It is not only that. The gains mostly went into the pockets of the rich, and many poor people are hardly better off. It is not the first time that humans have sacrificed quality of life for growth.

Our distant forbears switched from hunting and gathering to growing crops and herding cattle. That dramatically increased food production. Like us today, these poor suckers thought that if they worked harder, they would have more food and their lives would be better. Yet, more children survived, and they remained on the brink of famine. Even worse, their diets became less varied, leading to poorer health. They often ate tasteless porridge, while their forebears had nuts, berries, and fruits to chew on. They lived in unhygienic settlements where they contracted more infectious diseases. They suffered more from violence as farmers had to defend their crops and animals against thieves. And so, peasants were much more miserable than hunter-gatherers who lived before them.3

Since time immemorial, most people have had barely enough. Frugality was a virtue and wastefulness a vice. Parents taught their children to be satisfied with what they had. Few scraps remained unused. When my father wished for a toy, he would take a branch from a tree and turn it into one himself, at least when he had time to play and didn’t have to do chores on the farm. He didn’t know better and was quite satisfied with whatever toy he could create from a tree branch. His mother didn’t throw away food. And if his trousers had a hole, she would mend them. They were poor, but had enough. If they needed a costly item, they saved for it. Our virtues have evolved. In a time of excessive production and consumption, restraint and patience are impediments to growth.

It is grow or die. Without growth, investors lose trust, the financial system collapses, and the economy will follow suit. The excess production needs willing consumers to gobble it up. Investors should not lose their money. To prevent this catastrophe, consumerism became the new ethic. Businesses use psychology, advertisements, and the media to convince us to indulge ourselves. It is our moral duty to buy more stuff. That is what we want to hear, so the adherents of the religion of consumerism at least do as their preachers tell them. Today, many children have mountains of toys they never play with because they spend their time on social media.

Growth, including economic growth, is exponential. Increases come on top of previous ones. It is unsustainable. Economists argue that efficiency improvements reduce resource and energy consumption, but the opposite happens due to the Jevons Paradox. Efficiency improvements make products more affordable, allowing more people to purchase them. To add insult to injury, innovation brings new products to the market. The combination of efficiency improvements, innovation, and our unlimited desires will ensure we take as much as we can until nothing is left.

An extreme case is information technology. Since the 1970s, computers have become over a million times as powerful. Their capacity and numbers grew far more, perhaps over a trillion times, so computers consume over a million times more energy and resources than they did in the 1970s. And what for? We don’t need computers. Otherwise, people in the 1960s would have died horrible deaths from a lack of information technology. Had you studied history, you could have known that countless generations have survived without it. Here is where economic growth comes from nowadays. Somehow, influencers selling us more stuff and replacing us with artificial intelligence generate a productivity miracle.

Our inner drives

Since the Industrial Revolution, schedules and appointments have determined people’s lives. We work at designated intervals. Trains must be on time. Roads must have more lanes to prevent congestion. We save time by travelling faster, eating ready-made meals, utilising cleaning services, and buying new items rather than mending them. And still we hurry because of schedules, appointments, and long working hours. As nations become ‘developed’, more people get sucked in, join the treadmill, and become cogs in a system over which we have no control but that determines our destiny.

A 2025 report from Microsoft claims that employees are experiencing an ‘infinite workday’ of constant emails, meetings and notifications. They check their emails as early as 6 AM, juggle meetings through the afternoon and stay online well into the night. According to Microsoft’s data, employees are interrupted every 2 minutes by meetings, emails, or messages, and receive an average of 117 emails and 153 Teams messages each workday. Many are feeling overwhelmed.4 Humans can’t keep up for much longer, and artificial intelligence and robots will take over, as they are more dependable and never complain. And that will turn humans into useless consumers of resources and energy.

Why can’t we work for three days or for twenty hours per week? It must be possible. What is the point of working hard to turn the planet into a wasteland and let artificial intelligence replace us? What is the point? And why the hurry? It is how the system works. Time is money, so we live by the clock. A high standard of living requires capital, thus profits for its owners. Everyone must be present during working hours. A business can only be profitable when operations run smoothly. Corporations incur losses if raw materials, workers, or repair crews arrive late. Competitors will put them out of business. That is because operations have become optimised, so a few people produce all we need, while we entertain the remainder in the bullshit economy to generate profits for investors.

We work so efficiently that a few people produce everything we need, leaving a surplus of labour needing employment. That is why many of us work in bullshit jobs, working very hard to turn resources and energy into waste and pollution. Modern societies have become complex, so bullshit jobs make economic sense. You can become an influencer or trade crypto. Free-market proponents say that the market is the ultimate judge of usefulness. That is also an opinion, and a fatal mistake. Markets have no morals, and the ethic of the merchant is no ethic at all.

The system hooks into our inner drives, most notably our natural desires for security, comfort, and status. Squirrels gather and store nuts to get them through the winter. They pile up more nuts than needed. But they aren’t nuts. You can’t be sure what the winter will bring. A few more nuts can make a difference. Yet, as the nuttery increases, the likelihood of that decreases. We save for a rainy day, retirement, or to give our children a good start. Our desire to amass assets stems from our survival instinct. As you approach your destined appointment with that scythe-wielding fellow, that urge dissipates.

As a child, I had won over a thousand marbles. My gains came at the expense of other children at school. Yet, I sought to win more. What was the point? That I had never thought about. Having more marbles was pointless, except that I could marvel at them like Scrooge McDuck could spend time looking at his money in his warehouse. I was not that different from a greedy billionaire. And unlike most people, I haven’t lost my marbles, which is not a coincidence, by the way.

We are social animals, and we compare ourselves to others. If you want to belong to a group, you often need what others have as well. If you are a fan of FC Barcelona, you buy items from the fan shop and attend football matches to fund the outrageously overpaid players with your hard-earned money. Many of us seek status. For men, status gives mating opportunities. No matter how old, annoying or ugly a billionaire may be, he attracts good-looking fashion models. Those who can afford it buy Gucci bags, Ferrari cars, and Rolex watches, only to show others that they can. It would be a waste to give money to the poor. I also didn’t hand out marbles to those who didn’t have any, because that would amount to rewarding stupidity.

A capitalist might say that it is okay to be rich as it doesn’t go at the expense of others. Only that is a lie. The rich live unsustainable lifestyles. The capitalist fairy tale tells us that we deserve a reward for our excellence in ruining the world. After all, it is hard work. And if we buy these luxuries, some of that wealth will trickle down to the children working in the sweatshops that produce them. It is an inefficient way to end poverty and requires more resources than there are. Humanity’s current lifestyle already requires more than two Earths to sustain. And if everyone lived like the affluent, 80% of the people would have to die. But humans are not creatures of logic. We are social animals who cooperate through fairy tales like capitalism.

Ideally, you can achieve a higher status by being helpful to others or contributing to society. That motivates us to help and contribute. And we are thankful to those who bring food to the table. Businesspeople pay for our groceries. You wouldn’t have anything to eat if they weren’t busy squeezing money out of something, even when we could do without it, and even if that something is slowly poisoning us. We would be starving in the capitalist economy if we didn’t make and trade all that useless stuff. And not everyone is fit to run a business. It is why we value entrepreneurs. But where does it all end?

Tell me true, tell me why, was Jesus crucified?
Was it for this that Daddy died?
Was it you? Was it me?
Did I watch too much TV?
Is that a hint of accusation in your eyes?
If it wasn’t for the Nips
Being so good at building ships
The yards would still be open on the Clyde
And it can’t be much fun for them
Beneath the rising sun
With all their kids committing suicide
What have we done?

Pink Floyd, The Post War Dream

The Japanese have worked hard to get ahead, putting the British shipyards out of business, only to see their kids committing suicide. The Chinese are following suit. Why can’t we be happy? It is not that the Japanese didn’t have enough. When you have enough, you don’t need more. Jesus said that it is easier for a camel to go through the eye of a needle than for a rich person to enter the kingdom of God. The phrase ‘you’ll own nothing, and you’ll be happy’ appeals to our deepest fears of a dismal future in which we starve while being fed propaganda. We prefer a fatal excess of material goods to the bliss of the needy North Koreans. Somehow, we think that the choice is between capitalism and socialism. Can’t there be something better?

Modernisation

You can only say that things are heading in the wrong direction if you expect disaster or when you have a vision of how things should be. Otherwise, there is no right or wrong direction. The ecological apocalypse may kill billions, and technological development could terminate humanity, but are these terrible things? It depends on whether you think humanity is precious, which is merely an opinion. Modernisation has had its critics in the past. They weren’t that stupid, except for believing that we have a choice and can change the system. We might if we are all on the same page, but that will never happen. It is not only that we accept the bribe. We also don’t know the future.

Mahatma Gandhi believed industrialisation wouldn’t solve the problems plaguing the Indian poor. He urged Indian villagers to remain self-sufficient in food, make their clothes, and avoid the temptation of mass-produced consumption goods. When Gandhi lived, most Indians were hardly better off than their forebears had been before British colonisation. Today, poverty in India has declined dramatically. The Unabomber claimed in his manifesto that the Industrial Revolution had initiated a process that would eventually destroy humanity through technology and end freedom by forcing us to adapt to machinery.

We shouldn’t romanticise the past. Poverty has declined. Yet, the Industrial Revolution created an engine of permanent change, driven by competition, economies of scale, and innovation. We have become cogs in a system over which we have no control. Communities disappeared, giving way to societies. And the competition never ends. Humans emerged as winners in a brutal contest between species known as the struggle for survival. They then turned into the destroyers of other life on Earth.

Humans innovate faster than other species. We have eliminated the competition, taken over the planet, and completely ruined it. The remaining wildlife lives in a few reservations. Artificial intelligence will soon outcompete us, turning us into useless consumers of energy and resources. The driver of competition is trade. Without trade, two countries can’t compete, not even two villages, for that matter. The result of unchecked competition is mass destruction. The alternative could be lower-quality products and poorer service. If it is a matter of life and death, you may have to accept that. There may be ways to regulate the competition so that quality doesn’t suffer that much, but setting the right priorities begins with admitting that poverty is preferable to death by competition.

Things are getting more evil

What we see as good benefits something, and what we see as evil harms something. And intentions may also matter. So if the whale dies due to your efforts to save it, that may not be good, but stupid. So what you think is good or evil depends on what you have in mind, what you believe is beneficial and harmful, whether you believe intent matters, and what you think the consequences of choices are. That allows room for debate. Intent is an interesting issue. You can make the same choice, such as euthanasia, out of compassion, out of cruelty, or based on a principle you believe in. Consequences are an even more interesting issue. Evil intent can have favourable outcomes, while good intent can bring disaster. That has been an argument in defence of capitalism, so greed is good. One can say that communism reflects the failure of good intentions. The capitalism-socialism debate also reflects divergent views on law and morality within the Western tradition.

In the Anglo-Saxon world, with the Common Law, individuals are sovereign, and ethical philosophy is pragmatic. It means that moral rules are matters of agreement, making good and evil a matter of popular sentiment. And so, freedom is the ability to do as you please, and outcomes matter more than intent. In continental Europe, with Civil Law, the lawmaker is sovereign, thus the king or the people in a democracy, and idealism dominates ethical philosophy, most notably in Germany. It means that good and evil are absolute, freedom means liberating yourself from your lower urges, thus becoming rational and morally upright, and intent matters more than outcomes. Adam Smith was a pragmatist from Great Britain, while Karl Marx was an idealist from Germany. When, during the Cold War, the fight for capitalism and individualism turned into a moral crusade, the United States imported its idealist philosophers from Austria. An example is Von Hayek.

Adam Smith, the founder of modern capitalist thought, argued in his book ‘The Wealth of Nations’ that self-interest in a market economy promotes overall economic well-being, as ‘it is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.’ In other words, self-interest rather than benevolence fills our stomachs. Conversely, socialist systems, despite being invented with good intentions and a moral appeal, led to poverty and famine, so they are evil. Traditional moral systems regarded self-interest as evil and benevolence as good. Capitalism thus comes with an inversion of that morality, ultimately making greed good. It reflects pragmatic moralism rather than an idealistic or absolutist take on ethics.

Capitalism has brought prosperity to many. Yet it mostly rewards individuals for their ability to generate money by transforming natural resources and energy into waste and pollution, producing things we don’t need. Whatever intentions the greedy may have, their efforts bring about an apocalyptic catastrophe that some major religions have long predicted. We can be pragmatic and judge the greedy by the destructive outcomes of their actions. And we can be idealistic or absolutist, arguing that markets have no morals. Individual market participants may possess moral values, but markets never do. There are always people willing to do the trade. When there is demand, there will be supply. The trader’s ethic is no ethics at all. That is why money corrupts everything.

Karl Marx wrote that capital is dead labour that, like a vampire, only lives by sucking living labour. In capitalism, the dead eat the living, eventually leading to a zombie apocalypse as predicted by ancient Christian prophets. The specifics of the events do not precisely match those in the Book of Revelation, but every sizeable inheritance or successful launch of a new corporation that gets us hooked on things we don’t need is the birth of a new zombie that is sucking the life out of us.

The innovation in blood sucking never stops. Vampire capital, or private equity, is the latest brainchild of capital owners to suck more money out of us. The giants, such as Apollo Global Management, Blackstone, and the Carlyle Group, control $8 trillion in assets. Over 18,000 private funds operate in the US, mainly investing in medium-sized companies. The figure grew by more than 50% in the last five years. According to McKinsey consultants, global private equity assets reached $13 trillion in 2023.5

Here comes just one example. There are countless others. About 70% of nursing homes in the United States are for-profit. They have increasingly merged into larger chains, often owned by private equity firms. Two-thirds of the nursing homes’ cash flow comes from Medicaid. The company Manor Care had 25,000 beds and was the second-largest nursing home chain in the country by 2017. A private equity firm, The Carlyle Group, acquired it in 2007 through a leveraged buyout.

Here comes just one example. About 70% of nursing homes in the United States are for-profit. They increasingly have merged into larger chains owned by private equity firms. Two-thirds of the nursing homes’ cash flow comes from Medicaid. Manor Care had 25,000 beds and was the second-largest nursing home chain in the country by 2017. The Carlyle Group acquired it in 2007 through a leveraged buyout. Carlyle sold the land on which the nursing homes stood to a company specialising in providing real estate to healthcare providers. Carlyle pocketed the proceeds from the land sale, using them to pay off the debt incurred while acquiring Manor Care. Manor Care then had to pay rent using its Medicaid revenues, while Carlyle took the operating profits. With this rent burden, Manor Care’s margins contracted. Carlyle then insisted on cutting positions and wages.5

The quality of care deteriorated as the chain struggled financially and laid off staff. In the wake of the private equity purchase of Manor Care, nurse staffing fell, and resident deaths increased by 11%. Bills, mainly to Medicare, increased by 8%.6 Code violations soared. Lawsuits from relatives spiralled, and Manor Care went bankrupt in 2018. There was a lot of money for lawyers in it, also. There are plenty of examples. When a private equity firm acquires a doctor’s practice, it starts employing profit-boosting strategies, including surprise billing. Private equity firms remove doctors from insurers’ networks, allowing them to bill patients for far more than insurers would pay.

Pharmaceutical corporations pay doctors for prescribing their drugs. Their marketing efforts contributed to the opioid crisis in the United States. An example is Purdue Pharma, which developed, manufactured, and aggressively marketed opioids for decades, causing addiction and overdose deaths. After the settlement, the Sackler family, who had long owned the corporation, walked away with billions. Many Americans don’t trust their healthcare system, nor do they trust pharmaceutical corporations. These feelings, the COVID-19 vaccine scare and conspiracy theories led to an estimated 200,000 fatalities in the US because of not taking these vaccines.7

Big Pharma funds healthcare research, so there is reason to be distrustful. On the other hand, ‘independent research’ and ‘independent magazines’ are a business model for quacks and snake-oil salespeople, who sell alternative treatments and sensational stories. Quackery is even more lethal and driven by that same profit motive. The death toll of not taking the vaccines vastly outstrips the number of people who died from them. It is a sign of something more troubling. Money has corrupted US healthcare, along with the rest of US society, to the point that not only is trust in healthcare collapsing, but trust itself. And with good reason. Americans pay more for healthcare than anyone else, while they hardly live longer than Cubans, a destitute people suffering under a failed communist experiment. And now comes the skinny. If we can only choose between communism and capitalism, it is a choice between stagnation and poverty on the one hand, or the end of humanity, driven by the pursuit of profit, efficiency measures, and innovation on the other. Maybe we can do better, but that requires a wonderful fairy tale we can believe in.

We live by stories

Most of us wouldn’t be so depraved as to do what the private equity firms do. Still, if you are rich already, how can you make money out of denying the elderly their care or defrauding unsuspecting patients? Yet, if you own 1,000 marbles, why do you want more, leaving other children with none? I was a child who amassed marbles, but the people in the vampire capital business are adults. Markets have no morals, and the merchant’s ethics are no ethics at all. There is money in it, and it is legal, so it happens. Money is our highest value, so greed is good even if it comes at the expense of the sick and the elderly. We look at the returns of our investments, not at the consequences. So, how could we have ended up here? It is the destruction of moral values. So, how could evil have overtaken us in this fashion?

The famous sociologist Max Weber called it the disenchantment of the world, a long-term trend toward secularisation and rationalisation that reduces the influence of religion, magic, superstition, and traditional authorities. With the help of natural science, capitalism has been the engine of disenchantment. It greatly increased material wealth, but it left a void because we are religious creatures. We need to believe in fairy tales and magic to function optimally as human beings. Eugene McCarraher argued that capitalism eliminates sacredness from material objects and social relationships, at the expense of our well-being, leaving us without ethics. The environmental lawyer Gus Speth once put it like so,

I used to think the top global environmental problems were biodiversity loss, ecosystem collapse and climate change. I thought that with 30 years of good science, we could address these problems. But I was wrong. The top environmental problems are selfishness, greed and apathy, and to deal with these, we need a spiritual and cultural transformation, and we scientists don’t know how to do that.

He is right. Only religion can solve the issue. Jesus said that you can’t serve both God and money. The Dutch call this issue ‘the merchant and the vicar.’ You are either on the side of God or on the side of money. There is no compromise. So far, money has always won. To change our course, we need a new foundation for our culture, values, and way of life, but that requires a new world religion. Traditional peoples see nature as sacred. Likewise, we can see God’s creation as sacred. We are here to keep it rather than to destroy it. In 1854, the Native American Chief Seattle gave a speech when the US government wanted to buy their land. A redacted version of his oration became a rallying cry within the environmentalist movement. In that version, Seattle reportedly said,

How can you buy or sell the sky, the warmth of the land? The idea is strange to us. Every part of this earth is sacred to my people. We are part of the earth, and it is part of us. The white man does not understand our ways.

One portion of land is the same to him as the next, for he is a stranger who comes in the night and takes from the land whatever he needs. He leaves his father’s grave behind, and he does not care. He kidnaps the earth from his children, and he does not care.

We might understand if we knew what the white man dreams, what hopes he describes to his children on long winter nights, and what visions he burns into their minds so they will wish for tomorrow. But we are savages. The white man’s dreams remain hidden from us.

Chief Seattle and his people had lived simple lives in their own Eden. He saw that the white man was on a road to nowhere. He dreamt, not much unlike the poor sobs who invented agriculture 10,000 years ago, that if he worked hard, his life would be better. It was the fairy tale he believed in. Today, the world follows the white man’s path and many work even harder than he does. Poverty is declining worldwide, but the Earth can’t sustain our lifestyles, and artificial intelligence may soon make us obsolete, so that it will all have been for nothing. Will we ride towards our destruction, or can we be content with having enough? How do we get there? That is not merely an economic question. It begins with the fairy tales we believe in.

Featured image: Bicyclists. By FaceMePLS from The Hague, The Netherlands – Buitenleven / Country Life. Wikmedia Commons. CC BY 2.0.

1. Investor Insanity? The Degenerate Economy Index Up 130%. Boaz Sobrado (2025). Forbes.
2. Real gross domestic product per capita in chained 2017 dollars (A939RX0Q048SBEA). Federal Reserve Bank of St. Louis.
3. Sapiens: A Brief History of Humankind. Yuval Noah Harari (2014). Harvil Secker.
4. American workers are stuck in an ‘infinite workday,’ according to Microsoft report: ‘People are feeling very burnt out’ Sophie Caldwell (2025). CNBC.com.
5. Private equity: vampire capital. Michael Roberts blog (2024).
6. Private equity: health care’s vampire. Steffie Woolhandler, David U. Himmelstein, Elizabeth Schrier, and Hope Schwartz (2024). Statnews.com.
7. Estimated preventable COVID-19-associated deaths due to non-vaccination in the United States. National Library of Medicine. Katherine M Jia, William P Hanage, Marc Lipsitch, Amelia G Johnson, Avnika B Amin, Akilah R Ali, Heather M Scobie, and David L Swerdlow.

Slums in Jakarta

From scarcity to abundance

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The road to prosperity

Until very recently nearly everyone lived in abject poverty. Most people had barely enough to survive. In 1651 Thomas Hobbes depicted the life of man as poor, nasty, brutish, and short. Yet a few centuries later a miracle had happened. Many people are still poor but more people suffer from obesity than from hunger while the life expectancy in the poorest countries exceeds that of the Netherlands in 1750, the richest country in the world in the wake of the Industrial Revolution.

In 1516 Thomas More wrote his famous novel about a fictional island named Utopia. Life in Utopia was nearly as good as in the Garden of Eden. The Utopians worked six hours per day and took whatever they needed. His book inspired writers and dreamers to think of a better world while leaving the hard work to entrepreneurs, labourers and engineers. Today many of us have more than they need but still we work hard and feel insecure about the future.

Why is that? The answer lies within the nature of capitalism. It is not enough that we just work to buy the things we need. We must work harder to buy more, otherwise businesses go bankrupt, investors lose money, and people will be unemployed and left without income. In other words, the economy must grow. That worked well in the last few centuries, and it brought us many good things, but it may be about to kill us now.

People in traditional cultures didn’t need much. They were easily satisfied. Many modern people in capitalist societies believe they never have enough. You can always go for a bigger house, a more expensive car, or more luxury items. Many of us do not need more but the advertisement industry makes us believe that we do. We believe in scarcity even when there is abundance. And so the economy must grow. That is what they tell us.

But what are the consequences of this belief? If you eat too much this is great for business profits. And if you become obese as a consequence and need drugs for that reason, you again contribute to business profits so this is even better. Meanwhile we are using the resources of this planet in a much faster pace than nature can replenish. Humanity is standing before the abyss. Civilisation as it is will not continue for much longer. The end is near.

What has this to do with interest? If we want more products and services, we need more businesses, so we need investments. To do investments, we need savings. And to make people save, we need interest to make saving attractive. Consequently investments need to be profitable to pay for the interest. But there can be too much of a good thing. If we don’t need more stuff, we don’t need more savings, and interest rates go down.

A sustainable and humane economy?

Is it possible for humanity to live in harmony with itself and nature? We work harder than ever before and in doing so we destroy life on this planet. It seems hard to change this. If you organise production differently then your products might not be sold at a price that covers the cost to make them. In a market economy the value of a product is the price it fetches in the market. Marketing often comes down to inflating the market price of a product or a service to make more profit.

In the past there have been two fundamentally different approaches to the economy. For instance, before Germany became united in 1990, there were a capitalist and a socialist Germany. Socialist Germany ensured that everyone was employed. People in socialist Germany had enough but they had little choice as to what products they could buy. For instance, in socialist Germany there were two kinds of yoghurt while there were sixty in capitalist Germany.

And there was little freedom in socialist Germany. The secret police were everywhere. When Germany became united the socialist economy collapsed. Socialist corporations suddenly were bankrupt because no-one wanted to buy the products they produced. The ensuing reorganisation of the economy led to mass lay-offs and a staggering rise in unemployment. Ultimately 60% of the jobs in the former socialist firms disappeared.

Many lives and communities in former socialist Germany were destroyed. And people suddenly felt insecure about their future as businesses had to compete and make a profit in order to survive. In a market economy efficiency considerations determine what is produced. These efficiency considerations are the result of customer preferences as well as the requirement to make a profit. Loss-making businesses usually can’t attract capital in a market economy.

The quest for efficiency results in fewer and fewer people producing the things we need. To keep everyone employed in a capitalist economy unnecessary products and services must be produced, causing a rapid depletion of scarce resources as well as lots of waste. At least in theory we work can a few hours per day so we have more time for our mobile phone and each other. It may also be possible to free up resources to address poverty and other social problems.

And what has this to do with interest? The profit a corporation is expected to make should be higher than the interest rate in the markets for money and capital. Because what’s the point in making the effort and taking the risk of running a business if you can get the same return on a savings account? And so it appears that with negative interest rates corporations with zero profits can survive and that the economy doesn’t need to grow.

Share of Labour Compensation in GDP at Current National Prices for United States

The road to inequality

Not so long ago an economist wrote a book that sent a shock-wave through the economic world because of stating a major cause of wealth inequality, which is that the return on capital usually is higher than the rate of economic growth. Capitalists reinvest most of their profits so capital usually grows faster than the economy most of the time. It can be proven beyond any doubt that capital can’t grow faster than the economy forever. Something will have to give at some point.

And what has this to do with interest? Interest is any return on capital. Interest income is the income of capitalists. That includes business profits and interest on bonds. The graph shows that labour income as part of the economy has diminished in recent decades in the United States. And that is because the capital share of national income has risen. In the past depressions and wars destroyed a lot of capital. Since 1945 there hasn’t been a serious depression or a world war.

The capitalist economy is like a game of monopoly. First everyone is doing great and capital is built in the form of housing and hotels. At some point some people can’t pay their bills anymore. To keep the game going, the winners can lend money to the losers. But at some point the losers can’t pay the interest any more. To keep the game going, interest rates must be lowered, so they can borrow more. But at some point some people can’t pay the interest again.

This happens in the real economy too. In a game of Monopoly we can start all over again. In the real economy that’s not an option. It would mean closing down factories in another great depression or destroying houses in another world war. So the game must continue. In Monopoly the rich can lend money at negative interest rates to the rest so that they can pay their bills. In the real economy this may be possible too.

Monopoly features a scheme that looks like a universal basic income. Every time you finish a round you get a fixed sum of money from the bank. At some point the bank may end up empty. The rich can then lend money to the bank at a negative interest rate to pay for it. It might seem a stupid thing to do because Monopoly is just a game. But the real economy is not. It may need an income guarantee for everyone financed by the rich.

An outline of the future economy

Can we have an economy that is humane and in harmony with nature? A few centuries ago no-one would have believed that we could live the way we do today and most people would have believed that it is more likely that unicorns do exist. If excess resource consuming consumption is to be curtailed, fewer options for consumers remain, for instance there may only be organic products, and supermarkets in the future might look a bit like those in former socialist Germany.

That may not be so bad. People in socialist Cuba live as long as people in the United States despite the United States spending more on healthcare than any other country in the world. Cubans eat no fast food so they live a healthier life style. And Cubans suffer less from a negative self image than people who are exposed to the advertisement industry. Advertisements aim to make us unhappy with ourselves and what we have in order to make us buy more products and services.

Like in former socialist Germany there isn’t much freedom in Cuba. If the government is to regulate the fat content in fast food or the sugar content in sodas then we lose our freedom to become obese. Alternatively, the government could even end our freedom to destroy life on this planet and kill our children. That may be oppression. But the alternative may be a collective suicide of humanity. Even though socialism failed we may have to pick the best parts out of it and integrate them into a market economy.

If the most resource consuming non-essential activities are to be axed, entire industries will be wiped out like in socialist Germany. One can think of making air travel sustainable and what that will with ticket prices. It is bad for economic growth. Many people would not like this. Still, life in a future sustainable market economy can be much more agreeable than life in Cuba or former socialist Germany.

So what has this to do with interest? A dramatic change to make the economy sustainable can cause a massive economic shock like the Great Depression. The economy can soon recover if interest rates can go negative. Before you say that it is more likely that unicorns exist, this has been tested during the Great Depression. The outcome is dubbed the Miracle of Wörgl. And evidence for the existence of unicorns has not yet been so forthcoming.

If interest rates are low then the creators of ideas and makers of things are rewarded more. They are the entrepreneurs and labourers rather than the owners of capital. It is in the spirit of Silvio Gesell who believed that labour and creativity should be rewarded and not the passive ownership of capital. Only when there is a shortage of capital or more demand for goods and services than there is supply, people need to be encouraged to save.

The economy is already constrained by a lack of demand rather than supply. That will be even more so when excessive consumption is to be curtailed and the rich have fewer options to spend their money on. And so it may become possible to fund an income guarantee with income taxes as well as negative interest on government debt. This can improve the bargaining position of labourers.

It is better to have an income guarantee rather than a universal basic income because that would be cheaper. There is little to gain from handing out money to people that already have enough. And the scheme should provide an incentive to work. A simple example can explain how that might work out. Assume there is an income guarantee of € 800 per month and a 50% income tax. The following table shows the consequences for different income groups.

Perhaps it doesn’t feel right that people are being paid for doing nothing. But nowadays people are paid for producing and selling things we do not really need and by doing so they endanger our future. Someone who does nothing at all can be worth much more for society than a travelling salesperson, a trader on Wall Street or a constructor who builds mansions for the rich. Of course it is better that people do something useful and useful people should be rewarded for their efforts, but doing nothing is always better than doing something stupid, and having zero value is always better than having negative value.

Another question is how this can be paid for? The Miracle of Wörgl shows us that the economy can flourish without growth when interest rates are negative so that most people will be employed. Money can still be a motivator to run a business or to go to work but less so than in the present. It doesn’t have to stop people from starting a business. Many entrepreneurs didn’t intend to become rich. They just wanted to be an entrepreneur or believed in the product they were making or selling. Still, there is no doubt whatsoever that a humane economy in harmony with nature will be very different from the economy of today.

Featured image: Slums built on swamp land near a garbage dump in East Cipinang, Jakarta Indonesia. Jonathan McIntosh (2004).

Other images: Share of Labour Compensation in GDP at Current National Prices for United States. FED. Public Domain

Illustration for the first edition of Utopia

Welcome to Utopia

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Utopian dreams

A few centuries ago, nearly everyone lived in abject poverty. Most people had barely enough to survive. In the Middle Ages, 30% of the children died, often of malnutrition or diseases. And so, Thomas Hobbes wrote in 1651 that man’s life was poor, nasty, brutish, and short. It has been that way since time immemorial. Around 1800, Thomas Malthus concluded that humans live in a permanent state of misery. Once we have more food and resources, more children will survive, so that we will always be on the brink of starvation. At the time, only one billion humans were roaming the Earth, searching for a meal.

Two centuries later, a miracle had occurred, and it was unexpected if you had lived in 1800 or before. Today, more than eight billion people live on this planet, and less than one billion live on the brink of starvation. The life expectancy in the poorest countries exceeds that of the Netherlands in 1750, the wealthiest nation before the Industrial Revolution. At first glance, it looks like Paradise. Available food and resources have increased faster than the population. Capitalism and fossil fuels enabled this growth. We now use more resources than the planet can sustainably provide, so an apocalypse is in the air.

In 1516, Thomas More wrote a novel about a fictional island, Utopia. Life in Utopia was good. The Utopians had a six-hour workday and had enough because everyone took only what they needed. Utopia means ‘nowhere,’ but the name resembles eutopia, which means ‘a good place.’ More may have intended the pun. There is more than enough for all of us. So, why can’t we all work a few hours per day, live peaceful lives and have enough? A well-functioning society requires a set of values and a culture to support it.

Utopian dreams aren’t new. According to the Bible, humankind once lived in the Garden of Eden, where people lived simple lives and were happy with what nature provided. Jesus said, ‘Look at the birds of the air; they do not sow or reap or store away in barns. God feeds them.’ There have since then been utopian dreams of peace and sharing. Most utopian dreamers think of a better world while leaving the hard work to others. In reality, utopian societies are not perfect and are oppressive to those who don’t fit in. Usually, their ideologues define the ideal human as hard-working and public-spirited.

Third ways

There have been several attempts to arrive at a synthesis of capitalism and socialism, often called a third way. The challenge of socialism, the antithesis of capitalism, fuelled a lively debate about economic systems in the second half of the 19th and the first half of the 20th century. Silvio Gesell, who wrote Barataria, was one of the central figures in this debate, as was Henry George in the United States. Since the Cold War, that debate has narrowed down to a struggle between communism and capitalism, or between individual freedom and enforced collectivism. After the collapse of the Soviet Union, the feeling in the West is that capitalism is superior and that there is no alternative.

The Soviets have tried to bring communism into practice. They replaced markets with state planning and repression. Due to the forced collectivisation of farms, millions died of starvation. Millions more ended up in prison labour camps. The end of communism led many people to believe that a better future lay ahead. But many of the economic problems we face today stem from faith in capitalism and the idea that governments can manage its drawbacks. And so, the question remains: is a third way possible? The Chinese have kept innovating and remained determined to make socialism work. It did so by making the Chinese economy more capitalist. However, the state still runs much of it.

The Russians lost faith in the fairy tale of socialism as central planning produced poor outcomes. Still, the Chinese economy has baffled the proponents of the capitalist myth. The Chinese allow the profit motive to exist as long as businesses conform to the Chinese Communist Party’s objectives. State ownership of enterprises further ensures that. The Chinese have demonstrated that you can submit the profit motive to a society’s goals and place large corporations in sovereign wealth funds. But competition still determines the outcome. We are in a rat race that will probably not end well.

The Chinese political economy is more advanced than Western models in that it subordinates the economy to political goals while promoting prosperity for China’s population. In many fields, China has surpassed the West. So if we were to agree on humanity’s goals, political control works better than pure capitalism. Chinese culture contributed to China’s development. Several Asian nations with similar cultures have also successfully modernised their economies. Modernisation is also a cultural shift from reliance on families and communities to markets and states.

The failures of capitalism and socialism come from the fact that both are models of reality, thus simplifications, and that the oversights in both models come with disastrous consequences. We are religious animals who want to believe in fairy tales like capitalism and socialism. The proponents of these systems blame their failures on execution rather than on the systems themselves. To clarify the discussion and address confusion about terminology, it may be helpful to provide definitions of economic systems. Their differences centre around ownership of resources, capital, and labour.


resourcescapitallabour
communismstatestatestate
socialismstatepublicprivate
third way / mixedvariesvariesprivate
capitalismvariesprivateprivate

Under communism, the state owns all there is, including your labour, so you can’t even decide on the job you take. Under socialism, you can choose your occupation, but capital and natural resources are public, thus owned by workers or the state. In mixed economies, ownership of natural resources and capital varies. You may own the ground, but if there is oil underneath, the oil may belong to the state. There may be state-operated corporations, such as railways, alongside private corporations. Under capitalism, everything is private. There may be public services, but there are no public corporations. Few countries give their resources away for free. Governments want a piece of the action.

One crucial oversight is culture. There were substantial differences in living standards in the Soviet Bloc. Czechoslovakia did relatively well. Yugoslavia suffered from high unemployment, but the Slovenian unemployment rate never exceeded 5%, while Macedonia and Kosovo had rates of over 20%. These were extreme differences within a single country and under the same system. Likewise, capitalism also promoted varying results. Latin America remained poor despite having mostly right-wing regimes. Cultures change, and an advantage can turn into a disadvantage. Success breeds complacency, and to stay competitive, you have to regularly ‘reinvent’ yourself.

China has developed its economic model, a state-run socialist market economy, which now outcompetes the West. Its success depends on the Chinese people’s hard work, discipline, and ingenuity, as well as China’s long-standing tradition of modern bureaucratic government and Confucian ethics, which enable the government to work in the public interest and the people to respect authority. Chinese culture thus helped them to achieve this. China’s economic success resembles that of neighbouring countries with similar cultures, such as Japan and South Korea. The Japanese and South Korean economic successes also involved state planning and the state organising industries.

Free economy

There are other ways of organising the economy besides communism and socialism. These are community economics and religious economics, so economies founded on a moral system. Economic thinking centres around the division of tasks between the market and the state. There is little room for moral systems and communities. Religion can make people pursue other goals in life than maximising economic utility, while communities can produce most of the essentials, as they did in the past. Barataria had an economy with private enterprise and home ownership, but without capitalists, bankers, or merchants. The Baratarians were a community sharing a religion.

Silvio Gesell believed in economic self-interest as a natural and healthy motive for satisfying our needs through productive activity. He aimed for free and fair competition with equal opportunities for all. He proposed the end of legal and inherited privileges, so the most talented and productive, rather than the most privileged, would have the highest incomes without distortion by interest and rent charges. Henry George believed that society gives land its value through public services. George thought that a land tax would benefit the overall economy and could replace other taxes.

After Argentina experienced an economic depression in the 1890s, Gesell found that returns sometimes failed to meet investors’ minimum requirements. It caused investors to put their cash in their pockets, disrupting money flows. It regularly caused economic hardship and unemployment. Gesell proposed a holding fee on currency to keep the money in circulation, as low returns are more attractive than paying the surcharge, which amounts to a negative interest rate. Gesell’s economic system was well known in Germany as the free economy. In Wörgl, the holding fee on money proved a successful recipe to revive the economy during an economic depression.

European Union

European economies are mixtures of capitalism and socialism. Many Brits found the union too socialist and bureaucratic, so they left. The European Union tries to regulate capitalism a bit too much to the taste of many Britons. Overall, Western Europeans live a relatively good life. Well-being is hard to measure, but European societies are among the world’s most agreeable, at least if you believe the rankings. And if every country kills innovation with legislation like the bureaucrats of the European Union, we wouldn’t need to fear artificial intelligence, genetic engineering or other new technologies. But this political-economic model will probably not survive the competition for much longer.

Europe has a collectivist tradition with Christian and socialist roots, as well as worker and consumer protection laws. Europeans live longer than Americans, partly because the European Union has banned unhealthy foods that are available in the United States. At the same time, governments run the healthcare systems, so most healthcare is for the public interest rather than private profit. In Europe, it is harder for corporations to pass business-friendly legislation through bribery of politicians. That is also because Europeans have more faith in the common good than Americans do. Like the invisible hand, our imaginary invisible friend, the common good, has a few magical powers of its own.

Immigrants do much of the hard manual labour in Western Europe, often for low wages, so they help many Europeans lead agreeable lives. They frequently live in poor housing. Others may find Western Europeans lazy, as they work 36 hours per week and have five weeks of holidays each year. Europe is losing the competition, or at least that is what the experts think. Still, the lives of people in Western Europe may be the closest to what life should be in Paradise, except that European energy and resource consumption would be unsustainable if everyone lived like that. The demise of the European Dream shows that competition is the reason why we can’t live in Paradise forever.

Nazi Germany

The Nazis produced an economic miracle during the Great Depression. Their success came from deficit spending for rearmament and from restricting trade with the outside world, so government expenditures boosted the German economy without causing trade deficits. It is similar to Keynesian economics. It worked like the miracle of Wörgl, except that the German government accrued a large debt while the council of Wörgl did not.

Factories were idle, and many people were unemployed, so the scheme didn’t lead to high inflation. Price, wage and rent controls also helped keep inflation in check, but they hurt small farmers. The Nazi economy was a mixture of state planning and capitalism. Germany was rearming and preparing for war, so it was also a war economy. Countries organising for war take similar measures to mobilise their industries for warfare.

Yugoslavia

Yugoslavia was socialist rather than communist. It combined state planning with markets and decentralised decision-making or worker self-management. The Yugoslav economy fared better than that of fully communist countries. Yugoslavia was more open, and living standards were higher. Eventually, Yugoslavia couldn’t compete with more capitalist economies. The oil crisis of the 1970s magnified the economic problems. Foreign debt soared. Generous welfare spending further contributed to Yugoslavia’s financial woes. The case of Yugoslavia highlights the issues that plague utopian economies.

The country implemented austerity measures, such as rationing fuel use and limiting imports of foreign-made consumer goods. Yugoslavia had been able to feed its people until then, but from the 1970s onwards, the country became a net importer of farm products. Yugoslav citizens could travel to the West. Emigration helped the economy by reducing unemployment and bringing in foreign currencies as emigrants returned money home to support their families. The Yugoslav economy collapsed in the 1980s.

Openness to foreign competition contributed to the demise of the Yugoslav economy. Yugoslav consumer products were inferior to foreign products. To compete, businesses laid off workers. The Yugoslav economic system might have worked if every country had operated its economy like so. Yugoslav products would have sufficed had there been no better alternatives. In that case, mass unemployment wouldn’t have materialised, and Yugoslavia could have managed, perhaps with less generous welfare. Utopian economics can only work when the economy encompasses the entire world.

China

The stories of Airbus and Boeing demonstrate that state ownership of large businesses can work better than private ownership. Boeing was the industry leader, but ruined itself by focusing on shareholder value. Reducing quality brought short-term cost savings, boosted the stock price, and generated management bonuses. That seemed all fine until Boeing’s aeroplanes began dropping from the sky. The largest holders of Airbus stock are European states, allowing the corporation to focus on its long-term goals. The state-owned aeroplane industry is one of the few areas where Europe is still at the top.

Traditional Soviet-style communism yielded subpar economic results, but the Chinese continued to innovate. The Chinese socialist market economy (SME) has private, public and state-owned enterprises (SOEs). China is not capitalist, as the Chinese Communist Party (CCP) retains control over the country’s direction. It is a command state-market economy like Nazi Germany was. Unlike Nazi Germany, which aimed for maximum self-reliance, the Chinese economy integrated into the global economy. It depends on exports, like those of other Asian Tigers such as Japan and South Korea. China’s advantages include a massive market, which enables it to achieve economies of scale, the world’s longest tradition of rationally administered states, and a culture shared with some other East Asian countries that enabled the Chinese to develop quickly.

The ideological vision behind China’s market reforms was that China was underdeveloped and that a fully developed socialist planned economy would emerge once the market economy fulfilled its historical role, as Marx prophesied. The CCP claims it has incorporated a market economy into the Chinese socialist system. The CCP leadership looks at its project through an ideological lens. Proponents of capitalism might argue that China is more capitalist than the West, given its success. Had China failed, the same people would have blamed it on socialism. Others call it state capitalism, as the SOEs that comprise a large share of the economy operate like private-sector firms and retain their profits rather than returning them to the government. On economic organisation, the West can learn from China.

China eliminated extreme poverty, which declined from over 90% in 1980 to less than 1% today. It also became the world’s leading manufacturing economy and the world’s leading producer of unnecessary items that end up in our landfills. Despite its leadership in renewable energy and electric cars, China has also become the world’s leading polluter and carbon dioxide emitter. China’s status as a manufacturer and exporter distorts the picture. By importing from China, other economies appear less polluting. Those who have visited China long and often enough to have an informed picture agree on the following:

  • China is ahead of the West in several crucial fields. Its economy is more efficient. The West, as it operates now, is losing the competition.
  • Cities are clean, and violent crime levels are low. There is intensive surveillance, which we in the West consider intrusive.
  • There is a lot of corruption. Unlike in many other countries, Chinese corruption promotes economic growth by bribing people to get things done.
  • China is a dictatorship, but citizens have options to criticise and influence the government. If you aren’t a troublemaker, you are relatively free.
  • China represses dissenters and has put millions of people in internment camps to re-educate them and turn them into Chinese citizens.

Chinese corporations align with the Communist Party’s societal goals. There is a profit motive, but profit is secondary. The government can provide support through subsidies. In that sense, the Chinese economy looks like that of the Soviet Union. This model achieves acceptable living standards. At present, China outcompetes the United States and Europe in many fields. If our society’s goals are sustainability and happiness, this economic model can help align corporations with public policies.

State control and ownership of businesses, as in China’s, can be a viable way to pursue political goals such as protecting the environment and reducing poverty. Business objectives, such as profit, can become secondary to political goals, provided that corporations receive support when needed. With state ownership, it becomes feasible to ban products or subsidise others without harming or favouring private entrepreneurs. What China has demonstrated is that a politically steered economy can be competitive and achieve acceptable living standards. And so, we should have confidence that a political economy grounded in moral values can achieve acceptable living standards.

Getting to Denmark

In 1997, my wife and I visited a town in Venezuela. The shops there had armed guards. Shopkeepers believed that they needed these security measures. Not surprisingly, I didn’t feel safe there. If you need guns to protect yourself, something is wrong with society. Perhaps criminals had free rein, and you could not trust the police. Starting a business in Venezuela seemed unwise. I have also been to Denmark. The difference is astounding. Venezuela is an extreme case, and so is Denmark. In the 2024 Corruption Perceptions Index, Denmark ranked first, with the lowest level of corruption in the world. Venezuela was at the bottom. Compared to the rest of the world, Denmark is a Paradise.

Poverty, inequality, and the absence of the rule of law go hand in hand. Without a rule of law, you and your property are unsafe, and building a flourishing society becomes impossible. Some societies are more agreeable than others. Economists understand the rule of law as secure property rights, but it is more important that citizens feel safe and can conduct their affairs in peace. High-quality societies don’t come easy. It is tough to have a capable government, the rule of law, and accountability to the citizens simultaneously. One measure the Danes took to preserve their society was limiting migration, but it would be better if all societies were as agreeable as Denmark’s.

That is possible. Denmark became the way it is because of its unique history. The Danes turned from raping and pillaging Vikings into the peaceful nation it is today. Cultures can change dramatically. Danish history includes the Protestant Reformation. The German sociologist Max Weber argued that the Protestant ethic contributed to the rise of modern capitalism. This ethic includes education, hard work, thrift, and moral uprightness. And that affects attitudes towards graft. The ethic was most present in North-West Europe. Formerly Protestant countries are the least corrupt. But every country can achieve the same. Singapore, Uruguay and Japan are also among the least corrupt countries.

So, what is life in a high-trust society? Everyone is a good citizen. The government is clean. No one misuses state benefits. There is no crime. You feel safe on the streets. You can trust the police. The rules apply to everyone equally. A government can’t create a good society. It merely reflects society. A government can’t enforce laws when its citizens don’t believe in and don’t live by them. Denmark is a cohesive society. People feel connected to each other and share the same values. Becoming a global society like Denmark is an unlikely future for humanity, and getting to Denmark is a utopian dream. Unless, of course, unless a miracle happens. Only religion can move mountains.

Latest revision: 6 December 2025

Featured image: Illustration for the first edition of Utopia by Thomas More.

1. Leviathan. Thomas Hobbes (1651).