Economic calculation and industry

I spent the last section answering one of the two big challenges for a non-reciprocal gifting economy: Will people work? Now it's time to turn to the other big challenge: Will things go where they need to go? This is the issue addressed by teh economic calculation problem. It's such a big question, I'm going to tackle it in three different sections: this section here on business and labour, another section on distribution, and a third section on supply and demand signals and aggregation (which is where I talk about giftmoots).

The questions really being addressed here are:

• why would businesses create and supply certain products?
• how would we prioritise where those products go?
• how do we put all the relevant information together?

The answer in an exchange economy is usually related to prices. Businesses create products because they are profitable, and supply them for profit. The products go to the people who can pay the most for them. And the prices themselves indicate if something is in high demand or has a lot of suppply.

Of course, a non-reciprocal gifting economy does not have money and does not have prices, so in the following articles I will examine some of the solutions that work for such a system.

Worker motivation by industry

Earlier I claimed that people would likely work until their quality of life became an acceptable level, and then they might stop to simply enjoy life. (This, of course, puts aside the idea that some people's ideal quality of life - maybe the majority of people - includes some sort of work.) I also claimed that the quality of life would generally increase the more people were working (with some caveats about what constituted work, and a potential limit where there are diminishing returns for each added worker). The economy would then reach some sort of equilibrium, where enough people would stop working that (until some innovation occured) the quality of life would no longer improve.

But it is a simplification to propose that there is a linear scale of quality of life. What one person finds signficant to their quality of life is something that someone else might find problematic or distasteful. An individual person can measure quality of life by more than one factor, and those factors won't necessarily improve or degrade in sync with each other. Instead, we might find that some people prioritise hospitals over general practices, or travel accessibility over educational accessibility, parkland over movie theatres, and so on.

With that in mind, it might be useful to suggest that the general quality of life measure can be broken down into various different aspects, maintained and improved by different industries. There are a couple of ways that I think it is meaningful to think about this: as workers in the relevant industry, and as potential workers outside of the relevant industry.

In the relevant industry

This is the easiest reasoning to follow. Let's say that someone values healthcare, and their acceptable quality of life includes healthcare. The original claim was that if the general quality of life fell below their acceptable level, they would be motivated to work. Within any particular industry, the claim would be that a worker would be motivated work in that industry if that aspect of quality of life was unacceptable. So, for our example worker, if the healthcare industry were below an acceptable level, they would be motivated to work in the sector, and if it were running fine, they would not be motivated to work in the sector.

One advantage here is that people capable of working in the industry could have a relatively robust understanding of the industry, where it was failing, how much better it could do, and so on, whereas an outsider might not. We already see this with volunteering - when industries like healthcare and disaster response have difficult conditions, there are often experienced people who volunteer to help out and fill the gaps between the current quality and the desired minimum quality.

So the general movement toward an equilibrium could occur not just for general quality of life, but for specific aspects of quality of life, as workers for that sector move in and out of work.

But industries are completely separate societies. People aren't born into healthcare and then choose whether to work or not. Instead, people choose whether to work in certain industries or not. A person might choose between working as a teacher or a nurse, for example. So workers will also assess whether any of their preferred industries are meeting their acceptable quality of life levels, and then choose which industry to pursue. A nurse might change to become a teacher if the healthcare industry is performing well but the educational sector is understaffed, or a new worker may choose which industry to go into based on their assessment of which needs most improvement to meet their satisfaction.

Outside of the relevant industry

But not everyone has the capability to do every job, and for a variety of reasons. That means that not everyone will be able to enter into an industry that they would like to see flourish more. But there are still several ways that these people can express their preferences through work.

For example, a person who wants to help improve the healthcare industry does not have to work as a healthcare worker, but could work in an administrative role, cleaning role, or other critical support role. And that work might not be directly tied to the industry, but incidentally or occasionally associated with it - for example, someone could take a cooking job that supplies meals to hospitals, but not solely or constantly.

A person could also work in an industry that they feel is associated. For example, a person who loves television doesn't have to work on a tv show or building tvs to support the industry, but in the energy industry, the telecommunications industry, the catering industry, and so on.

On the other hand, they may think that working as, for example, a gardener or an arborist is unrelated, and not pursue any work in that industry, even if their favoured industry is under-performing their quality of life desires. So rather than dissatisfaction with overall quality of life translating into simply any work whatsoever, it would translate into work only in certain industries. This expression of preferences directs resources towards some industries and away from others.

This is a type of economic calculation where individual preferences have collective force to direct resources towards the aggregate wants of society, and it is done without money and without prices.