Democratizing resource allocation

Main article: Societal optimization

Main article: Economic systems

One of the primary benefits of a system like ours will be in improved resource allocation. Current resource allocation systems (eg regulated market capitalism) waste a tremendous amount of wealth on unnecessary labor and goods. Furthermore, we distribute wealth in counterproductive and undemocratic ways. We underpay manual workers, overpay managers, maintain positions in which no actual work is accomplished, create make-work projects, spend on luxury goods (an example of the flat part of the pareto curve), and underfund investments in infrastructure, education, and research. Value in capitalism is whatever someone is willing to pay. Value in socialism is decided by a government. Although most economic systems are an amalgam of both, probably for the better, the result is not an optimal allocation of resources but rather one decided by interested parties, usually the powerful.

We can do better by choosing an economic system more objectively focused on optimized results. This de-emphasizes the role of self-dealing, including ideology, and re-emphasizes the role of practical outcomes. One ideological conflict, for instance, is how best to provide health care. Ideological debates will focus on whether it is a function of government to provide such services or whether it should be left to the individual (and market). But if we agree that our societal goal is to maximize health services at the lowest cost, we already have at hand the optimization problem that should govern the question. Some won’t like the answer because it may require government intervention but if this is the case, the optimization problem was not stated correctly, at least for them. Others won’t like the answer because it would be contrary to their own interests but, again, if this is the case they signed up dishonestly for the optimization problem. Their optimization problem was to produce a health care system that minimizes their cost. At any rate, once we have an optimization problem everyone agrees on, it is a matter of constructing a policy likely to achieve this outcome.

How might this work? Ideas and perhaps full policy proposals will be put forward by interested participants. But remember, since we are dealing with a clear economic problem, everything we do from this point forward is really optimization of an objective function, or at least the generation of the Pareto optimal curve. Many ideas will come from participants. These ideas will have to be assembled into full policy proposals, perhaps by a few people who have been designated for the task. A “comment and review” period will ensue where the public provides feedback on the proposals and they are modified accordingly. When the proposals are finished they will be rated for cost and benefit. It is presumed that enough ideas will be generated that a Pareto optimal front can be established. This will depend on how well the design space has been explored. Regardless, a Pareto curve will be established and the proposals on it will then be voted on by the public, perhaps through a cardinal voting procedure. Once the winning policy is selected a further optimization round might be contemplated by, for instance, combining with the winning policy elements of the next best policy. The rating of the optimized policy can then be ascertained and, if truly better, adopted.