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Tuesday, June 08, 2010

Government and Markets are competing systems

After I shared the list of ideas (download from Scribd) I discussed in my book "Subverting Capitalism & Democracy" (buy on amazon) I have received my first feedback. Ellen Di Resta, an innovation consultant and a dear friend, liked my proposition that Government and Markets are competing systems. Understanding the implied competition is critical to understanding role of governments and markets.

I believe that both government and markets are will of the people. People express their opinion through votes and through prices. Today, voting is limited - at the most about 50% people vote. while  almost everyone, including the poor, are connected to the markets. It appears that markets are better equipped to solve or do as people want. However, there are differences. 

Firstly in the way we pay for services of governments and markets. Markets use efficient mechanisms (pay-per-use) while government uses unfair mechanisms (everyone pays - as taxes).

Secondly, markets are exclusive. They are open to those who bring value to exchange. The influence on market is proportional to the value you bring to the market. Government, on the other hand, is inclusive, more just. Everyone has the "right" to participate. Everyone participates equally.

I argue that since people participate in both, they often confuse their roles. This allows, I believe, expanding governments, weaker regulations and general dissatisfaction with the government about taxes. I believe we need to fix this to get to a better system. 

We should interpret the responsibility of government in this context.