5.0 New Design

To design a political economy to harness discovery, invention and innovation to the public weal will require profound changes from the original design of the political economy that was designed to harness the pursuit of property to the public weal. The original design strengthened contracts so that individuals with different abilities could enjoy the fruits of their labors in acquiring different amounts of property. The design could be considered a compromise between the mass and the economic elite in that it inhibited leveling, but at the same time gave the mass a vote in direct election of the House of Representatives. Third party effects of two party contracts were either small or were ignored. For example, pollution did not become a problem of major policy concern until the 1960s. In the original design science was subordinate to economic interests.

To harness discovery, invention and innovation to the public weal we start with the premise that two party contracts frequently have large third party effects that need to be regulated to promote the public weal. This means that the design must compromise between three groups--the mass, the economic elite, and the scientific elite. The scientific elite both promotes discovery that leads to invention and innovation and must determine if and how the third party effects of economic activity are to be regulated. This, obviously, is a very difficult problem.

One of the important themes of the book is increasing the rate of innovation to more quickly utilize the higher rate of invention created by the social innovations discussed in the previous section. One of most important areas of invention are the continual advances in information technology. Many current and future innovations are based on implementing processes whereby man augmented by computers increases from being a sublinear to a polynomial processor. What this means is that while unaided man prunes large sets without considering each member, computers can perform a linear, quadratic, cubic or even higher power number of operations on the members of the large set in a reasonable amount of time.

The issue we shall address is how is man augmented with a computer more efficient than man without a computer. We shall not consider the question of whether a computer can think, because software that is purely administrative such as the software that runs an automatic teller machine, ATM, is efficient even though it is definitely not intelligent. We shall call artificial intelligence creations such as expert systems, case based reasoning, genetic algorithms and neural nets quasi-intellegent software to indicate their severe current limitations.

The first topic to consider is a discussion of the advances in information technology. An idea attributed to Marx is that the superstructure of the political economy depends on its technological basis. This idea can be argued from the perspective of microeconomics in that the technological basis of society determines what forms of organization are efficient. At least a general knowledge of information technology is necessary to understand informational society. Then we will discuss the impact of this technology on automation and the income distribution.

We present an analysis of community to solve the following design problem. If society is to reduce the demand for energy and the consequent global warming, activities should be organized either locally or through communications channels. At the same time because economic relationships will be under constant change the community must provide nuclear families great support by involving the residents into the community. We shall demonstrate that the choice mechanism coupled with the global search capabilities of computers could lead to a successful design.

The economy we must consider the full impact of innovations made possible by increasing unaided man from a sublinear processor to a polynomial processor. Consumers aided by computers will more closely approximate the ideal of a rational consumer. Economic firms will be constantly transformed by a high rate of invention and innovation that will require making economic activity observable to researchers in universities and other research institutions.

A major impact of increasing man to a polynomial processor is to create a major conflict between efficiency and privacy. Man unaided by computers is limited in ability to process large amounts of data so that he has little demand for vast quantities of observations on individuals. But, aided by computers man can data mine extraordinary amount of details of individuals looking for patterns to exploit profitable. Such accumulations of data are a major privacy problem eliminate privacy of individuals and subject them to all kinds of possible abuse. Resolving this conflict will be called operational information policy. Another conflict that needs to be resolved is the need for observations of the political economy to promote a better understanding of the behavior of the political economy. This information policy will be called scientific information policy.

To improve the governments ability to innovation we must first resolve the conflict between the mass, the economic elite, which is now usually corporations, and the scientific elite in creating a much better system of checks and balances. This will increase the prospect that government actions have the properties of general benefits, efficiency and consistency. Also to make government a better innovator a vast decentralization of governmental functions is proposed.

Finally, with the advance in DNA research and the computational resources to cope with the resulting amount of data, the individual must deal with his or her genes. This will result in one of the great historical adjustments in what is meant to be an individual.