Chapter 13
Democratic Capitalism
Why Not Give It a Try?
Democracy and capitalism have been struggling with each other for some time. Wouldn’t
it be possible to invent a new, digitally upgraded kind of capitalism that is aligned with the
values and foundations of democracies? How would such a capitalism look like? What would
be its elements? In this connection, I will discuss the monetary, financial, and taxation system.
I will also propose investment premiums, to allow for bottom-up projects. Last but not least,
I will introduce a socio-ecological finance system, which would combine measurements
of environmental impacts with new incentive systems. What I have in mind is a multidimensional real-time feedback system, which would allow one to manage complex systems
more successfully, or even enable revolutionary self-organizing and self-regulating systems.
13.1 The Failing Financial System
In 2007/08, a shot was heard around the world. A real estate crisis in the USA had
triggered a financial and banking crisis,
1 which eventually turned into a world-wide
economic and political crisis. More than 12 years later, we can still hear the echo
of these events. Even worse, the crisis has not been resolved. Now, there are many
countries with debt levels of the order of 100% of the Gross Domestic Product (GDP)
or even higher.
2
In order to allow countries to pay at least the interest rates on their debt, the
central banks had to reduce them to almost zero. There have been even negative
interest rates,
3 such that those who make debts will have to pay less money back.
This sounds like paradise, but an economy cannot work like this for long. It will not
anymore reward the companies, which do a good job and perform well. Instead, it
will reward business models that do not work. In many cases, these would even harm
our planet.
1 See https://en.wikipedia.org/wiki/Financial_crisis_of_2007–2008.
2 See https://en.wikipedia.org/wiki/List_of_countries_by_public_debt (accessed on August 7,
2020).
3 Negative Interest Rates, Bloomberg (August 4, 2020) https://www.bloomberg.com/quicktake/neg
ative-interest-rates.
© Springer Nature Switzerland AG 2021
D. Helbing, Next Civilization,
https://doi.org/10.1007/978-3-030-62330-2_13
269
Democratic Capitalism
Why Not Give It a Try?
Democracy and capitalism have been struggling with each other for some time. Wouldn’t
it be possible to invent a new, digitally upgraded kind of capitalism that is aligned with the
values and foundations of democracies? How would such a capitalism look like? What would
be its elements? In this connection, I will discuss the monetary, financial, and taxation system.
I will also propose investment premiums, to allow for bottom-up projects. Last but not least,
I will introduce a socio-ecological finance system, which would combine measurements
of environmental impacts with new incentive systems. What I have in mind is a multidimensional real-time feedback system, which would allow one to manage complex systems
more successfully, or even enable revolutionary self-organizing and self-regulating systems.
13.1 The Failing Financial System
In 2007/08, a shot was heard around the world. A real estate crisis in the USA had
triggered a financial and banking crisis,
1 which eventually turned into a world-wide
economic and political crisis. More than 12 years later, we can still hear the echo
of these events. Even worse, the crisis has not been resolved. Now, there are many
countries with debt levels of the order of 100% of the Gross Domestic Product (GDP)
or even higher.
2
In order to allow countries to pay at least the interest rates on their debt, the
central banks had to reduce them to almost zero. There have been even negative
interest rates,
3 such that those who make debts will have to pay less money back.
This sounds like paradise, but an economy cannot work like this for long. It will not
anymore reward the companies, which do a good job and perform well. Instead, it
will reward business models that do not work. In many cases, these would even harm
our planet.
1 See https://en.wikipedia.org/wiki/Financial_crisis_of_2007–2008.
2 See https://en.wikipedia.org/wiki/List_of_countries_by_public_debt (accessed on August 7,
2020).
3 Negative Interest Rates, Bloomberg (August 4, 2020) https://www.bloomberg.com/quicktake/neg
ative-interest-rates.
© Springer Nature Switzerland AG 2021
D. Helbing, Next Civilization,
https://doi.org/10.1007/978-3-030-62330-2_13
269