2016/10/24 Knowledge Forum
Thread: Adam Smith “The Wealth of Nations”
Book 3 Chapter 4 “Towns Improved the Country”
The full title of this chapter is:
How the Commerce of the Towns Contributed to the Improvement of the Country
This chapter provides a discussion of the positive feedback that occurred in Europe and Britain as towns developed and both demanded and encouraged agriculture over time.
This chapter also provides, in the context of the present series on the Knowledge Forum, an opportunity to consider how the principles of Capitalism might be implemented in communities remote from Earth. Let us suppose that the governing charter of a given habitat requires that all activities must be carried out by a minimum of two, and preferably by three competing entities.
A policy along these lines will (presumably) encourage constant efforts to lower price while maintaining or increasing quality of goods or services. However, because competition presumes winners and losers, the losers will fail to secure or to hold onto market share.
Because entrepreneurship requires sophisticated skills of leaders, even if sufficient capital is provided by backers to insure success, success in competition with two established competitors does not guaranteed the first time an individual makes an attempt to secure market share.
A culture that would endure in such a situation must anticipate a proportion of investment will be lost as individuals and teams attempt to take on established groups.
A (very loose) rule of thumb for investors in a region of the United States called 'Silicon Valley' is there will be only 1 out of 10 enterprises that will make enough money to pay for the losses of the other 9, and still provide a respectable return for the investors.
Reference for more accurate study: The Wall Street Journal
The Venture Capital Secret: 3 Out of 4 Start-Ups Fail
By DEBORAH GAGE
Updated Sept. 20, 2012 12:01 a.m. ET
In thinking about design and management of long term communities away from Earth, it seems to me that in order to avoid growth of a static state of mind, such as those which have been observed on Earth for thousands of years when outside forces do not stir things up, it will be appropriate to encourage a constant state of struggle to win market share from established enterprises, and for established enterprises to compete with each other both to meet the immediate needs of the population, and to win new customers as new individuals are introduced to the society.
Returning now to Mr. Smith:
Begin quotation from Page 440:
Thirdly, and lastly, commerce and manufactures gradually introduced order and good government, and with them, the liberty and security of individuals, ...
Science Fiction writers have often attempted to describe communities that might come into being in the future, both on Earth and away from it, whether the occupants are human or otherwise. In thinking back over decades or reading, I cannot recall any scenario within which an author thought it worth while to imagine a competitive system of government such as the United States is attempting to maintain in 2016.
Never-the-less, it seems to me that in order to avoid growth of a static culture in communities which are away from Earth, and quite possibly moving further away over time, such communities should be established so that competition for positions of public leadership (and public service) is built into the structure of the societies, and scrupulously maintained.
In late 2016, the United States has witnessed a disturbing ascendance of a person with demagog tendencies in a national election. This person appears to have successfully appealed to the worst possible instincts of the population, and more to the point, a significant portion of the population has responded.
Mr. Smith wrote at a time when land was still both constrained (in Europe) and wildly abundant (in the American colonies and elsewhere). Land in habitats away from Earth will necessarily be constrained until exploring communities find Earth-like planets. It seems to me that a competitive culture will find a balance between encouraging children to maintain a productive activity, and encouraging better able individuals to assume responsibility for such activities.
Competition between “farms” might be a mechanism for insuring the most able and best adapted to the responsibilities of a particular activity will be able to earn the right to continue them.
Where I hope to end up over the course of these weekly ruminations is with a conclusion that the economy of the planet Earth of 2016 can support a class of distant communities with digital communications reflecting the greater variety of capability of the larger population, while at the same time providing a large and ready market for digital communications from the smaller populations, who may yet offer insights or achievements not occurring elsewhere.
May every member of The Knowledge forum grow financially, intellectually, socially and beyond.