As for capitalism and productivity I highly recommend Dan Lyons’ Lab Rats exposing the complete chaos that human management is in.
People dynamics are complex and well, dynamic. Changes and rules carry potential for difficult to predict outcomes.
Humans are not hens and capitalism has turned out to be extremely unproductive in many situations requiring collaboration — who would’ve thought that putting short term self interest above everything else is not the best of ideas.
So there are two ways we could approach this game. In the game theory optimal solution my goal is to minimize my worst possible outcome. In the exploitative solution my goal is to maximize my best possible outcome. This has an oddly direct analog to this conversation.
> "..who would’ve thought that putting short term self interest above everything else is not the best of ideas."
I fully agree with you. Elevating self interest to the highest assumption is an awful idea. But in practice it's the least awful of other even more awful ideas. By assuming the lowest common denominator (self interest > all) you create a scenario where the worst scenario, of people behaving in this way, is not catastrophic in any way. In fact it's wholly expected. You will probably never have a utopic outcome, but you'll also probably never have a catastrophic outcome.
Other systems have been trialed multiple times. These systems are phenomenal in theory. So long as every person agrees to cooperate and play their assigned role in a fair and equitable way we can have a utopia where no one ever need go without and everybody can live a comfortable life without fear of ever going without. The problem here is that these systems are extremely dependent upon good behavior. With good behavior, you get what some might call a utopia. But when bad behavior emerges, instead of a utopia you get starvation, oppression, and a general nightmare of existence.
---
Maybe one of the coolest things about capitalism though is that you're free to try any system you want, even within it! For instance the Garden of Eden [1] has been a phenomenally successful fully self sufficient independent commune. By contrast, if you'd like to try out a capitalist (or even some sort of communal system) within an enforced social economic system, you can't. And trying to do so would generally be met with a rather aggressive response from the government. Because once again, the sustenance of such systems require everybody play their role. If people just start doing whatever they want, the whole system would collapse. With a half dozen ideologically aligned people on a few acres of land, this works out phenomenally well. With millions of diverse people on millions or billions of acres of land, it tends to be somewhat less successful.
It also requires a certain wilful denial of the mounting evidence that catastrophic outcomes - including starvation, oppression, and worse - have already happened for many people, and are likely to happen for many more people in the near/medium future.
Having said, it's true that this is the Number One problem that humanity has to fix now - how to deal with bad actors?
Clearly, elevating them to positions of immense power and influence through political, corporate, and economic systems that attempt to deny their toxicity isn't the correct answer.
Meanwhile there's a certain unaware irony in applying the "toxic" label to employees, but not to employers.
Most of the FAANGs (with the possible exception of Netflix) and many prominent unicorns could be considered toxic actors in exactly the sense described in the paper the OP is based on - self-regarding, high-performers generating high productivity gains for insiders, but a net social and cultural loss overall.
Things like this are pretty improbable, but far from impossible. The odds of catastrophe are probably higher than utopia, but your concern for catastrophe should still be at least somewhat comparable to your enthusiasm for the odds of a utopia emerging from capitalism. Neither is at all likely.
----
As for bad actors, I imagine at one point the vast majority of politicians probably thought about getting involved in politics to try to make the world a better place. They were likely good people, like I think most tend to be. But at the same time I think we are all probably alot more 'morally flexible' than we'd like to admit.
Imagine I tell you I'll give you a million dollars a year if you agree to spend an average of an hour a day to engage in divisive trolling online. I somehow have a mind-reading device to ensure you will genuinely and actively work to do this and further my malicious ends. Regardless, unless you're already quite rich, you're probably going to agree after approximately 0 seconds of thought. What's one more troll even matter, right?
Now imagine you're in power and I want you to do something awful. So I give you a nice long power point presentation, more than enough to ensure you can convince yourself it's a good thing to do, and then offer you a very enticing sack of incentives as well. You're suddenly going to do a great job of convincing yourself that that snazzy powerpoint was right on point. I mean if you hold the banks accountable the economy will really collapse, and people will starve, it'd be catastrophic. The only way to save the world is to not only not hold the banks accountable, but to give them billions of dollars instead and work to actively re-empower them. Yes, Mr. Sachs, I see your point. I completely agree with you! Now hand me those sacks!
----
So the whole issue isn't about getting rid of bad actors. You need to somehow elevate people to power that cannot be swayed by self interest. I don't think this is, or ever will be, possible. Even in a time where we have Star Trek style replicators that can pump anything out in an instant there will still be incentives - ego, sex, power, fame, legacy, desirable appointments, ideological victory, etc.
I do fully agree with you on your pointing out the quite hypocritical distinction between behavior of employer and employee. Our entire economy is increasingly be driven by culturally regressive business endeavors. I think there are some solutions there, but this is another topic altogether.
Pure capitalism and pure socialism are both destructive ideologies that inevitably lead to cruelty. Hasn't humanity moved on from this false dichotomy yet? Successful societies manage the balance between the two.
I do very much appreciate the premise of being free to try different approaches within the framework of capitalism.
However all these approaches compete with actors who do not comply to good behavior and often use highly predatory tactics both internally and toward competitors.
Also, capitalism fails to account for external factors. Selling gas pollutes everyone’s air for free. Producing billions of plastic bags and bottles affects everyone’s oceans and rivers and surroundings, for free. Maximizing exploitation and squeezing one’s workers in an employer’s market creates dangerous levels of equality, chronic diseases and destroys families, for free. Extracting and exploiting attention from a full generation of children will cripple said generation in unpredictable ways, and is still allowed, for free. Same with the destruction of privacy, worldwide.
Capitalism is good at extracting and turning resources into money. It is not good in a world of limited resources.
And I’m not even mentioning the acts of lobbying and collusion which allow corporate entities to change the environment to suit them better than it does living human beings, not unlike a colonizing force.
Capitalism selects for what works for certain individuals.
We don't know that the success of capitalism isn't just a pyramid scheme that has yet to destroy the biosphere. We only know that on the scale of a few lifetimes, modern capitalism has worked ok-ish for us in the first world. It's been pretty rough on the former colonies and the proxy states.
Capitalism is very new. Mercantilism is just in the rear-view mirror. Capitalism has been subsidized by the simultaneous rise of industrial technology.
There have been flourishings of sudden well-being in the past. The Romans, the Mayans, etc. They discovered new techniques of agriculture, shipping, weapons manufacture, bloomed and expanded and collapsed and died.
Capitalism has not yet matched the long-term success of the Roman republic or the subsequent empire, let alone the Egyptian and Chinese systems of successive dynasties supported by a civil service.
It's a huge mistake to assume that capitalism works better just because we've been doing ok with it for a while and because it's the system embraced by the country that won WWII by being across an ocean. That gave capitalism a big leg up but the headstart is running out.
Kleptocracy has a good chance of out-competing managed capitalism in the next fifty years by using regulatory capture.
If you want to avoid regulatory capture by deregulating, remember that an unfettered market has always degenerated into kratocracy (government by the powerful) and kratocracy tends to turn into aristocracy.
Capitalism: Doing OK for now!
It’s one thing for me to personally think I’m at the end of history chilling in a coffee shop in SF, it’s quite another when I’ve got the finger on the nuclear codes.
From Wiki:
> The end of history is a political and philosophical concept that supposes that a particular political, economic, or social system may develop that would constitute the end-point of humanity's sociocultural evolution and the final form of human government.
This is the nice thing about capitalist systems. It simply selects for whatever works. At times this is not a good thing (e.g. - perhaps convincing people to buy drugs they don't need could be more profitable than making drugs people genuinely need), but in general it tends to be better, and more organic, than what any individual or group might try to dictate as what should be desired.