The point of this diagram is to show not only the major historic periods in production, but also that each one requires a certain model of economics in order to properly take advantage of it. In fact, doing anything else can even be harmful.
The main lesson here is:
If you have an environment of natural* scarcity, then:
- You must use a scarcity economic system (e.g. capitalism, socialism, etc.)
- You cannot use a post-scarcity system (e.g. Technocracy). Doing so would confer none of the benefits of a system like Technocracy, and only be a scarcity system anyway.
And if you have an environment of technologically-produced abundance (post-scarcity), then:
- You must use a post-scarcity economic system, and
- You cannot use a scarcity economic system. Attempting to do so causes ever-increasing social and economic instability, waste of resources, destruction of the environment, and will inevitably collapse upon itself, resulting in even greater problems.
* Our current system in North America experiences scarcity only because it is artificially maintained.
The Economic Eras
As we can see from this chart, each major technological era also requires its own form of basic economic model. The Pre-Agrarian era, dominated by barter, did not require any advanced economic scheme because of the simplicity of life during that era. The coming of the Agricultural Revolution (point A) allowed people to make far more food than before, freeing up some of the members of society to other tasks, such as carpenter, blacksmith, armorer, artist, performer, philosopher, scientist, or statesman. These specialized fields grew and helped advance technology and science to the point where we were able to develop the Industrial Revolution (point C). During this time however, people needed something more sophisticated than simple barter in order to better take advantage of the opportunities that agriculture made for them, and hence the Price System, or use of money, was devised. With this people were able to accumulate wealth in greater amounts and thus partake in bigger and more advanced projects, furthering the progress of civilization.
The Industrial Revolution represented an even bigger change in society than did the Agricultural Revolution. This can be seen when one considers that before 1800, 98% of all work done was by human muscle power, with the remaining 2% done by non-human or "extraneous" energy, such as animals, or simple water wheels. After 1900 however, with steam power, internal combustion, electricity, and factories all advancing at a tremendous pace, 98% of all work done was now being done by machines, with only 2% being done by human beings. Since the amount of people working did not significantly change, this means that the amount of work being done was vastly greater than ever before in history.
Another important change brought about by this event was the movement of workers. Just as the Agricultural Revolution virtually eliminated the hunter-gatherers and put them to work on the farm, so too did the Industrial Revolution take people out of farms and put them in cities, to work in factories, with construction machines, or even in other pursuits like science, arts, and finance, in even greater numbers than before.
With such a change, does it not follow then that our basic economic model would need to change again, just as it did at the advent of the agrarian era? Instead, we continue to use the old system of money and debt, to the detriment of all. Rising crime, overcrowding, pollution, and wasted resources are all hallmarks of our society today, long overdue for a change. This change was discovered by the Technical Alliance during their work in the 1920s, and what they found was that the current Price System, that aside from scope and complexity, had not changed in its basic model for thousands of years, and was growing increasingly incompatible with our new mode of industrial production. Industry had given us the capability to produce an abundance, and destroy the scarcity that the Price System is so firmly based on. No amount of "fixing" or "reform" can change its basic nature, and it is that basic nature that continues to give us our ever-increasing problems.
For each method of production, there is a corresponding method of distribution that is compatible with it. To use anything else invites problems, even disastrous ones. If people had continued using barter during the agrarian age, not only would this have greatly limited their accomplishments upon which we live today, but it would have invited all sorts of problems, such as the physical management of large amounts of crops, or livestock. Too much time and effort would have been wasted simply accounting for these large sums, and this "overhead" steals effort and resources better put to use helping society. The same situation exists today, with our massively complex financial system taking up time and energy out of more productive pursuits. Banking, finance, trade, stocks, speculation, currency trading, advertising, marketing, accounting, etc. all represent wasted effort and resources, and the subsequent lowing of the standard of living available to all. It is a massive "overhead" that is forever increasing, for as long as we continue to abide this fundamental incompatibility between our production and distribution. It is time we began looking at what we can do to adjust to the system of production we want, because the when two things are incompatible, one of them has got to go, and I don't think that most people would like to go back to living in the 18th century. In fact, even if we wanted to, we couldn't, for our population has outgrown this continent's ability to support an agrarian economy, and any such change would result in a drastic and painful reduction in our population.
So the choice remains: do we keep our outdated economic system, and go back to 18th century farm living, with most of us dying in the process, or do we keep our technological way of life, eliminate the wasteful "overhead" and embrace a new future fully compatible with our production, taking full advantage of it and finally being able to solve such long-standing problems as poverty, disease, homelessness, poor health-care and education, pollution, and overconsumption of resources?
One last point for clarity: The periods on the chart between points A and B, and C and D, represent the "transition periods" when the new mode of production is becoming more widespread and common. Initially, only a few places use such methods, and only on a small scale. Over time however, the advantages of the new system become more well known, and more and more people begin to use it. As this happens, the need for a new economic system grows, and eventually becomes so big that any continued use of the old system not only hold a society back, but causes it the increasing problems that we have already discussed (points B and D). By the estimation of the Technical Alliance, point D for North America has already occurred, in 1929.