把“资本主义”倒过来

Turning "Capitalism" Upside Down

> By Colin Huang · 2017-09-26 · [Original link](https://mp.weixin.qq.com/s?__biz=MzAwNjc1ODg4NA==&mid=2652692558&idx=1&sn=c1f1437255f6c8fb270857ce4e681ab8) (Chinese)
> Our translation from the Chinese original.

Buffett is an admirable capitalist; he is a pure capitalist. His whole career can be described as tirelessly, single-mindedly and rationally moving money around to enjoy the fruits of compounding. I like reading his letters to shareholders: for decades they have repeated the same simplicity, repeated a purity that isn't easy. In his empire, one hand is insurance and the other is investment; with one hand what he sells is the ability to withstand risk, and what he collects is money, while on the other side he puts the money into orchards that have moats and can produce compounding.

Originally, when I started writing this public account, I very much wanted to write a piece about insurance, with the planned title "Insurance, the Ultimate of Capitalism". Roughly what I wanted to say was that insurance is very interesting, and also very much embodies capitalism. The "rich" have capital and "much money", so their ability to withstand risk is strong; the "poor" have "little money", so their ability to withstand risk is weak. So the "poor" need to buy this ability to withstand risk from the "rich". Although insurance really is something many people need, and also gives him a more stable life, or at least a more settled state of mind, in the end, the product of insurance further promotes the transfer of wealth from people without money to people with money. I call it the ultimate of capitalism because it further amplifies the power of capital. A soft, intangible thing like "having money = being safer" is also turned into cash through insurance. If it goes on like this, if the market is highly efficient and undisturbed, and the law guarantees the legitimacy of capital and its compounding, then what may well happen is that the rich get richer and the poor get poorer.

The reason Buffett is admirable, and can even be labeled great, I think, is this: he is not only a supremely gifted capitalist who can play the game of capital to the ultimate; he is even more a lovable person who knows clearly that money is not the goal. On the one hand he enjoys the joy the game of capital brings him; on the other hand he wisely gave the great majority of his money to Bill Gates, who is younger than him, letting Gates carry out the redistribution wealth ought to have, with an easy mind. At the same time, unafraid of criticism, he also urges other rich people to give their money away too, and urges the state to raise taxes on the rich, carrying out wealth redistribution with greater force at the level of mechanism. (What's interesting is that Buffett's father was a Republican member of Congress, and none of these things Buffett now advocates look like Republican positions.)

In capitalist America a marvelous Buffett was born. He got joy from the game of insurance and the compounding of capital, and then lightly handed the burden of the money to Bill Gates. This is so wise; this is probably the simplest, easiest way for a capitalist to get joy in a capitalist environment. Money is first accumulated and then redistributed; in this cycle, Buffett mainly focuses on the first half. In the "post-capitalist" era, suppose the effective redistribution of money is just as important as its accumulation. I can't help wondering: is it possible, likewise using insurance and compounding, or rather insurance and compounding turned upside down, to make the distribution of wealth a bit more even? Do there exist some mechanisms that would let the poor also sell "insurance" to the rich, let the poor also sell some of their own "soft power", their own intentions and ability to withstand risk to the rich, thereby achieving more finely tuned feedback, a cycle of money flowing back from the rich to the poor with a shorter period?

For example, a thousand people in summer already think that in winter they want to buy a down jacket of a certain style. Together they write a jointly signed order to a manufacturer, and are willing to put down a 10% deposit at last year's price. In this case, it's quite likely the factory is willing to give them a 30% discount. Because from their jointly signed order the factory obtains a certainty of demand the factory didn't originally have. This certainty can be turned into the convenience of producing in the troughs of the production plan, and can also be turned into confidence when buying raw materials. The factory can even further sell this certainty on to upstream and supporting manufacturers in exchange for a further reduction in the factory's costs. In terms of the form of the transaction, this transaction is like a group of people each spending 1 yuan to buy a 3-yuan time-limited voucher, and then the factory, because it sold these vouchers, can also go on to buy similar time-limited vouchers from upstream and supporting manufacturers, say spending one thousand to buy three thousand in time-limited vouchers. If these thousand people have a certain credit record, and together they place a jointly signed order expressing their intention but pay no deposit, would the factory be willing to give them a discount? I think it probably would be willing too, only perhaps not 30%; but would 8% do? This is like the factory using time-limited discount coupons it issues itself to buy, from ordinary consumers, an insurance policy guaranteeing purchase in the future. If you think further, there are actually many more forms that could marketize, productize and monetize ordinary people's intentions and ordinary people's certainty about their own future needs. Suppose the system gave each person only one chance to express an intention to buy a cotton-padded coat; then it's as if each person were given a cotton-coat intention voucher (this intention voucher may be something he got in exchange for his accumulated credit). Then is this intention voucher worth money to the capitalist who runs the factory? How should the price here be set, and what limits should the two-sided trade have?

The essence here is that each person (whether poor or rich) is often much clearer than other people about his own intentions, about his own needs and plans at some point in the future. And each person's plans and intentions, and the individual's grasp of the certainty of some behavior of his own, are often valuable to the supplier who meets the demand. It can reduce the uncertainty of organizing production, and can help achieve a more effective allocation of resources and capital. For this reason, I guess that capitalists and the rich are willing to buy this reverse insurance from ordinary people and the poor. This reverse insurance can let every ordinary person's credit and intention be turned into cash. This reverse insurance is no longer the poor accumulating credit and money in order to borrow money from the rich and pay interest (in the case of lending, because the poor have borrowed money they must pay interest, so the things they buy end up more expensive than what the rich buy), or spending money to buy the certainty of life from the rich. Instead it's the reverse: the rich and capitalists pay ordinary people and the poor to buy the certainty of their allocation of productive capital. In the former kind of insurance and financial lending products, money flows from the poor to the rich, while in this reverse insurance money flows from the rich into the poor; there should be a qualitative difference here.

The next questions are how to productize this certainty each person (rich or poor) has about his own intended behavior; how to make it standardizable, circulating like a discount coupon; how to create forms for expressing intention; how to create products that achieve the transfer of this certainty; and how to turn this transfer of certainty into financial products and money. Besides this, one should consider making the productization of this transfer of certainty [Translator's note: the original writes 确性传递, apparently missing 定, for 确定性传递, "transfer of certainty"] decentralized (because its scenarios are too many, and its situations too many), and it must be able to avoid fraud in this relatively decentralized process of producing and circulating "certainty products", and form a virtuous cycle in which good money drives out bad. I wonder whether blockchain was born at just the right time for this "reverse insurance"...

(Having finished writing it, when I think about this upside-down capitalism, it really is a bit interesting :))

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