Capitalism is a remarkably effective economic system which works under two basic assumptions. The first assumption is that all exchanges are locally optimal and mutually beneficial, which entails that they reward excellence and generate value. The second is that all parties have equal access to these exchanges. If those two are valid predicates, the resulting system is as fair as it can reasonably be and will generate collective wealth consistently.

Where pure capitalism goes wrong is where it is in violation of either predicate. Unfair transactions benefit only one party, or encourage suboptimal selections. These can exist for emotional, behavioral, or otherwise extra-economic reasons. In the ‘emotional’ category, major examples are gifts, inheritance, and nepotism. These result in consolidation of wealth, as money stays in one community or family- against its natural tendency to disseminate. Human psychology can be abused towards these transactions, most notably in marketing and advertising (preying on social pressure), insurance (preying on fear), and gambling and drugs (preying on addiction). These also push towards wealth inequality, and are different from the previous group only in the moral standing of the perpetrator. Finally, there are extra-economic factors. Power imbalances enable an economic party to manipulate their position in a transaction without providing additional wealth. For example, in crony capitalism, wealth can be exchanged for political power. With enough wealth, the distinction between it and power is immaterial, and that power can be used towards monopolistic ends, among other abuses.

Violation of the second predicate is limited to discriminatory practices. Those can be divided further into innate characteristic discrimination, class discrimination, and chosen characteristic discrimination (eg. former convict, tatoos, homeless).

These issues cannot be skirted. They exist at a conflict point between society and economics, and they result in a dystopic long-term outlook for capitalist society.

But we can combat them with regulation. With substantial research and effort I have come to a set of restrictions which maintain economic and social freedom, but prevent long-term decay. Without further ado

  1. Limits on inequal trade.

By bounding inequality in transactions, we can limit the power of those interested in making them. For example, a hard limit of $60,000 earned through these unfair transactions every 15 days grants individuals the economic freedom to be self-sufficient in these fields, but bounds the impact on the overall economy to a much smaller number. Naturally I foresee some complaints with this regulation- shouldn’t someone with money be allowed to give it to someone else as much as they like? Sadly, no. The consequences of these actions are simply too disastrous to leave unfettered. Or perhaps someone might wonder how these unfair transactions can be spotted, as trade can happen in private, and value is often immeasurable. For this, read on, the next regulation will explain. If you’re worried about how this might apply to inheritance, that will be covered in regulation #3.

  1. An anonymous, universal, centralized trading depot

Discrimination is impossible in anonymity. AWS wis the go-to example for an effective implementation of such a system, although it applies only to services. Imagine instead a government-run singular system that enables the public exchange of goods and services while maintaining the privacy of the individuals making those exchanges. Such a system would make trade regulation much more effective, and would enable economists to get a true mathematical notion of the value of a given property.

  1. Inheritance dissemination

In the current economic system, an individual who dies is entitled the right to pass their belongings on post-mortem. This is nonsensical. When an economic player dies, they can no longer make educated economic decisions, and should not be granted the right to do it anyway. Instead, I propose a structure that follows logic a little more. When someone dies, they are buried with all of their money and property, save for their three most valuable items which they can freely pass on. After a predetermined grace period, everyone will be free to take these items on a first-come first-serve basis, up until the point where they rot in the ground. This system prevents the consolidation of wealth on a large scale, but on an individual scale inheritors will be able to claim what is rightfully theirs if they are fast enough.

  1. Rewarding skilled labour

While an ideal capitalist system features agents who always buy products with the greatest value per cost, in practice they frequently prefer cheaper products regardless of the difference in quality. This means that unskilled sweatshop labour can be exploited for cheap goods that often dominate in a market against superior but more expensive competition. I propose we implement a system that rewards artisans on a per-good or per-service basis, granting them access to new markets as they prove their ability to produce quality goods. For example, a novice leatherworker is only permitted to produce simple gloves until they’ve proven that they can do so effectively, while a more experienced leatherworker might produce a studded leather shield without the worry of being forced out of the market by an inferior product.

There are other points of note, more trivially resolvable in this system. People are afraid of AI taking down entire industries? Simply illegalize botting. By banning the trade typical of the real world (with our centralized currency and trade depot), we can prevent exchanges for political clout or otherwise unethical goods. If someone spots a flaw in this system and tries to take advantage of it, they violate a law against knowingly exploiting bugs.

While it certainly could use some fine tuning, I have no doubt that these regulations will have very long-term positive effects. And for anyone who is used to and prefers the old way, we’ll simply provide an ‘old-school’ version of the economy, grandfathering the option to those who have existed as economic players before the transition.