[MUSIC] What other big social policy tools are there to design society? One very famous one that made a lot of noise was from a social theorist, a really deep thinker called Karl Marx. And Karl Marx developed the theory, Das Kapital. There was actually, also other ramification, he was a polymath, a critical scholar and an economist, a social scientist, sociologist, everybody claims he was there. And then also some politicians took his theories and made political theories out of it. But he was an intellectual academic, and one of the ideas he thought about society and he thought deeply about society. If you read books like Das Kapital, the Capital, it reads like an introduction of 101 economics. Actually most of what he actually analyzed and nowadays has become the foundations of how we think about economics. So they incorporated in the standard syllabus and the standard textbooks. And one of the things that conclusion is that after thinking deeply and observing the economy and how things are distributed, he said, well, they're different classes that emerged in an economy. And why are the different classes? And one of his deep insights was, well, that's because of the interest rate. So the idea is that you have capital and just by the fact of capital through the interest rate, you're gaining more capital. Well, that leads actually to self reinforcing positive feedback loop. Whereas the ones that have capital get more capital and the rich get richer and the ones that don't have capital actually has to borrow and have to pay the interest rate. And get less capital and actually then become poor and that creates a class society, that's why you call this book, The Capital. And the theory capitalism is described in that book and criticized in that book, because he said, well, if you would do away with the interest rate, you would have a completely different society. Now how you would design such as a society, that's something up to question. But it is in the spirit of going out of, thinking out of the box, looking for innovative solutions to see how we can actually make the economy work. If it does work, if it doesn't work, and what aspects of it works. Many of the aspects, many of the ideas he had are nowadays integrated in our economic systems. And one of the indices, so let's look at that. Let's look at this argument of the interest rate. So what we do in the next model in sugar escape number six is we create lenders and borrowers. And how that actually works is that you have loans, loans, tradition in our setup would. And actually, if you think about it benefit from the old and from the rich who don't need as much as they have especially for reproduction. So thinking a bird's eye view of the entire society, it's important for us to reproduce that somebody reproduces. The old and the rich can only reproduce to a certain extent. So there might be some others who could be reproducing, fostering our society and our entire species but don't have enough resources. Remember now to reproduce you need to have at least as much resources that you started out with. So when a fertile agent is in need of sugar in order to fulfill the reproduction requirement, he can go to somebody has too much, gives as much under the reproduction need is met or half of it. And then after ten ticks, so after ten time steps, the borrower pays the sugar back to the lender plus a certain interest rate, they can have a 10% interest rate. Or if there's not enough money, he will default he will give half of the wealth and then ten ticks later, ten timeframes late. That's how we can program, that's one way of programming and you could change that and test the different conditions. So let's see what happens. So here we have our setup of loans, everything else is pretty much the same. We have our replacement neuron that means we do have sexual reproduction and children. Now we color our agent by who is a lender and who is a borrower. So if we go now, we first see the number of agents increases. We start with 400 again, and here we see different kinds of agents. And we see the gray ones are the ones who neither lend nor borrow and we see they quickly decline at the beginning. So they are not very competitive, they don't participate in that lending/borrowing game. We see here, the dark purple are the lenders, and we see they quickly increase their wealth. That makes sense, because they're getting interest rate, right, they're getting interest rate of 10%. Whereas the borrowers here, the ones who borrow, the pink ones are kind of like here in the middle, they're doing better than the ones that do not participate in lending and borrowing. And here, this medium purple one are the ones who are lenders and the ones who are borrowing. So we see clearly that we have a social hierarchy, but the social hierarchy, overall, seems to benefit everybody. One thing we can also notice here by the number of agents is we don't have these fluctuations anymore. It's not like the population is overdoing it and completely exploiting its environment. Because even if you get into a hard environment, if you get into a recession where there's not enough resources around. You can lend some money and you can get over the hardship. Now it seems we're reaching some kind of plateau. Let's see if that will accelerate a little bit, so we can see how that actually turns out. During these times you can also see here and there are changes, the ones who are neither lending nor borrowing money are going up and now they're going down again. And wow, we never had so many agents yeah, we had 1,300 agents. If you reach that very quickly, but stable, we don't fluctuate to this 1,300. We are getting a pretty stable society and we're getting a social hierarchy at the end. It took a bit to settle in, but we have the lenders on top, the capitalists, the ones who are lending money and getting interest rate, getting rich just by having capital. Then afterwards we have the ones who are borrowing, the ones who are benefiting from it. And actually getting over these drought, over these times where they're not enough resources by by borrowing money. Then comes the ones who neither participate in either of them and then at the bottom there are the lenders and the borrowers. Interesting, you can think about why they are at the bottom. So we now grew a social hierarchy, we grew different classes by this lending and borrowing. So it has something to do with the classes, as Marx said, all right? We do clearly see different classes just produced by this phenomenon of the interest rate. So the interest rate is a very important aspect of the economy and very related to the class system in society that was Marx's analysis, right? So now we can also see we can combine it with something of our previous result. For example, our inheritance setting is let's turn on our inheritance setting. And what we do now with this inheritance setting is not only that you inherit the fortune that your fathers and mothers, your parents made, but you also inherit the debt. Wow, let's imagine that. So we don't only pass the fortune on, but if your parents inherited debt, you also pass the debt on. What do you think will happen in nowadays society? That's pretty much a shot in there, if you can think through that amazing, I don't know if I couldn't. So let's check it out and that's what we do in agent based modeling. We just test it and see what we get and you can see here, the gray ones are going down again, the lenders are again, getting their position on top. The borrower seems like it really doesn't have a difference if you put this policy in, right? It seems like we pretty much get the same result. So well, that might be a policy that doesn't really matter in the big scheme of things. Wait, now something happens. Now somehow the gray ones, the ones that are neither lending nor boring, rare really increasing, they caught up with the capitalists. That means the ones that don't participate in the financial market, that don't get get credits and they don't get mortgages, these ones are now, wel, l they are out competing everybody. They're here now on top after 300, let's say after three generations, the three generations playing this game of passing on debt to others. Now I see some fluctuations here and now we get a different kind of social hierarchy. Clearly the gray ones, the ones who do not participate in the financial capitalist system of borrowing and lending an interest rate reimbursement are now the ones who do best. Followed by the capitalists, followed by the lenders, and then followed by the borrowers. That means yes, if I would have a law like this that passes on not only the good fortune but passes on also the debt that I have. Actually, in this case, the group that is naturally competing on some other basis, maybe they have a better vision, maybe they have a better metabolism. Maybe they're just more lacking some other sense that they take the right turn at one point, but we can see. Yeah, it would be interesting now to test that for evolution and see if that brings brings on more evolutionary pressure on society. Because now it seems like yeah, the gray ones, which are the ones who compete on basis of the natural endowment seem to out-compete everybody else. So again, we can influence society just with a quite simple change in policy, in public policy.
