The past year (2008) has been the most tumultuous and exciting for someone who has an interest in, and understanding of, economics and the human condition. Something I had been hoping for occurred, the ground was finally tilled and prepared for a new system of trade and interaction amongst the people of the world. The dead wood of Communism had been burnt and removed in the late eighties, all that was needed was the eradication of the weeds of capitalism and the soil is now vibrant with the desire for new growth. A new way forward that encompasses the best of what we have had before, and what is needed for a sustainable future. A system that provides both freedom and security, and puts power into the hands of the many rather than the few.
A system that encourages long term planning rather that short sighted profit, a system which allows long term nurturing to greatness rather than the elevation of the fancy of the time. A sophisticated but simple rock on which each individual or group of individuals can achieve what they desire most, not what is most necessary. It makes proper use of the capital foundations our forbears have lain for us, and of the highly integrated information and banking system we now possess.
I propose a very simple money or wealth distribution system,. Working in real-time through the already established electronic banking system it syphons off a very small amount of every transaction (or movement) of money and redistributes it in an even manner to each person in the economy. This is flow taxation and flat welfare (more info:http://iwillknow.jesaurai.net/?page_id=316) to give it terms that may be more familiar, but this is beyond normal taxation it is mainly a regulatory sump for the economy, collecting surpluses in overactive economies and topping up slow ones with more inflows.
The social effects of this system are massive. A flat income of $22 000 a year for each individual (citizen) breaks their cycle of work/consume to survive, and removes the fear of being retrenched. And for business it gives flexibility in employment, only taking on workers when required and releasing them when they are not. It also allows qualitive decision making. Is this job right for me? What are we trying to achieve from this business? Who do we help? How do we effect the environment? Questions which have always been buried under the necessity to make a return before anything else can be considered.
I also read in the New Yorker recently a story about genius, and that many, nay most so called genius’s take many years to learn and hone their skills to express their genius. And in order to survive and flourish through the long years of toil they relied on benefactors,. Family and friends to financially support them. That made me think; how many other genius’ could have given up on their preferred path because they needed to earn a living? I think many. And one could argue that given the time and freedom we could all find our inner genius no matter what field that may be in. This new system allows people to try. And we would hope humanity will be better off for it.
The question which is probably most freighting is: can we be trusted to still do the mundane necessary things of survival? Will we still grow food, clean the streets, gut fish, clean sewers etc.
I admit I have my doubts too. I look to examples where countries have a good welfare system already and see if these things are still done, whether their society still functions. Denmark for instance offers 80% of your previous income as unemployment benefits, and their society functions well. Sweden and Norway also have quite high levels of welfare, and their societies work fine. Their streets are cleaner than most European cities and their public amenities are some of the best in the world. This suggest given the choice people will be altruistic, they will look after the common good.
I think once people become used to the idea that they are doing ‘work’ for reasons that are not just survival and status they will hopefully realise these things just need to be done for the good of us all. And you will probably find unpleasant jobs will be quite highly paid. Also the sigma attached to ‘dirty’ jobs will vanish as those willing to do so will have moral as well as financial status.
The other problem may lie in the collection of money, will people avoid the system of exchange in order to avoid the syphon (tax) of funds. The tax is set at a very low percentage 1% to 0.5% the only people that would find it financially beneficial to avoid the tax are those that turnover huge volumes of money for small returns on that turnover. Money market traders, share market traders (short term speculators), and gamblers. I envisage a lower tax account for these traders so they don’t disappear completely, but the daily bump and hedge speculators would diminish significantly. This is not a bad thing, and could actually be beneficial as the capital being used for these short term investments would move to longer term, hopefully tangible investments.
As I have touted this idea around the most common reaction is blankness, its as though people feel guilty for receiving something for nothing, the triple link between work, income, and consumption is so engrained into our modern psychi that it may take a generation for peoples thinking to really open up. This is good and hopefully means people will still want to work and contribute, and will use their new income to invest in long term projects for the benefit of mankind. I personally would like to fund electronic car manufacture and a new media group. This is just me though I’m sure everyone else has their own plans.
New vs The Old
The fundamental problem with capitalism is that it was doomed to fail ( recession is inevitable after a period of growth), and that those that suffered most when it did were the poor majority. Other than this it gives freedom, encourages innovation, rewards success, and creates huge links across social borders. The new way holds the benefits and gives a stable base so that when the market forces fail the majority don‘t suffer greatly
Another major problem with capitalism that has become most apparent recently is its short term motives. It can’t sustain long term losses in order to produce something that is environmentally sustainable. It encourages consumption of readily available resources without any plan to conserve them for future use. And it can’t factor in qualitive costs (externalities). Such as clean air, pleasant surroundings, happiness and environmental diversity. It doesn’t encourage planning for the unknown future beyond this generation.
The new way encourages long term planning and recognises that most people when given an environment free from the fear of not surviving will want to plan 5, 10, 100 years into the future. It gives us inner pride to feel we have done something good for the next generation, and this inner pride should out weigh the immediate gratification of wealth accumulation. Of course this won’t be for all, and the diversity of desires is what makes the system work so well.
Communism gave stability, predictability and guaranteed work and income. But it forgot to allow people the freedom to take risks and be their own person. It became stagnant with ennui and even the planners lost interest. The spark of humanity was snuffed and instead a dull flame lit a drab house.
This is not what people desire, for a while I think people will sit idle but our natural desire for life will get us up off the couch and back to work, innovating, planning and doing the daily chores we know we must to live a good life.
The new way is full of possibilities and it gives us, the people of the world the chance to explore them all.
David J Campbell