Another possibility: eliminate private ownership of land. This is actually not as radical as it sounds. It's a big shift in mindset, but not that big a change in how things actually work. The mindset shift is to go back to the native american idea that all land is collectively owned by the people. The government is the "management company" that administers it, and one of the things it can do is offer long-term leases. This would essentially be the same as the status quo except that instead of owning the land and paying property tax, you'd own a lease and pay rent. The reason I think this would have a beneficial effect is that the change in mindset would change the dynamics of political debates. For example, NIMBYism would be less tenable because it's not your back yard any more. You're just a tenant.
Inheritance tax is making it expensive to trasnfer a family-owned farm down the generations, and as a result they are sold to corporations instead. Bigger, wealthier families avoid the tax altogether by using legal methods, which makes the inheritance tax burden mostly fall on the poorer farmers. Removing ownership of land would do nothing to combat this. In fact, if farmers didn’t own their land, things would get worse, not better: they would have no incentive to use long-term (costlier) agricultural strategies, since they wouldn’t have any guarantee they’d benefit from it. Further, they’d be less likely to invest in long term equipment. Guess who would? Larger corporations. In other words, this proposal would exactly concentrate the wealth to big corporations, perhaps the opposite of your intention.
That is why I added: "with an exemption for private businesses below a certain size that are both owned and administered by a single family".
> Bigger, wealthier families avoid the tax altogether by using legal methods
Yes, to make this work you'd have to eliminate those loopholes.
Second system syndrome is en vogue right now in politics. Maybe there is some tectonic shift that will happen this century due to technological progress, but I'd counter moderate and incremental change would be much less risky (if you botch a software project maybe people lose jobs, if you botch a political sea change millions of people die) and there is plenty of small but meaningful improvements to be had for every class of person.
Small iterative changes are fought tooth-and-nail by those emboldened through exploits encouraged by capitalism who, ironically, hold most the power to make such changes (not much unlike historical implementations of fuedelism).
The system itself is very self-preserving in that nature. Those who have the most to lose in the system have the most power and resources to resist change because that's how the underlying system is structured.
With socioeconomic mobility at an all time low due to earlier successes closing doors behind them (the "american dream"), it's no wonder people are growing more frustrated and seeking radical change over incremental changes. They've tried incremental change (and watched their parents and grandparents try it). It didn't work, so now they're pulling out the stops and who could blame them.
Look at the 2016 and upcoming 2020 presidential elections, largely fueled products of this issue in various forms. People are growing very tired of being lied to and exploited. The very wealthy groups, as the article suggests, need to consider that maximizing long term profits may require them to reduce their short term profit margins a bit and keep working classes from turning this entire country upside down.
Read up on the phenomenon called "the tragedy of the commons" [1] to learn why this is a terrible idea.
For even more of an idea on where this can lead you can have a look at the 'Talk' page for the same Wikipedia topic [2] which shows an editing war on the very definition of the topic. Shared ownership does not imply shared stewardship as is made clear by the actions of some of the more vociferous Wikipedians.
[1] https://en.wikipedia.org/wiki/Tragedy_of_the_commons
[2] https://en.wikipedia.org/wiki/Talk:Tragedy_of_the_commons
> one of the things it can do is offer long-term leases
Look at Hong Kong, housing prices there have grown seriously out of whack, average citizens are suffering and young adults are leaving.
You'd need a very competent and uncorrupt government to accomplish this ideal.
If you compensate the owners of the land and take your time building the government institutions that will manage it the second option seems possible. Maybe something like what Scotland did in the 90's (I think it was) when they abolished the last parts of the feudal system.
I don't see how that would be possible in the US though. US politicians are typically funded by corporations and corporations own land. Besides, from what I understand, the right to own their own land is very important to quite a few Americans.
Put differently: I'm pretty sure an adult American in the 80's would scream "communism" at your ideas. Some of those work as politicians today. :-)
For example, if I'm on land I don't own, I have no real right to freedom of speech because I have no right to be on the land to begin with since it's privately held. I'm there legally by permission of the property owner only and can be removed.
This becomes increasingly problematic the more private entities take ownership of land. Imagine a world where a few hundred people own nearly all the non-government owned property and the vast majority of citizens have to rent/lease or utilized shared property.
Those private entities begin to dictate if I can take pictures, say certain things, bring a weapon on that property, etc. If the entire industry decides "we only allow Comcast Internet service on our grounds to drill into walls," then unless new laws or enacted at a state/city level forcing landlords to allow it or the FTC steps in, I guess you're using Comcast or doing without.
In theory, conventional wisdom argues competitors will enter the market with less restrictions. In practice, it's all profit driven and the most efficient market solutions get adopted resulting in shared policies across the industry. If business across an industry in general finds it's more profitable that people can't have weapons on their properties and you have no land ownership, then you can own a gun but you'll have no where to put it. Or you may want to spread an idea through speech but no one will allow it. You're then restricted to either government properties where you do have those rights or another private entity that allows it.
Property ownership is very complex here.
You call it "penalizing success." I call it the principle that successful people have a civic duty to contribute more to the common good.
> owned for generations
You say that as if it's axiomatically a good thing for something to be owned for generations. This is far from clear. Why should one person be entitled to own something that another is not just because of who their parents were?
Historically, what follows this is mass poverty.
The mindset shift is to go back to the native american idea that all land is collectively owned by the people.
Native Americans tended to go to war when one group infringed on another's territory.
The government is the "management company" that administers it, and one of the things it can do is offer long-term leases.
The government struggles administering drivers licenses. And wherever they've been the landlord, the results have almost universally been impoverished ghettos.
What do you mean?
In 2005, historically, Myspace was THE social network and Facebook was basically nothing.
Yes, but historically capitalism has worked. That's the whole point here: things are changing. Not all of the lessons of history apply in a post-scarcity world.
As I'm fond of saying: In a capitalistic system, a few people end up with all the money and power. In a communistic system, a few people end up with all the money and power. The means are different, but the result is the same.
There are very few countries in the world that lived by the laissez faire rules of capitalism, because its been a disaster every time.
Now, this also assumes that people become literally useless in the automated future, compared to systems. It's possible - if unlikely - that humans always move on to a higher frontier of uniquely human work once the previous one becomes automated. In that scenario, UBI could be a great way to ride that transition. Also, partial UBI, meant only to give people a platform for growth in a world that still has jobs for them, could be a good way to combat economic inequality.
People are just realizing now we’ve become the cows needed to legeitimize the capital that is milked back out of us. I agree though that UBI is just trying to juice that feedback loop in the most superficial way possible. Like cows deciding that more hay and hormones will somehow free them. (It won’t)
Well it relies on a fair and properly functioning democracy. We have a very corrupt system at the moment, people don't get what they want because politicians are bought and paid for by their donors. We need adequate defenses against this in our system, then it stops being anything to do with the altruism of the elite, because the majority regular folks are going to continue voting for the UBI or other benefits.
The other balance is the threat of revolution. Keep the population happy enough or they'll come for you.
Removing the gated community effect would also help. If the rich have to use the same services as the rest of us, then they have an incentive to ensure those services are well run. If large inheritances are effectively taxed away, then they have to ensure society provides a good platform for their children. Etc.
For that, there need to be consequences for politicians that screw up. There aren't. Actually, nowhere do we even have a real democracy. A regular person has no say in anything at all.
One possible counter is that people may have more free time to spend engaging in politics. Once one need is satisfied attention will inevitably shift. Mazlow's hierarchy and all that.
One of the main reasons people give when I ask them why they don’t pay attention to politics is that they don’t have any time or energy or willpower left to do so after working 40+ hours a week doing largely meaningless, soul-crushing tasks.
What you're missing is that not everyone will be qualified to do those tougher new jobs. Especially the people who are now working at McDonalds, as cashiers, etc.
there is a fundamental error in how you are thinking about this
Lobbyists matter more for issues where most people don't have a direct interest and/or aren't paying attention. UBI by its nature would have a very large constituency, once people are getting the checks.
That said, I agree that partial UBI would be better to start, but more for reasons of affordability and not changing the economy too quickly.
So billionaires and the AARP both get their way most likely at the cost of future generations.
1) Automation is going to make the concept of jobs obsolete. Therefore most of the population will simply die of poverty if we don't artificially redistribute all of the wealth.
2) Many people today are stuck in poverty because they're too financially stretched to pay for healthcare, education, a car to get to work, childcare, etc., even while spending all extra time working multiple jobs. The hope is that by giving them a life raft, they'll have the leeway to spend time, money, and energy on self-betterment, and thereby enrich the economy.
My argument is that #1 sounds good but doesn't seem robust against a few powerful bad actors. #2, though, could be quite effective.
Exactly the same thing could be said about slaves.
> ..., which gives us power.
Which didn't give them much power though.
It worked okay at the height of industrial era, but worse and worse ever since. Nothing good happens if you let people who bear no real responsibility for anything, to make decisions. Only property owners should vote.
That's a good slogan for starting a war. One day, people like you will have their land taken from them. Will they still feel the same way?
The fact is, if you take away a person's vote, they have no voice AT ALL in their government. The vote actually happens to be the last thing PREVENTING war because the fact is, everyone would like to do what they want and not have other people tell them how to live. We have government to prevent people from hurting each other and doing mean things to each other, and though it may not be all that effective, anarchy never works and always ends in some kind of oligarchy.
People go to war whenever things are taken from them. Land, property, rights, etc. They are happy when things are given to them. Bread, circuses, etc. So if you want to start a war, take from people. If you want to prevent it, give to them.
1. Income is not taxed. Wealth is.
2. Wealth tax brackets are determined based on a multiplier: no one person may own more than 1000 times the median per capita wealth.
3. Wealth is not actively monitored. But undeclared wealth is not protected by law.
What would the implications of this scheme be?
It would be the world's greatest party until it collapses, because no savings, investments, and risk-taking means that jobs disappear.
Also, stealing would be very popular, so a job in law enforcement is about as good as it gets. It would allow you to seize the most.
This particular plot revolves around a mathematical proof (not unlike psychohistory in the Foundation) that indicates any society where a single member is able to acquire more than 1000x the power of the median member results in a power/wealth accumulation feedback loop that eventually destroys the society.
Wealth laws tend to benefit only the rich, not because people don't have good ideas, but because the people in power always implement the ideas in ways that benefit them. Nothing changes. The problem is a people problem - which causes the economic problem - not a systematic problem.
FOH.
Human and nature dynamics (HANDY): Modeling inequality and use of resources in the collapse or sustainability of societies /Safa Motesharrei a,⁎, Jorge Rivas b, Eugenia Kalnay c
Summary Collapses of even advanced civilizations have occurred many times in the past five thousand years, and they were frequently followed by centuries of population and cultural decline and economic regression. Although many different causes have been offered to explain individual collapses, it is still necessary to develop a more general explanation. In this paper we attempt to build a simplemathematicalmodel to explore the essential dynamics of interaction between population and natural resources. It allows for the two features that seemto appear across societies that have collapsed: the stretching of resources due to strain placed on the ecological carrying capacity, and the division of society into Elites (rich) and Commoners (poor). The Human And Nature DYnamical model (HANDY)was inspired by the predator and prey model, with the human population acting as the predator and nature being the prey. When small, Nature grows exponentially with a regeneration coefficient γ, but it saturates at a maximum value λ. As a result, the maximum regeneration of nature takes place at λ / 2, not at the saturation level λ. The Commoners produce wealth at a per capita depletion rate δ, and the depletion is also proportional to the amount of nature available. This production is saved as accumulated wealth, which is used by the Elites to pay the Commoners a subsistence salary, s, and pay themselves κs, where κ is the inequality coefficient. The populations of Elites and Commoners grow with a birth rate β and die with a death rate α which remains at a healthy low level when there is enough accumulated food (wealth). However, when the population increases and the wealth declines, the death rate increases up to a famine level, leading to population decline. We show how the carrying capacity – the population that can be indefinitely supported by a given environment (Catton, 1980) – can be defined within HANDY, as the population whose total consumption is at a level that equals what nature can regenerate. Since the regrowth of Nature is maximum when y = λ / 2, we can find the optimal level of depletion (production) per capita, δ* in an egalitarian society where xE ≡ 0, δ∗∗(≥δ∗) in an equitable society where κ ≡ 1, and δ* in an unequal society where xE ≥ 0 and κ N 1. In sum, the results of our experiments, discussed in Section 6, indicate that either one of the two features apparent in historical societal collapses – over-exploitation of natural resources and strong economic stratification – can independently result in a complete collapse. Given economic stratification, collapse is very difficult to avoid and requires major policy changes, includingmajor reductions in inequality and population growth rates. Even in the absence of economic stratification, collapse can still occur if depletion per capita is too high.However, collapse can be avoided and population can reach equilibrium if the per capita rate of depletion of nature is reduced to a sustainable level, and if resources are distributed in a reasonably equitable fashion.
Unless I misread the summary, I read it in a hurry
Mass migration of the poor, who have second and third generations at higher-than-host-normal birthrates sounds like a major trigger of this kind of summary collapse.
It both directly increases inequality and secondarily increases inequality by taxing the middle class harder, at the same time it causes a population bloom.
Under this HANDY model, the mass migration in response to stalled US population growth could be the proximate trigger for a US social collapse.
Yet we also have many thousands homeless.
Truly, capitalism is the worst form of government. Except for everything else, which share the downsides and lack the upside. It's why there are tens of thousands pouring over the border monthly-- to get to America and to capitalism. They want to work for their chance.
Is there someplace else you're thinking about?
There are many examples but a the most basic one in the US is that the outcome of a trial is highly correlated with the amount of money you spend on lawyers.
A problem with Khanna and the article is that he is just continuing to give outsize influence to the rich. I hope he can learn something from Sanders and not worry too much about "alienate(ing) some of his wealthiest backers".
They can and do, it's part of daily business strategy. Sometimes those efforts are shared if the company is publicly held, even then, the majority of the returns snowball to the large shareholders.
A retired good friend of mine from the chemical industry worked at one of the leading chemical businesses. Part of their entire business strategy/model was collecting strategic patents in chemical processes to prevent others from competing and forcing them to pay royalties to that company. He worked there for several decades leading one of their core research divisions and they shut down most their research divisions because the patent game gave more ROI than actually producing innovative new processes. That specific business now primarily focuses on acquiring IP as blockades and tolls to innovators entering the industry.
That's just one example but I see many businesses use as many anticompetitive strategies as they can get by with. In the tech industry, often potential competitors are simply bought out early before they become competitors either through offers or hiring their talented staff.
Pick a business and they've probably engaged in similar activities. People are not delusional with this assessment, it's spot on.
Too many? How many is too many? So only 20% if the population feeling locked out would be a okay?
Feel locked out? So it’s just in their heads? The unwashed masses are so emotional. Like animals they go on feelings not facts.
Looking for someone to blame? Their baseless feelings need some outlet and if they’re blaming me it must be just because I happened to walk down the street that day, not because of anything I actually did.
The truth is they don’t feel locked out, they are locked out and after giving people like this guy a pass for three decades are finally looking for the reason they’ve been getting screwed over and this guy is scared shitless they’re going to find it.
The sad part is it’s not going to happen. More likely thing is they’ll have to part with 0.000001 of their wealth to make 5% of the population winners and just get them to oppress the other 95% thus ensuring a healthy return on that 0.00001 making them even richer. They’ll just have to get over the humiliation of having to share their success with a few extra people.
Preach on brother zcw100!
Most of the excesses seem to be a matter of not outlawing bad things. Is the wealth itself actually harming anybody?
Edit: I guess there is the snowball effect where previous winners have competitive advantages in new competitions, or else outright rent seeking behaviours. I'm also curious about those aspects.
Now, how you'd go about doing it, I have no idea.
People often confuse the needs for working markets (capitalism) with preserving the elite’s position (rent-seeking).
I worry about this now, particularly in what's increasingly a post-nationalism era with almost frictionless global capital mobility. The ultra-rich do their damnedest to pay almost no taxes on their massive wealth and buy themselves even greater tax breaks. The Trump tax "cuts" (I say this because for many professionals living in blue states it was a tax increase) were such a nakedly self-serving (even corrupt) wealth grab at the expense of the country. It's depressing how easily manipulated the GOP base was and is in supporting this (or at least not holding their representatives to account).
What difference does it make if you have $50B in assets vs $60B? I mean really?
You gained that wealth because you lived in a country that was politically stable, had infrastructure like roads and bridges and wasn't being invaded or fighting wars (mostly). Someone needs to pay for that.
This almost feels like an algal bloom of wealth. In an algal bloom, individual organisms are finding local optima. The net result however is that everything dies.
So how about this:
1. We need stronger estate taxes. Inherited wealth is a recipe for a permanent ruling class and a pox on our house.
2. Owning land in the US subjects your worldwide income to US taxes.
3. We need to start property taxing income rather than taxing spending. This further lowers effective tax rates.
The last one requires a little explanation. Let's say you earn $100m in a year. As ordinary income this may cost you $40m in taxes. Of course, no one pays that. It's typically structured so you only earn income for tax purposes when a gain is realized.
So if you need "only" $20m to live this year instead you just realize a $20m gain and pay taxes on that, leaving the other $80m untaxed. It's worse than that because not all of that $20m will be a gain. This allows you to offset tax liabilities essentially indefinitely.
But it gets even worse than that. At the height of the QE era, you could borrow money for essentially nothing. So instead you borrow $25m, putting $5m aside to service the debt for some number of years and don't realize any income and pay no taxes whatsoever. Companies were issuing corporate bonds like crazy in this era to avoid US corporate taxes.
