Saturday, November 27, 2010

Giving Wealth a Chance

“In a monetary system there is an inherent reason for
corruption and that is to gain a competitive advantage over someone else.” Jacque Fresco

One of money’s great shortcomings is its tendency to accumulate to itself. The rich become richer, the poor poorer. Countering this, capitalism’s most beguiling selling point is the arbitrary way money-flow, as affected by buying and selling, acts as an impartial force for democracy and social good (The Invisible Hand). Vote with your wallet, communicate your desires with your spending power, and keep government out of it. We all know the argument.

But the poor cannot simply 'vote' how they want – many can barely afford food – while the rich get far too much of a say, and do their level best to keep it that way.

In the US, the idea of redistributing income is seen as socialist, and therefore evil. However, capitalism is by definition a distributor and redistributor of wealth via the price mechanism, using so-called rational or enlightened self interest to drive this forward. But, instead of the theoretically predicted 'creative destruction,' humanity has repeatedly endured too much hoarding and accumulation under capitalism's aegis. Today we have Too Big To Fail, but the pattern is the same across the centuries; stubborn social divisions leading to decadence and corruption. This is generally predicted by the quote opening this piece.

Monetary wealth is capitalism’s implicit goal, its sign of success, the carrot to poverty's stick. Poverty is the horror to be avoided at all costs. Inescapably this dynamic will tend to entrenched social divisions, and we have indeed seen this throughout history. Humans, being highly intelligent and social, have 'escaped' the law of the jungle by establishing dynasties and institutions for protection of 'our own' (be that race or class or creed) down through the generations. Now we have immortal legal persons known as Corporations, cheating death, and hoarding power and wealth like there were no tomorrow. Soon there won't be.

Lopsided and therefore unhealthy distributions of money are like stagnation in an ecosystem, when dynamism is suffocated and rot (decadence) sets in. Wide and deep money-flow simply cannot persist over time at sufficient speed and depth unless the system is designed from the ground up to affect this. A guaranteed income, aligned with demurrage (negative interest) and the other suggestions I list below, would not ‘redistribute income’ in the sense of 'theft,' but ensure healthy money-flow, keep democracy working, prevent stagnation and persistently deep income inequality, and promote growth only where it is healthy to do so. This post is a rough and discussion-oriented attempt to list goals and priorities as I see them, and part of an ongoing attempt to redefine wealth.

Core socioeconomic elements:
1. Guaranteed income from birth to death
2. Negative interest of 4% on all money
3. One tax – sales tax, simple, no avoidance possible
4. All money spent into existence by state
5. 100% reserve banking (if banking is at all necessary (see below))
6. (?) One currency worldwide (???)

Full employment, with work to be redefined at the cultural level
Open, optional education geared to maturity and creative problem solving, not rote
Constant or increasing amounts of fertile topsoil (other cultures have managed this)
Clean air
Constant or rising water tables of clean water
Ever falling crime rates
Full automation of grunt labour where this is good for society and the environment
As close to 100% recycling as possible (adherence to cradle-to-cradle design principles)
Goods built to last for as long as possible
Building of ‘intelligent’ eco-cities and new transportation network (ET3)
Speedy transition to renewable energies
Health system focused on prevention, not cure
Decreasing emphasis on ownership, increasing focus on access
Where feasible, goods and services to be given away for free

All of the above under the following directive: demote money, promote wealth.

(Some thoughts on my thoughts: Persistent and deep money flow throughout all parts of economy including return to govt. ‘coffers’ (trash) guaranteed by points 1,2 and 3 – hoarding would be virtually unheard of. Investment in new production could be funded by the 'community' on Internet sites designed to raise interest in new ideas (this would be very democratic and give the term 'purchasing power' real meaning). Otherwise government could enable new production, in which case either ‘normal’ money would be spent into existence, or ‘fixed-life, single-purpose’ money that ‘expires’ after having fulfilled its function. We need only a healthy aversion to risk, not horror of it. (Could banking be entirely automated? It need simply be storing money and tracking its movement, money being mere numbers.) Assumed/expected at the outset is less (I really mean “less”) economic activity. I seek the death of the pursuit of ever increasing monetary profits and Perpetual Growth, and the demise of the very notion of 'money is wealth.' I am not against growth (whatever that is), I am against forced growth.)

Implemented in full, the above suggestions would change economic activity and society beyond all recognition. We have lived for centuries in a culture whose central premise – at least the elite's propaganda tells us this – has been the ‘naturalness’ of the struggle for existence, where ‘civilized’ reward is accumulation of material goods and a subsequent demonstration of one’s societal value via conspicuous consumption (certainly over the last century). Changing course towards a resource-based economy is by necessity a radical departure from the Money-Wealth paradigm, which is, to my mind, far past its sell-by date (it had its uses) and the hidden heart of the battle ground.

Thus I am uninterested in the thinking of those who, either explicitly or implicitly, remain trapped in the dying story. Judged through the grey-tinted spectacles of the current system, the above suggestions can only seem unworkable. And it’s true, they are unworkable ... in the current paradigm. They are valid, however, as parts of the process of hewing a new path forward into the uncertain future. What the above cannot engender, systemically, are the familiar ‘successes’ of the current mode; ostentation, non-stop economic ‘growth,’ differential advantage, and so on. Unlikely therefore are: huge houses; ownership of multiple, expensive cars; exploitation; poverty; crime; cronyism; moral hazard; political corruption; concentrations of wealth and power, and so on. As such, to the untrained eye, all this seems no doubt to be the ravings of a dangerously socialist mind.

And no, such negative socioeconomic phenomena, currently so pervasive and endemic, are not the organic and inevitable consequences of human nature. Homo sapiens sapiens were strictly egalitarian for the vast majority of their existence on earth. It is the current system which goes ‘against the grain,’ to the extent there is a grain. Witness the suicide and depression, the perversity of paedophilia and the sex industry generally, the inhumanity of exploitation, the very existence of the word ‘decadence.’ Watch children’s insatiable curiosity purposefully extinguished by a schooling system designed to dumb us down for the industrial age, for uneasy subservience, for insatiable consumption. Feel your own yearning for honesty and integrity, recognise your despondency and cynicism when you fear they may never come.

Nevertheless, ideals and rhetoric have never been enough on their own. Practical considerations are always paramount. Is the direction I promote workable?

A joyous spending into existence of the negative-interest money a society needs to tick economically is but Stage 1, the key turning in the ignition. The social engine must keep turning over in some kind of dynamic balance, after it has been sparked to life. While money is needed for enabling economic activity, money must continually move from place to place, from person to person – as far as possible without exception – or gangrene will set in, in the form of gross imbalances. Perhaps it is helpful to think of money as society’s blood, which has to reach the very tips of the remotest limbs to keep society healthy. (Cutting off ‘unneeded’ fingers and toes, or Culling the Poor, is not a long term solution; the current paradigm necessitates rich-poor divides by design. It is elitist and must, in the view of the elite, remain so, come what may.)

It is for this reason alone that the unemployed are an economic ‘problem,’ with familiar societal and psychological problems all arising from this economic ‘uselessness.’ With a guaranteed income they would at least have sufficient spending power not to become ‘gangrenous,’ but would monthly need more money from the government, earning none from a paying job. By definition, the unemployed perform no economic activity which keeps non-taxed, existing money circulating, except spending. It would be absurd for a government constantly to spend more and more money into existence, just to pour it directly into the pockets of the unemployed. Some proportion of the money flowing through the economy must be taxed back to the government to prevent inflation, to keep money circulating rather than expanding. The amount of money in circulation should be increased only because of, or to enable, increased production, not otherwise (where the purpose of production is not the pursuit of monetary profit, but to improve society, be it for pleasure, leisure, transport, whatever).

The question is this: Does guaranteed income plus high unemployment plus a large state sector necessarily result in a too powerful and therefore corrupt state? Power corrupts, absolute power corrupts absolutely. Or, more fundamentally: By systemically preventing concentrations of monetary power, do we ensure concentrations of state power?

No. The Market can now be reintroduced as an efficient distributor of goods and services after money's importance has been systemically demoted. We could privatize education totally, health too, and much else besides, as long as wealth is culturally decoupled from money, and deep and persistent money-flow is systemically assured. The 'think global, act local' maxim can find its full voice too.

Guaranteed income flows to adults and children. School is optional so children and parents could choose; there would be healthy competition here. Health would be all about prevention, not cure. Transportation systems would be designed to render accidents impossible. Stress can be removed from the work place as egalitarianism flourishes, carcinogens and other toxins removed from food and other production processes. Cities would be designed for minimal energy use, maximum community, maximum safety and health. Crime would fall dramatically, police and army would become increasingly unnecessary.

In short, concentration of power can be avoided and market principles re-embraced without fear of wealth concentrations, the state's role can be minimized, the private sector expanded, by designing a money system to prevent wealth gaps from arising, and opening society up to true democratic processes.

The underlying premise here is that (non-sociopathic) humans need to feel needed. As a social animal, that urge is perhaps the main element of human nature, to the extent there is such a thing. Perfection is of course impossible, but a healthier blend of competition and cooperation, of 'collective' and 'individual' is surely possible.

The intense competition for unnecessarily scarce money has reached a sickening pitch of avarice that will surely end in blood globally, for, as much as national governments might like to believe otherwise, we live in an interconnected community of business and money, such that we can now safely say, “Nowhere is safe.” The arrival of the Internet has added a social layer to that interconnectivity which is working to undermine the status quo's grip on the hearts and minds of the so-called masses. The jockeying and jostling to stay in power is now totally transparent and will likely soon become war, war which cannot take us anywhere better long term, unless, by chance, a radically new consensus arises from its horrors. As I have echoed elsewhere, the entire ‘Self Against Other’ story is closing (to paraphrase Charles Eisenstein). A new paradigm is being written, but a third global war could well mean its stillbirth, hence the pressing need to do what we can now to prevent that possibility.

The above represents the direction towards post-scarcity economics as I imagine it. The journey is the destination. The means are the ends.


Greg said...

On first read the only thing I would question (as you seem to too) is the one currency.

I'm not sure why exactly, if everyone is on the same page one currency would work. I suppose my reticence is knowing that any suggested reforms that spoke of a one currency world would be viewed with skepticism by many.

There would be no way to just do some of what you suggest since it is a complete system overhaul that makes this possible.

I'll have more thoughts on this later.

Toby said...

Exactly, I'm very unsure about the one world currency thing, and have mentioned it for two reasons. It prevents trade in currency exchange, and therefore minimizes the degree to which money can be used as a commodity; and too hear other people's thoughts and suggestions on this point. I look forward to yours.

And yes, there's no good way of implementing only some of the proposals. Patchwork doesn't work, not long term anyway.

MwaH said...

Dear Toby,

I was wondering if you are aware of Richard Eisenstein's book "The Ascent of Humanity". In his frankly seminal work he is very much in line with your own course of thought and inquiry, especially in economic terms. I think it might be a valuable source for further thoughts for you. It definitely is for me.

The book's website (where it is even available for free):

Appreciate your work. Keep on keeping on.
Kind regards.

Toby said...

Hi MwaH,

Charles ;-) Eisenstein is a favourite of mine. I've got "The Ascent of Humanity", recommend it at pretty much every opportunity, and have even read it twice. It is, as you say, a seminal work, and has influenced me profoundly. So friendly, humble, erudite, honest and courageous. It's really one of a kind. His next book, soon to be released, is called Sacred Economics. Boy am I looking forward to that! This post is in some ways an anticipation of the kinds of suggestions I guess will appear in that book.

I've exchanged a couple of mails with him. Out of that small exchange came this gem:

"Matter is what we can see of spirit."

I love that.

MwaH said...

Charles, of course. Must have had my attention elsewhere, wherever that might have been...

I'm just starting the Ascent, after having become an avid reader of his essays on Reality Sandwich (and browsing through the book on his website). Looking forward to explore his thoughts in more depth and take away some insights, which I without doubt will.

It's always great to meet some "members of the tribe" on the net - keep up the good work.