If it was possible to replace the entire economy in one fell swoop, what would be the best model?
It is pretty obvious that the current one isn't working for the majority of people and favors a narrowing few, which is why the rich get richer, as the poor give them more and more. But, it is also obvious that nothing is going to change, unless we change it or history repeats again and again like it has to redistribute wealth - war.
There must be a better way, right?
Now, I am obviously "crypto biased" in that I believe that if anything is going to improve the economy, it is decentralizing the monetary system to create an open and transparent marketplace for trade in all things important to us, but this is going to be an uphill battle as, no one with any power from the current system is ever going to want that. Even though, it isn't a complete solution either, unless it is set up with a fair few protections in place to make sure that the same thing we have today, doesn't happen again.
For example, what if there was a "salary cap" on what a CEO earns - where for example, A CEO can't earn more than 100x their lowest paid employee and 200x the lowest paid person in their entire supply chain? For example, Tim Cook from Apple:
Cook's total compensation for 2021 included a $3 million annual salary, $82.3 million stock award, and a $12 million cash bonus, according to company filings.
That is 100 million dollars. A worker at Foxconn that assembles iPhones earns around 400 dollars a month, which is about half the recommended salary for someone in China.
Using this as the metric as the low base, Tim Cook would be able to take a total of 4,800 x 200 = $960,000 worth and the lowest paid Apple employee would get a minimum of 9,600. Sounds fair? Not really, but there would also be another 99 million to distribute amongst the employees from Tim Cook's salary alone. Somewhere in there, there is an equilibrium point that straightens the curve out a little, rather than almost vertically hockeysticking at the top end.
What about those stock awards that amount to 27x the salary? How come some people get awarded like that, whilst others get no ownership at all? Perhaps it would make sense to have some kind of standardized stock option model, if Tim Cook gets 25x his salary in stock options, so does everyone else. Will they dump? Well, that depends on whether they can afford to hold, which comes down to their salary and living conditions.
Apple has 500,000 people working in Final assembly, which means that if Tim Cook gets the 1M and then 27 M in stock options, the workers who are earning 5000 a year will each get 135,000 worth of Stock (1/200th), which amounts to, 67,500,000,000 dollars of stock - yes, that is 67.5 billion dollars worth.
Does Tim Cook want his workers to dump to improve their living conditions?
Apple annual gross profit for 2021 was $152.836B, a 45.62% increase from 2020.
Almost half their total profit for 2021.
That is untenable, isn't it? Shareholders would never go for this shit!
Now, the numbers don't actually matter here, it is the idea that requires consideration. Essentially, the world is going to keep facing violence in many forms caused by economic disparity until something is done that reigns in the runaway train filled with the world's wealth. But, in order to change course, the train has to get off the centralized track and decentralize control, meaning that the train disappears, replaced by many vehicles. For this to happen, ownership of assets has to be distributed far more widely and with less depth across the population, as this point agency, liability, responsibility and consequence on each of us.
But, we aren't even close to having this yet and we are not going to get close if we keep expecting the current authorities to do what is best for us, because they are incentivized to do what is best for themselves, and that is to keep things exactly as they are.
If in this hypothetical scenario we were able to replace the economy, much of the "bath water" is going to be related to the governments, financial institutions and systems and the way corporations are able to operate in the economy currently. So, it is no wonder why they wouldn't support the decentralization and visibility in the current economic processes, because it would mean the end of their existence.
But, this is just scratching the surface of what would likely get changed in a complete overhaul of the economy, if we were looking at it to be valuable for the most number of people, as inheritance laws, taxes, voting processes, education systems, healthcare, insurance, investing and every other aspect of our transactional lives would have to be affected. It would be impossible to plan it from scratch and get it right, so what would be needed is a system that is ably to dynamically flex with usage, ebbs and tides that will shift the parameters as required.
A decentralized, free economy, with a transparent platform that contains the base rules and monitors all data to ensure that no one person or group is able to take too much advantage over others, before the organic rebalancing takes place.
This is just a little thought exercise, but I wonder if we were to crowdsource a new economic model, what would most people choose? I suspect that because we generally do what we know, we will likely mostly choose the same thing again - because we just don't want to think that much about it or get our hands dirty with the responsibility. I mean, people are making this choice already now, as while most know about crypto, very few are "interested enough" to actually investigate it.
As said, this only touches upon a couple of points out of the million that would need to be addressed, but what things would you want to add that you think would make for a better economy?
It'll never happen.
Taraz
[ Gen1: Hive ]
Posted Using LeoFinance Beta
Well that's good as I was doing my usual of trying to work out if I needed to concentrate and work my way through it or if I could just like I usually do acknowledge their existence and hope the rest of the post still made sense without them XD
That and also because all change is bad and has to be avoided at any and all cost.
Better people would make for a better economy I guess seeing as the economy is entirely people driven (whethe they want to realise or admit it or not). But that one is probably a hard ask most of the time especially given the varying opinions of "better" XD
My numbers rarely make sense! :D
As I have mentioned a couple times recently - what would we be capable of if we actually worked together for a better world. I suspect, much more than we are today.
Interesting article. I tend to ask the question... how do we eliminate corruption and greed so a new economy can thrive? Or can we find a balance so all people are happy? As long as we have corruption and greed, there is no real change. Is seems that corruption always finds that undisclosed opportunity.
This is where there has to be transparency, because that creates accountability. Every transaction, all blockchains equal zero. For example, out of the billions of blocks on chains now, how many accounting errors have there been?
History repeating itself. It would certainly be nice if there was a peaceful way to resolve extreme income gaps but I don't think it can be done without bloodshed. Just imagine if CEOs like Tim Cook would put their ridiculous incomes back into their companies and the lives of their workers. It's so fucked up for one human to have control of $100 million. I'll just be over here storming the Bastille if you're interested in joining.
!BEER
And that is 100 million per year. It is quite insane.
But, I think the only "peaceful2 way is to shift value through decentralization of currencies and business models - but it will get violent because those with power now, will not want to relinquish it without a fight.
It's classic power struggle stuff. That's why cryptocurrency and DeFi in general is so heavily censured and regulated by those in power. I look forward to seeing where things go in the next couple decades.
If there's no solution rendered in situations like this the problem will keep on expanding and creating more issues if nothing is done and this wouldn't be appropriate to see the economic occur this way.
it keeps spiralling downward until it crashes into violent revolution - then it resets to climb and fall again.
I don't know but I don't exactly trust people right now to make a good decision. Most of them don't really have good financial knowledge. However, I guess I would trash out the taxes and just have some taxes baked into the final price we pay at the store. People will be charged on how much they spend and no more hassle with taxes.
Posted Using LeoFinance Beta
Yep, this makes sense to add or, a hybrid approach of some kind - a basic uniform percentage for all to cover essential services etc - and then a goods and service tax. A simplification is definitely needed. I would also add that if companies are able to own property like people, they pay taxes like people.
Well, it is not possible to change this order with the current system as it has been built on inequality.
Right, many people know or hear about cryptos today. However, most of them are not aware of blockchains such as HIVE. I told some people around me about HIVE, but they are reluctant because it comes easy to share their selfies rather than producing some blog-style posts.
What you can think could be done with HIVE, but we need more investors in HIVE. Invesment not with money, but with their efforts.
It isn't that they don't just know about Hive, they don't even check to see how the basics work, or the potential value propositions. Lazy living.
Even the misleading media contributes to the imbalance and the inability to correct the economic situation. Advertisements for evening parties, artists and players in trivial fields receive huge sums, while in important scientific fields there is marginalization. How do they want a happy life without real change and guarantee the right to a decent life for people until we gradually eradicate corruption? it's a major problem
yes, a collective of nurses go on strike for less than a single artist earns from posting on Instagram.
If there would be a "salary cap" on what a CEO gets, the traffic of black market and unregistered money flow would baloon 😝 Even today, the number of
fictitious companies (money washing machine) are all time high.
Ah - but this is what blockchained business activity is for ;)
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