A Free and Fair Economy

in #society2 months ago


The above image was made by @amberjyang with Midjourney using the prompt 'line drawing, splash of color, transfer of money out of communities and into the hands of a powerful few.'

It is rare these days to hear any serious consideration of freedom or fairness in public discourse. To my way of thinking, these things should be front and center. As animals, freedom is our natural state. As people, fairness maximizes freedom throughout the population, preventing one person or group's freedom from denying freedom to other people. In a more perfect world, freedom and fairness would form the basis for all societal systems.

A financial world based on these ideas would be great, but that's not what we have. Our monetary system was designed to maintain artificial scarcity of dollars. Outside of government spending, private interests control where the money flows through the economy and where it does not flow, in part by relying on a credit system that exemplifies structural racism. Wealth doesn't move through this economy fairly. It flows perpetually from the poor to the rich.

This transfer of money out of communities and into the hands of a powerful few represents what former US Secretary of Labor Robert Reich calls an upward redistribution of wealth. Since the pandemic, corporate price gouging has kicked this upward redistribution into overdrive. The neoliberal position is to break up corporate monopolies and to increase taxation of the rich. Conservatives want to cut taxes and deregulate everything, letting the chips fall where they may.

Both approaches would further enrich a small group at the expense of everyone else. Neither course of action would make society more free or the economy more fair. From my perspective, a better way forward would involve a few key components. First, a universal wealth tax in the neighborhood of 5 percent. Second, Universal Basic Income and universal healthcare funded by this tax. And third, an alternative financial system underpinned by blockchain token markets.

The scheme I envision would eliminate capital gains, social security, and medicare taxes. It would also eliminate expensive government programs like SNAP and HUD subsidies. With free healthcare and guaranteed income, people would be free to do whatever they wanted. This could only work if UBI amounts were tightly coupled to market prices, such that inflation automatically and commensurately inflated benefit amounts.

The universal wealth tax I favor would be truly universal, encompassing all legal entities and all quantifiable forms of wealth. Every person and company would pay 5% of their total holdings in tax every year. Total holdings includes all cash, securities, and other property. For assets like real estate that can't be divided or easily disposed of, the government could essentially put liens on the property, tokenize these liens, and sell the tokens on the open market to raise dollars for its budget.

Benefit amounts would have to be sufficient to pay for a real average cost of living. Receiving a UBI, millions of people would quit their jobs. Many of these would find or create better jobs. Others would travel or explore the arts.

Freed from the constraints of wage slavery, large numbers of people might become more politically involved. Instead of spending their days on the clock, they'd vote, campaign, and lobby, giving new meaning to the term populism. Of course, not everyone would be so productive. Lots of people would probably do very little.

An alternative financial system underpinned by blockchain token markets isn't as far-fetched as it first sounds. These markets are coming into existence already. The underlying tech is widely available. Right now, regulator attacks are slowing the growth rate of this sector in the US. But a single overseas exchange could easily bypass US regulators to make these markets more accessible.

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Well, it's an alternative. But I don't think it's a good one.

Although it can be a barrier to entry at the low end, simply owning things and property is a foundation of financial stability. The government taking (by means of force) 5% of value per year ends up with 40% of that value in government hands after just 10 years. Redistributing it via UBI would not make up for that. If UBI were sufficient for anyone to live off of without doing anything, it wouldn't be sustainable. As long as there are limited physical resources that we absolutely need to live, economic value has to come from somewhere. Especially if UBI amounts were tied to inflation, it would quickly devolve into absurd hyperinflation.

And how can you sell/forfeit 5% of your X thing every year? For not just your house or car, but most things people own, you can't. The liens idea is not a reasonable workaround, puts everyone at the mercy of just about anyone else, and that is not anywhere close to freedom. Much further than what we have already.

Pretending everything doesn't fall apart after a couple years: most people would end up in a state of equilibrium of 5% of assets equaling whatever they receive in UBI.

You make some good points. Liens may not be the way to go. But I'm not convinced that a real UBI + universal healthcare funded by a wealth tax would be any less sustainable than the current situation.

Right now, those with too little to survive are often trapped in perpetual emergencies, at the mercy of economic predators, paternalistic government programs, and the incarceration industry. This segment of the population is growing, and the cost to taxpayers is high. From this post about it:

According to the National Alliance to End Homelessness, a person experiencing chronic homelessness costs the taxpayer an average of $35,000 a year (2016). In another study of 5,000 people experiencing Severe Mental Illness (SMI) and homelessness in New York City, the average annual cost of service use was calculated to be around $40,500 per person.

On housing alone, a major project in the Twin Cities provides tiny homes to the homeless at a cost of $45,000/person/year. Simply giving individuals a third of that amount would enable them to afford reasonable rent amounts.

Simply giving individuals a third of that amount would enable them to afford reasonable rent amounts.

That makes the assumption it would be spent on rent. Given no choice and having the money be directly paid to the place that houses them would not be unlike Section 8 housing. And based on what I've seen first hand and many anecdotes from a couple friends who have houses they rent, Section 8 residents often make for very bad tenants. It would be easy to take your housing for granted if it's essentially free or heavily discounted. Not in all cases, but often enough the people at the lower rungs of society are there because they can't effectively live independently. Making housing free doesn't always change that.

Rarely do idealists that want to help people who are homeless seem to understand that basic boundaries and social standards need to be met by people to actually be independent, and if that relatively low bar can't be met, the last line of compassionate defense is paternalistic government intervention such as asylums.

Hmmm. I love your willingness to think and envision in big ways. Super interesting, and look forward to exploring this topic more with you. I'm so curious how you'll respond to @pfunk's comment.

We also live in a society where it seems as though people are conditioned to believe their life is built on heavy sacrifice and hard work, although I think this is more common with older generations. Yet younger generations are pouring their energy into things of self-interest and material/superficial goals, largely due to the corporatization of daily life and the lack of any deeper meaning in life (which erodes our sense of interconnectedness).

I feel like any social system that teaches people that it is productive and purposeful to spend their lives creating beautiful things or tending to themselves or their community (like planting a garden) will be a huge shift in how the masses understand reality. Yet I'd love to see a society where this shift occurs. And I think sharing, gift economies, and other community-based currency could really thrive and enrich lives.

One thing that could help make a UBI socially successful would be a renewed emphasis on the value of hard work for fair pay. And many jobs would have to become more meaningful or their workers would all just quit.

Something I'd like to see is new kinds of worker co-ops forming and becoming large enough to begin competing with corporate giants. This may even pressure some companies into treating their workers better.

The world of humanity is exposed to what we don't deserve but I have come to discover that at times life gives to us the least that we actually expect but we just need to cope with it

Fair enough.

Your Universal Wealth Tax is a good idea, and would help to redistribute wealth so it's not concentrated in the hands of the powerful few leaving the general masses in deep want. There's no doubt that the powerful few would fight the implementation of such an idea so it doesn't displace them and that's where the real problem lies. Thanks for writing and have a nice.

I feel like the wealthiest people might support this as it creates an alternative to more traditional and much harsher forms of economic redistribution.

You’ve got a perfect idea for the wealth tax. I think it will at least remove so many people from poverty even through it is not all

We can hope.

We quite live in a world whereby we work as if there will not be tomorrow but it quite seems like the world of government keep ripping people off due to the tax stuff