Democracy for politicians means cobbling together a coalition of interests into a majority. This often involves packaging individually corrupt programs and promises to enough interest groups such that the coalition defends each other's corrupt gains. In the US the traditional Republican coalition in the last 10-30 years has been the unholy triumvirate of religious conservatives, large corporations and those influenced by small government demagoguery. The Democratic party coalition has included unions, and education, but mostly anti-unholy alliance proponents.
Seniors and over-50 baby boomers are an interest group in of themselves, have remarkably homogeneous interests, and will only get larger and more important over the next 40 years. Older people have more wealth on average than younger people (due principally to the time available to acquire it). Older people vote more than younger people, and they have the wealth to directly influence elections as well. Global population forecasts estimate 9B people in 2050 and a peak of 10B in 2100. The increase from our current 7B is expected to come entirely from undeveloped nations. We can imagine that food shortages and competition for food explain these peak population forecasts. These images can turn horrifying the more we contemplate them.
The logic of the social contract made sense in the 1930s. At its core, children and the elderly subsidized by working adults makes sense in that we are all once young and hopefully old. What we pay in taxes should on average amount to what we get in lifetime benefits. The use of the term "pyramid scheme" is appropriate for 2 reasons though. 1. New adults pay for the benefits of old adults, and 2. Its only sustainable if the population pyramid (birth and death rates) continue to have a large amount of new working adults. We are all destined to become Japan eventually, and Japan expects a 1 worker to 1 retiree ratio by 2050
The crisis of democracy is the silent conspiracy of older citizens who can individually vote their self-interest in keeping the entitlements granted by previous generations, while voting against the other social contract components. Secondary aspects of the social contract include welfare and economic stimulus. Does an older citizen want more education spending? No. Welfare? No. Job Creation? No. Protecting Unions? will just increase consumer costs. Just lower taxes on their investments and keep medical and pension entitlements. If we lower taxes on corporations there could still be enough revenue available to pay their entitlements, and (short sightedly) it might lead to a value increase in their investment portfolios. The crisis of democracy is that other people's grandchildren paying for your lifetime benefits sounds like the best idea ever to the self, and the collapse of civilization after your lifetime, an inconsequential cost.
At the root of this, is the concept of whether a society/nation carries in its heart the mandate to grow/sustain the society/nation. Portraying a pretense for this mandate makes politicians and people seem nice, moral and sincerely caring about the society. The belief is propagandized and instilled in children. Social growth and sustainability is in the interest of children and working aged people (especially if family focused). Its also in the humanist/divine's interest/goals to have social growth and sustainability. However, democracy is a mere collection of self interests and has no axiomatic principles. If a majority wants prisons for blacks and jobs and opportunities for whites, it can vote to promote such policies while patting itself on the back for eliminating slavery and creating civil rights. An autocratic king is more committed to social growth and sustainability than a democracy, because the king hopes to bequest rule over the society to an heir, while a democracy does not have tangible concerns beyond the individual lifespan of its members.
While I am finger pointing older citizens for their self-interest to cash out of a society rather than contribute to its sustainability, they are not alone in that self interest, and this phenomenon happens frequently in the corporate world. Corporate management will always propagandize and sell commitment to future growth and sustainability of the organization. A board of directors is similar to a congress or parliament in that they have official power over organizational management, but are frequently hand picked by management, and influenced by the same people and factors. Both management and the board are insiders of a corporation capable of inflating the perceived value of the firm (justifying bonuses, salaries and benefits), while knowing when to sell (cash out) before the rest of the shareholders will hear and understand the news. Shareholders have the same pretenses of democratic decision inputs that our state democracies do, but are at a significant information disadvantage, and tend to vote for who they are told to. The corporate analogy to older democratic citizens is the block of shareholders enabling management and the board to eventually bankrupt the company. (The eventual fate of all corporations is bankruptcy). While there is a much weaker religious dogma for the sustainability of a corporation than of a nation, it is useful to management for the employees and stakeholders to believe in the sustainability mandate.
solutions:
I'll first mention a violent, unpleasant and undesirable solution: Soylent Green. Violent war between the young and the old. The young can win a violence contest with the old, even though the old can win a property/wealth based contest. Moral examination of this involves understanding the right of property, even if productive and valuable for social growth, as a right only deserving respect if it is accompanied with social justice/fairness. The current common accusations of class warfare every time a banker is criticized is fundamentally an attempt to escape the burden of social justice for property owners. One side can't morally justify the allowable tools of war if limiting the tools allows their side win. A more moderate version of this proposal is to simply cancel the pension and healthcare entitlements to the elderly. This is still violent theft of the contributions they made to the social contract. Entitlements they counted on.
Part 1: There is 2 parts to the solution I recommend. They both involve the basic income aspect of natural governance. The first part could be skipped, and may at first sound as ridiculous as the violent solution above. If our nation is a sinking ship, and the upper floor champagne and caviar entitlements will run out before most of us can complete our 45 year term in the engine room bailing out water, then the fairest solution is to open up the champagne and caviar access to everyone, even if that both causes the benefits to run out more quickly and distracts some people from bailing out the water. Basic income is providing the same old age social pensions to citizens of all ages (or just to adult citizens) without any means (poverty) test. I've already justified basic income as a social right to a dividend, as an economic growth program, as a comparative cost to an expensive and inefficient bureaucratic empire that filters welfare recipients, and with a social peace and social justice benefit that forgoes the abuse and expense of militaristic justice and prison system. This new justification is based on the proper reaction to the consensus that the social contract ship is sinking. It is unfair to limit the benefits of the social contract to a select few who are electorally motivated to sink the ship as long as it carries the full weight of their benefits.
The other unfairness is that of one (age) class insisting that the lower classes in the pyramid work to maintain benefits for those at the top which they are at high risk to never be able to obtain themselves. Entitling everyone to the same benefits, importantly, provides an incentive to keep bailing water longer if the consequences of stopping means an end to current benefits. It is a clear tangible loss rather than future retirement benefits that may have been cancelled anyways for any number of reasons. Its reasonable that shared benefit in society leads to shared commitment to its sustainability.
Part 2: Although I disagree that basic income creates a net spending drain on a society, that fear is the only justifiable opposition to basic income (though the most common opposition is that all welfare and all taxes are evil). If granting all citizens basic income leads to overwhelming unsustainable debt that forces a default slightly sooner than the otherwise expected default, the solution then is to simply default and start a new society under a new name. I argue that a natural governance society would be the proper replacement of a sovereign, but let's discuss the alternative of USA 2. First, Sovereignties are artificial entities. The term sovereignty is still relevant today, even though there are few remaining kingdoms, because Sovereigns issue bonds for the state. Unlike corporations which have machines, slaves, and Intellectual property which they can turn into cash by either making and selling widgets or selling the assets, and even some levels of government who can put up buildings as collateral for loans or bonds, Sovereign bonds are exclusively backed by the reasonably immoral power of the state to violently extort taxes and duties from people. All of the major revolutions (US, French, Russian) involved a repudiation of national/sovereign debt. Though, its not listed on the link, I recall the US arguing for the repudiation of Iraqi debt after they captured Saddam Hussein. Another major difference between Sovereign and corporate debt, is that there is no court with jurisdiction over Sovereign actions of any kind, and no power or jurisdiction to enforce any payment or restitution. The only recourse is war. In the case of declaring USA 2, and repudiating all debt, the question of who and whose army would/could do anything violent is probably a null set. In the case of Greece 2 or Iceland 2, though there are powers that could impose their will, it is my hopeful opinion, that shared democratic idealism would prevent military action.
Sovereign bond lenders have likely miscalculated the possibility that a democratic government could be declared corrupt. Fundamentally, the declaration that USA 1 government is corrupt is the only propaganda declaration (odius debts) necessary to justify repudiating its debt for the new USA 2. I assume that the majority of Americans consider the US government currently corrupt, considering that the Ebola virus has the approximate same approval ratings. If a referendum to declare the US government odius/corrupt had the consequence that a yes answer means eliminating over $10T in financial obligations (and growing significantly each year), then many fence sitters would vote yes. The USA 2 concept is within the current political spectrum because elected officials can envision retaining power, while repudiating debt.
There is an alternative retaliatory option than war available to creditors. The threat to never lend any more. If the US government just declares itself evil, repudiates its debt, but stays in power without good revolutionary theater, then USA 2 will not attract new foreign investors. An explanation for the delay in the declaration of Greece 2 (default on its debt) is that the timing for Greece 2 is dependent on foreign creditors refusing to lend it any more. If foreign creditors haven't yet refused to lend Greece more money, then there is no reason for Greece to default right now. When creditors do refuse to lend it additional funds, Greece will have no reason (other than fear of war) to not repudiate/default on its debt. I expect a crisis in all sovereign debt after Greece repudiates its debt, because they will show how easy it is... Better lend Greece more money.
The reasons that a natural governance society is better than a simple rebranding of the sovereign are many. First, relevant to these discussions, is that natural governance's basis as an association of people means that it can claim a message of being less corrupt than the state it replaces, and so can claim with a straight face that it deserves to repudiate its former state's debt. The undeniable impression of revolutionary social justice in Egypt's 2011 Arab spring, limited the US's aid to its puppet regime to supplying it more tear gas. Second, an association of people can form a real basis for borrowing money that a sovereign lacks. The association of people can be jointly liable for the loan. So at the very least, foreign creditors may overlook new and innovative ways they could fail to be repaid. Third, and most important, natural governance has no basis for long term debt. Each social function and program is proposed, created and continued with a funded budget. There cannot be an unfunded program. Furthermore, tax collections should be targeting the overfunding of total program costs, because natural governance targets surpluses to distribute as egalitarian dividends. Fourth, if there is an accidental or short term deficit incurred, it is to every society member's interest to repay it as quickly as possible so as to resume receiving cash dividends.
To summarize the argument for natural governance over the rebranding of a nation: It allows the credible repudiation of debt on previous corruption grounds, provides for the shared liability of the people in incurring new debt, doesn't require or use any debt in governance, and its members are deeply motivated to repay debt quickly if it is incurred.
Another basis for natural governance is that even if it promotes a target level of survival basic income as a fixed entitlement, its designed around distributing surplus revenue as a citizen dividend. If the burden of those not creating taxable income ever becomes too high, relative to the dividend amounts, then the dividends/entitlements can (and should) be adjusted down. The difference between fixed entitlements that society is obligated to pay you, and shared surpluses dependent and proportional to you and your neighbours' (and thier children's) efforts, is that the latter encourages nurturing society. Even if nurturing society is against the collective financial interests of many individuals, nurturing society will still make them happier and less shameful.
Tuesday, December 13, 2011
Thursday, November 17, 2011
Customer vs member relationships
Libertarian and anarcho-capitalist philosophies generally espouse the voluntaryism principle that society would be better off if its members formed bilateral contracts among each other as an alternative to socialized decisions or policy. The simplest bilateral contract forms a customer-supplier relationship. The clear advantage of independent customer relationships is the right of the customer to divorce his supplier and seek another alternative.
The evils of a customer relationship, however, are that customer information knowledge is not perfect, and the supplier sales function involves educating/brainwashing its clients that their offering is to the customer's benefit, and the supplier is interested in seeing all other alternatives destroyed.
Our current Citizen-Government relationship very much represents these worst evils of customer relationships. Even if our democracies allow us a small role (1/300M) in participating in the selection of our supreme ruler, and grant us some rights of due process and speech, we are still in a position of being brainwashed/educated that invading Iraq, drug prohibition, and family law are good for us. Our rulers furthermore entitle themselves to a monopoly of rule, and alternatives are effectively prohibited.
In the battle of ideas, it is understandably difficult for people to forecast the preferred social organization because (with the libertarian path) the theoretical possibility of choosing service providers and leaving them for "better" service providers, involves giving up the protections of due process, and the enforcement against the most egregious forms of extortion and anti-competitive violence. It would be a necessarily worst outcome if a completely free market, results in the freedom to corrupt markets, and monopolies that are less accountable and "fair" than our current governments' ensure.
Shareholder-Corporate relationships are also usually customer-like relationships. Shareholders of public companies do have the power to leave easily (by selling their shares at minimal transaction costs). But because public corporations tend to have a large management-loyal shareholder group/majority, management can educate/brainwash its shareholders that it, and its actions, are good for them. Because those who are both not loyal to management and unhappy with direction will self-select themselves to leave, rather than influence management, in public companies, shareholders can be classified as either management loyal or management apathetic. A minority shareholder is just as powerless as affecting the corporation, as a citizen is powerless in affecting his government. Only monumental organization effort can hope to effect change, and even then, failure is more likely than not. The primary abuse of shareholders is to pay them insufficient dividends, and instead keep the surpluses to spend at management's discretion, usually, until the business is eventually bankrupted. One example of management's abuse of shareholders is Intel's purchase of McAffee for an overinflated amount. While shareholders had the freedom to leave upon hearing the news, their option to do so came at a cost of $4B in lowered stock price.
A membership relationship is one where members have both influence over the organization and deserve and obtain their share of operational surpluses. Ultimate membership relationships involve equality in ownership amongst members, and a decentralized organizational structure where no single administrator oversees all organizational decisions, and member initiatives are approved and led independently. The principles of ultimate memberships are the basis of natural governance, natural-finance-communal-equity, and open partnerships. The simplest rule of thumb to determine whether a relationship is customer-like or member-like is whether the administrators have the power to set their own salary, then explain how that is good for you.
The primary benefit of a membership structure is that it solves the monopoly problem. If customers have influence over the pricing and service level of their membership services then if they are overcharged, they at least benefit from the organization's profits through dividend payments of the surplus. So the harm of monopoly on its customers is neutralized. If alternate suppliers would be to the benefit of customer members, then customer members would not authorize the destruction of competition. If the membership organization is decentralized then would-be-competitors can join instead, and propose a member initiative for an alternative/supplementary service.
Car sharing services are a recent innovation leveraging the appeal of sharing culture, and modern communications infrastructure. There are 2 distinct business models: One where a fleet of company owned vehicles is made available for sharing, and the other where individual suppliers offer their car for sharing when they do not need to use it. Both models offer attractive new customer propositions compared to both traditional car ownership and car rental models. Even if they are forced by market alternatives to offer attractive customer proposals, car sharing services, even if highly democratizing the customer experience could benefit from real membership models. For instance, the real value of the organization in the business model where consumers (renters) and producers (car sharers) are matched is the marketing and matching software and processes. A membership driven organization can use its members for financing. That is consumers and producers can buy a share of the organization and/or lend funds to the organization. Spreading risk among members allows the organization to charge its members less, and still be sustainable (or charge more and pay surpluses back to members), and so can outcompete alternative capital structures and business models. Therefore, not only can membership organizations prevent the harm of monopoly on its customers, it can also provide the most efficient organizational structure possible.
An explanation for the basics of communal equity and membership organizations (at link). A question I cannot yet answer is whether it is possible to have partial (rather than ultimate) membership features. Membership at its core means influence and financial participation. While a corporate or governmental PR department would appreciate creating an illusion of influence (white house petitions) or illusions of financial participation (theoretical possibility of corporate dividends), its unclear how limited influence in decisions or dividend policy can properly constitute influence rather than powerlessness.
Under libertarian philosophies, it is unclear how extortionist mafias don't become an overwhelmingly powerful protection force. If you can't stop them, it is at least better for you to be a mafia member than an extorted mafia customer.
The evils of a customer relationship, however, are that customer information knowledge is not perfect, and the supplier sales function involves educating/brainwashing its clients that their offering is to the customer's benefit, and the supplier is interested in seeing all other alternatives destroyed.
Our current Citizen-Government relationship very much represents these worst evils of customer relationships. Even if our democracies allow us a small role (1/300M) in participating in the selection of our supreme ruler, and grant us some rights of due process and speech, we are still in a position of being brainwashed/educated that invading Iraq, drug prohibition, and family law are good for us. Our rulers furthermore entitle themselves to a monopoly of rule, and alternatives are effectively prohibited.
In the battle of ideas, it is understandably difficult for people to forecast the preferred social organization because (with the libertarian path) the theoretical possibility of choosing service providers and leaving them for "better" service providers, involves giving up the protections of due process, and the enforcement against the most egregious forms of extortion and anti-competitive violence. It would be a necessarily worst outcome if a completely free market, results in the freedom to corrupt markets, and monopolies that are less accountable and "fair" than our current governments' ensure.
Shareholder-Corporate relationships are also usually customer-like relationships. Shareholders of public companies do have the power to leave easily (by selling their shares at minimal transaction costs). But because public corporations tend to have a large management-loyal shareholder group/majority, management can educate/brainwash its shareholders that it, and its actions, are good for them. Because those who are both not loyal to management and unhappy with direction will self-select themselves to leave, rather than influence management, in public companies, shareholders can be classified as either management loyal or management apathetic. A minority shareholder is just as powerless as affecting the corporation, as a citizen is powerless in affecting his government. Only monumental organization effort can hope to effect change, and even then, failure is more likely than not. The primary abuse of shareholders is to pay them insufficient dividends, and instead keep the surpluses to spend at management's discretion, usually, until the business is eventually bankrupted. One example of management's abuse of shareholders is Intel's purchase of McAffee for an overinflated amount. While shareholders had the freedom to leave upon hearing the news, their option to do so came at a cost of $4B in lowered stock price.
A membership relationship is one where members have both influence over the organization and deserve and obtain their share of operational surpluses. Ultimate membership relationships involve equality in ownership amongst members, and a decentralized organizational structure where no single administrator oversees all organizational decisions, and member initiatives are approved and led independently. The principles of ultimate memberships are the basis of natural governance, natural-finance-communal-equity, and open partnerships. The simplest rule of thumb to determine whether a relationship is customer-like or member-like is whether the administrators have the power to set their own salary, then explain how that is good for you.
The primary benefit of a membership structure is that it solves the monopoly problem. If customers have influence over the pricing and service level of their membership services then if they are overcharged, they at least benefit from the organization's profits through dividend payments of the surplus. So the harm of monopoly on its customers is neutralized. If alternate suppliers would be to the benefit of customer members, then customer members would not authorize the destruction of competition. If the membership organization is decentralized then would-be-competitors can join instead, and propose a member initiative for an alternative/supplementary service.
Car sharing services are a recent innovation leveraging the appeal of sharing culture, and modern communications infrastructure. There are 2 distinct business models: One where a fleet of company owned vehicles is made available for sharing, and the other where individual suppliers offer their car for sharing when they do not need to use it. Both models offer attractive new customer propositions compared to both traditional car ownership and car rental models. Even if they are forced by market alternatives to offer attractive customer proposals, car sharing services, even if highly democratizing the customer experience could benefit from real membership models. For instance, the real value of the organization in the business model where consumers (renters) and producers (car sharers) are matched is the marketing and matching software and processes. A membership driven organization can use its members for financing. That is consumers and producers can buy a share of the organization and/or lend funds to the organization. Spreading risk among members allows the organization to charge its members less, and still be sustainable (or charge more and pay surpluses back to members), and so can outcompete alternative capital structures and business models. Therefore, not only can membership organizations prevent the harm of monopoly on its customers, it can also provide the most efficient organizational structure possible.
An explanation for the basics of communal equity and membership organizations (at link). A question I cannot yet answer is whether it is possible to have partial (rather than ultimate) membership features. Membership at its core means influence and financial participation. While a corporate or governmental PR department would appreciate creating an illusion of influence (white house petitions) or illusions of financial participation (theoretical possibility of corporate dividends), its unclear how limited influence in decisions or dividend policy can properly constitute influence rather than powerlessness.
Under libertarian philosophies, it is unclear how extortionist mafias don't become an overwhelmingly powerful protection force. If you can't stop them, it is at least better for you to be a mafia member than an extorted mafia customer.
Monday, September 19, 2011
Deficit Adjusted GDP - An improvement to measuring economic health.
This is essentially a basic-intermediate economics post that hopes to fix distorted public policy discussions.
Gross Domestic Product (GDP) is the sum of all income during a year/quarter in a nation. It is used as an economic benchmark for the health of nations. So it becomes a politicized tool of economic policy management: Calling on government to create economic activity and jobs.
The single most important simple fix to economic distortion and mismanagement would be to use a new benchmark: Deficit Adjusted GDP (DAGDP). This benchmark simply substracts from GDP, social (governments for every level) annual growth in public debt.
The key reason for this benchmark is that any $10T(rillion) economy (as measured by GDP) can become an $11T economy by incurring a $1T deficit/public debt increase. To remain at $11T, the economy must maintain that $1T deficit/public debt increase each year.
Deficit increases can be effective (or inneffective) in growing the economy by more than the deficit amount through what is known as the multiplier effect. This is dependent on the kind of deficit, the tax rate, the proportion of deficit funding that is saved, and the proportion that remains within the society. A $1T tax cut given to the wealthiest who will not spend any of it will not increase GDP at all. A $1T spending increase that will be entirely spent within the society on taxable activity, whose recipients in turn spend it all on taxable activity within the society will not only increase GDP far more than $1T (through the respending), but will increase tax revenue by the full $1T (through infinite respending that creates more economic activity that is eventually taxed as someone's profits).
Comment on above US chart and table: From 2002, US debt increase has been above 500B/year, and grown dramatically to over 1T/year since 2008. DAGDP for 2009 (12,117B) was below DAGDP for 2006 (12,733B). This doesn't mean that 2008/09 stimulus programs were a poor reaction (or smart), but rather that there would have been substantial more economic collapse without them. The econometric labelling of a depression is a 10% reduction in GDP. That was practically achieved in 2008 in DAGDP terms. Political economics can avoid every depression or recession label by simply sufficient skyrocketing deficit increases. The practical future policy basis for DAGDP in dealing with current unsustainable budget deficits is to achieve stable to slight (0%-2%) GDP growth while targeting smart deficit reduction initiatives. DAGDP growth of 4%-6% can be targetted and achieved even while traditional economic measures show relative stagnation. Without DAGDP as a benchmark policy tool, it is too easy for politicians to keep increasing unsustainable deficits (or download to state governments) in order to keep apparent (GDP) economic measures, and short term electability prospects.
Another general argument against even broad tax reductions is that it tends to not affect the "beer money" component of average disposable income much. Average citizen tax reductions mean that they can afford more for gas/food/rent/healthcare, and this causes price inflation in those sectors which capture most of the disposable income increase that is created by the tax reductions, and so very little true (job creating) economic activity is created by tax reductions.
A focus on disposable income, and especially the truly discretionary part of disposable income, is the key to sustainable economic growth. Just as important is the reduction of the necessity of saving through lower healthcare costs (ideally socialized) and the existence of social safety nets. A purely market approach to healthcare could allow individuals to think that they can buy infinite life, but they need to save millions to cling to that hope. Socialized healthcare even if some end of life treatments are deemed socially unaffordable, are highly economically stimulative because they allow individuals to consume instead of saving throughout their life. If you eliminate social safety nets such as healthcare and old age pensions, then you reduce disposable income more than through equivalent progressive taxes because every individual is forced to save/insure for future expenses, and the flat/regressive nature of the forced savings significantly reduces the proportion of society able to afford homes, vehicles, and other consumer goods.
While natural governance focuses on the only truly fair entitlement of basic income (citizen dividend-as-equal-share of social tax income), there can be obvious other entitlements (healthcare) that are a net benefit to society's welfare and economic health/growth. Even with our relatively corrupt current governance models, benchmarking economic performance through DAGDP instead of GDP would ensure that sensible policies are discussed, and underline the destructiveness of war spending, and crony giveaways to the wealthiest. In the US specifically, the Congressional Budget Office (CBO - relatively independent analyst of policy proposals) should adopt DAGDP to score policy.
A More comprehensive alternative to using GDP as an economic benchmark was initially discussed. That different approach focuses on aggregate social wealth.
Gross Domestic Product (GDP) is the sum of all income during a year/quarter in a nation. It is used as an economic benchmark for the health of nations. So it becomes a politicized tool of economic policy management: Calling on government to create economic activity and jobs.
The single most important simple fix to economic distortion and mismanagement would be to use a new benchmark: Deficit Adjusted GDP (DAGDP). This benchmark simply substracts from GDP, social (governments for every level) annual growth in public debt.
The key reason for this benchmark is that any $10T(rillion) economy (as measured by GDP) can become an $11T economy by incurring a $1T deficit/public debt increase. To remain at $11T, the economy must maintain that $1T deficit/public debt increase each year.
| Year | GDP-US $ billion | Gross Public Debt -total -delta $ billion | growth in public debt | |
| 1996 | 7838.5 | 6235.35 | - | a |
| 1997 | 8332.4 | 6590.71 | 365 | a |
| 1998 | 8793.5 | 6761.75 | 171 | a |
| 1999 | 9353.5 | 6974.78 | 213 | a |
| 2000 | 9951.5 | 7080.52 | 106 | a |
| 2001 | 10286.2 | 7323.90 | 243 | a |
| 2002 | 10642.3 | 7879.78 | 556 | a |
| 2003 | 11142.1 | 8572.68 | 693 | a |
| 2004 | 11867.8 | 9331.24 | 759 | a |
| 2005 | 12638.4 | 9990.33 | 659 | a |
| 2006 | 13398.9 | 10655.37 | 665 | a |
| 2007 | 14077.6 | 11360.49 | 705 | a |
| 2008 | 14441.4 | 12537.01 | 1177 | a |
| 2009 | 14119 | 14539.40 | 2002 | e |
| 2010 | 14660.4 | 16172.73 | 1633 | g |
| 2011 | 15079.6 | 18093.69 | 1921 | g |
| 2012 | 15812.5 | 19318.51 | 1225 | g |
| 2013 | 16752.4 | 20556.13 | 1238 | g |
Legend: | ||||
Deficit increases can be effective (or inneffective) in growing the economy by more than the deficit amount through what is known as the multiplier effect. This is dependent on the kind of deficit, the tax rate, the proportion of deficit funding that is saved, and the proportion that remains within the society. A $1T tax cut given to the wealthiest who will not spend any of it will not increase GDP at all. A $1T spending increase that will be entirely spent within the society on taxable activity, whose recipients in turn spend it all on taxable activity within the society will not only increase GDP far more than $1T (through the respending), but will increase tax revenue by the full $1T (through infinite respending that creates more economic activity that is eventually taxed as someone's profits).
Comment on above US chart and table: From 2002, US debt increase has been above 500B/year, and grown dramatically to over 1T/year since 2008. DAGDP for 2009 (12,117B) was below DAGDP for 2006 (12,733B). This doesn't mean that 2008/09 stimulus programs were a poor reaction (or smart), but rather that there would have been substantial more economic collapse without them. The econometric labelling of a depression is a 10% reduction in GDP. That was practically achieved in 2008 in DAGDP terms. Political economics can avoid every depression or recession label by simply sufficient skyrocketing deficit increases. The practical future policy basis for DAGDP in dealing with current unsustainable budget deficits is to achieve stable to slight (0%-2%) GDP growth while targeting smart deficit reduction initiatives. DAGDP growth of 4%-6% can be targetted and achieved even while traditional economic measures show relative stagnation. Without DAGDP as a benchmark policy tool, it is too easy for politicians to keep increasing unsustainable deficits (or download to state governments) in order to keep apparent (GDP) economic measures, and short term electability prospects.
Another general argument against even broad tax reductions is that it tends to not affect the "beer money" component of average disposable income much. Average citizen tax reductions mean that they can afford more for gas/food/rent/healthcare, and this causes price inflation in those sectors which capture most of the disposable income increase that is created by the tax reductions, and so very little true (job creating) economic activity is created by tax reductions.
A focus on disposable income, and especially the truly discretionary part of disposable income, is the key to sustainable economic growth. Just as important is the reduction of the necessity of saving through lower healthcare costs (ideally socialized) and the existence of social safety nets. A purely market approach to healthcare could allow individuals to think that they can buy infinite life, but they need to save millions to cling to that hope. Socialized healthcare even if some end of life treatments are deemed socially unaffordable, are highly economically stimulative because they allow individuals to consume instead of saving throughout their life. If you eliminate social safety nets such as healthcare and old age pensions, then you reduce disposable income more than through equivalent progressive taxes because every individual is forced to save/insure for future expenses, and the flat/regressive nature of the forced savings significantly reduces the proportion of society able to afford homes, vehicles, and other consumer goods.
While natural governance focuses on the only truly fair entitlement of basic income (citizen dividend-as-equal-share of social tax income), there can be obvious other entitlements (healthcare) that are a net benefit to society's welfare and economic health/growth. Even with our relatively corrupt current governance models, benchmarking economic performance through DAGDP instead of GDP would ensure that sensible policies are discussed, and underline the destructiveness of war spending, and crony giveaways to the wealthiest. In the US specifically, the Congressional Budget Office (CBO - relatively independent analyst of policy proposals) should adopt DAGDP to score policy.
A More comprehensive alternative to using GDP as an economic benchmark was initially discussed. That different approach focuses on aggregate social wealth.
Monday, May 9, 2011
Secession of the individual: Outlaw to Inlaw (Associated subscriber)
Secession is the only human right necessary to achieve political freedom and political processes that promote the status of the governed as equal associated members of a society rather than subjects under a hierarchical rulership. Denying the right to secession are biases in favour of the rulership's authority and continued systemic dominance over the ruled. Democratic rulerships (that deny the right to secession) cannot serve the public interest because political processes allocate power rather than promote public value, or reflect public will.
This is the first of 3 parts on the principles of secession. This deals with the most difficult aspect of "allowing" secession to very small groups, or what is an "allowable reason" to secede. The short answer is that there cannot be "moral limits" or a need to justify secession to the ruler you are divorcing. There are, however, practical considerations and philosophical outlooks societies can make that promote cohesion and membership. So it is the moral right to self determination of every individual as long as there is practical consideration of his neighbour's rights.
An outlaw is someone who has been determined to be outside the law, and most relevantly outside of any due process considerations. The default state of an individual's secession is that of outlaw. The outlaw is solely responsible for his own protection. There is no crime in harming an outlaw. This is a fundamentally negative life state in that there is vulnerability to extortion and accusations of an offense by anyone in the surrounding society, and so even if you spend substantial resources to be able to fend off a sizable militia or armed gang, you can not protect yourself against the power of national armies, and if any member of society can invoke the wrath of the state against you, and you lack due process recourse, then you will lose. There is furthermore a likelihood that the state has political leanings in favour of persecuting those that would declare themselves outlaws against the state.
The lack of due process (equality of rights between incumbent society members and the seceded/outlaw) is the impracticality of individual secession. The fairly simple solution is to subscribe to a due-process-service. Quite possibly even the incumbent state's due process service.
I define an inlaw as a seceded person who retains equal due process and state-granted-human rights to the people around him. To secede inlaw with Canada means to subscribe to its body-of-law-with-provable-harm-to-a-victim-other-than-the-perpatrator (excludes criminalization of self-victimization such as watching bad tv, masturbation or drug use, and excludes presumptive victimization (victim cannot prove harm, but political forces treat victim as child incapable of agency) such as child labour, prostitution, polygammy, and minor interpersonal conflicts). The seceded inlaw group is free to differ in criminalization of activities involving non-provable harm. The purpose of the subscription is to protect the seceded inlaw from victimization by the rest of society, and similarly protect society from the inlaws, through due process mechanisms rather than vigilantism and war. It should be possible to subscribe to alternate sentencing guidelines (for example victim/social compensation instead of incarceration).
Paying for the subscription to due process has many options. The first step is finding out how much it costs. Education and welfare have a portion of their costs attributable to crime prevention benefits to society and the inlaw. The entirety of police, judicial, and incarceration cost system per capita should be chargeable to the inlaw. The inlaw's property value could influence the cost and terms of his due process protections, in the sense that someone with more value to protect would pay more for the protection component of due process services.
Paying for due process rights of accused can be on a separate basis than paying for the privilege of invoking judicial protection of the inlaw's rights. A per-capita levy, and/or income tax can pay for due process jurisdiction over the inlaw. Usage fees or wealth tax are an option in paying for part of the costs involved in seeking judicial assistance to protect the inlaw.
Inlaw secession is thus a negotiation between the incumbent society and the divorce applicant. Payment principles are to be cost based. The incumbent society likely has a power advantage in the negotiation to select the type of cost basis that advantages it most, but mediation can assure that the payment formulas remain cost based.
One petty reason to secede is to continue enjoying the benefits of a civilized society while trying to avoid paying for them: A tax avoidance argument for secession. While excessive military and police spending, irresponsible debt, and crony-plutarchist alliances and dominance of a nation are perfectly reasonable grounds for secession, tax avoidance (while retaining social advantages) is not. Natural tax policy provides fair taxation principles to incumbent societies, and further provides practical disincentives to secede based purely on tax arbitrage.
Natural tax policy has 3 core components. It equalizes taxation of investment and employment income; It serves as a progressive consumption tax; and it taxes income (or more accurately, cashflow) in the jurisdiction where it is earned rather than the jurisdiction where the earner resides. This last feature is the key to permitting fair principled secession. Business income taxes can be viewed instead of a tax on profit, as a tax on revenue and tax credits on expenses. Natural tax policy replaces revenue taxes with cash inflow taxes, and expense credits with cash outflow credits. Taxes and tax credits can be incurred in different jurisdictions. The net effect of these tax policies is that imports (products or employment labour) are taxed the same as domestic purchases, and exports from a jurisdiciton become tax-subsidized by that jurisdiction. In the relationship between a seceded inlaw and the incumbent society, his employment and business income from that society remains taxed by the society. Since seceded-inlaws or other nations' imports bring in tax revenue but don't result in social service outlays, there is a social profit obtained by allowing the formation of peaceful seceded inlaws and trading with them. It prevents the formation of seceded inlaws for the purpose of leeching from established society.
It is society's fundamental right to tax income within its borders. A free man is free to not earn income from outside his borders, and free to not trade. There is voluntary relationship between societies/inlaws. Natural taxation policy and subscriptions to due process provide social cohesiveness that discourage secession based on purely economic grounds, as the inlaw may continue to pay a substantial share of social costs while losing some of its benefits. However, natural taxation policy and due process subscriptions remove all moral basis for the state to object to secession of individuals or groups. There is no economic disadvantage to the state of secession. If an individual or group has a philosophical objection to continued participation in the state, and agrees to the state's right to natural taxation and sharing the costs of due process systems to resolve conflicts between their populations, then the only basis for the state to object to their secession, is a claim of privilege for continued ownership/enslavement and continued rulership, and therefore obvious tyranny.
Modern secessionist movements have mostly been based on distinct society arguments: That a common people deserve self rule. We all deserve self rule. Democratic contests where the winner rules over the losers must be through the consent of the losers. Otherwise they are violent, even if the losers are too powerless to oppose the rule, and no actual violence is observable. That our societies have increasingly vitriolic opposition of philosophies should allow the political losers to discuss secession, even if the only purpose/outcome is to limit corruption and tyranny of the political winners through compromise to retain rulership over the opposition's followers. With a small number of political parties, there is no guarantee that each party's leadership is free of corruption, or that every citizen perfectly identifies with one of the party platforms. The right of secession must thus be extended to small groups and individuals. Even if political disappointment does not necessarily lead to political violence, political disappointment is disappointing. There is no justification for forcing disappointment on people.
Quebec has had its secessionist movement framed as a distinct society argument. The argument never resonated with me when it was in the context of seceding from a liberal Canada. The cultural divide seemed irrelevant in the context of general philosophical compatibility. Ina conservative Harper's Canada, the distinct society argument resonates not based on cultural and ethnic origins, but on philosophical divides, and completely ineffectual democratic opposition. Other areas/people of Canada would share a philosophical rather than cultural basis for secession with Quebec, and allowing individual secession allows for a federation of individuals to contribute to the cost of due process with their neighbours.
Peaceful secession as outlined in this paper has reasonable expectations to remain peaceful. Refusal to be ruled by a group has no expectation to lead to refusal to trade with them. A country that allows you to secede should not cause either party to harbour ill feelings. Natural governance allows societies to cooperate more broadly than due process subscriptions/agreements. They can share regulatory and social support frameworks, so secession doesn't have to imply full separation of sovereign hierarchical frameworks.
This is the first of 3 parts on the principles of secession. This deals with the most difficult aspect of "allowing" secession to very small groups, or what is an "allowable reason" to secede. The short answer is that there cannot be "moral limits" or a need to justify secession to the ruler you are divorcing. There are, however, practical considerations and philosophical outlooks societies can make that promote cohesion and membership. So it is the moral right to self determination of every individual as long as there is practical consideration of his neighbour's rights.
An outlaw is someone who has been determined to be outside the law, and most relevantly outside of any due process considerations. The default state of an individual's secession is that of outlaw. The outlaw is solely responsible for his own protection. There is no crime in harming an outlaw. This is a fundamentally negative life state in that there is vulnerability to extortion and accusations of an offense by anyone in the surrounding society, and so even if you spend substantial resources to be able to fend off a sizable militia or armed gang, you can not protect yourself against the power of national armies, and if any member of society can invoke the wrath of the state against you, and you lack due process recourse, then you will lose. There is furthermore a likelihood that the state has political leanings in favour of persecuting those that would declare themselves outlaws against the state.
The lack of due process (equality of rights between incumbent society members and the seceded/outlaw) is the impracticality of individual secession. The fairly simple solution is to subscribe to a due-process-service. Quite possibly even the incumbent state's due process service.
I define an inlaw as a seceded person who retains equal due process and state-granted-human rights to the people around him. To secede inlaw with Canada means to subscribe to its body-of-law-with-provable-harm-to-a-victim-other-than-the-perpatrator (excludes criminalization of self-victimization such as watching bad tv, masturbation or drug use, and excludes presumptive victimization (victim cannot prove harm, but political forces treat victim as child incapable of agency) such as child labour, prostitution, polygammy, and minor interpersonal conflicts). The seceded inlaw group is free to differ in criminalization of activities involving non-provable harm. The purpose of the subscription is to protect the seceded inlaw from victimization by the rest of society, and similarly protect society from the inlaws, through due process mechanisms rather than vigilantism and war. It should be possible to subscribe to alternate sentencing guidelines (for example victim/social compensation instead of incarceration).
Paying for the subscription to due process has many options. The first step is finding out how much it costs. Education and welfare have a portion of their costs attributable to crime prevention benefits to society and the inlaw. The entirety of police, judicial, and incarceration cost system per capita should be chargeable to the inlaw. The inlaw's property value could influence the cost and terms of his due process protections, in the sense that someone with more value to protect would pay more for the protection component of due process services.
Paying for due process rights of accused can be on a separate basis than paying for the privilege of invoking judicial protection of the inlaw's rights. A per-capita levy, and/or income tax can pay for due process jurisdiction over the inlaw. Usage fees or wealth tax are an option in paying for part of the costs involved in seeking judicial assistance to protect the inlaw.
Inlaw secession is thus a negotiation between the incumbent society and the divorce applicant. Payment principles are to be cost based. The incumbent society likely has a power advantage in the negotiation to select the type of cost basis that advantages it most, but mediation can assure that the payment formulas remain cost based.
One petty reason to secede is to continue enjoying the benefits of a civilized society while trying to avoid paying for them: A tax avoidance argument for secession. While excessive military and police spending, irresponsible debt, and crony-plutarchist alliances and dominance of a nation are perfectly reasonable grounds for secession, tax avoidance (while retaining social advantages) is not. Natural tax policy provides fair taxation principles to incumbent societies, and further provides practical disincentives to secede based purely on tax arbitrage.
Natural tax policy has 3 core components. It equalizes taxation of investment and employment income; It serves as a progressive consumption tax; and it taxes income (or more accurately, cashflow) in the jurisdiction where it is earned rather than the jurisdiction where the earner resides. This last feature is the key to permitting fair principled secession. Business income taxes can be viewed instead of a tax on profit, as a tax on revenue and tax credits on expenses. Natural tax policy replaces revenue taxes with cash inflow taxes, and expense credits with cash outflow credits. Taxes and tax credits can be incurred in different jurisdictions. The net effect of these tax policies is that imports (products or employment labour) are taxed the same as domestic purchases, and exports from a jurisdiciton become tax-subsidized by that jurisdiction. In the relationship between a seceded inlaw and the incumbent society, his employment and business income from that society remains taxed by the society. Since seceded-inlaws or other nations' imports bring in tax revenue but don't result in social service outlays, there is a social profit obtained by allowing the formation of peaceful seceded inlaws and trading with them. It prevents the formation of seceded inlaws for the purpose of leeching from established society.
It is society's fundamental right to tax income within its borders. A free man is free to not earn income from outside his borders, and free to not trade. There is voluntary relationship between societies/inlaws. Natural taxation policy and subscriptions to due process provide social cohesiveness that discourage secession based on purely economic grounds, as the inlaw may continue to pay a substantial share of social costs while losing some of its benefits. However, natural taxation policy and due process subscriptions remove all moral basis for the state to object to secession of individuals or groups. There is no economic disadvantage to the state of secession. If an individual or group has a philosophical objection to continued participation in the state, and agrees to the state's right to natural taxation and sharing the costs of due process systems to resolve conflicts between their populations, then the only basis for the state to object to their secession, is a claim of privilege for continued ownership/enslavement and continued rulership, and therefore obvious tyranny.
Modern secessionist movements have mostly been based on distinct society arguments: That a common people deserve self rule. We all deserve self rule. Democratic contests where the winner rules over the losers must be through the consent of the losers. Otherwise they are violent, even if the losers are too powerless to oppose the rule, and no actual violence is observable. That our societies have increasingly vitriolic opposition of philosophies should allow the political losers to discuss secession, even if the only purpose/outcome is to limit corruption and tyranny of the political winners through compromise to retain rulership over the opposition's followers. With a small number of political parties, there is no guarantee that each party's leadership is free of corruption, or that every citizen perfectly identifies with one of the party platforms. The right of secession must thus be extended to small groups and individuals. Even if political disappointment does not necessarily lead to political violence, political disappointment is disappointing. There is no justification for forcing disappointment on people.
Quebec has had its secessionist movement framed as a distinct society argument. The argument never resonated with me when it was in the context of seceding from a liberal Canada. The cultural divide seemed irrelevant in the context of general philosophical compatibility. In
Peaceful secession as outlined in this paper has reasonable expectations to remain peaceful. Refusal to be ruled by a group has no expectation to lead to refusal to trade with them. A country that allows you to secede should not cause either party to harbour ill feelings. Natural governance allows societies to cooperate more broadly than due process subscriptions/agreements. They can share regulatory and social support frameworks, so secession doesn't have to imply full separation of sovereign hierarchical frameworks.
Friday, April 8, 2011
Anarchist's Dilemma game
The core idealist anarchist principle is that of non-aggression. It is in fact a core tenet of any utopian philosophy: A pledge to not initiate aggression. The Anarchist's dilemma game is a simplification of an anarchist world of 2 people/groups, and the payoffs each can expect if they either choose peace, or lie about choosing peace (choose war). Note that whether or not one side is a war monger, it still wants to pretend to want peace so as to convince the other side to be unprepared and unaggressive. Thus , the non-aggression principle is susceptible to hypocrisy: "Non-aggression is something you should believe, so that I may take advantage of your gullibility."
ME
Peace War
Y Peace 1 1
O War -1000 0
U
Above "chart" is payoff matrix for Me, in an anarchist's dilemma game between me and you.
- If we both choose peace, we both create and keep 1 unit of wealth
- If we both choose war, there is stalemate, but neither of us produced any wealth
- If I choose war, and you choose peace, I steal your unit of wealth
- If I choose peace, and you choose war, I die and can no longer keep playing.
Many of you will recognize this as a variation of the Prisoner's dilemma game. (See first comment below for fuller explanation of game). Probably the most important philosophical and game theory concept. The Anarchist Dilemma variant is an important reformulation of the payoff and precept with historical insights into the formation of religion, currency and civilization, and insights into the future of civilization.
Note that the win-win solution occurs if both sides choose peace. 2 units of wealth are created, and split evenly between the two. We all call that the "good" encouraged outcome, and so would god, and every religion. The need to convince everyone else that peace is the good choice motivated religious worship of that good force, and quite possibly, fictionalized personified exaggeration of that force for good. "Peace is good because we have faith that peace is good" is a valid argument even if it is circular. Similarly, reinforcing faith in currency or faith that your neighbour will/should not murder and pillage you naturally enhances value.
Promotion of the good outcome has also justified the state's role of administering police forces to punish its citizens who choose violence over peace. Note (in the anarchist dilemma game) that despite the mutual profit of choosing peace, each person individually gains greatest expected utility (by a wide margin) by preparing for war, and thus not producing any surplus value/wealth. By adding punishment for crime, socialized police forces can add sufficiently negative consequences to compel citizens to choose peace. Socialized costs should be less than the sum of individual protection costs, and if it is successful in compelling people to be peaceful, it helps achieve that good and productive outcome that happens to be otherwise against individual participants' interest.
The obviousness of the police solution for guiding citizen behaviour would imply an equal obviousness in sovereign nations associating to pool military funds into a punishment organization. The less we all spend on military, the more we can enhance wealth and happiness in our own countries, and less military spending brings about even less defensive military spending requirements. The 2 main arguments against a global punishment force happen to be the same as those against a state punishment (police) force:
- Punishment force efforts can be politically biased instead of principled.
- Individual protection efforts can be more effective in protecting the individual's interests.
Addressing the 2nd point first, consider driving regulations. We can all individually get to where we need to faster by being allowed to drive 200mph+ while multitasking and enjoying alcoholic beverages. We're collectively safer by forbidding/punishing those behaviours. Similarly, preventing individuals from amassing the most powerful weapons (including nuclear) and militias, and not having to rely on their judgement for application of that force, makes us collectively safer and richer. Under the anarchist absence of a punishment force, the principle of vengence and cost-ineffective deterrence leads to more death and destruction, and poverty.
Political bias and errant use of police resources are strong arguments equally against states and a global association of states. The primary rationale for natural governance is addressing this issue head on. Any socialized police/enforcement force cannot have any influence on any other socialized association. And no influence on creating laws. The police chief should have a mandate to be effective and fair, and direct electoral accountability for only that mandate. This is the best we can do to prevent political bias in enforcement, and political bias for creeping legislation after an association is formed. In the case of global punishment force, the simplest mandate is to enforce the territorial integrity of all sovereign members, and in order to "eliminate" civil strife, support a procedure for all secessionist movements. On the latter point, the option for divorce is an option for peaceful resolution of any disagreement. It is both distracting, and destructive, to entertain reasons for either side to be more deserving of murder or punishment.
Secession also solves terrorism. Political violence by the relatively powerless stems entirely from the inability to affect the political process. Policies which frequently intentionally disenfranchise those thought too weak to fight back. Beyond terrorism, all political violence within a territory is based on the prize of political control of that territory. The UN's attempt to create strong(er) states in Africa has directly created violence among groups for the prize of political control. Beyond civil violence, political acrimony, for instance in the US, should lead to divorce. Republicans and Democrats appear to have irreconcilable differences, rather than an acceptance of one ruling over the other. Beyond political acrimony, In Canada, objection to political process where the majority who oppose a clearly corrupt authoritarian ruler resolved to spend $1500 of each Canadian's money on prisons and poorly designed fighter jets, shouldn't force Canadians to accept the political process, or submit to its results. The option of secession is more important than democracy in resolving political differences or abuses, and guarding against corrupt, or simply biased, governance.
Democracy may be a peaceful means of obtaining political control, but that control is substantially equivalent to any non-democratic ruler. Revolutionary ideals and principles such as the obviousness of self-determination, or Montesquieu's "Government should be set up so that no man need be afraid of another.", have yet to ever survive democracy. There are no laws protecting the people from the government, and only a small individual voice in choosing vague and unaccountable election platforms. Democracy is not enough to have effective, accountable government.
A final tangent to leave you with. An alternative to a global punishment force borrows from natural finance's 3 party contract system (comptrollership function) where 2 parties contract with a 3rd in order to resolve differences (or act as punishment decider/enforcer) between the 2 parties. Unlike typical arbitration processes, care must be taken to guard against systemic bias between the two parties (company-consumer arbitration tends to favour companies because they are more likely to need future arbitration. The same bias applies towards state prosecutors). Funding of the arbiter has to be formulaic and independent of the outcome of a complaint, and the appointment of the arbiter, made prior to any complaint. The purpose of this mechanism is to accommodate many small seceded communities in a regionally efficient manner.
Monday, January 31, 2011
ISP Usage Based Billing is reason to leave Ontario and Canada
The CRTC's decision to allow BCE to protect its television properties and services by forcing all ISPs to charge $1.90 per gb (their cost is under $.01) over 25gb per month rate is a good reason for citizens to abandon Ontario and Canada. Or perhaps coming back enough only to collect healthcare and old age benefits.
By creating exorbitantly expensive bandwidth consumption rates compared to other first world nations, it deprives Ontarians from the consumption benefits, and choice of services, enjoyed elsewhere. In addition, it harms innovation and entrepreneurship in information technology industries, severely incentivizing that talent to leave for civilized and developed jurisdictions, and harms virtually all companies that use the internet as part of their business.
By rejecting information technology professionals and enthusiasts from enjoying life in Canada and Ontario, by increasing their internet bills $500-$1000 this year, and easily $2000+ in comming years compared to the benefits that could be enjoyed elsewhere in the world, Ontarians should reject Ontario and possibly Canada for this blatant favoritism to a monopolist. Those regions of the world almost as great as Ontario to live and work in, surpass it if a $2000+/year comparative cost is included.
I urge the Ontario legislature to pass a monopolist tax of 80% or 90% or 100% on all UBB revenues, so that BCE rethinks its economic necessity.
By creating exorbitantly expensive bandwidth consumption rates compared to other first world nations, it deprives Ontarians from the consumption benefits, and choice of services, enjoyed elsewhere. In addition, it harms innovation and entrepreneurship in information technology industries, severely incentivizing that talent to leave for civilized and developed jurisdictions, and harms virtually all companies that use the internet as part of their business.
By rejecting information technology professionals and enthusiasts from enjoying life in Canada and Ontario, by increasing their internet bills $500-$1000 this year, and easily $2000+ in comming years compared to the benefits that could be enjoyed elsewhere in the world, Ontarians should reject Ontario and possibly Canada for this blatant favoritism to a monopolist. Those regions of the world almost as great as Ontario to live and work in, surpass it if a $2000+/year comparative cost is included.
I urge the Ontario legislature to pass a monopolist tax of 80% or 90% or 100% on all UBB revenues, so that BCE rethinks its economic necessity.
Friday, January 14, 2011
Canadian basic income vs guaranteed income
Hugh Segal a Canadian senator has been proposing a guaranteed income for Canadians of $20k. Guaranteed income means that if you make less than 20k, the government will provide you with the DIFFERENCE so that your total income is 20k only if it would be less than 20k without the supplement. Universal basic income (UBI) on the other hand, is a cash award (likely much smaller than 20k) for all citizens to do with as they wish.
Guaranteed income is a patently horrible idea. First, it creates a welfare trap. It is a massive disincentive to work if every dollar you earn means losing a dollar in benefits. It takes effort and experience to be qualified to earn more than $24-30k per year, and that effort becomes less attractive if you are taxed at 100% for your first 20k in earnings. An even more important deathknell to the concept is the potential for tax fraud and riskless speculation. First riskless speculation, as one example of the canadian tax code, gains and losses from short selling stocks are treated as ordinary income, and so making large bets against Canadian companies would have an outcome of heads I win, tails I break even because guaranteed income gives me back what i lost. The tax fraud opportunities are similarly investment based, where apparent losses are reinbursed through guaranteed income, and it further promotes untaxed underground economic activity.
Basic income on the other hand is a spectacular idea. There is no qualification for it, and so no potential for fraud or disincentive to work. Seniors already receive it through OAS (old age security) program. http://www.basicincome.com/ is an advocacy site that does a good job detailing the case for basic income, and offers a math analysis using 2000 figures. While I applaud the site's effort to partition basic income (and calculate impact) among adults, seniors and children, I strongly disagree with the proposed basic income levels (10k per adult 15k per couple) as being much too high.
Initial Target Basic income should be a survival level.
$6000 per adult, even in Toronto can afford renting a room ($300-$400/mo) from strangers at market rates, and food. Granted not much else. I'm about to show why this number should have strong political right wing support for it. From page 8 of this UBI advocacy paper, in 2004,
But its much rosier than that. $5200 in AFTER TAX basic income is revenue neutral. If we assume that on average, most basic income recipients would have total income above $38k (and use that tax bracket), and with the marginal tax rate for Ontario of 33.30%, then the actual revenue neutral pretax basic income levels we could afford are $7796.10 per person. So replacing transfer payments with $6000 per adult basic income is actually a significant government expense reduction. Providing bonuses for seniors and children on top of the $6000 can still be revenue neutral. Not only is it revenue neutral, but each taxpayer is getting back $6000 (pretax) as well. Arguing for UBI above $6000 should be deferred until the effects of this initial UBI level can be appreciated.
Basic income has substantial economic and social benefits. First it is not a poverty program, so it doesn't trap the poor into continuing qualifying. It replaces many government and charity social services with private and cooperative ones. It is much easier to help the homeless, depressed and disabled if they have $6000 to contribute to room and board, or for them to band together to share shelter or build communities.
Eliminating desperation through UBI means a whole lot of police and regulation requirements become less necessary. Desperation is the prime motivator for violent crime. Desperation and power imbalances are the reason we have oppression laws. Minimum wage laws become no longer necessary. So, the young and poor can gain more opportunities for experience and on-the-job training. Domestic violence accusations without evidence, where intervention is as bad or worse than non-intervention, is based on dated myths that women are economically oppressed by spouses, and so we can shift towards non-judicial-intervention solutions (advise them to separate). So basic income would help municipal budgets as well, by reducing large public and social services and social costs.
There are more important, but less well understood, economic benefits as well. Citizens can consume and invest more, because the safety net of basic income means they need to set aside less for emergency or long term unemployment. The economist Keynes noted that economic activity grows as the multiplier effect (the speed/velocity at which people spend their earned income) grows. Less risk aversion to spending means increased velocity of money. Less risk aversion due to the safety net of UBI leads to many more economic benefits: It is easier to fund higher education. It is easier to invest or start a small business with lower fixed salary if you have basic income support. It is easier for employees to consider commission based or profit sharing based compensation instead of fixed salaries. Both of these (less overhead) means it is easier to make a business case for loans to your business. The benefits of cooperating for survival create greater sense of community through more relationships, and an interconnected pool of people to cooperate on business ventures and help themselves out of poverty.
There are also some left wing/pro-labour economic arguments for basic income, and higher than survival rate basic income. First, the only mechanism that exists to counteract wealth inequality towards industrialists is wage inflation. If some people drop out of the labour pool due to the availability of basic income, then it raises competitive wage and benefits balance for those that remain in the labour pool. (Which incidentally probably attracts more people back into the labour pool). In fact, the only criticism of basic income shown on the wikipedia page is that without benefit or wage concessions, labour tends to volunteer fewer hours to their employer.
A $6000 basic income to all Canadian adults is less expensive than the bureaucratic hierarchy that currently oversees poverty and personal transfer payment programmes. It further brings substantial social and economic benefits that will make Canada strong, successful and happy.
Guaranteed income is a patently horrible idea. First, it creates a welfare trap. It is a massive disincentive to work if every dollar you earn means losing a dollar in benefits. It takes effort and experience to be qualified to earn more than $24-30k per year, and that effort becomes less attractive if you are taxed at 100% for your first 20k in earnings. An even more important deathknell to the concept is the potential for tax fraud and riskless speculation. First riskless speculation, as one example of the canadian tax code, gains and losses from short selling stocks are treated as ordinary income, and so making large bets against Canadian companies would have an outcome of heads I win, tails I break even because guaranteed income gives me back what i lost. The tax fraud opportunities are similarly investment based, where apparent losses are reinbursed through guaranteed income, and it further promotes untaxed underground economic activity.
Basic income on the other hand is a spectacular idea. There is no qualification for it, and so no potential for fraud or disincentive to work. Seniors already receive it through OAS (old age security) program. http://www.basicincome.com/ is an advocacy site that does a good job detailing the case for basic income, and offers a math analysis using 2000 figures. While I applaud the site's effort to partition basic income (and calculate impact) among adults, seniors and children, I strongly disagree with the proposed basic income levels (10k per adult 15k per couple) as being much too high.
Initial Target Basic income should be a survival level.
$6000 per adult, even in Toronto can afford renting a room ($300-$400/mo) from strangers at market rates, and food. Granted not much else. I'm about to show why this number should have strong political right wing support for it. From page 8 of this UBI advocacy paper, in 2004,
The largest components of these transfer payments are UI, OAS and welfare. At 25M Canadians over 18, 130B is $5200 per adult. It is unclear whether the $130B includes the administrative overhead of the agencies that oversee the transfer programs (and it probably at last excludes union pension obligations), but assuming it does, it means that eliminating all of those transfer programs and replacing them with a $5200 basic income is revenue neutral.The total Canadian government (both federal and provincial) transfer payments to persons was 130 BILLION dollars, more than double the MacDonald Commission numbers – excluding health care and education. This included all programmes mentioned plus the universal GST (our value added tax) credit. So replacing some of these with a more humane and efficient basic income is hardly a question of wasteful or even new spending.
But its much rosier than that. $5200 in AFTER TAX basic income is revenue neutral. If we assume that on average, most basic income recipients would have total income above $38k (and use that tax bracket), and with the marginal tax rate for Ontario of 33.30%, then the actual revenue neutral pretax basic income levels we could afford are $7796.10 per person. So replacing transfer payments with $6000 per adult basic income is actually a significant government expense reduction. Providing bonuses for seniors and children on top of the $6000 can still be revenue neutral. Not only is it revenue neutral, but each taxpayer is getting back $6000 (pretax) as well. Arguing for UBI above $6000 should be deferred until the effects of this initial UBI level can be appreciated.
Basic income has substantial economic and social benefits. First it is not a poverty program, so it doesn't trap the poor into continuing qualifying. It replaces many government and charity social services with private and cooperative ones. It is much easier to help the homeless, depressed and disabled if they have $6000 to contribute to room and board, or for them to band together to share shelter or build communities.
Eliminating desperation through UBI means a whole lot of police and regulation requirements become less necessary. Desperation is the prime motivator for violent crime. Desperation and power imbalances are the reason we have oppression laws. Minimum wage laws become no longer necessary. So, the young and poor can gain more opportunities for experience and on-the-job training. Domestic violence accusations without evidence, where intervention is as bad or worse than non-intervention, is based on dated myths that women are economically oppressed by spouses, and so we can shift towards non-judicial-intervention solutions (advise them to separate). So basic income would help municipal budgets as well, by reducing large public and social services and social costs.
There are more important, but less well understood, economic benefits as well. Citizens can consume and invest more, because the safety net of basic income means they need to set aside less for emergency or long term unemployment. The economist Keynes noted that economic activity grows as the multiplier effect (the speed/velocity at which people spend their earned income) grows. Less risk aversion to spending means increased velocity of money. Less risk aversion due to the safety net of UBI leads to many more economic benefits: It is easier to fund higher education. It is easier to invest or start a small business with lower fixed salary if you have basic income support. It is easier for employees to consider commission based or profit sharing based compensation instead of fixed salaries. Both of these (less overhead) means it is easier to make a business case for loans to your business. The benefits of cooperating for survival create greater sense of community through more relationships, and an interconnected pool of people to cooperate on business ventures and help themselves out of poverty.
There are also some left wing/pro-labour economic arguments for basic income, and higher than survival rate basic income. First, the only mechanism that exists to counteract wealth inequality towards industrialists is wage inflation. If some people drop out of the labour pool due to the availability of basic income, then it raises competitive wage and benefits balance for those that remain in the labour pool. (Which incidentally probably attracts more people back into the labour pool). In fact, the only criticism of basic income shown on the wikipedia page is that without benefit or wage concessions, labour tends to volunteer fewer hours to their employer.
A $6000 basic income to all Canadian adults is less expensive than the bureaucratic hierarchy that currently oversees poverty and personal transfer payment programmes. It further brings substantial social and economic benefits that will make Canada strong, successful and happy.
Wednesday, January 12, 2011
Moderate Anarchy
Even anarchist communities would quickly institute regulation against murder and theft. Human rights must be inclusive of property rights, as the right not to be murdered or abused is your property, with theoretically your right to bargain it away. Even leftist versions of anarchy that promote sharing, circles of trust, or gift economies are implicitly recognizing property rights as communal property, membership property, or the social esteem (assets) of expected returned favours. A commune must retain the right to sell itself either in whole or in expanded membership, even if it may choose to gift those rights away. Without the right there is no incentive to invest in the commune.
The only form of anarchy that doesn't recognize property rights whether or not they admit it, is nihilism. The state/media portrayal of anarchists as destroyers of everything ostensibly under the pretext of wanting to loot property lawlessly. While such people exist, and arguably the most militant revolutionaries are those that seek the greatest power or greatest power vacuum under which they aim to personally profit, anarchism is essentially an idealist framework founded on liberty and voluntaryism.
Laws against violence and theft are easy to accept voluntarily. The alternative is amassing or joining the strongest armies to fight for what little property exists, and employing people in the security or brigandry industry means they are not employed in creating property and value. Once we accept that there needs to be regulation and enforcement against violence and theft, we accept that there must be laws, police and courts. Privatising these is an impossibility, because the rich white gated community protection force can only serve its clients instead of idealist law, and state oppression is simply replaced with private oppression.
Accepting law, courts and police doesn't mean accepting a state, even though hardly anyone realizes this yet. One solution, is to simply prevent all other legislation than violence and theft prevention. Legislation is the tool by which the state circumvents all mandates and checks on its power. Its irrelevant that the original US constitutional convention specifically mandated federal law to be as minimal as possible, all opportunities to expand federal power through legislation are taken with impunity. Its irrelevant that there are independent branches of government who pretend to act as checks and balances if politicians have higher loyalty to their parties, and if the branches and parties can gain more power through collusion rather than opposition.
Having accepted laws and enforcement against violence and theft are worthwhile, what do we do when 12 year olds drag race cars drunk through school zones repeatedly causing death to themselves and pedestrian children? Legislating driving privileges based on maturity, sobriety, and perhaps proven capacity would become popular, with no obvious alternative solution to preventing the harm. Similarly, regulating stock (and other) markets such that buyers and sellers have a minimum amount of cash or assets to place trades is better for the market than if people are constantly dealing with fraudulent or insolvent counterparties. Also similarly, its normal for people to prefer regulation aimed at preventing pollution and industrial disasters over seeking compensation for union carbide bhopal or bp event horizon oil spill type events on the grounds that preventing harm is better than compensating harm, and there is no guarantee that a negligent party has the capacity to compensate fully its victims.
Even though we have strong arguments for popular legislation, there is no reason whatsoever for these regulatory bodies to be hierarchically structured under one executive. By making regulatory agencies independent, and as much as possible, each individual regulatory (sub) legislation independent, we prevent a state aparatus from using all of its tentacles to oppress its citizens. By making these regulatory or legislative silos accountable to the electorate, their efficiency and necessity needs to always be justified.
Natural governance uses the term natural in its sense of truth and correctness. It presumes the primal value of freedom and presumes that society should be a voluntary association for the mutual benefit of its members, and not its leadership. Rather than eliminating all leadership, the natural solution is to have justified and accountable leadership on narrow mandates. This provides a natural balance in providing social services that are essential or at least of value, and limiting the power and expense of government.
The only form of anarchy that doesn't recognize property rights whether or not they admit it, is nihilism. The state/media portrayal of anarchists as destroyers of everything ostensibly under the pretext of wanting to loot property lawlessly. While such people exist, and arguably the most militant revolutionaries are those that seek the greatest power or greatest power vacuum under which they aim to personally profit, anarchism is essentially an idealist framework founded on liberty and voluntaryism.
Laws against violence and theft are easy to accept voluntarily. The alternative is amassing or joining the strongest armies to fight for what little property exists, and employing people in the security or brigandry industry means they are not employed in creating property and value. Once we accept that there needs to be regulation and enforcement against violence and theft, we accept that there must be laws, police and courts. Privatising these is an impossibility, because the rich white gated community protection force can only serve its clients instead of idealist law, and state oppression is simply replaced with private oppression.
Accepting law, courts and police doesn't mean accepting a state, even though hardly anyone realizes this yet. One solution, is to simply prevent all other legislation than violence and theft prevention. Legislation is the tool by which the state circumvents all mandates and checks on its power. Its irrelevant that the original US constitutional convention specifically mandated federal law to be as minimal as possible, all opportunities to expand federal power through legislation are taken with impunity. Its irrelevant that there are independent branches of government who pretend to act as checks and balances if politicians have higher loyalty to their parties, and if the branches and parties can gain more power through collusion rather than opposition.
Having accepted laws and enforcement against violence and theft are worthwhile, what do we do when 12 year olds drag race cars drunk through school zones repeatedly causing death to themselves and pedestrian children? Legislating driving privileges based on maturity, sobriety, and perhaps proven capacity would become popular, with no obvious alternative solution to preventing the harm. Similarly, regulating stock (and other) markets such that buyers and sellers have a minimum amount of cash or assets to place trades is better for the market than if people are constantly dealing with fraudulent or insolvent counterparties. Also similarly, its normal for people to prefer regulation aimed at preventing pollution and industrial disasters over seeking compensation for union carbide bhopal or bp event horizon oil spill type events on the grounds that preventing harm is better than compensating harm, and there is no guarantee that a negligent party has the capacity to compensate fully its victims.
Even though we have strong arguments for popular legislation, there is no reason whatsoever for these regulatory bodies to be hierarchically structured under one executive. By making regulatory agencies independent, and as much as possible, each individual regulatory (sub) legislation independent, we prevent a state aparatus from using all of its tentacles to oppress its citizens. By making these regulatory or legislative silos accountable to the electorate, their efficiency and necessity needs to always be justified.
Natural governance uses the term natural in its sense of truth and correctness. It presumes the primal value of freedom and presumes that society should be a voluntary association for the mutual benefit of its members, and not its leadership. Rather than eliminating all leadership, the natural solution is to have justified and accountable leadership on narrow mandates. This provides a natural balance in providing social services that are essential or at least of value, and limiting the power and expense of government.
Tuesday, January 11, 2011
High Tax Libertarianism
Natural Governance proposes both high progressive taxation system and small libertarian government. It is libertarian because it both breaks down government into small independent electorally accountable functions without the power to expand their powers legislatively, and distributes the surpluses associated with eliminating government functions back to the people.
The impossibility of legislative expansion of powers, or concentration of power either hierarchically or to single points of corruption means that all public (government) expansion must be through electoral majority, and the fact that every voter receives a direct cash payment for reducing government services or choosing cheaper regulation means that there are strong forces to limit public/social regulation.
At the same time, obvious and serious objections to libertarianism/anarchism are considered and addressed. Private police forces are unworkable and simply another name for armed gangs serving their customers. Wealth redistribution is actually a powerful economic development and social cohesion force. It is socially cohesive in that it placates violent crime and social unrest. Progressive taxation policies were largely the result of anarchist and communist revolutionaries, and is substantially the reason for national civility, docility, and conformity in 20th century OECD nations. It is economically developing because wealth redistribution empowers more consumers. We each need only one car, shelter, tv and phone, and have limits on drink and food desires, and so necessarily have the power to produce and sell more goods if all can afford them, rather than if few can afford hundreds of them.
A safety net conforming to libertarian principles is unconditional basic income. For Americans, elimination of all government functions except for the IRS could lead it to distribute its tax revenue as $10,000 to each adult citizen. It is libertarian and idealist in principle because no authority, discrimination or corruption is used to determine or qualify the recipient or pilfer administrative overhead in providing the redistribution. Concern for and prevention of poverty are inherent popular fears of accepting libertarian principles, and so marrying basic income to systemic pressures to reduce the size and authority of the state serves to overcome the only practical objection to libertarianism.
Regulation is not inherently bad. All necessary/appreciated regulation is a direct result of events that occurred in its absence. Expansion of government and regulation made without accountability is evil and corrupt, but cannot be stopped in our current political systems because each individual law and program or enforcement policy is not important enough to determine the elected king of the hierarchy that produced it. We are all too removed from political action to affect anything. The only way to change ineffectual political action is make any law or social program a directly accountable function with no possibility of self expansion of the function.
Taxation is also not inherently bad. Higher progressive rates are justified in being less of an inconvenience on the very successful. All financial success is due mostly to the cooperation of the society that you extracted your surpluses from. Other taxes (than income taxes) can also serve to direct social goals with invisible hands. Taxes on pollutants or personally destructive behaviour can serve to both curb their consumption and fund society or recoup social costs.
The impossibility of legislative expansion of powers, or concentration of power either hierarchically or to single points of corruption means that all public (government) expansion must be through electoral majority, and the fact that every voter receives a direct cash payment for reducing government services or choosing cheaper regulation means that there are strong forces to limit public/social regulation.
At the same time, obvious and serious objections to libertarianism/anarchism are considered and addressed. Private police forces are unworkable and simply another name for armed gangs serving their customers. Wealth redistribution is actually a powerful economic development and social cohesion force. It is socially cohesive in that it placates violent crime and social unrest. Progressive taxation policies were largely the result of anarchist and communist revolutionaries, and is substantially the reason for national civility, docility, and conformity in 20th century OECD nations. It is economically developing because wealth redistribution empowers more consumers. We each need only one car, shelter, tv and phone, and have limits on drink and food desires, and so necessarily have the power to produce and sell more goods if all can afford them, rather than if few can afford hundreds of them.
A safety net conforming to libertarian principles is unconditional basic income. For Americans, elimination of all government functions except for the IRS could lead it to distribute its tax revenue as $10,000 to each adult citizen. It is libertarian and idealist in principle because no authority, discrimination or corruption is used to determine or qualify the recipient or pilfer administrative overhead in providing the redistribution. Concern for and prevention of poverty are inherent popular fears of accepting libertarian principles, and so marrying basic income to systemic pressures to reduce the size and authority of the state serves to overcome the only practical objection to libertarianism.
Regulation is not inherently bad. All necessary/appreciated regulation is a direct result of events that occurred in its absence. Expansion of government and regulation made without accountability is evil and corrupt, but cannot be stopped in our current political systems because each individual law and program or enforcement policy is not important enough to determine the elected king of the hierarchy that produced it. We are all too removed from political action to affect anything. The only way to change ineffectual political action is make any law or social program a directly accountable function with no possibility of self expansion of the function.
Taxation is also not inherently bad. Higher progressive rates are justified in being less of an inconvenience on the very successful. All financial success is due mostly to the cooperation of the society that you extracted your surpluses from. Other taxes (than income taxes) can also serve to direct social goals with invisible hands. Taxes on pollutants or personally destructive behaviour can serve to both curb their consumption and fund society or recoup social costs.
Monday, January 10, 2011
Natural Governance
Natural Governance is the outcome of designing governance from the ground up. The principles are similar to anarchist ideals, but also the ideals of democracy we are led to believe exist in grade school or from politicians. These principles are:
There is no need for a legislative branch. All laws and regulations are created by existing or newly created accountable governance silos. A proposed silo can be as simple as a study to examine the impact of proposed legislation or program or policy. Legislative branches are incapable of providing checks and balances if they are loyal to political parties and/or the institution of government.
There is no need for voter anonymity. Voters or their chosen delegates can base their votes on principle or bribes. There are no fixed terms, so buying a vote is only useful until it is paid for. No anonymity means voter fraud is less likely, and voting can be done remotely and electronically. Support for a delegate or proposal can be withdrawn at any time.
A governance silo can apply regionally and supercede a larger regional/national regulations or associations. Natural governance supercedes nations or even national associations, replacing hierarchical subservience with membership in multiple individual regulatory associations. Membership in a regulatory association may still be democratically imposed on the minority.
The chaotic guidance of Invisible hands is what Adam Smith glorified in the free market. Goods and services innovated and produced based on consumer acceptance. Ideas to provide value (as efficiently as possible) to society are allowed to spring up without central planning or approval. Natural Governance applies the same principles to social policy where voter choice of every idea and initiative is on each individual idea/initiative's merits, and efficient execution of policy is needed to keep voter-supported governance of that policy. Academics and truth proponents can thus play a much stronger role in society evaluating proposals and directly shaping policy.
Capturing regulators (having the regulators serve the industry/groups it is charged in policing) is easy under a hierarchical state, because any corruption or inneffectuality of an agency has no repercussions on the elected government. No US presidential campaign ever includes projected appointments and mandate of the SEC, FEC, or FDA. Therefore, politics and contributors determine their mandates without any electoral consequences. Natural Governance provides the mandate's proponent with the authority to execute the elected mandate, and thus complete accountability for it.
The state and society supposedly share the same values and goals, though the state unfairly asserts its primacy. Weakening the state can enhance social value, and prominence of society in competition with others. Natural Governance is thus of national strategic importance in achieving social and economic prominence and relative dominance over competing societies, by the simple virtue of being more desirable to join and remain in such society. The naive implication is that a weaker state makes a stronger nation, and everyone should warmly embrace the concept.
Regulation means all laws and powers, (and, distinct but related, the enforcement thereof). With popular determined regulation, comes the possibility to regulate government/regulator power. Governance silos require common enforcement resources. Enforcement agency mandates should still be elected, but they have a simple honest administration mandate. They exist mostly as a an efficiency mechanism that murder regulations and robbery regulations can be enforced more efficiently within the same police agency. The enforcement agency's budget is the sum of all funding assigned by governance silos that utilize the agency.
The main regulation of the government silos comes from philosophical opposition to the silo's mandate. While one person can head multiple silos, it can be easy to separate silos into narrow divisions. For instance, the EPA can have individual silos for each industry. Driving regulations can branch off pilot programs for radical theories promoting either sharp spikes fixed on drivers steering wheels, or uncontrolled intersections. Philosophical objection to mandates is manifested by proposing narrower mandates, or proposing competing mandates that can be implemented in parallel or in pilot locations, and receiving electoral support to do so. The other regulation of governance silos involves regulation of mandate and budget execution. Court or electoral challenges can be made to recall or replace the silo administratorship based on execution failures of its electorally promised mandate.
Starting Points
The obvious starting point is to simply transform all agencies, departments and ministry heads into elected silo heads. But one election option must be to remove a department or program. We can model an egalitarian nation as an egalitarian enterprise. Progressive taxation is universally supported on the grounds of wealth redistribution, which happens to serve the industrious by providing more customers with the means to purchase the economic value they contribute. In practice however, relatively few funds are distributed to the less wealthy because they are instead spent on government programs, only some of which expensively determine who is to be given funds. So an alternative starting point is to treat tax revenue as belonging in equal share to all citizens, and absent a reason to spend it, redistribute it to all in equal shares as "basic social income". This is a marriage of progressive and libertarian ideals. It also provides a universal safety net that lessens desperation and the opportunity to prey on desperation, and allows more risk taking. This implies very static tax policies.
A libertarian myth is that community funded enterprise is necessarily inefficient. "Government" provided services such as healthcare and roads have several cost efficiencies over private services. Savings from lack of metering (measuring each consumers use), lack of a sales transaction (education and convincing time), lack of cash security and handling, and no built-in profit markup. These advantages mean that it is completely feasible for public services to be approved by voters and seen as an attractive option and worth foregoing part of their share of basic social income to support those services. At the same time, those services must be provided efficiently to continue receiving support, and an ever expanding wasteful empire becomes constrained.
The most obvious services that would likely be dropped in favour of higher basic income include welfare, unemployment insurance, old age assistance, and military offense expenditures. The biggest problem with welfare and UI is that it provides a massive disincentive to work. Working means losing benefits. Basic income has no demonstrated-need conditions. Fixed tax rates and basic income happen to self regulate the economy. There's no need for minimum wage laws. If basic income is sufficient to remove people from the labour pool, then the labour pool's bargaining power is raised, and may attract more people to the labour pool. If the economy does poorly, and each's basic income goes down due to lower tax revenues, then again the labour pool will tend to go up out of necessity and wages adjust down to the economy.
One regulation model to rule them all
Government and private sectors have always been intertwined through regulation of the private sector. A model that maximizes both access to services and efficiency and effectiveness of those services is to regulate standards for those services in exchange for partly subsidizing them for consumers and provide low interest loans (by the community/nation) to consumers for purchasing the service. Healthcare and education are considered by most as essential social services. The above formula guarantees access to those services to all. However, by insisting on a personally accountable portion of the costs to service users, there is a "market" incentive for the user to verify that the service is at least useful if not necessary. The mechanism promotes efficient and effective services, and curbs the most serious fraud opportunities (phantom services). It further shifts much of the funding for public socially desirable services away from taxes and towards users. This, in addition to being fair (users pay more than non users), has the advantage of making programs that benefit some groups more than others more palatable to be partly publicly funded (by all through elections). User loans can use the natural finance soft loan concept of being repaid based on ability through what is tantamount to surtaxes on income. Unregulated businesses can tap into soft loan financing for their customers as well.
- Free Association by equal members. Administrators are elected to serve the membership rather than rule over them.
- Minimization of sovereignty. Protection of membership from external aggression does not imply protection of the rulership from change or influence.
- Secession and recall must be a recourse for freely associated members to maintain freedom.
- Recognition of points of corruption in politics and rulerships. The ease of empty promises, capturing unnaccountable regulators, and serving powerful interests ahead of social interests.
The primary solution is straightforward. Independent governance silos as fine grained as practical, are to be elected on specific mandate and budgets. This means that the head of the FDA and head of the military are each elected and accountable to the people and court review of their chosen budget and mandate, and have no relationship to each other or to a greater hierarchy.
There is no need for a legislative branch. All laws and regulations are created by existing or newly created accountable governance silos. A proposed silo can be as simple as a study to examine the impact of proposed legislation or program or policy. Legislative branches are incapable of providing checks and balances if they are loyal to political parties and/or the institution of government.
There is no need for voter anonymity. Voters or their chosen delegates can base their votes on principle or bribes. There are no fixed terms, so buying a vote is only useful until it is paid for. No anonymity means voter fraud is less likely, and voting can be done remotely and electronically. Support for a delegate or proposal can be withdrawn at any time.
A governance silo can apply regionally and supercede a larger regional/national regulations or associations. Natural governance supercedes nations or even national associations, replacing hierarchical subservience with membership in multiple individual regulatory associations. Membership in a regulatory association may still be democratically imposed on the minority.
The chaotic guidance of Invisible hands is what Adam Smith glorified in the free market. Goods and services innovated and produced based on consumer acceptance. Ideas to provide value (as efficiently as possible) to society are allowed to spring up without central planning or approval. Natural Governance applies the same principles to social policy where voter choice of every idea and initiative is on each individual idea/initiative's merits, and efficient execution of policy is needed to keep voter-supported governance of that policy. Academics and truth proponents can thus play a much stronger role in society evaluating proposals and directly shaping policy.
Capturing regulators (having the regulators serve the industry/groups it is charged in policing) is easy under a hierarchical state, because any corruption or inneffectuality of an agency has no repercussions on the elected government. No US presidential campaign ever includes projected appointments and mandate of the SEC, FEC, or FDA. Therefore, politics and contributors determine their mandates without any electoral consequences. Natural Governance provides the mandate's proponent with the authority to execute the elected mandate, and thus complete accountability for it.
The state and society supposedly share the same values and goals, though the state unfairly asserts its primacy. Weakening the state can enhance social value, and prominence of society in competition with others. Natural Governance is thus of national strategic importance in achieving social and economic prominence and relative dominance over competing societies, by the simple virtue of being more desirable to join and remain in such society. The naive implication is that a weaker state makes a stronger nation, and everyone should warmly embrace the concept.
Regulation means all laws and powers, (and, distinct but related, the enforcement thereof). With popular determined regulation, comes the possibility to regulate government/regulator power. Governance silos require common enforcement resources. Enforcement agency mandates should still be elected, but they have a simple honest administration mandate. They exist mostly as a an efficiency mechanism that murder regulations and robbery regulations can be enforced more efficiently within the same police agency. The enforcement agency's budget is the sum of all funding assigned by governance silos that utilize the agency.
The main regulation of the government silos comes from philosophical opposition to the silo's mandate. While one person can head multiple silos, it can be easy to separate silos into narrow divisions. For instance, the EPA can have individual silos for each industry. Driving regulations can branch off pilot programs for radical theories promoting either sharp spikes fixed on drivers steering wheels, or uncontrolled intersections. Philosophical objection to mandates is manifested by proposing narrower mandates, or proposing competing mandates that can be implemented in parallel or in pilot locations, and receiving electoral support to do so. The other regulation of governance silos involves regulation of mandate and budget execution. Court or electoral challenges can be made to recall or replace the silo administratorship based on execution failures of its electorally promised mandate.
Starting Points
The obvious starting point is to simply transform all agencies, departments and ministry heads into elected silo heads. But one election option must be to remove a department or program. We can model an egalitarian nation as an egalitarian enterprise. Progressive taxation is universally supported on the grounds of wealth redistribution, which happens to serve the industrious by providing more customers with the means to purchase the economic value they contribute. In practice however, relatively few funds are distributed to the less wealthy because they are instead spent on government programs, only some of which expensively determine who is to be given funds. So an alternative starting point is to treat tax revenue as belonging in equal share to all citizens, and absent a reason to spend it, redistribute it to all in equal shares as "basic social income". This is a marriage of progressive and libertarian ideals. It also provides a universal safety net that lessens desperation and the opportunity to prey on desperation, and allows more risk taking. This implies very static tax policies.
A libertarian myth is that community funded enterprise is necessarily inefficient. "Government" provided services such as healthcare and roads have several cost efficiencies over private services. Savings from lack of metering (measuring each consumers use), lack of a sales transaction (education and convincing time), lack of cash security and handling, and no built-in profit markup. These advantages mean that it is completely feasible for public services to be approved by voters and seen as an attractive option and worth foregoing part of their share of basic social income to support those services. At the same time, those services must be provided efficiently to continue receiving support, and an ever expanding wasteful empire becomes constrained.
The most obvious services that would likely be dropped in favour of higher basic income include welfare, unemployment insurance, old age assistance, and military offense expenditures. The biggest problem with welfare and UI is that it provides a massive disincentive to work. Working means losing benefits. Basic income has no demonstrated-need conditions. Fixed tax rates and basic income happen to self regulate the economy. There's no need for minimum wage laws. If basic income is sufficient to remove people from the labour pool, then the labour pool's bargaining power is raised, and may attract more people to the labour pool. If the economy does poorly, and each's basic income goes down due to lower tax revenues, then again the labour pool will tend to go up out of necessity and wages adjust down to the economy.
One regulation model to rule them all
Government and private sectors have always been intertwined through regulation of the private sector. A model that maximizes both access to services and efficiency and effectiveness of those services is to regulate standards for those services in exchange for partly subsidizing them for consumers and provide low interest loans (by the community/nation) to consumers for purchasing the service. Healthcare and education are considered by most as essential social services. The above formula guarantees access to those services to all. However, by insisting on a personally accountable portion of the costs to service users, there is a "market" incentive for the user to verify that the service is at least useful if not necessary. The mechanism promotes efficient and effective services, and curbs the most serious fraud opportunities (phantom services). It further shifts much of the funding for public socially desirable services away from taxes and towards users. This, in addition to being fair (users pay more than non users), has the advantage of making programs that benefit some groups more than others more palatable to be partly publicly funded (by all through elections). User loans can use the natural finance soft loan concept of being repaid based on ability through what is tantamount to surtaxes on income. Unregulated businesses can tap into soft loan financing for their customers as well.
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