Capitalism

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“There are two fruitcake religions infecting the USA right now: Kristianity and Ferengiism. By Ferengiism I mean the belief that you must do whatever makes you the most money no matter what the short or long term consequences to yourself or others. It is the state corporate religion.”
~ Roedy (born: 1948-02-04 age: 61)

“If you knew, as I do, the power of giving, you would not let a single meal pass without sharing some of it.”
~ Gautama Buddha (born: 563 BC died: 483 BC at age: 80)

Introduction

I wish to argue that capitalism still has some problems. I am not advocating abandoning it. Clearly it is the best approach mankind has developed so far. I merely want to point out that it needs some fine tuning to deal with certain classes of problem.

The Problems with Capitalism

“The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.”
~ John Kenneth Galbraith (born: 1908-10-15 died: 2006-04-29 at age: 97)

1. Excluded Parties

   The biggest problem with capitalism is that its solutions are based purely on short term economics, how to provide a given service most cheaply to the consumer. Only producer and consumer are involved. However, in the process of providing that service, many others may be adversely affected, especially in the long term. They have no input into the decision making process. Examples would include such things as cars that pollute, boom boxes that can be heard for blocks, snowmobiles designed to harass wildlife, harsh chemicals that kill fish when improperly disposed of, or in an extreme case, atomic weapons. Capitalism fails to consider the big picture. It is sort of like looking at the world through gold-coloured glasses. It has no way of considering non-economic factors in decision making.

2. Foolish Actions

   The producer always acts to maximise his profit. This sometimes leads him to do things that are wasteful or irritating to the consumer, e.g. nylons than deliberately run, razor blades that deliberately go dull quickly, or light bulbs that burn out quickly. He may kill millions of dolphins in order to catch tuna for one cent less a can.

3. Allocating Costs

   There are costs that are hard to allocate, e.g. the costs of recycling an automobile. Since the original producer does not pay these costs, he has no incentive to make his automobiles easy to recycle.

4. Market Leader Advantage

   The market leader has a huge advantage over his competitors. He has capital to buy them up. He can use Microsoftian strategies to lock customers into his products. He can use huge advertising budgets to persuade customers to pay more for inferior products. He can buy off politicians to rig the laws in his favour.

5. The Bad Pushes Out the Good

   In Thailand, a toy company makes dolls for companies like Mattel and Tyco, toys like Simpsons characters, Barbies, and plush elephants.

   There was a big fire and most of the workers died because they were locked in the building. The few that did survive jumped out of third story buildings, and the survivors were the ones who were cushioned by falling on their coworkers below.

   Capitalism made the owner of that building lock the workers in. If he did not do that, a rival company would and that other company would be marginally more profitable, and would put a company that had proper ways of dealing with fire out of business. The bad and unscrupulous push out the good and ethical. Any decent people are put out of business by unscrupulous ones.

   In a similar way, seeking maximum profit compels companies to cut wages, reduce benefits, ignore worker safety, pollute and cheat. It is not enough for a company to be profitable. It must be the most profitable to survive.

   This building was in Thailand where there are no government regulations to protect workers. In such circumstances, capitalism forces the employer to spend nothing on fire protection, and to lock workers in to prevent theft or taking breaks. Were it not for government regulation curbing the capitalist drive for maximum profit, we would see similar tragedies in Canada and the USA.

6. Short Term

   Capitalism has a short term outlook. It difficult to attract money for example to develop a new antibiotic that may not be needed for another decade, but which will take seven years to create. We may even know that such an antibiotic will be desperately needed in a decade. There are too many other projects competing for capital with a faster payback. We will run out of fossil fuels in a mere 30 to 60 years, yet capitalism is incapable of getting on with the long range preparation needed. It tends to only look ahead about a year. Most of what goes on in the stock market is speculation (that is gambling) based on hours or days. It has nothing whatsoever to do with investing in new businesses that will produce new products. A society that has no long-term values is a jungle. It is not a civilisation any more.

7. Speculative Drones

   Capitalism turns productive citizens into drones who do no useful work. All they do is buy and sell stocks and live off the interest. An entrepreneur who creates a business does useful work. Someone who investigates businesses to see which deserve capital invested in them does useful work. However, the person who just sits back and earns a living off interest, or plays all day buying and selling stocks is not producing anything useful. He is just engaging in respectable form of gambling. These people are little better than welfare bums in terms of the way they are investing their time. America has abandoned productive manufacturing and moved to profitable, but utterly non-productive, money management service industries. They do this because can make hundreds of times more money than through legitimate investment. It is economic masturbation.

8. Economic-only Focus

   Profit becomes the only motive for business decisions. This leads us as a species to do some very odd things. For example, we as a species have now developed the technology to totally wipe out the AIDS plague. However, we refuse to use it, because our capitalist mentality insists that every person taking a medication must pay equally for it. It does not matter that the cost would be trivial to produce the medication to wipe out the plague now that the difficult work of developing the drugs has been done. Further, we don’t wipe out AIDS because that would be unprofitable. Maximum profit demands keeping the virus around infecting new customers. And finally we don’t wipe out AIDS because we don’t have a way of allocating costs of projects that benefit every world citizen. We have spent about 4 billion on researching new AIDS treatments but only 0.1 billion on finding a vaccine to prevent new infections.

9. Ecological Concerns

   Capitalism is overheated. It aims for constant growth. It ignores the biological imperatives that all systems must be closed and self-sustaining. In biology, constant growth is called cancer. We can’t keep expanding the economy on a finite planet. You can expand quality of life, but you can’t (and I mean can’t not shouldn’t) do it by ever expanding consumption of natural resources. This problem is a side effect of capitalism’s narrow focus rather than considering the big picture. Capitalists pushed the Newfoundland cod stock right to the point of extinction before they would pay attention to what nature was telling them. Even then, the capitalist fishermen rioted demanding the right to kill off the last few fish. The glamour of capitalism makes people ignore the harsh biological realities of life on planet earth. They foolishly imagine the laws of economics trump the laws of physics and biology.

10. Conspicuous Consumption

    “Liberals feel unworthy of their possessions. Conservatives feel they deserve everything they’ve stolen.”
    Mort Sahl

    With capitalism as religion/life philosophy, those whose consumption is most conspicuous, have the highest status. Waste as a positive value conflicts with the biological practicalities of a sustainable human population on the planet. With 6 billion people to house and feed, we can no longer afford to waste resources.

11. Vested Interests

    Sometimes the vested economic interests work in favour of the society. For example, it is to the insurance companies’ benefit if people have fewer accidents. So you find them lobbying for safer cars, fire safety inspection etc. On the other hand, sometimes the vested interest works against society. Drug companies have a vested interest in seeing their customers stay sick and continue buying their drugs. Food companies have a vested interest in obesity by encouraging their customers to exercise less and eat more so they buy more food.

12. Gravity of Money

    Consider the problem of the gravity of money. Money tends to flow toward those who already have a surplus of money. The rich get richer and the poor get poorer. The top 10% now make 82 times what the bottom 10% make in Canada. The gap widens ever year. Why is this? Because of interest, those with more money tend to get more money and those without tend to get even less, everything else being equal. The human mind gets into greed spirals where no amount is enough. To feel good, not only must you have more than everyone else, you must also push everyone else down as far as possible. The more money you get, the more powerful you get. The more powerful you get, the more you can bully or exploit others into handing over their money to you, and into persuading the government to do this for you. This creates a greed-power-money spiral. Unless there are checks, this will concentrate nearly all the wealth and power in fewer and fewer hands. In Canada one man, Conrad Black, controls nearly all the newspapers, TV and radio stations, and dictates their conservative editorial view. No politician dare challenge him. A TV station toppled a socialist government by showing police arriving at the premier’s back door, over and over and over for months even though there were never any charges. Capitalism, by itself, tends to concentrate wealth and power in fewer and fewer hands. This same gravity of money principle works between countries as well. Rich countries tend to get richer and poor countries poorer. The elite control the education system and convince the masses that the gravity of money is a Good Thing^TM, and should be encouraged, not compensated for.

    

13. Instability

    In a stable system, the relative numbers of people at each income level remains constant. Individual people, of course, become richer or poorer, but the distribution of incomes does not change. In the early days of man, pretty well the only factor in production was labour and all labour was supremely valuable. However, in our modern society, labour is much less important. Technology, capital and knowledge overshadow labour. Unskilled labour is increasingly less valuable. Further, computers take over a greater proportion of skilled labour every year. This leads to an instability, since labourers no longer have the clout they once had. The rich get richer and the poor get poorer.

    “We can have a democratic society or we can have the concentration of wealth in the hands of the few. We cannot have both.”
    ~ Louis Brandeis (born: 1856-11-13 died: 1941-10-05 at age: 84) , Supreme Court Justice from 1916— 1939

14. Ain’t We Got Fun

    Play 
    Bill collectors gather 'round and rather haunt the cottage next door,
    Men the grocer and butcher sent,
    Men who call for the rent.
    But within, a happy chappy, and his bride of only a year,
    Seem to be so cheerful,
    Here’s an ear full of the chatter you hear:

    Ev’ry morning
    Ev’ry evening
    Ain’t we got fun?
    Not much money,
    Oh but honey,
    Ain’t We Got Fun?
    The rent’s unpaid dear,
    We haven’t a bus.

    In the winter, in the summer,
    Don’t we have fun?
    Times are bum and getting bummer,
    Still we have fun.
    There’s nothing surer:
    The rich get rich and the poor get poorer
    In the meantime,
    In between time,
    Ain’t we got fun?

    Just to make their trouble nearly double,
    Something happen’d last night.
    To their chimney a gray bird came,
    Mr. Stork is his name.
    And I’ll bet two pins
    A pair of twins just happen’d in with the bird.
    Still they’re very gay and merry,
    Just at dawning I heard:

    Ev’ry morning
    Ev’ry evening
    Don’t we got fun?
    Twins and cares dear, come in pairs, dear,
    Don’t we have fun?
    We’ve only started,
    As mommer and pop,
    Are we downhearted,
    I’ll say that we’re not!

    Landlords mad and getting madder,
    Ain’t we got fun?
    Times are bad and getting badder,
    Still we have fun!
    There’s nothing surer,
    The rich get rich and the poor get laid off
    In the meantime,
    In between time,
    Ain’t we got fun?

    When the man who sold 'em carpets told 'em,
    He would take them away,
    They said "Wonderful! here’s our chance!
    Take them up, and we’ll dance!"
    And when burglars came and robb’d them

    Taking all their silver, they say.
    Hubby yell’d "We’re famous,
    For they’ll name us in the papers today!"
    

    Night or daytime,
    It’s all playtime,
    Ain’t we got fun?
    Hot or cold days,
    Any old days,
    Ain’t we got fun?

    If wifie wishes,
    To go to a play,
    Don’t wash the dishes,
    Just throw them away!

    Street car seats are awful narrow,
    Ain’t we got fun?
    They won’t smash up our Pierce Arrow,

    They’ve cut my wages,
    But my income tax will be so much smaller,
    When I’m paid off,
    I’ll be laid off.

    ~ Words by Gus Kahn and Raymond B. Egan
    Ain’t We Got Fun 1921
    Music by Richard Whiting

15. Monopoly

    Capitalism falls apart when a monopoly forms. One theorist, Axelrod, said you need 26 independent competing companies to avoid monopoly or collusion. This is often hard to achieve in practice. We have a schizophrenic attitude to collusion. If companies collude to fix the price of gasoline or bank interest rates, there is much screaming and gnashing of teeth. However, if they formally merge first, or if the leader buys out all its competitors, there is not so much as a peep of indignation.

    	recommend book⇒Evolution of Cooperation
    		paperback	hardcover
    	ISBN13:	978-0-14-012495-8	978-0-465-02122-2
    	ISBN10:	0-14-012495-0	0-465-02122-0
    	publisher:	Penguin
    	published:	1990-04-26
    	by:	Robert M. Axelrod
    Using computer modeling Axelrod discovers the power of a simple tit for tat strategy in dealing with others. He also discovers the mathematical conditions under which people co-operate, collude, compete, aid each other or refuse to offer reasonable assistance. He also explains the mathemetics of why corporations tend toward price-fixing and other co-operative behaviour with their competitors.
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16. Toothbrushes

    Capitalism works spectacularly well and handling the needs of individual consumers. Go to your supermarket and marvel at how many types and colours of toothbrushes there are. On the other hand, it has no mechanism for funding global projects, like eradicating malaria or dealing with the effects of global warming. Even though a nation like the USA could raise 100 billion dollars in six weeks to deal with terrorism, it was able to pledge (then fail to deliver) only 200 million (1/50 as much) to deal with AIDS in Africa. The only problems that get tackled with any enthusiasm are the ones that directly affect the rich.

17. All Economic Activity Is Good

    Economics seems to value all economic activity equally. The Exxon Valdiz was great for the GNP. Funerals count toward the GNP. Intensive care for lung cancer helps the GNP.

18. Sinking Below the Event Horizon

    If a person in the third world sinks below a certain level of poverty, it is impossible to get back way out. He needs capital, even if just $50.00 USD $10,000.00 USD investment you can get billions in return. Just go look at websites that track campaign contributions. Even foreign governments, e.g. Israel and China can play. Israel’s investment in American politicians nets it $10,000.00 USD per Israeli citizen in foreign aid.

19. Sodomy

    God destroyed the city of Sodom, not for anal sex, but for sodomy, which the bible clearly defines as:

    “Behold, this was the iniquity of thy sister Sodom, pride, fullness of bread, and abundance of idleness was in her and in her daughters, neither did she strengthen the hand of the poor and needy.”
    ~ Ezekiel 16:49

    Money is a co-operative game we humans play to reward each player proportionately to the efforts they expend on behalf of others. Those with fabulous wealth have discovered ways to cheat both the letter and the spirit of the game. They contribute little and take the lion’s share of the pie. They imagine they earned exclusive right to their wealth when in actuality they stole it.
    ~ Roedy (born: 1948-02-04 age: 61)

20. The Bastard Effect

    There is constant pressure on a company to be more profitable than the competition. This leads them naturally to underpay workers, spend less on working conditions, dispose of pollutants irresponsibly, treat animals poorly, lay off workers, etc. Companies get no brownie points for responsible behaviour. Investors look only at the profitability. In a similar way, countries compete. The countries with the laxest labour laws, the laxest pollution laws, the lowest minimum wages etc. attract the new factories.

    In the USA, CEO’s of corporations are required by law to act like bastards. They are not permitted to consider the interests of the stakeholders, e.g. the employees, the customers, or the people living where the company does business. They are only permitted to consider the bottom line interest of the stockholders. The corporation by law acts like a psychotic person, someone without a conscience.

    	recommend book⇒Corporation: The Pathological Pursuit of Profit and Power
    		paperback	hardcover
    	ISBN13:	978-0-7432-4746-7	978-0-7432-4744-3
    	ISBN10:	0-7432-4746-9	0-7432-4744-2
    	publisher:	Free Press
    	published:	2004-02-17
    	by:	Joel Bakan
    Based on the Documentary The Corporation available on DVD. It talks about how corporations behave like psychotic humans without concern for morality or the welfare of others. They are single mindedly devoted to profit, and the governments give them free reign. Also talks about corporations such as Interface (a carpet maker) who are notable exceptions to the rule.
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21. Rupert Murdoch

    is the fourth richest man in the world. He got that way by buying up newspapers, TV stations and radio stations, then using the profits from those to buy still more, creating effective monopolies in country after country. He was then in a position to coerce the planet’s politicians to pass laws favourable to his business interests. If they did not do what he wanted, his giant media machine would smear them. He imposed his own warped extreme right wing views on this media empire and in turn on the whole world. Through it, for example, through FOX, he was able to mislead the majority of Americans that Saddam Hussein was responsible for 9/11. with endorsements from all his newspapers, he was able to get a village idiot elected to the presidency of a country of which he was not even a citizen. The problem is the gravity of money gives far too much power to a single individual. Murdoch has millions of times more power than an ordinary citizen. This is dangerous. Power corrupts; absolute power corrupts absolutely.

22. Religious Fundamentalism

    Americans in particular seem to approach capitalism not as just a way of organising a financial system, but as a fundamentalist religion. They know nothing of alternatives other than they are all "evil". They are deliberately blind to the shortcomings of their own extreme form of capitalism. They become busybodies meddling in other country’s financial affairs that don’t in the least concern them. They are willing to go to war with people who prefer a different system.

23. Corruption

    “What do I care about the law? Ain’t I got the power?”
    ~ Cornelius Vanderbilt

    When people get rich enough, they have the power to buy off politicians and law enforcement to let them do whatever they please. That power inevitably corrupts them.

24. Scapegoating

    “Poverty is nature’s way of excreting unhealty, imebecile, slow, vacillating and faithless members of society.”
    ~ Herbert Spencer (born: 1820-04-27 died: 1903-12-08 at age: 83)

    To the capitalist, the poor are expendable. The poor are defined as the people with the bottom fifth in wealth. Yet even if everyone on earth were millionaires, toiling 16 hours a day, there would still be a bottom fifth in wealth, whose interests did not matter. Capitalism’s mad desire to torment the poor, is as silly as torturing people because they were not sufficiently tall, or did not consume enough food. For sustainable world, we need to moderate consumption. This mad race for maximal conspicuous consumption takes us in the exact opposite direction.

Solutions

1. Communism per Karl Marx

   This is just too idealistic. People won’t work with out incentives.

2. Communism per Lenin

   A centrally planned economy is just too ponderous. It might work better today with modern computers. It leads naturally to totalitarianism and corruption with too much centralisation of power. Chinese Communism has the same problems. Because it is essentially a seniority-based bureaucracy, the leaders are always much older than the rest of the population, hence overly conservative and without a proper appreciation of the needs of the young.

3. Socialism

   The problem here is the government keeps expanding into areas where there is no need for it to do so, gradually increasing taxes, and giving the public what the bureaucrats think is good for it, rather than what it wants. For example they will subsidise opera and art work created out of dung or raw meat. The advantage is that the decision makers on things like hydro electric projects are responsible to the people as a whole. They have to consider not only economics but political considerations.

   There are some successes. For example the Canadian federal government formed a oil company called Petrocan to provide some competition to the small number of large oil producers. That competition kept them more honest than they were in the USA. The important thing is the mix of private and public enterprise. Pure public without private competition becomes complacent, just like any monopoly. Unfortunately, the current government is corrupt and is getting rid of Petrocan at the request of the private oil companies, even though Petrocan is a great money maker for the country.

4. Star Trek Next Generation

   The assumption here is technology will eventually make this clamoring for more goods superfluous. There will be no merit in conspicuous consumption. There won’t even be a need for money since goods and energy will be so cheap. Yet Star Trek’s political system is a militaristic hierarchy, not even as good as a distributed capitalist system for decision making. There is also the minor problem this the wantum mechanics that makes it all possible is not quite here yet.

5. Non Profits

   Companies or charities that compete in the same arena as ordinary for profit companies. They attempt to make their decisions based on ethics and global optimisation as well as economic realities. They put the spot light on the unethical activities of their competitors in their struggle for customer and employee loyalty. The problem is, when you play poker and the other players "cheat" it is very hard to stay in the game if you don’t too.

6. Pollution Taxes

   Capitalists will do whatever you want them to, if that thing is the most profitable. We need to create taxes for polluting, taxes for creating unrecyclable goods, etc. that reflect the true costs of these activities to the planet as a whole. Unfortunately, big companies have the politicians in their pockets and block all such measures, not realising such taxes are actually in their long term best interest too.

7. Incentives for Ethical Capitalism

   ethical capitalism

   a scheme producing goods or services that entails spending money to earn money that does not damage the earth or cheat the customers with overpriced, poor quality or mislabeled products.

   The ethical behaviour of a corporation is nearly always worse than the lowest common denominator of its leaders and shareholders. It works solely to maximise profit. It is therefore necessary for the government to offer incentives for ethical behaviour and disincentives for unethical behaviour to guide corporations back onto the track of normal morality. To persuade companies to behave well, we must set up the economic conditions so that they behave well naturally. You can do this with law or with financial/tax incentives. It does not really matter all that much what the rules are to a company really, no matter how much they scream. The costs are passed on to consumers, and all companies pay the same taxes.

8. Democratic Budgeting

   When you pay your taxes, if you want, you can direct some proportion of your taxes to specific areas. You could say for example that you wanted 10% to go for defense, 30% to funding new energy sources, 0% to drug enforcement, 50% to incentives to companies to make their products recyclable, and 10% to fund the development of new antibiotics. This gives the people a direct hand in budgeting, attempting to bypass the corporation-bribed politicians. Gradually over the years, the proportion you were allowed to allocate could be upped as the public became more sophisticated in its choices — more aware of the consequences of over/underfunding.

9. Exposure

   Ralf Nader convinced Detroit to build safer cars, even though it was against their short term best interest. In retrospect, the change has been exceedingly profitable for them. With the Internet, anyone can become a miniature Ralf Nader, exposing the not-so-optimal decisions that various corporations are making. Google is very democratic. If people like your site and what you have to say they build links to it. Google then rates your site higher in the searches. With sufficient pressure, it then becomes economic for corporations to behave better. Then they start bragging about their new improved behaviour. Then that behaviour becomes a new competitive battleground and the pressure is no longer needed.

10. World Federation

    A federation of countries, if it worked as well as the federation of the Canadian provinces, the federation of the United States or the European Union, would save a great deal of money in defense. That money could be redirected to globally useful projects like eradicating AIDS and malaria, and bringing all water supplies up to an international standard. Unfortunately, globalisation has come to mean serving the interests of multinational corporations like Nestlé at the expense of everyone else.

    With the current system, the true rulers of the world are the multinational corporations, not the governments. They want to keep things that way.

11. The Body

    The cells in your body co-operate with the understanding that every organ in the body has to function properly for the body as a whole to survive. In tough times, e.g. hypothermia, the body shuts down blood to all but the core systems with the goal of making the body as a whole survive. Similarly, if a political party is able to keep backstabbing to a minimum and have its member co-operate, it has a better chance of prevailing over other political parties. Similarly for workers in a company or citizens of a country. To compete effectively at a higher level, you must co-operate effectively at a lower level. Americans encourage cut-throat competition and exploitation within their country. Little wonder America’s ability to compete internationally is waning. Similarly, to compete against global problems like peak oil and environmental degradation, countries need to co-operate. They don’t understand this yet.

12. Foreign Aid

    To compensate for the natural flow of money from poor to rich countries, in 1969 the western countries met and agreed to donate back 0.7% of their GNP to the third world. According to Stephen Lewis, UN Special Envoy for HIV/AIDS, had the countries kept their promises there would have been enough to fund the end of malaria, tuberculosis, stop the AIDS epidemic and contribute substantially to ending world hunger. However, they reneged. Here is what they actually donated in 2003:

    Country	% of GNP in 2003
    Saudi Arabia	5.50
    Norway	0.92
    Denmark	0.84
    Netherlands	0.81
    Luxembourg	0.80
    Sweden	0.70
    	Below 0.7 goal
    Belgium	0.61
    France	0.41
    Ireland	0.41
    Switzerland	0.38
    United Kingdom	0.34
    Finland	0.34
    Germany	0.28
    Canada	0.26 was 0.48 in 1993
    Australia	0.25
    Spain	0.25
    New Zealand	0.23
    Greece	0.21
    Portugal	0.21
    Austria	0.20
    Japan	0.20
    Italy	0.16
    United States	0.14

    It is ironic that Americans think of themselves as the most generous nation on earth when in reality, they are the stingiest, coming in second last place in the west. I’m sure that if Americans generally were aware of this poor showing, they would insist on moving into first place. Up until 1985, Canada was giving at the 0.49% level, and claims it will gradually get back there over the next ten years.

    Americans can take pride though, that because they are the third largest country in the world, and because they have largest GNP, that even though they are the stingiest as a percentage of GNP, America is in first place in terms of total contribution to global foreign aid. Unfortunately, national pride makes Americans dwell on this fact and ignore their last place standing by the generosity measure. On the other hand, American foreign aid is often not worthy of the name. It sometimes take the form of weapons. It comes with strings attached, so it could sometimes better be considered bribery. It sometimes does more harm than good e.g. Monsanto seed with terminator genes. And the lion’s share ($6.2 billion of the $14.9 billion the USA provides in foreign aid), goes to Israel, hardly what most would consider a third world needy country.

    With only 1/27th of the planet’s population, America takes from the world 1/3 of its natural resources and gives back 1/1000th of its GNP in foreign aid, and, like some Biblical hypocrite, trumpets the deed as astoundingly generous. Other industrialised nations are not that much better.

    It would take only about $1 billion a year to bring tuberculosis under control, yet somehow, even with trillion dollar budgets, it can’t be found in the combined budgets of the western world. To put this is perspective, this is about 1/4 the amount America spends on lipstick each year.

    The international economic system is strongly weighted in favour of the rich nations. The World Bank and IMF sporadically bail out third world countries, but what is needed is a formal, sustained, reliable flow of money back to the poor countries to level the playing field.

    “Somehow the conventional wisdom of 200 million sullen South Americans sweating away in the hot sun for the next decade to earn the interest on their debt so Citicorp can raise its dividend twice a year does not square with political reality.”
    ~ Barton Biggs , Managing Director Morgan Stanley Investment Banking.

13. Negative Income Tax

    Accept that the entire economic system is rigged in favour of the wealthy, and that it tends to create a flow from poor to rich. Instead of trying to stop that flow, simply create a counter flow to precisely balance it. This would create a truly level playing field that the capitalists are so fond of. This could be implemented as a negative income tax. The problem with most current systems to redistribute wealth to the poor is that the instant the poor make any income at all, all assistance disappears, effectively taxing their income at over 100%. Hardly the incentive any capitalist worth his salt would strive for.

    Professor Milton Friedman’s negative income tax proposes getting rid of all welfare bureaucracies and simply leveling income at tax time. Those with very low income get money back — money to live on for the next year, that might be paid out in installments to help budgeting. Ronald Reagan liked the idea but never implemented it. Negative income tax is similar to a guaranteed livable income. With it, everyone, rich and poor, gets a monthly cheque sufficient for subsistence. At tax time accounts are squared, and the rich effectively give the money back, and the poor do not. There is no means test and no bureaucracy to decide who is worthy of help. Everyone, rich and poor, housed and homeless is. People have freedom to spend that money anyway they please. You would need a bureaucracy to care for mentally deficient people and drug addicts who could not survive without supervision, but not for people who had no problem other than poverty.

14. Wealth Caps

    When someone becomes superwealthy, they become above the law. They can buy politicians and judges. Their very wealth intimidates, turning ordinary folk into slavering sycophants. Consider CNN’s Lou Dobbs interviewing Bill Gates. He did a perfect impersonation of Ned Beatty in The Toy. The super rich become almost like black holes, sucking all money and companies that come within their purview into themselves, crushing them. For the same reason that we no longer permit dictators or kings with absolute power, we should limit just how much economic power a person is permitted to accrue. In a similar way we should block mergers and force large corporations to break up to ensure competition prevails. Consider how corrupt the oil industry has become with so few players. It has even subverted the US federal government. Almost every cabinet member is an "ex"-oil person. They are running the country purely for the short-term benefit of the oil corporations.

15. Size Taxes

    “I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country; corporations have been enthroned, an era of corruption in High Places will follow, and the Money Power of the Country will endeavor to prolong its reign by working upon the prejudices of the People, until the wealth is aggregated in a few hands, and the Republic is destroyed.”
    ~ Abraham Lincoln (born: 1809-02-12 died: 1865-04-15 at age: 56)

    Taxation on corporations should discourage bloated monopolies and conglomerates, and encourage small and medium-sized businesses. Corporate taxation should be progressive, just like personal tax. The rate should be based on the total income of the conglomerate. Excess profits, aka gouging, should be taxed to discourage companies from schemes to screw the public.

    Where gargantuan size is truly needed, market forces will create size.

    The purpose of corporations is to provide goods and services. The means is via raising money for stockholders. You want a tax system than continually reminds corporations of that. Americans particularly are prone to enslaving themselves to corporations. Corporations should be subservient to the public interest.

16. Gambling

    The original purpose of gambling was wealth redistribution. With casinos taking over the function, it is now mainly a tax on the stupid.

17. Manure Economics

    “Money is like manure, it’s no good unless you spread it around.”
    ~ Thornton Wilder (born: 1897-04-17 died: 1975-12-07 at age: 78) and Jerry Herman (born: 1931-07-10 age: 77), Horace Vandergelder in Hello Dolly

    Folk wisdom says everyone prospers if everyone has money to buy the necessities of life. If some don’t, then not only they suffer, but those they would buy from also fail to prosper. In Canada, the family allowance benefits and the GST rebates that are the same for rich and poor alike, have this function. Unfortunately, they don’t help those who need it most, the homeless. However, I oppose any sort of program that encourages having more kids.

    In contrast, Reagonomics, aka Voodoo economics, aka trickle down economics holds that concentrating the wealth in the hands of the most wealthy and powerful is the best approach because clearly these people are the movers and shakers and know how to make things happen with money. Everyone will prosper as a result of the increased economic activity. The government will more than make up for its largesse to the wealthy by increased tax revenue from the stimulated economy. Three presidents have tested this theory. What were the results?

    • President Reagan: a deficit larger than all previous administrations in history combined. The gap between rich and poor widened.
    • President Bush Sr.: a deficit larger than even Reagan’s. The gap between rich and poor widened.
    • President George W. Bush: turned a healthy surplus into a deficit topping even his Bush Sr.’s, The first trillion dollar experiment failed, so he tried a second. The gap between rich and poor widened.

    “The definition of insanity is doing the same thing over and over and expecting a different result.”
    ~ Rita Mae Brown (born: 1944-11-28 age: 64) in Sudden Death often misattributed to Benjamin Franklin.

    Persistence is great, but you must persist with something that works.

    By Rita Mae Brown’s definition, George Bush Jr, is insane.

    Why don’t Reagonomics work?

    1. The wealthy are smart cookies and invest the largesse overseas in more booming economies. The money does not sit around long enough to generate an economic activity at home.
    2. The wealthy have no need of more necessities. They spend it on luxuries and frivolities, which don’t do anything for the practical prosperity of the country. Reaganomics distorts the economy away from producing useful goods to frivolous ones — toys and services for the idle rich.
    3. The poor have less money to spend on necessities.
    Perhaps, just as an experiment, we could also test the manure theory of economics. Let’s see what happens when you spread the wealth around, unconcentrate the wealth, narrow the gap between rich and poor. But wait, the experiment has already been tried, numerous times, with great success! The most notable experimenter was Franklin Delano Roosevelt with his New Deal that pulled America out of the deepest recession in history.

    “To the wealthy, the word ‘enough’ is meaningless.“
    ~ Matt Fair

    Politicians know full well the manure theory of economics works and that Reagonomics does not. Why would they persist in the folly of Reagonomics? Why do they disparage the workable manure theory of economic with even less palatable epithets such as communism? I suggest their motives have nothing to do with stimulating the economy. They are simply giving kickbacks for campaign contributions received from the wealthy both over and under the table. Campaign contributions have an astounding ROI (Return On Investment).

18. Guaranteed Annual Income

    As jobs become scarcer, and computers and outsourcing devours jobs, are we going to let the general population starve? For the first time in history there is a surplus of labour. We have to get used to the idea that people have a right to life even if they don’t have a job. This can implemented with a guaranteed minimum annual income, perhaps to top people up, or a flat amount given to everyone. That flies in the face of human thinking ever since the invention of agriculture. If you don’t work, you don’t eat. Yet now there simply is not that much work that has to be done. We could ease into this new reality with a gradually shrinking work week to help share the gradually shrinking pool of jobs. Instead, people are working longer hours and taking on multiple jobs just to earn food and rent. The labour glut is forcing wages down and down. People in the third world are hit hardest. They toil in Kathy Lee Gifford’s purse factories in China for $0.03 USD an hour.

19. No Public Companies

    Consider how socially responsible The Body Shop and Ben & Jerry’s ice cream were before they went public. Once they went public, they started behaving like any other unscrupulous company. The problem is the publicly traded corporation that acts without conscience. They are required by law to act that way, acting purely to maximise profit. Perhaps we should only allow privately held companies and make the owners legally liable for what their companies do. In Germany, designated employees are legally liable for what their corporations do. The problem with this approach is raising sufficient capital for big projects. Ethical capitalism almost never happens in a publicly traded company. Famous examples of ethical sole proprietorships included Josiah Wedgewood, Henry John Heinz and Milton S. Hershey. You usually see it in a co-op where the owners are the customers, e.g. Mountain Equipment Co-op. You also see it to some extent where the union of workers owns the company, e.g. WestJet. You can see the pattern. The closer the owners are to the customers, the more ethical a company will be. Historically, absentee landlords are the most notorious for mistreating their tenants. Publicly traded companies are the industrial equivalent of absentee landlords.

Quietly Screwed

• Inflation. Inflation makes money effectively disappear from the everyone’s bank accounts and from those on fixed incomes. I wonder who gets it?
• Devaluation. In 2003, the American dollar lost 20% of it purchasing power abroad due to the collapse of the value of the American dollar. This happened because of Bush’s record deficits and the huge trade deficit with the rest of the world.
• Electric companies charge higher and higher rates for electricity even though it costs them less and less to produce it.
• Software companies sell you software that does not work, then claim an extra cost upgrade will make it work properly.
• Sales taxes are sometimes explicit and sometimes hidden. By not doing them in a consistent way people lose track of just how much they are.
• Banks lend out your money five to twelve times over, charging interest, and charge you for the privilege.
• Near monopolies such as Altria/Kraft/Philip Morris hide that fact by selling under hundreds of different formerly legitimate brand names, e.g. Altria is really Philip Morris Tobacco, Kraft, General Foods, Sanka, Starbucks, Country-Time Lemonade, Oscar Mayer, DiGiorno, Calumet, Shake ‘n Bake, Jell-O, Oreo, Post, Nabisco, Planters, Toblerone…
• Companies go bankrupt leaving the shareholders with nothing. Where did all that money go?
• Fledgling investors lose their shirts time and time again. Where did all that money go? Why did they always lose? They might have done better playing three card Monte.
• A bum who steals a loaf of bread will likely get more jail time than a stock broker who steals ten million from pension fund. When a broker is fined for fraud, the fine is less than 1% of the amount stolen, hardly a disincentive.
• Private banks are permitted to lend money that they don’t really have, to the government at interest. In other words, the taxpayers pay the banks for a service they don’t really provide.

Darwin

Capitalism makes us do many things that will almost certainly make our species go extinct including: creating nuclear weapons, creating artificial plagues, eroding soils, polluting groundwater, wiping out other species at a rate of four a hour — the same rate as the biggest extinction event in earth’s history, burning fossil fuels causing greenhouse gases, widening the gap between rich and poor to the point of fomenting war and terrorism. From Darwin’s point of view, anything that makes your species go extinct in a definite no no.

Desire For Wealth

Here are the main ways you can trick others into giving you money without giving them something of value in return:

• Capitalism. You trick people into giving you money simply because you have money already.
• Crime. You embezzle, steal, counterfeit, pull church cons, take bribes etc.
• Fame. If you are sufficiently famous, people will assign you high status, and hence pay a huge premium for your services, including entertainment.

The irony is, those most successful in subverting the money system to deflect a huge flow of undeserved wealth to themselves, are the ones who scream loudest about even modest taxes and about how others “steal” money from them in the form of taxes. They are like bank robbers bitching about being forced the give back 10% of their ill-gotten loot.

Conclusion

No matter how much effort we collectively expend, there will always be precisely 50% of the population below average. In Dickens day, we punished such people with indentured servitude and debtors’ prisons (where they had no hope of earning money to pay off the debt or even paying for their food). Today we punish the people of the third world with grinding poverty, pressing our economic advantage to the fullest. Perhaps in some enlightened future time, we will look back on our times as barbaric, when we deliberately tormented the economically disadvantaged.

The key thing to understand is that the elites of the world like things the way they are. They want the poor to be as grindingly poor as possible. It makes them feel better by comparison. The elites are in control of the corporations, the governments and the media. We see only their point of view day after day. Even the poor and middle class are seduced into voting Republican, voting against their own best interest. The only hope I see for cracking this hold on the popular imagination is the Internet, which may gradually supplant TV and newspapers as a more open forum.

“I sit on man’s back choking him and making him carry me, and yet I assure myself and others that I am very sorry for him and wish to ease his lot by all possible means, except getting off his back.”
~ Leo Tolstoy (born: 1828-09-09 died: 1910-11-07 at age: 82)

Books

	recommend book⇒Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and StickYou with the Bill)
		hardcover	kindle
	ISBN13:	978-1-59184-191-3	B000YJ67LS
	ISBN10:	1-59184-191-7
	publisher:	Portfolio Hardcover
	published:	2007-12-27
	by:	David Cay Johnston
How the American taxation system takes money from the poor to enrich the rich. It is about the fundamental crookedness and unfairness. He names names, how each of the famous rich Americans cheated to get their wealth.
abe books.co.uk abe books.ca amazon.co.uk amazon.ca abe books.de chapters.indigo.ca amazon.de abe books.com abe books.fr amazon.com amazon.fr barnes and noble.com abe books.it powells.com iberlibro.com abe books anz

	recommend book⇒Unequal Protection: The Rise of Corporate Dominance and the Theft of Human Rights
		paperback	hardcover
	ISBN13:	978-1-57954-955-8	978-1-57954-627-4
	ISBN10:	1-57954-955-1	1-57954-627-7
	publisher:	Rodale Books
	published:	2002-10-04
	by:	Thom Hartmann
How corporations have taken control the government and have used terrorism as an excuse to abrogate human rights.
abe books.co.uk abe books.ca amazon.co.uk amazon.ca abe books.de chapters.indigo.ca amazon.de abe books.com abe books.fr amazon.com amazon.fr barnes and noble.com abe books.it powells.com iberlibro.com abe books anz

	recommend book⇒Screwed: The Undeclared War Against the Middle Class — And What We Can Do about It
		paperback	hardcover	kindle
	ISBN13:	978-1-57675-463-4	978-1-57675-414-6	B001AFF25M
	ISBN10:	1-57675-463-4	1-57675-414-6
	publisher:	Berrett-Koehler Publishers
	published:	2007-04-28
	by:	Thom Hartmann
This book is simple and somewhat repetitive. It argues five main points. A vigorous middle class is essential for democracy. Throughout history, the elites have done battle to eliminate the middle class and scoop all the wealth for themselves. Starting with Reagan, the lower and middle classes in the USA have become poorer while the elite’s wealth has exploded into the stratosphere. The elites tell all manner of lies to trick the middle class into giving up their power and wealth to the elites. You have a choice: government can run things, via representatives responsible to the people. corporate CEOs can run things, responsible only to their shareholders. When you consider the alternative, big government managing society does not look so bad.
abe books.co.uk abe books.ca amazon.co.uk amazon.ca abe books.de chapters.indigo.ca amazon.de abe books.com abe books.fr amazon.com amazon.fr barnes and noble.com abe books.it powells.com iberlibro.com abe books anz

“If you ignorantly believe there’s not enough life support available on planet Earth for all humanity, then survival only of the fittest seems self-flattering to warrant magna-selfishness. However, it is due only to human’s born state of ignorance and the 99.99 percent invisibility of technological capabilities that they do not recognize the vast abundance of resources available to support all humanity at an omni-high standard of living.”
~ Richard Buckminster (Bucky) Fuller (born: 1895-07-12 died: 1983-07-01 at age: 87) Grunch of Giants

	recommend book⇒Grunch of Giants
		paperback	hardcover
	ISBN13:	978-0-9740605-1-4	978-0-312-35193-9
	ISBN10:	0-9740605-1-8	0-312-35193-3
	publisher:	Book Publishing
	published:	2004-03
	by:	Buckminster Fuller
Fuller was one of the first to notice the effects of corporate power and globalisation. He follows the history starting from WW II.
abe books.co.uk abe books.ca amazon.co.uk amazon.ca abe books.de chapters.indigo.ca amazon.de abe books.com abe books.fr amazon.com amazon.fr barnes and noble.com abe books.it powells.com iberlibro.com abe books anz

	recommend book⇒Supercapitalism: The Transformation of Business, Democracy, and Everyday Life
		paperback	hardcover	kindle
	ISBN13:	978-0-307-27799-2	978-0-307-26561-6	B000VMBYSY
	ISBN10:	0-307-27799-2	0-307-26561-7
	publisher:	Knopf
	published:	2007-09-04
	by:	Robert Reich
Robert Reich was minister of labour under Bill Clinton. He explains how competition between companies for favourable legislation has lead to a sort of lobbying arms race. He explains the consequences, cheaper consumer prices, but also lower wages, and less job security. He points out that corporations have no interest whatsoever in community values. It is pointless to expect them to care about global warming, job security, health care etc. They are purely market-driven. He believes this is as it should be. (I strongly disagree. Corporations should be just as responsible as individuals, and all individuals should be personally responsible for their actions they perform on behalf of the corporation.) However, he calls for citizen involvement in government to ensure issues that affect entire communities are properly addressed.
abe books.co.uk abe books.ca amazon.co.uk amazon.ca abe books.de chapters.indigo.ca amazon.de abe books.com abe books.fr amazon.com amazon.fr barnes and noble.com abe books.it powells.com iberlibro.com abe books anz

Links

• thoughts about money.
• The End of Work: an essay about what happens to economics as computers make human workers obsolete.
• Comer.org (The Committee on Monetary and Economic Reform) describes how private banks create money out of nothing and lend it to governments at interest.
• Inequality of wealth.

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