Yea, a lot of the future is going to suck for awhile…but things can also get better. Here’s how I think we can build a better post-capitalist society.
(This article is part 3 of a series entitled “Metamurmerations”, where I talk about our shared future).
My system will provide a Universal Basic Income (UBI), a single tax and a more fair and equitable rate of income between all socioeconomic classes. It will still provide for competition in markets while also ensuring the common good. Let’s get started.
UBI (Universal Basic Income)
To start, the UBI is not meant to be MBI, or Minimum Basic Income. The UBI is enough so that an individual would be able to live comfortably in a rented apartment and provide for their needs and even interests. This system is not meant to punish people for being poor by making them scrape by until they can find a job. That’s not equitable, it’s just slow torture.
Let us assume then that the UBI provided is about $5,500 per month. The most common problem with UBI structures is that it causes massive inflation; if people are getting a check every month for $5,500 then the money supply will quickly spiral out of control as people horde and/or spend their UBI only to get more of it later. From here my system will begin to diverge from what you have probably already heard.
In my system, UBI is a cash flow guarantee, not a paycheck. Your UBI account will be topped off at $5,500 at the beginning of the month. If you do not spend anything, you won’t get anything the next month since your account will already be $5,500. If you spend $4,000 then you will get that amount back the next month to bring you back up to $5,500.
In this way, inflation has been cut off at the individual UBI level. Of course, this person can still take this money out and save it – which brings us to capital limits.
Universal Capital Limit (UCL)
The only way to properly balance this system out is to provide for a maximum income as well. I call it a Universal Capital Limit. Before I explain how this works and why it is necessary I want to first address the elephant in the room; no one wants to have a “maximum” amount of money they can make, right?
In my model I have capped a person’s maximum net worth at 10,000x UBI. That means that the maximum net worth a person can have is $55 million. In a society where everything is based around a monthly income of $5,500 I think a capped income of ~$460,000 is completely reasonable.
Now, as for why this cap exists; it is to control inflation at the other end of the spectrum. Let’s say everyone spends their UBI every month – that money is flowing out into the economy. Let’s say an individual owns all of the housing on a block of streets. That person will receive the rent of every individual in those buildings and eventually they will have an excessive amount of capital. If this capital were unchained then this person would be able to completely devalue the currency over time by simply accruing an unfathomable horde of cash. So the UCL exists to prevent this from happening by limiting the total amount of money that is theoretically available in the money pool.
In this way we cap inflation from both ends – UBI checks aren’t compounding so individuals cannot simply stockpile tons of cash every month and UCL prevents individuals from stockpiling tons of other people’s cash.
In another sense, the UCL mechanism ensures that the society is living within it’s means regarding it’s biosphere. If we were to convert our currency to represent some form of energy – much like the petrodollar – then we would know the theoretical maximum amount of energy required (number of people x the maximum income) to support the society at 100% utilization. Of course there will be people who try to circumvent the system and doubtless many people who would be happy simply staying on UBI, so that theoretical limit will never be reached. But it would help us plan our society to fit within the energy budget of our surroundings.
Government Spending & The Drawdown Tax
The government can print as much money as it wants to fund projects. If a new bridge needs to be built, the government can make money out of thin air and pay people to do it.
Left unchecked, the people in charge could easily inflate away the value of a currency by creating projects and funding them with these thin-air funds. So how do we prevent this?
Simple; we institute a drawdown tax across all accounts within the economy that removes a small portion of each person’s net worth and destroys it (not including monthly UBI funds). This removes money from the money pool at a constant rate, preventing inflation.
It is like a hot spring that is being fed from the mountain; while water is always pouring into the pool, a small amount of it is constantly being drained, preventing the pool from overflowing. This rate can be adjusted up or down to increase or decrease the rate of reduction in inflation, but it should have a minimum amount that it is proportional to the amount of total money in the pool. For example, if we were to add 100% of the money pool to itself in one year, then we would want to implement a tax rate of about 8.3% each month to pay it off by the end of the year. That would be 8.3% of the total money pool – so this tax would be distributed across everyone’s bank accounts. By the end of the year, the money would be re-absorbed and then destroyed (permanently taken out of circulation), leaving the government able to issue more currency the next year for more projects.
The Job Market
I predict that this system will have the major beneficial effect of not only reducing the income gap but also repositioning undesirable jobs.
If anyone reading this has worked customer service they know that it is a thankless, painful job where in today’s world you are paid very little to put up with a lot of entitlement from customers. It never sat right with me that these jobs are so unpleasant but also pay so little. Shouldn’t the law of supply and demand mean that these unpleasant jobs would be in low demand and thus be forced to pay higher wages?
However in our society the alternative to working these thankless roles is starvation. So, with the introduction of a UBI, employers would be forced to pay a fair market rate – something above the UBI – in order to attract employees to these roles. It would turn the job market on it’s head, because employers will have to compete with an alternative option to the jobs they have open. For those free market capitalists out there, it is introducing true competition to the market.
Speaking of capitalists, let’s talk competition. There have been many papers written about the ill effects that this economic system has had on our society, but the beneficial ones can also not be ignored. In the more equitable society of the 1950s and 1960s (if you were a white man), capitalism allowed for a much more level playing field and the ability for, theoretically, any individual to come up with an idea and make it big. I think that’s a good thing, but it’s also unrealistic to base a society completely off of that.
So as not to drag out the point, I’ll state what I think the ideal structure would be, given the economic system I have proposed;
In my system, I would take the communist approach to housing. That is to say that everyone gets a place to live. For all it’s faults, the USSR did one thing very well and that was to provide public housing to it’s people. It helped many individuals in the former Soviet states to have a community in their apartment block that they could fall back on when the collapse came. In stark contrast to the American hypercapitalist approach to land ownership, the idea that every citizen was owed housing as part of the social contract created a strong and resilient community group.
Before anyone reading this states that that is just not what the United States is, then I would point you to “This Land is Your Land”, written in 1940 and is one of America’s most famous folk songs. It goes; “This land is your land, this land is my land. From California, to the New York Island.”.
However – that is not to say that capitalism cannot exist! For certainly, everyone should get a home as provided to them by the society that they contribute to. However, not everyone wants to live in a communal apartment block. That is why the idea of private home ownership is still valid in the system I have proposed. One could still put their home on the market and sell it or even rent it to another.
So you see, in housing the ideas of communal communism and capitalist competition are indeed compatible.
Food, Water, Electricity, Transportation, Internet (The Utilities)
Here, I would say that these necessities should be treated as socialist constructs, whereby the means of production and distribution should be owned and/or regulated by the community as a whole.
We already have something like this in the United States, with local utilities. However because the United States is ideologically capitalist it is often implemented in an inefficient “private company whose only client is the government” manner.
But say we simply remove that and take the approach that anything necessary to keep society going should be owned by that society. It does not make sense to have private competition because that necessitates a profit motive or at least a selfish one. However, competition is good for improving systems. So why not encourage competition and innovation within these utility systems? Create internal teams that can compete with each other and integrate the utilities directly with the university and educational systems. A society’s educational systems should be one of it’s premier resources for discovering new ideas, rather than just a place for people to learn to repeat existing ones. By integrating them with public utilities we can drive innovation and efficiency in socially-owned systems without resorting to the inefficiencies of capitalism.
One of the key issues with the structure of education in the United States is that school’s funding relies on local property taxes. This means that a depressed area will naturally have a depressed school system and have no way out. However, with my tax destruction system, a government could issue as much money as necessary to fund it’s school systems, based on the total money in the pool, so long as that amount is destroyed through taxes before the end of the year.
This is where capitalism shines and where I think it should be allowed to roam freely. The United States has shown that the incredible amount of individualized options afforded to people through the means of capitalism are simply unmatched. There is no reason why you cannot have a communist housing complex, socialist utility system and capitalist free market all coexisting. It’s not a zero-sum game where one system can exist.
So how could a system like this flourish? No matter what you think of it, I’m sure that you would agree it would be challenging to implement in today’s political climate. Not to mention the sheer weight of belief behind the US Federal Government and that government’s commitment to capitalism. It seems impossible to change the course of that ship.
That is because it is. This system, or any new system, for that matter, will not be ushered in through a mass organization of “the people” toppling the government, nor through a long and slow process of electoral politics. The worldwide system of capitalism is too firmly entrenched and will not be dislodged until it dies on the vine.
However, this system can still grow and even, eventually take over. As capitalism withers, societies that rely on it will become increasingly unable to support the needs of it’s constituent members. They will turn to other means to get by or find hope. For those organizations that can support their members, they will gain a strong and loyal following – one that grows through organic word of mouth as people begin to offer to others a method for getting through the tough times.
So the most important part of everything I have described is that it provides for the needs of it’s people above all else. Otherwise, what’s the point?
The Metaverse & Cryptocurrency
What I use this term to refer to is an Internet-borne transnational state. Quite frankly I call it the “metaverse” because people know the term and I’m not great with names.
This system will grow within the context of a decentralized network of organizationsthat works with each other across borders to support and benefit each other and help each other up.
It would be in evolutionary competition with all other forms of human resource utilization; nationalism, fascism, capitalism – all the isms. The winner would be the system that best serves the needs of it’s constituents and is able to protect itself from corruption – both without and within.
The system which I’ve described requires a digital currency in order to function. It is the only way to implement things like the Drawdown Tax, the UBI or the UCL. Money as software is the only way to make this work and it’s only possible because we have that technology now.
So we will have a “metaverse” or network of people keeping each other going during the worst of it, governmening themselves via whatever means they see fit. Their commonality would be the implementation of a fair and efficient economic system to replace the current one.
This group will meet in virtual 3D conference halls or simple bulletin boards. They will debate using Discord, Telegram or any number of chat software. They will be members of a larger nation, yet ally themselves with this extended online community that provides for them with healthcare, lodging, food and more.
This group will also not be monolithic and instead work as a network of smaller networks, supporting each other through this underground Internet society. While every group will need something different, the decentralized protocol that will make this happen will function as a universal translator for trade, where one organization’s token can be converted through a chain of intermediary needs. For example;
- Group A needs food and can provide technology.
- Group B needs technology and can provide cash.
- Group C can provide food and needs cash.
Group A would buy food from Group C and pay them in technology. The system would automatically route it so that the technology goes to Group B, and Group B’s cash goes to Group C to pay for Group A’s purchase. We would need this turbocharged digital bartering network to sustain society as people’s needs get wildly out of sync with what they can provide.
In earlier posts I talked about how the Metaverse could be a simulation of the future. Everything I’ve described here would be tested in a virtual world first, where people would be encouraged to break it as much as possible so it could be repaired. Only then would it be ready to be rolled out to society at large.
There are certainly tough times ahead. Things will be much worse for many people as we move forward, but after every storm is the chance to rebuild what was destroyed. The future can be better. We can make that future get here sooner by working together and being more creative than we have been encouraged to be by our society. Let’s figure out this new world together.