This might be called market socialism, though this particular version is my idea (came up with it when I should have been studying for exams a few weeks ago).

The system I'm describing is technically socialism, as the 'means of production' are publicly owned, however is entirely unlike the soviet union and many other historical examples of 'socialism' – first and foremost because this is not an example of a centrally planned economy.

Assume most things are similar to our own systems unless I've pointed out something different – I'm trying to keep this relatively short.

To describe it:
In essence, there should not be private companies, private ownership of land, or of natural resources(where feasible ).
Private property in the sense of consumer goods most certainly exists and from this starting point of some revolution of some sort further enforcement would not be difficult as these things would simply not be for sale.
People work, as normal, and receive wages.
There will be no income tax whatsoever, and probably not any other tax beyond those to internalized externalities, and possibly some sort on the use of natural resources.

“corporations” or other such business entities certainly exist, however they will all be owned by the government, although the government would not directly appoint members to the boards of directors.
Government owned business will operate for profit.
There will be some form of inter-company equity and debt markets to facilitate investment as well.
There would be some form of 'independent' authority existing under the government that would be responsible for obtaining revenues. Making appointments to the boards of directors and whatnot.
This would need to be done carefully given that enterprises are still competing but are owned by the same entity. However it's quite possible. There'd would also need to be some way to create new businesses, but it's certainly possible.

There would be many business entities existing, they would compete, sometimes some would fail – they would not be bailed out.
Since profits not reinvested will be dividends and accrue to the government, there should be a substantial source of revenue there and then.
What is noteworthy about government ownership of profit seeking business entities is that it avoids the need for most distortionary taxes – It would not be necessary for income taxes to be imposed on either personal income or corporate income – this is actually a more efficient arrangement then a modern 'capitalist' economy and this reason alone means that any small problems with the system do not immediately become fatal flaws - there are very real advantages aside from any “fairness” or "equality of opportunity" idea.

Land would be able to be rented of course, and it would be possible to secure for a long period of time the right to rent and even transfer these rights to another person or entity, however land would not be for sale per se.

Personally I'd seriously wonder about perhaps having for profit health and education services and using voucher systems and other market based alternatives to government provision of services, though I suppose you could still do it. Given revenues would be going back to the government and it would be possible to provide some form of 'basic minimum income', real wages after tax would be higher (as there's no income tax) it shouldn't be entirely out of the question.

While there might be some form of private debt market or private banking, savings and investment is generally out of 'private' domain, though it would still be dominated by market forces.


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Basically, to try and make a bit more sense of it:
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Consumers:
Spend money on goods and services

Business:
Pays wages to consumers
Reinvests to some degree
May pay rent on use of natural resources or land to government
Pays Dividends to government

Government:
Provides "essential” government services – provision of public goods (defense, non-excludable infrastructure, legal system, ect)
Passes some funds back to consumers in the form of things like education/health services (though actual provision would probably be by profit seeking business)
May invest further into business
May provide some level of “citizen dividend” back to consumers.


------------------------------
Compared to the present:
------------------------------

Consumers:
Spend money on goods and services
Save(invest) .... or borrow

Business:
Pays wages to consumers, which are taxed
Reinvests (remember that capital gains will benefit only those who own the busniess)
Pays dividends to shareholders
Pays corporate taxes to government if incorporated (I'd rather not complicate things with small business)

Government:
Provides various services (and a whole lot of other bullshit too)

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It should actually be possible to have small business in this economic system as well as long as investment goods aren't bought by consumers are but simply rented. - remember that this could mean permanent renting anyway.
Given economies of scale and the fact that rents on investment goods would be competitive, no one will be obtaining much equity from doing this anyway - so it doesn't violated the whole socialism thing. You could be the manager or organizer of say, a bar.... sure. This sort of arrangement definitely lends itself to collectives for small scale things - particularly hospitality and various other services industries.

The way to handle the rent of natural resources including land is to allow competition on the level of rent entities or consumers are willing to pay to use the resource/land – that money of course goes back into the public purse.
There's no problem with competitive markets for rent afterall, and if one enterprise believes they're able to be more profitable with a given office block, then they'll be willing to pay more rent – we still have an efficient allocation of resources (and arguably more efficient in some ways – goodbye property bubbles)

It bears mentioning that this entire system assumes consumers are utility maximizers – we are assuming here that people are greedy, this is not any attempt to get away from that. Indeed the driving force behind a societal reorganization would have to be the 'greed' of people less well off under the current system anyway.

I may have missed a bit, and I want to try and get across this concept to people so please criticize and/or ask for more detail.

A thread like this deserves some well thought out replies, however I'm up to my eyeballs with work at the moment, so I'm posting here to remind myself to reply at a later date.

You're basically advocating a more controlled, socialist state. Which is what people should have. This bullshit about it being your right to do this, do that is total crap. People need regualtion in some areas because they are fucking stupid.

Parents restrict their kids for their own good. The state needs to do the same for the people sometimes. Universal healthcare, schooling, education etc are all areas that could do with more government interaction. People talk about democracy and brilliance in America and yet they don't have social care. Haha, right.

Socialism doesn't change how the economy works, it'll still be a capitalist world just with more social policies for the majority/everyone. It's a step away from capiltalism in the long run only if you want it be.

I don't ubnderstand the big no attitude toward socialized care in America. You get irked because someone won't tip because waiting staff earn fuck all and need your contributions to have a decent wage and life, but you won't pay some taxes so that people can get the healthcare they also need for a decent life?

:rolleyes:.

You're basically advocating a more controlled, socialist state. Which is what people should have. This bullshit about it being your right to do this, do that is total crap. People need regualtion in some areas because they are fucking stupid.

Parents restrict their kids for their own good. The state needs to do the same for the people sometimes. Universal healthcare, schooling, education etc are all areas that could do with more government interaction. People talk about democracy and brilliance in America and yet they don't have social care. Haha, right.

Socialism doesn't change how the economy works, it'll still be a capitalist world just with more social policies for the majority/everyone. It's a step away from capiltalism in the long run only if you want it be.

I don't ubnderstand the big no attitude toward socialized care in America. You get irked because someone won't tip because waiting staff earn fuck all and need your contributions to have a decent wage and life, but you won't pay some taxes so that people can get the healthcare they also need for a decent life?

:rolleyes:.

... that isn't at all what I'm advocating.

What's my incentive to run a business under this system?

So, the government owns all natural resources. Businesses owned by the government rent these resources to use them to make finished products, which will be bought by their employees.

I'm not seeing how starting a business isn't doomed to fail in this system. Additionally, this puts all control over resources in the hand of the government, making them impossible to acquire aside from through government. This looks like begging for the politics of pull.

What's my incentive to run a business under this system?


The same as it is under the present system.
Management of a corporation are appointed by the board of directors, which represent shareholders.
The 'incentives' for management are being paid.
Stock options are certainly out but that doesn't rule out generous renumeration.


So, the government owns all natural resources. Businesses owned by the government rent these resources to use them to make finished products, which will be bought by their employees.

Not bought specifically by their employees.
Products are sold as normal - the only differences from present are that the business is publicly owned and that land and natural resources are rented.



I'm not seeing how starting a business isn't doomed to fail in this system. Additionally, this puts all control over resources in the hand of the government, making them impossible to acquire aside from through government. This looks like begging for the politics of pull.


The actual creation of new entities is something that needs to be worked on - capital markets being the sticking point.
However capital markets as is aren't working great, and for the past century have been far from efficient in allocating resources anyway - there's room for error, particularly if some distortionary taxes can be done away with.

When I say 'owned by government', I don't necessarily mean administered through normal departments/ministers.
The point is that the return goes back into the public purse.
There shouldn't be any room for meddling, the powers to do so shouldn't even exist under the law.
Government should have less planning powers then it has now - even in first world countries getting development applications approved can be like dealing with the mob.

so in this system, the government, and therefore the elite own ALL the land and natural resources. the companies (also government run) rent the land from the government?

WHY?

this whole thread is too stupid for words.
you can't divide the world into government, business and consumers.
government is a consumer as well as a business
business consumes and governs to a certain extent
consumers do business and some consumers govern.

The actual creation of new entities is something that needs to be worked on - capital markets being the sticking point.
However capital markets as is aren't working great, and for the past century have been far from efficient in allocating resources anyway - there's room for error, particularly if some distortionary taxes can be done away with.

When I say 'owned by government', I don't necessarily mean administered through normal departments/ministers.
The point is that the return goes back into the public purse.
There shouldn't be any room for meddling, the powers to do so shouldn't even exist under the law.
Government should have less planning powers then it has now - even in first world countries getting development applications approved can be like dealing with the mob.

My point was that you'd have to go through a government bureaucracy to get the rights to lease land, rent the use of resources, etc. Some administrator is going to decide who gets those rights, probably some salaried middle management guy with no personal interest at stake. You can't just legislate that this guy, or others like him be objective and fair, or even knowledgeable enough to tell a good business plan from a bad one. He has nothing at stake, he personally risks nothing if he's wrong. There's no incentive to invest wisely, and I can't imagine this not becoming wildly corrupt.

I think that in trying to do away with a few problems, your system would open a floodgate on a bigger one.

My point was that you'd have to go through a government bureaucracy to get the rights to lease land, rent the use of resources, etc. Some administrator is going to decide who gets those rights, probably some salaried middle management guy with no personal interest at stake. You can't just legislate that this guy, or others like him be objective and fair, or even knowledgeable enough to tell a good business plan from a bad one. He has nothing at stake, he personally risks nothing if he's wrong. There's no incentive to invest wisely, and I can't imagine this not becoming wildly corrupt.

I think that in trying to do away with a few problems, your system would open a floodgate on a bigger one.

Well, actually the idea would be that they'd go to the highest bidder.
If coal company A reckons they can be more profitable then coal company B mining a given area, they'll in all likelihood going to be willing to offer more.

It's really not that hard to enforce that and there isn't much of a need to determine what's a 'good business plan', all that matters is the valuation rent offers.

In the case of land, it isn't like there aren't functioning rental markets at the moment anyway- while in this case we'd have a monopoly(with attendant issues for efficiency), it wouldn't be difficult to create several leasing agencies.

Finally, rental rights could always be trade-able. There's nothing like a secondary market in something to find out what it's really worth anyway:P

you can't divide the world into government, business and consumers.


Yeah, totally. Pretty much every economist who existed over the past hundred years was a fucking moron.

The absence of private ownership of land discourages the development and improvement of the land. If you look at the development of shanty towns in residential districts in 3rd world cities, the biggest and most important step in the process is the granting of ownership by the government. Once the fear of removal from the land is removed, people feel much more inclined to invest in their property. Roughly, what length of leases did you have in mind? with shorthold leases you would not encourage the improvement of land or property, with long legal leases the practical effect is tantamount to ownership anyway. How would this system deal with unemployment, as surely in this scenario unemployment would equal homelessness?

With regards to healthcare, it's clear from present day examples that where profit is the goal behind it corners are cut to ensure profitability (voiding health insurance, under prescribing non-life saving drugs etc). Most settlements have neither enough room nor inhabitants to accommodate more than one hospital, thus removing the impact of competition.

What's the motivation to set up a profitable business when the government is going to reinvest most of you're profit elsewhere? Why bother putting yourself through the stress when all that can happen is at best breaking even or at worst failure?

I think this system would have more problems with corruption than any other system we've already tried. The whole idea relies on companies passing on their profits to the government for re-distribution and re-investment. How are you going to oversee this and ensure that no-one's fiddling the books? The answer is you can't, at least not in anyway satisfactorily. Where large sums of money are stake, government or "independent" accountants will have their silence bought.

The absence of private ownership of land discourages the development and improvement of the land. If you look at the development of shanty towns in residential districts in 3rd world cities, the biggest and most important step in the process is the granting of ownership by the government. Once the fear of removal from the land is removed, people feel much more inclined to invest in their property. Roughly, what length of leases did you have in mind? with shorthold leases you would not encourage the improvement of land or property, with long legal leases the practical effect is tantamount to ownership anyway. How would this system deal with unemployment, as surely in this scenario unemployment would equal homelessness?

Unemployment generally equals homelessness now unless you have savings to live off, friends/relatives who can help or actually own your own home, which isn't at all universal.
Not really ruling out a welfare system of some sort anyway.


With regards to healthcare, it's clear from present day examples that where profit is the goal behind it corners are cut to ensure profitability (voiding health insurance, under prescribing non-life saving drugs etc). Most settlements have neither enough room nor inhabitants to accommodate more than one hospital, thus removing the impact of competition.

Yes quite possibly. It certainly doesn't void what the system is trying to do to have universal healthcare. It isn't really a central part of it though.



What's the motivation to set up a profitable business when the government is going to reinvest most of you're profit elsewhere? Why bother putting yourself through the stress when all that can happen is at best breaking even or at worst failure?


The creation of new businesses is a problem - that goes together with equity markets.

In the case of small business not much is different.
The point of the whole renting thing is that no one owns capital inputs - if you're an awesome manager of your little cafe and after paying your staff, the rent, and other costs you have a lot of money left over, it's probably because you're an awesome manager. Good for you.
In this cafe example, even if its in a good location, that advantage would be built into the rent. There isn't going to much missed at that level so there really isn't too much changed from the present.

Of course larger ones are a tad more difficult.
The big point of the system is to more fairly distribute income from capital.
This could be partly solved if there's a facility set up for the government to buy out parts of existing companies that companies might want to divest themselves of.
If they end up being overpriced it isn't *too* much of a loss, since the money ends up back in the public purse through dividends if the company which sold the asset doesn't have anything better to do with it.

In fact given acquisitions and involve takeover premiums anyway, there might just be an incentive for companies to embark on projects in areas where there aren't synergies with their existing operations, simply for the purpose of selling the asset later.

I'm a tad wary of this idea though, the more complex something is made the more chance for someone or something to fuck it up.


I think this system would have more problems with corruption than any other system we've already tried. The whole idea relies on companies passing on their profits to the government for re-distribution and re-investment. How are you going to oversee this and ensure that no-one's fiddling the books? The answer is you can't, at least not in anyway satisfactorily. Where large sums of money are stake, government or "independent" accountants will have their silence bought.

I don't think I quite made it clear -
corporate governance is not changing.
We're talking about a reassignment of ownership here, that's all. Government owning all the shares shouldn't really change much.

What else are they going to to with money aside from either re invest it or pass it to shareholders in the form of dividends?
Management that doesn't deliver returns to shareholders gets sacked. Yeah there are problems with corporate governance but aside from the threat of sacking there are other incentives that can be used to make management act in the interests of shareholders that are used now. Performance pay being a big one.
Stock options and shares as remuneration are obviously out in this system, but that doesn't mean CEOs can't be highly paid.


----------------------------

I'm not pointing this at anyone in particular, but just to make it clear to anyone who doesn't know, to put corporate governance in western countries simply:

Generally (and there are certainly many many exceptions) the people who manage a company are NOT necessarily the people who own a company.
While management may get paid a hell of a lot, the CEO isn't necessarily the guy getting most of a company's profits.

Shareholders appoint (or at least approve appointments) to the board of directors which oversees management, approves important decisions, and if necessary can fire management.

Criticism of this system on the basis that there's no incentive to run business, at least in the context of corporations isn't really legitimate because those who run corporations aren't necessarily those who own them. Taking away ownership doesn't change things much.

This whole idea would not work.

In essence everyone working for a company would be working for the government, since the government owns all the shares like you said. So then what happens if the company wants in invest money in X project and the government wants to do Y with the money?

Obviously the government gets its way since it owns the shares of the company.

Say you're an auto manufacturer. The government says you have to built this car, over that car. What the hell do they know about building cars? How does the government figure which car will make more money and in the end be better to build, to keep the company going? It seems that with this system innovation will only be hindered as there won't be any competition to do better than competing companies.

Don't you see? Government is the problem, not the solution. I suggest you re-think how a TRUE free market works, and I don't mean the US market today, because it is clear it is NOT a free market.

This whole idea would not work.

In essence everyone working for a company would be working for the government, since the government owns all the shares like you said. So then what happens if the company wants in invest money in X project and the government wants to do Y with the money?

Obviously the government gets its way since it owns the shares of the company.

Say you're an auto manufacturer. The government says you have to built this car, over that car. What the hell do they know about building cars? How does the government figure which car will make more money and in the end be better to build, to keep the company going? It seems that with this system innovation will only be hindered as there won't be any competition to do better than competing companies.

Don't you see? Government is the problem, not the solution. I suggest you re-think how a TRUE free market works, and I don't mean the US market today, because it is clear it is NOT a free market.

You entirely missed the point.

“corporations” or other such business entities certainly exist, however they will all be owned by the government, although the government would not directly appoint members to the boards of directors.
Government owned business will operate for profit.


The entire point here is it's NOT central planning, it's more or less a market economy where capital is publicly owned.
You talk about how 'what if the government wants to do X and the company Y' - how does that not apply to private shareholders as is?
Oh right... they appoint managers who DO know how to run a company for profit, and running the business for profit is the point. If they're being run for profit necessarily the managers are not being ‘ordered around’ by government for the fun of it, they’re being judged on their ability to deliver profits and fired if they fuck up.

As long as the method of appointment to boards of directors I don't see the problem.
Government ownership of equity simply does not instantly compromise the profitability of a company and it isn’t like I’m suggestion making corporate governance the responsibility of a legislative body.

I normally don't mind what you post, but not being able to own land is a serious sticking point.

I think there were classes of people in the past who were prevented from owning land, those were usually called slaves.

The incentive to start a business (being the owner) is that YOU receive the end profits. Your idea becomes YOUR money. Yeah I know governments tax people too much, but when's that going to change. Your idea's no different, the government gets ALL the profits. That seems to be more severe than what we're under now.

In fact, pretty much everything you propose isn't much different. This is still capitalism, only the Government takes 100% capital gains tax and pays wages in the form of welfare benefits. In terms of investment, the Government is simply acting as a bank, providing money for investment. Instead of a bank manager deciding whether or not a project is worth risking money for, some beaurocrat will instead.

The web of beaurocracy would kill the system, as central Governments are notorious for being inefficient. Every single company would have to be monitored for levels of perfomance. Governmental managers would have to be hired to ensure that the company managers are doing their jobs correctly. Managers would have to be hired to manage those managers. The resulting heirachy would create massive inequalities of scale.


The only thing that you have proposed is beaurocratised capitalism, where the state is essentially acting as a huge company. This system would be destined to failure.

Faggotry and nonsense.

:rolleyes:.

Fucking traitor. Go ahead and have the government wipe your ass and hold your hand you piece of shit.

Interesting thought experiment I suppose, but I can't imagine anyone desiring this, even if it were feasible. Which it isn't, it just begs for corruption.

Power doesn't need to be centralized any further than what is necessary to protect people from encroachment.

Although I don't expect a lot of you to believe that.

I normally don't mind what you post, but not being able to own land is a serious sticking point.

I think there were classes of people in the past who were prevented from owning land, those were usually called slaves.

The incentive to start a business (being the owner) is that YOU receive the end profits. Your idea becomes YOUR money. Yeah I know governments tax people too much, but when's that going to change. Your idea's no different, the government gets ALL the profits. That seems to be more severe than what we're under now.

Even if you 'start' a business, unless you have capital to contribute someone else will own it.

Just because that's more explicit here doesn't change the fact that it's the case anyway.

If I borrow $200,000 to open a bar, it's the banks bar until I progressively pay it off.

It's hardly more severe then what we have now.
With what we have now, in most countries your income is taxed exactly the same way -
even in the imaginary situation where someone works tirelessly from scratch and ends up earning a million dollars a year, Paris Hilton (hypothetically) getting that much because mummy and daddy left her a trust fund will at best be having that income taxed at the same rate.

Is it so severe to let people get 100% of their income from wages, while using income from capital to finance government activities?

In fact, pretty much everything you propose isn't much different. This is still capitalism, only the Government takes 100% capital gains tax and pays wages in the form of welfare benefits.


NO. it is NOT capitalism.
"Capitalism is an economic system in which land, capital goods, and other resources, are owned, operated and traded by private individuals or corporations for the purpose of profit."


If productive assets are publicly owned, it is NOT capitalism.
Markets =/= Capitalism



In terms of investment, the Government is simply acting as a bank, providing money for investment.
Instead of a bank manager deciding whether or not a project is worth risking money for, some beaurocrat will instead.


I think I've given a misleading impression, it's difficult to simply say "it's like what we have now except here, here and here" to people who may not have any (maybe even highschool) economics, so I've had to be really long winded.

Corporations pretty much always re-invest some part of their profits, if only to maintain their current equipment or whatever. Sometimes they raise capital through loans or stock issues.
(American corporations pay sweet fuck all dividends, they usually put more in then countries where imputation systems exist)

When I implied that the government might re-invest, what I sorta meant was that while some corporations would be paying out plenty of dividends, others might be wanting to raise capital. There would need to be a mechanism to put that back in, thus why there needs to be some form of intercompany capital markets and probably some other mechanism, since there may be cases where increasing the level of investment overall could be a good idea.
Governments do this already through various means - the main motivation behind some private pension schemes set up by governments is often a shortfall in national savings which they decide fix by 'forcing' people to save.

It may sound retarded, but a serious possibility for allowing reinvestment without being bureaucratic would be investment banks and the like, so if aside from intercompany lending, the government wants to increase the level of investment overall they can simply put the cash into these. Admittedly there's then the issue of "which one? of such investment banks, but returns can be compared objectively - and since theyd have a role in intercompany lending it isn't like there'd only be one(the one the government uses at any given time) because they'd have other use for them.
The idea is to have a fully functioning, competitive, publicly owned capital market.




The web of beaurocracy would kill the system, as central Governments are notorious for being inefficient. Every single company would have to be monitored for levels of perfomance. Governmental managers would have to be hired to ensure that the company managers are doing their jobs correctly. Managers would have to be hired to manage those managers. The resulting heirachy would create massive inequalities of scale.


Why does there need to be more bureaucracy then now?
Unless you're counting people working for government owned companies as being the same as people working in departments....
But I'm not proposing companies themselves do anything much differently so I don't see why it should change.

As it is right now, the board of directors of a company oversees management.
Yes its true that there could be problems in determining who to appoint to the boards, but remember that there IS an objective measure to go on in anything to do with the 'public' capital market - profitability.
Also, I'm not suggesting this be a function performed by a parliament.
It isn't unusual at present for people who manage one company to be on the board of directors of others, or for people to serve on the boards of directors of several different companies. Not to suggest that's necessarily good of bad, but there's opportunities for fucked up shit to happen now, so I don't see why this would necessarily be worse.

Furthermore there are problems in corporate governance now, particularly in companies where diversified investors with little incentive to pay individual attention to the governance of a company hold large proportions of the stock. This generally means that most of the appointees to the board of directors are simply those recommended by the present board.
It can make it all but impossible to sack even really bad management, since people with 0.2% of their portfolio rationally chose not to aquaint themselves with the details of the management practices of a single company along with a few hundred others.

Interesting thought experiment I suppose, but I can't imagine anyone desiring this, even if it were feasible. Which it isn't, it just begs for corruption.

Power doesn't need to be centralized any further than what is necessary to protect people from encroachment.

Although I don't expect a lot of you to believe that.

I'm not so convinced as to the corruption.

Why would people desire it?
Here's a hint:
all other things being equal and ignoring any efficiency benefits from not having distortionary taxes,
-if you pay more money in tax annually than you receive in dividends or gain in capital gains on assets, you are better off.

I can't help but think that the vast majority of people would be better off, except possibly during the upside of a property boom(and that doesn't work out so well does it?).

It isn't trying to centralize power, it's trying to perpetually redistribute wealth by using the proceeds of capital to fund 'necessary' government services (public goods, positive externalities, et all)

Fucking traitor. Go ahead and have the government wipe your ass and hold your hand you piece of shit.

He was trolling dude.

I understand the whole TL/DR aspect to a block of text like this, but he'd have had to have read it in order to get it so entirely wrong.

Sophisticated troll is sophisticated.:p

He was trolling dude.

I understand the whole TL/DR aspect to a block of text like this, but he'd have had to have read it in order to get it so entirely wrong.

Sophisticated troll is sophisticated.:p

whew, I'm glad that was cleared up.

Even if you 'start' a business, unless you have capital to contribute someone else will own it.

Just because that's more explicit here doesn't change the fact that it's the case anyway.

If I borrow $200,000 to open a bar, it's the banks bar until I progressively pay it off.

It's hardly more severe then what we have now.
With what we have now, in most countries your income is taxed exactly the same way -
even in the imaginary situation where someone works tirelessly from scratch and ends up earning a million dollars a year, Paris Hilton (hypothetically) getting that much because mummy and daddy left her a trust fund will at best be having that income taxed at the same rate.

Is it so severe to let people get 100% of their income from wages, while using income from capital to finance government activities?

They own it until you pay it off, unless you use your own cash from the beginning. That's obvious.

Being unable to own land is a huge sticking point. The government does NOT take a 100% capital gains tax now. I don't think being given money by your family is the government's business.

The income from capital is meant to be for investing in new businesses or expanding existing ones, not the kind of out of control spending that governments love to engage in. If the government's little business was just a competitor that had been set up (without excessive propping up) I wouldn't care what they did with the capital. As it stands under your plan they can decide people's income because there's no other employer around and they'll be able to take most/all of the capital that results from any new innovation that occurs.

In the grand scheme everything we do is socialist but all socialists are capitalists anyway. Nonetheless, it is my belief that a government big enough to give you anything you want is big enough to take away anything you have. It is also my belief that there can be future happiness for all in this country if we stopped believing the lie that government is good and has the ability to take care of us, because all they are doing is swindling us out of our hard earned money. Other than capitalism and democratic republicanism, all economic and political insist on one thing, you belong to the state, you and your ideas and your own life.

In America you are given a SS# which if you dont have you are not even acknowledged in this country as being alive or able to do much. Its rather sad, but some saving rationalization will overcome your reasoning and affirm to you that "government is good and has the ability to take care of us."

Socialism can work when it is not institutionalized.

The loss of private ownership of land may be of concern, but a larger problem is how do we transition from private to public ownership of land? Are former landholders going to be compensated? The value of the land is that great that paying compensation is virtually impossible.

An alternative to complete public ownership of land is to have private ownership, but with high land value tax. Land value tax would be similar to your proposed rent.

I don't know if you considered this, but with the auctions of natural resources, the reserve at auctions should be high enough to cover negative externalities. That way businesses (even publicly owned) cannot destroy the environment without paying for its repair.

I was going to let this thread die out of boredom, but your response is interesting and the sort I was hoping to get in the first place.

The loss of private ownership of land may be of concern, but a larger problem is how do we transition from private to public ownership of land? Are former landholders going to be compensated? The value of the land is that great that paying compensation is virtually impossible.


The transition would have to be much the same as that from private to public ownership of equity. Most definitely no compensation, the only way something like this would be implemented would be after some form of 'revolution'.


An alternative to complete public ownership of land is to have private ownership, but with high land value tax. Land value tax would be similar to your proposed rent.


Yes, a land tax is certainly possible as far as controlling speculation (oh you Georgist :P), but part of the idea of this is that productive assets aren't in private hands, and basically that people are paid for their labour (and all of their labour, not minus income tax).
While it would put and end to the idiocy of people getting rich off of land speculation without actually *doing* anything productive, along with the systematic ripping off of millions on the other end, it doesn't fix the fact that those who already have productive assets will be able to further amass wealth because aside from wage income they have the return on those assets and the fact that ownership of large amounts of wealth is largely on the basis of the 'genetic lottery'.
I don't really see land, once we take away the insane levels of speculation and overvaluing, as much different to other factors of production, even if we do want to separate it from other forms of capital.

I guess the basis of the system and therefore the thought experiment is already sortof in place, so while I'd love to debate private property and it's legitimacy and whatnot, it's sortof beside the point in this thread if you know what I mean.

I don't know if you considered this, but with the auctions of natural resources, the reserve at auctions should be high enough to cover negative externalities. That way businesses (even publicly owned) cannot destroy the environment without paying for its repair.


YES, most definitely and with negative 'reserves' if externalities are positive. I hadn't thought much into this much depth, but definitely.
This sort of framework (one of renting the use of resources rather then selling such rights outright) makes it very easy to do so.
Where productive assets are privately owned it can become very, very complex as the question of compensation always come in. This has been a big feature of many debates regarding emission trading schemes (though personally I'm not so convinced as to how big a problem global warming really is, and if it is even realistically possible that carbon dioxide emissions could be reduced anyway).
Ideally with this system such measures could be implemented from the start, and if they are implemented later it should be somewhat less difficult then one where property rights are already established.

No political or economical system is inherently good or bad. From democracies to dictatorships and from (quasi) free-market capitalism to state communism, all can potentially offer its citizens a high quality of life... if the right people are in charge. In other words, the bulk of the problem doesn't lie with the system, it lies with those in power who abuse the system for their own selfish benefit.

So long as there are people at the top who use the system as a vehicle to do evil, there will be problems, no matter what changes are put in place. NO political or economic system can work to its full potential if those in power don't work towards the greater common good. This is all it comes down to. It isn't any more complicated than that. It's entirely possible for a population under the control of a dictatorship to collectively live a better life than a population living in a democracy if the dictator in question happens to be fair, wise, tolerant and benevolent and those in power in a democracy happen to be corrupt and only interested in catering to the highest bidder.

People should be figuring out ways to attack the problem at the source. Changing the system won't make a lick of difference if those in power have evil intentions. They'll simply come up with new, creative ways to fuck you over, and the cycle will repeat itself all over again.

Yes, a land tax is certainly possible as far as controlling speculation (oh you Georgist :P), but part of the idea of this is that productive assets aren't in private hands, and basically that people are paid for their labour (and all of their labour, not minus income tax).


Actually Henry George initially proposed all land to be public and rented out - similar to what you are proposing. Land rights had already been assigned so land value tax ended up being a compromise.

I still cannot understand how you could chose an impartial board of directors for companies. At the moment it is the people who own equity in the company who chose the board of directors. It seems to work.

Under your system every citizen owns equity in the company. How can every citizen chose the board of directors? The easiest way to chose the board is to move the power to elect from those that own capital.

Unfortunately making money off capital is all that a business does. The employees work for themselves so they would have no interest in choosing the board. And land is also owned by everyone.

Actually Henry George initially proposed all land to be public and rented out - similar to what you are proposing. Land rights had already been assigned so land value tax ended up being a compromise.


Cool. That I did not know.


I still cannot understand how you could chose an impartial board of directors for companies. At the moment it is the people who own equity in the company who chose the board of directors. It seems to work.

Well in plenty of countries outside of the US (particularly westminster systems) even bodies where members are directly appointed by government (but for a fixed period, such that once on they have little incentive to curry the favor of the current government) are able to act independently. Reserve banks in particular can fit this description (once again, most definitely not the US).

If some body created and composed in that way was to then have the responsibility of making appointments to boards, it would be fairly well removed from the day to day antics of a parliament. Of course it wouldn't be so difficult to just have a corporate revenues department or something of the sort. It isn't like the government doesn't have an incentive to maximize its own revenues anyway.
The main point is that it'd be insane to have a parliament vote on appointees (particularly given the sheer volume).

There's little difference to the current system conceptually on the "those who own equity appoint directors" - the government owns the equity, it appoints directors.


Under your system every citizen owns equity in the company. How can every citizen chose the board of directors? The easiest way to chose the board is to move the power to elect from those that own capital.

Every citizen owns equity through the fact that every citizen 'owns' the government.
I'm not saying that every citizen literally owns some fraction of non transferable shares.


Unfortunately making money off capital is all that a business does. The employees work for themselves so they would have no interest in choosing the board. And land is also owned by everyone.

That's correct. This isn't Marxist 'worker run communal factory' bullshit. All we're doing is changing the ownership of capital from being privately owned to being publicly owned.
The whip on the backs of corporate management is simply in different hands, so to speak.

The income from capital is meant to be for investing in new businesses or expanding existing ones, not the kind of out of control spending that governments love to engage in. If the government's little business was just a competitor that had been set up (without excessive propping up) I wouldn't care what they did with the capital. As it stands under your plan they can decide people's income because there's no other employer around and they'll be able to take most/all of the capital that results from any new innovation that occurs.

Sorry I didn't respond to this earlier:
I can't source this, it's from my economics text book, but in most western nations pre tax returns to capital are about a third of GDP, with the rest being to Labour.

It's also hard to determine to what degree corporate profits are re-invested today, given that you'd need to separate re-invested dividends from 'new' investment.

However I'll mention that Hong Kong finances something like 40% of it's budget through a land tax, and their total budget is 15%ish of GDP.
Given that the government ownership of land would probably be a significant source of revenue the burden on corporate profits might not be so large.
I don't have the data nor the knowledge at present to attempt to calculate the total revenue that such ownership would bring, especially given the devaluation in land(and probably rents) that would certainly occur. However I don't believe it's that implausible given what people pay today for housing that a decent portion, possibly even 10% of GDP could be raised from that, given it's both personal and business land use.

Add that to corporate profits, and it doesn't appear implausible that government sector spending of 15 or 20% of GDP could be maintained.