Tuesday, 29 September 2009

Rationality for All

We need a new economy, and a clean set of rules to define it. By this I mean not impediments and containment to certain boundries, but a set of laws that will put into black and white what is "good" and "bad" for our economy - thus good or bad for our ability to work for ourselves and others.

Let's have a look at it from the bottom up, beginning with the very fundamentals of any economy. This would be the single unit - the work one man (of course by this I mean women as well) must do for himself to maintain his own existence. It is a common fact that, no matter the trade, one must at least fulfil this prerequisite to be categorised as one earning "an honest living". There's work of the body and work of the mind, but I'll develop that further on. For now we can say that, in the years of early humanity, an economy was limited to trading the fruits of one's labour against that of another, usually within a limited community. The invention of money was just a step up from this basic level - it allowed one to trade directly instead of trading chickens for grain for bricks as we used to.

All economies were "local" until the first 18th-century industrial revolution. Steam power and new metal alloys mixed with human inventiveness made it possible to make a single "type" item millions of times over. I suppose we could call this the beginning of the "factory economy" period.

Though it is more complicated, the production of any given product can be thought of as a "micro-economy" in itself: From its raw material roots, it engenders the work and techniques through its many stages until its appearance on the store shelf. The math is simple if we look at a factory's "top level" profitability - the money it spends to make its product is money going into the economy; the money it takes for the sale of its product is being taken out of the economy. The difference between the two, of course, is loss and profit. Therefore a company who takes much more than its production costs is taking money out of the economy.

If you would like to complicate this "top level" example, apply the same principle to every company involved in a product's "sub-production" - the mining company that provides the raw materials, the machine company that provides the factory's machines, the transportation company that carries the raw materials to the factory and carries finished product from the same to the store shelf. Now imagine that every company in this pyramid wants (at least) a 10% profit margin. By time you get to the top you will find that a product's "real" value is most often less than half of its price on the store shelf. It is mainly for this reason that the "first world" economy, as it stands, will be incapable of competing with the likes of China.

Now, about that profit margin. It would be next to impossible to even try imposing any means of control upon it (and I would be totally against the idea), but it is possible to determine whether it is "justified" or not. Were we all but beasts of labour an economy would be a simple matter, but thanks to our minds this is not so. It is thanks to our inventiveness and technology that we are able to create machines that lessen our physical burdens; it is exactly here where profit is warranted: when an invention lessens its user's workload. An inventor has every right to the time and money he saves his customer - and this at no damage to the existing economy. One is a maker of progress, and the other a benefits from it. If work is money, the balance there is pure. With this system only the inventive would be rich. But shouldn't this be so? There is still the impossibility of calculating the "how much work saved" side of things. (Aside - Outside this realm is entertainment, and in any well-educated society this should be democracy at its best - outside of the cycle of "need and sustenance", a customer will pay only if he's willing; that is to say if the product is good and the price is right.)

Our lives today are much easier thanks to generation after generation of inventors, but not all of them got a return for their work. Rather, mainly and namely from the second industrial revolution (1840's-1920's), it was the appropriator and producer of an idea who made the money - for the main reason that he already had the capital enough to produce. This already would instigate cries of "Unfair!" but there is little we can do but to brand such 'gleaner-profiteers' as the thieves they are, and hope that this would have a repercussion on the product sales. There is no feasible means to protect an idea - patenting has this intention in mind but there are always thousands of "almost" loopholes and ways around it. Though it is a basic truth that a product could have no better than its inventor as producer, in today's market it is he who pays that plays. Period.

The question to ask is "Why do those able to produce have capital enough to do so in the first place?" Again, I must stress that I am against 'taking' anything from anyone who already has it - we can't unless it was unjustly taken, and as things stand there are no laws to say that the existing greed-motivated system is "bad" - so we can't. Besides, once taken, the only rightful person a property could be returned to is the person from whom it was taken. In today's system, yet another next-to-impossibility. But I digress.

I think an idea of regulation may be based around an idea of "Squatting money". Capital that, once removed from the production cycle of a functioning economy (think of it as labour energy taken from the whole of a functioning "even trade" community), causes it imbalance.

True that most profit rarely "sits still" and is usually re-invested somewhere. Here we get into another sticky subject - is "investment" labour? Is loaning money labour?

The answer to the latter is easy enough, if one would calculate a bank's profit-earning as that of any factory in comparing its "production costs" against its profits. Yet is this really applicable in this way - does a bank's functioning and services save their clients any work? When one thinks about it, the answer is no; In fact, in total accumulated labour, though it is spread over time, the bank takes much more than it gives.

Investment is another matter more complicated. If a party give X amount of cash to a company, allowing it to expand its research/production to make new products, and based on this expansion makes new profits, giving the X cash invested a plus-value of the profit gains since its time of investment, is this labour? My first reaction is to ask "does the product save work for those who buy it?" If the answer is yes, that initial investment could be treated as "venture capital" which itself is positive in my books. If the answer is no, then more than likely it's pure speculation. Think record labels, petrol companies, etc.

But the question of the origin of the money invested also counts. Money of privilege is not money of labour. Nor is inherited money. Inheritance if fine; I see no problem at all with someone who had no need to live a life of labour thanks to a gift of someone else's who is no longer there to profit from it; yet I do see a problem if this capital is used for purely speculative purposes, especially investments in companies dealing in the market of "sustenance". Think petrol. Think metal. Think grain. Let the inheritors spend their parent/donor gains, thus, as the inheritor contributes no labour of his own, putting the economy back into the economy.

Again, how to apply this to law? I myself am totally against inheritance taxes - what right does someone have to claim half of the earnings of someone who had already spent his life paying his "just due" in taxes on those same earnings? Totally besides the point and quite unwarranted.

All of the above put together may seem confusing, but there is a thread through all of it - a division between sustenance, inventions and entertainment. Sustenance is our basic requirements for survival, inventions (machines and medication) ease our struggle to survive, and entertainment, well, entertains. (Just to clarify: energy is sustenance). Should we divide the market along these axae, discerning speculation and monopolies is a much easier task.

Now the relation between business and government. In any real democracy there should be none, only the impartial, un-biased and people-voted "anti-abuse" laws to protect both businesses and consumers alike.

What is a government? It is supposedly, within given borders, the guardian of laws demarking and enforcing the lines between all its people consider "good" and "bad" for its proper function. In some societies it is also the guardian of the 'collective security for the individual' meaning unemployment insurance and health plans paid in advance out of money pooled from a country's "collective wealth".

Before going further, but still concerning the above, I should pause to say that I see a country as a company that you yourself belong to that you yourself invest in. By that I mean that, should you agree with how a country functions: Its laws, its demands on its people and what it gives in return, you may choose to remain there. This for now is only an ideal, and granted that not all people have this choice, and certainly not at an early age.

I could even go as far as to suggest that everything in a given country open to "public use" be run by the government through funds invested by its people. By this I mean things health, transportation, and perhaps communication. Of course the government should run companies such as these - a democratic market is a free market and who uses one company or another should be up to the people themselves. I also agree that all could be privatised, but I do not at all leaving things like health and energy open only to those driven by the greed factor - a country's single non-profit nationwide infrastructure would be much cheaper to run and more stable (re-routing) than independent company-owned localised networks. Government energy of course would be paid as it is consumed, government health through an average base-plan (perhaps with options for higher coverage), government transportation paid for in a localised/national manner depending on the population concentration (aka local services provided) and government communication paid equally by every person who wants to use their network. Of course anyone can unsubscribe to any or all of the above for another service.

I see the above as a country in itself. Utilities used by all should be governed by all - meaning through democracy - for a lower cost per capita and a better gestation through custodians chosen by vote. Who would refuse to put their money into a system where they have a say in who's doing their job towards the services they get in return? In the present system people have the feeling they have no control over anything governmental (or commercial or consumer-oriented), and it is for that they don't vote. If you were giving your money to a company who has the job of giving you what you pay for, and you knew you would have your say about its success, would you pay? Would you vote? Damn right most would.

The same goes for laws. The guardians of the "public good" should be a minimal, network, vote-maintained from its tip to toe. To hell with politically-motivated judge designations and "bad" laws packaged with "good" ones for a unique senate vote - to hell with secrecy and closed-doors negotiations. The whole, save perhaps only the deepest defence infrastructures (and I stress defence), should be open to public scrutiny. Secrecy is "under the table", a sign of trickery, condescendence or mistrust; any of these inflicted by a politician towards the very people who put him in office makes for a sad and scary situation indeed. Is a country like this one worth investing in? Go figure.

Of course, for the above to work, we have to change our means (and raison d'être even) of education. School should be schooling towards the trade most interesting to a student - not a means to a minimal-effort "star job" often promised by the very same system. In fact, for the above system to work, individual thought must reign - proven fact must be taken for proven fact and tried and proven by he who is learning; anything opinion can come only after. In fact, in schooling, we must do away entirely with anything opinion. Give our young a chance to decide for themselves before subjecting them to the decisions of others. I can already hear the nihilists and right-wing nuts stampeding at that prospect.

Lastly, the place for religion - not in government. Religion is a political system in itself, a system whose laws are for the most part created for the preservation of its very same political hierarchy. Very few exceptions aside, religion is belief - belief in unproven theories of living man, and not at all a practice of a rational, logical and utilitarian thought. To state otherwise would be a heresy against humanity and all it has accomplished until now. Nor can we impose one improvable theory for another. Trade reason for belief and you've given up your role in any democratic system. But, as in any democracy, that should be for you to decide.

Through all of the above life would be business as usual, we doing our trades and trading what we earn with that of our neighbours. Oversimplified: Yes, Utopian: Compared to today, perhaps, but Impossible - not. Through the above I have but outlined only the base of what a country should be. I would like to see people return to working for a living and liking their jobs - their reason for living - instead of the conniving, arranging, fixing and indoctrinating "greed is good" period we are in today. Might I remind you that even the latter is a "reason to live" for some and the pride in that has today's world to show as a result.

People who think are rarely violent, and those conscious of what they accomplish in life (and its value to others) even less so. I think it is time that we, for now the majority, come forward to make our world our own. For all of us.