Home > income inequality, upward income and wealth redistribution > More effective remedies for inequality than Piketty’s

More effective remedies for inequality than Piketty’s

from Geoff Davies

I have read only reviews of Thomas Piketty’s Capital in the Twenty-First Century, but clearly it is valuable for documenting the nature and history of inequality over the past century or three, and for highlighting the excessive political power that flows from super-wealth.  Yet he frames it in terms of capital and capitalism and, for all the quality of his diagnosis, his main prescription evidently is just to tax the wealthy, through income and inheritance taxes.

The trouble is, capital and capitalism are very ill-defined.  To speak of capitalism is to invite an un-constructive shouting match.  Capitalism has caused great harm to people and the world!  Yes but capitalism is what has made us rich!

A more useful framing is that there have been, and can be, many ways to structure a market economy.  When one looks into the mechanisms that have operated in market economies, one can readily identify mechanisms that pump wealth from the 99% to the 1%.  One can then think of ways to stop or reverse these flows, so wealth flows more fairly to everyone involved in its generation.  It will be much more effective to fix the problems at the source than just to apply traditional retro-active bandaids like taxes.

In my own book Sack the Economists, I identified seven fairly obvious such mechanisms.  Below is an edited excerpt that summarises mechanisms identified in the course of the book’s analyses.  (Dean Baker has also made lists, short and longer, which are a little more detailed and only partly overlapping with mine.)

Financial market speculation

The financial markets are dominated by speculation and other activities whose sole objective is to siphon wealth from the productive economy.  The amount of wealth involved is very large.  Some indication might be obtained from the fact that financial sectors in the US and Australia now account for 30-40% of corporate profits.  Because corporate profits would be a large fraction of GDP, this means a significant fraction of total wealth is pumped to the rich by this mechanism.

Capturing emergent community wealth

This is the wealth that results from the proximity of individual assets and investments.  It belongs to no individual, it belongs to the community.  In some places some of this wealth is captured for community use, but very commonly the wealth passes as a windfall to private interests, much of it to developers and landlords.  In this way small property holders and renters lose their share of community wealth to those rich enough to be able to capture it.

Interest charged on new money

Our money is created in the course of making loans, and interest is charged as though it were savings, rather than having been created out of nothing.  Because we need money for the economy to function, this burden of interest weighs on the whole economy.  Banks profit by maximising loans, so the amount of money in circulation is maximised, and this increases the burden on everyone.  This is effectively a private tax on the entire economy that pumps wealth to the richest ten percent.  A simple charge for the service of providing a medium of exchange, along with stronger regulation of loans, would be far less burdensome on the economy.

Access to loans

The rich can obtain loans much more easily than the poor.  They can invest their loans and become even richer.  This mechanism is widely recognised and clearly an important factor, though it is hard to estimate the amounts of wealth involved.  Mohammed Yunus demonstrated, with his Grameen Bank in Bangladesh, that it is possible to give loans to the poorest people and so to reduce this iniquity.

The ownership escalator

We use only a restricted range of ownership options in our present economic system.  As a result ownership is highly concentrated.  Even though public corporations are owned collectively, it is the rich who own shares disproportionately.  Even though many people own some shares through retirement funds, the distribution of ownership is still strongly skewed to the rich.  Once you gain ownership of significant assets, wealth begins to flow to you.  If you are poor and have to rent your accommodation, wealth drains away from you.  Owners are on an up escalator.  The poor are on a down escalator.

As William Greider observed, the problem is not that capital is privately owned, the problem is that most people don’t own any.  We already have many forms of ownership that can change this.  Ownership can be distributed much more equitably by actively promoting less common forms such as ownership by employees and other stakeholders.  Ownership can also be conditional, with time limits and progressive transfers of ownership, or owning buildings but not land, and so on, as discussed earlier.

Corporate welfare

There are many subsidies paid to corporations or rich minorities that benefit the rich at the expense of the poor.  Often they harm the environment as well, thus harming everyone.  Even a decade ago perverse subsidies amounted to perhaps $2 trillion annually, a considerable fraction of global wealth generation.  Subsidies to fossil fuel use amount to perhaps $300 billion globally.

Tax avoidance

This is closely related to corporate welfare, because it is practised mainly by large corporations, particularly transnational corporations.  They do this by complex internal transfers of money that exploit loopholes in tax laws, or differences in tax systems among nations.  They are abetted by a few small nations that charge minimal corporate tax.  Such tax havens could be closed down overnight by concerted action of a few rich nations, but those nations’ governments are owned by the rich, so it doesn’t happen.  The proportion of taxes collected from corporations has dropped by about half over the past half century.

This list will not be exhaustive, but it already demonstrates that vast amounts of wealth are transferred to the rich by mechanisms that cannot be justified as the fair operation of markets.  Either the markets operate perversely, through the invisible fist instead of the invisible hand, or they have been rigged, with the connivance of compliant legislators.  Corporate welfare and much tax avoidance result from explicit interventions.  The other mechanisms are due to malfunctioning markets that allow some individuals to exploit an instability, an up escalator, that allows the rich to become richer.

If we simply eliminated the mechanisms that unfairly pump wealth to the rich, our societies would be considerably less unequal.  The need for welfare would be greatly reduced.  The efficiency of the economy would be increased, because producers would pay closer to the full costs of production, markets would operate more effectively, and costly welfare bureaucracies could be reduced.  The dignity and self respect of the less wealthy would not be compromised by having to accept welfare, and by being perpetually robbed and vilified by the greedy.  Fixing the problems at their sources would be far more efficient and effective than the various retroactive mechanisms that have been developed through the twentieth century.

 

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  1. April 19, 2014 at 7:18 pm

    Providing increased access to loans would only add to the debt overhang, creating more inequality, not less.

    http://www.scribd.com/doc/208964576

    • BC
      April 19, 2014 at 9:31 pm

      Correct, E.L. Today financial profits are nearly half of total profits and close to 5% of GDP, which is 3-5 times the historical share before the 1990s.

      Moreover, annual net flows to the US financial industry, including banks, insurers, and non-bank financial firms, exceed the growth of nominal GDP from a year ago, which historically is a recessionary indicator. Obamacare only exacerbates the situation by mandating gov’t subsidies to the insurance industry, increasing the net flows as a share of GDP to the financial sector.

      Finally, the aggregate of total gov’t and private health care spending and debt service is now an equivalent of more than 50% of reported GDP, exerting an onerous burden on private labor product, production, profits, and gov’t receipts, requiring gov’t and private health care spending and debt to grow as a share of wages, profits, and gov’t receipts that the private sector can no longer accomplish, owing to the associated costs.

      But it’s worse. Now we are facing the rapidly accelerating automation and elimination of services employment and purchasing power without net replacement from robotics, smart systems, biometrics, bioinformatics, Big Data, and the like, with the largest net disruptive effects occurring in health care, education, legal, and gov’t services in the next 5-10 to 20 years. These sectors have grown the fastest since the 1980s-90s, including employment of females at 65-80%+ of jobs.

      Thus, women are about to experience a scale of loss of paid employment and purchasing power that EXCEEDS that of men as a share of the workforce who have lost jobs en masse in the goods-producing sectors since peak US crude oil production per capita in 1970-85.

      Capitalism, as it has evolved to the advanced hyper-financialized rentier version since the 1980s, no longer creates net new full-time private employment and purchasing power to sustain a mass-consumer economy and the institutions that depend on said economy. Further, the private sector can no longer invest profitably and sufficiently grow fast enough to support the financial, health care, legal, and gov’t services that now exert an onerous burden on the US economy.

      Add in the effects of Peak Oil and real final sales per capita cannot grow hereafter.

      • April 20, 2014 at 9:24 pm

        Excellent points, all. Your initial observation regarding historical corporate profit levels is a critical thermometer, which leads me to ask: What are the key resources for such data?

    • April 20, 2014 at 7:59 am

      ELB – My point referred to loans for the poor, and their debt is minor to the financial industry as a whole. I totally agree the financial industry needs to be brought to heel, and reduced to a small service sector. And if the poor had better incomes, from other reforms, and loans were carefully directed, and land prices were reined in, then they could benefit further.

      • April 20, 2014 at 9:36 pm

        I’ve always admired the bootstrapping capacity of the Grameen bank, but the track record for community banks on US shores has been spotty, with some successes but also a number of failures due to long-standing and incestuous neighborhood relationships that often as not precede a plethora of non-performing loan activity.

  2. BFWR
    April 19, 2014 at 10:29 pm

    The consumer financial paradigm of loan only must be transcended by monetary grace. Debt and profit fit within the economic mindset that monetary grace encompasses.

  3. April 20, 2014 at 12:28 am

    Taxing income is likely to be fought tooth and nail by the rich. Taxes on income and inheritance would have to be quite aggressive to make a difference and thus raise widespread skepticism and sympathy for the rich. Complex sources of income mean an arms raise that the tax office would lose unless it was extremely heavy handed.

    I think they only reliable option is to tax securitised wealth: Every time a stock appreciates past certain milestones of market cap, force it to dilute and give a portion of stock to a sovereign wealth fund. Arrange for the state’s share to grow asymptotically to 49% or less. The objective is not to interfere with the management of firms, but to send a steady fraction of blue-chip corporate profits to the community.

    Although this sounds revolutionary, I think it’s easier to get it past the rich, not harder. The rich care largely about playing the game and winning. Whether the base of the pyramid owns 2% or 40% of wealth is probably irrelevant to them.

  4. April 20, 2014 at 10:43 am

    Thomas Piketty is an academic, who has never worked outside the ivory tower (from my web search). Most of academic knowledge about economics comes from books and research papers, which do not contain all relevant information about the real world of economics.

    For example, no one in business outside academia takes neoclassical economics seriously. Business loves the idea of deregulation to get red-tape out of their hair. Nearly everyone laughs at efficient markets in the real world and see them as opportunities to take money from fools who believe in them. For the same reason, they want stupid academics to continue to run central banks and governments. This is the real cause of inquality: designed by the system.

    It is all a shell game, where everyone is arguing about what they see (which is only propaganda), whereas the truth is buried in what they don’t see. Never in human history have so many been con about so much by so few.

    Piketty’s suggestion of a wealth tax is just so laughable, because the wealthy cannot be taxed. The wealthy has so many ways of avoiding tax, e.g. use tax havens, leave the country (e.g. Depardieu) etc. that only an academic like Piketty would suggest what has already failed so many times in real life.

    I don’t mean to be harsh on Piketty who is only in his forties. At his age I was far more stupid and naive. He is not at fault that he is a stooge. It is propagandists who seize on the opportunity to confound and confuse so that we don’t see the real problem.

    • Marko
      April 20, 2014 at 5:15 pm

      “Piketty’s suggestion of a wealth tax is just so laughable, because the wealthy cannot be taxed”

      Luxembourg and Switzerland collect , respectively , 2.0% and 1.2% of gdp annually in “recurrent taxes on net wealth”. That would be ~$2-300 billion / year in the U.S.

      We’ve taxed the rich heavily in the past , and we can do it again. You can eliminate tax dodges , as well as tax havens , using the same legislative and enforcement mechanisms used for current tax collection. It’s simply a matter of political will – specifically the willingness to tread on the toes of the rich.

      It takes a lot to drive people out of their home country. The fact that Depardieu is inevitably used as the poster boy for this argument tells you something about how infrequently it occurs.

      https://stats.oecd.org/Index.aspx?DataSetCode=REV

      • April 20, 2014 at 6:16 pm

        Marko, I was agreeing with Geoff Davies: the truly wealthy (e.g. bankers) have special arrangements with the government.The taxes on net wealth in your statistics merely refer to the net tax on the middle class, not the wealthy (who have net subsidy). That’s why there is measurably increase in inequality.

        The attack on capitalism and recommending “taxing the wealthy” is just so obvious and naive, because it really means more taxes on the 99% who really do the work. Don’t worry, taxing wealth has been happening already: it is taxing your savings for retirement indirectly through negative real interest rates and directly through confiscation of assets (e.g. bail-in).

        The rich don’t have to leave their home countries entirely to avoid tax, although they would have multiple passports. They can spread their assets to different countries. Depardieu was only a high-profile protest. There are plenty unseen who really understand the true nature of inequality, not Piketty it seems.

      • April 20, 2014 at 11:06 pm

        CURE:
        Personal Income Tax.
        $100,000 per person deduction.
        10% on up to $1,000,000
        15% thereafter.
        Just a straight E-Z TAX FORM.
        Fair and equitable. Comments by Justaluckyfool ( http://bit.ly/MlQWNs )
        ( “You are always welcome to share, copy, plagiarize, improve, etc..any comments.)

      • April 20, 2014 at 6:49 pm

        Just one example of (many of) how the government subsidize the rich. Richard Fisher, Dallas Fed President, has publicly admitted that US monetary policy (quantitative easing) has helped the rich. On 21 March this year, he said,“QE enabled the rich and the quick, was a massive gift…was deliberate to create the wealth effect”:

        http://www.bloomberg.com/video/fed-s-fisher-on-monetary-policy-asset-purchases-l1Yg9oh2Ri2R5_Vyv5KGtA.html

        Statement occurs at 52 minutes during Q&A session.

    • BFWR
      April 20, 2014 at 7:51 pm

      Lyonwiss,

      You are correct. People who have been in business, much more so than academics, know the reality of how difficult it is to remain in business and thrive. This is why businessmen are so dutiful in “cutting costs” as they should be. Socialism, for all of its appropriate and accurate observations of capitalism’s and Finance’s excesses and short comings still “misses the mark” when it places the blame for it all at the doorstep of profit…when the real and deeper cause of the problem of economic instability is a flaw in the rules and conventions of cost accounting which enforce the productive process itself to be price inflationary. How? Because the most basic rule of cost accounting is this: ALL costs must go into price. And yet individual incomes are never more than a fraction of total costs which means….that the rate of flow of total prices will always exceed the rate of flow of individual incomes….which means that money in the form of debt/loans must continuously be injected into the economy…which re-initiates the original problem of total costs exceeding total incomes….which continuously done inevitably ends up with mountains of un-repayable debt.

      If the business community ever awakens to this reality of a flaw in the cost accounting conventions it will do as Marx mistakenly thought they would do in regard to profit…revolt against Finance which, consciously or unconsciously, exploits the necessity to borrow instead of simply directly providing a supplementary income to the individual….and which would therefore enable Business to be profitable with only domestic demand…instead of having to obsessively export which only exacerbates the international scarcity of individual incomes…..and which makes them (and everyone else in an age of modern weaponry) vulnerable to the games that empires play.

      And so I say: Businessmen of the world unite! All you have to lose is an unworkable system that denies individuals the ability to completely purchase your products so you can be more readily profitable, and also forces you into dangerous and unethical geo-political games!

      • April 25, 2014 at 1:51 pm

        Excellent points, but by what mechanisms could “providing a supplementary income to the individual” be accomplished?

    • April 21, 2014 at 6:54 am

      Lyonwiss – I take your points but I don’t think they are quite so black and white.

      Sam Pizzigati’s The Rich Don’t Always Win documents the successful struggle in the US to rein in the plutocrats, a struggle that dramatically reduced wealth concentrations after WWII. It wasn’t until 1980 that the serious breakout began, with reductions of taxes on the wealthy and progressive deregulation of finance. So taxes can be part of the answer. My point is that progressive taxes are retroactive and therefore will always be less effective and less efficient than ensuring flows of wealth are not misdirected at their sources.

      As to academics – well I’m one, though a scientist. But I can read, and it’s not hard to figure out that business and finance people laugh at the (neoclassical) academic theories. The real divide is still neoclassical/non-neoclassical, rather than academic/non-academic.

      • Marko
        April 21, 2014 at 11:52 pm

        “My point is that progressive taxes are retroactive and therefore will always be less effective and less efficient than ensuring flows of wealth are not misdirected at their sources.”

        Piketty has documented that the misdirection of income flows to the top 1% follow reductions in their top marginal tax rates. The same mechanism will work in reverse ( it’s already worked once in the U.S. , post-FDR ). Yglesias has a recent piece describing this :

        http://www.vox.com/2014/4/18/5620702/case-for-confiscatory-taxation

      • April 22, 2014 at 1:07 am

        Fine Marko, taxes are part of the answer. But I did list a lot of other ways in which the rich gather more than they deserve, and Dean Baker lists more.

        Can this discussion move beyond the old framings and look again at actual economic mechanisms?

      • April 22, 2014 at 11:55 am

        Geoff, I know you can read. So can I. But I compare what I read with I find in the real world from experience. I can assure you that a lot that is important is not often discussed even, judging by the the topics of public discussion here and elsewhere.

        Academics make the most noise, because it is more or less expected of them and what’s worse they dominate the propaganda to government and business by their teaching, books, interviews, etc. Heterodox economics wants to change the status quo, but their inspiration only comes from reading old masters or new gurus, without much input from actual experience.

        There is little chance of the orthodox economic paradigm changing, with Krugman, Summers, Reinhart, Rogoff, mainstream media and recently Graeber and Piketty who are all learning the wrong lessons from history, without relevance to contemporary reality. This is why I’m challenging academic hubris: one against thousands.

        Ideas are “dime a dozen” and most of them are not very original any way – INET is full of them. The INET premise is that economics is basically sound, all important economic ideas already exist, it is a matter of getting some young blood to add something new to what’s already there. All we need is more conferences and workshops to get the best and brightest young scholars together to be guided by “leading” economists.

        The problem is the “leading” economists have been leading the world into an abyss. They don’t even understand the epistemological problem of economics. The noise from media academics and those in government and central banks shows nothing much has changed and a deepening crisis looms closer by the day.

        Your desire as a scientist to find “actual economic mechanisms” suggests the machine fallacy, which I comment on here:

        http://www.asepp.com/what-is-economics/#comment-14

      • April 22, 2014 at 12:26 pm

        Lyonwiss, I think we’re fighting the same battle. Totally agree with most of what you say, though of course I don’t have your “real world” perspectives.

        “Mechanisms” also operate within living systems (examples of complex self-organising systems), and if you’ve read anything I’ve written it ought to be clear that I think we can’t treat an economy as clockwork (“machine”) – that’s a problem with neoclassical. It’s a living system that must be treated with appropriate respect and humility.

  5. F. Beard
    April 20, 2014 at 3:31 pm

    A simple charge for the service of providing a medium of exchange, along with stronger regulation of loans, would be far less burdensome on the economy. Geoff Davies

    1) Common stock is an ethical form of private money creation that requires no usury, nor fractional reserves, nor deposit insurance nor any other government privileges.

    2) Inexpensive fiat, the ONLY ethical government money form, requires no usury either. Nor is it necessarily even a debt of government since what is essentially debt-free fiat can accumulate in the economy if the monetary sovereign never runs budget surpluses, nor borrows and the central bank is abolished.

    3) 100% private banks with 100% voluntary depositors is the ONLY ethical form of private banking since any government support for private credit creation allows the so-called creditworthy to steal from the less so-called creditworthy and from non-borrowers.

    Summary re credit: Private credit needs to be 100% private and government credit needs to be for the general welfare ONLY!

  6. April 20, 2014 at 11:11 pm

    i actually have some old papers by piketty–they are on his web site. i don’t get the excitement—his book is mostly data crunching (i guess maybe like computing pi to the nth decimal or the fine structure constnat—the data on inequality haven out since 1980).. it appears since i havent read it there is approximately zero math or theory in the book (and supposeldy this is from an mit math guy—my neice will be in mit too). perhaps they don’t teach dynamics or differential equations at mit. (my own exposure was linear algebra by gilbert strang, which was interesting in the last chapters not covered in class—and dude tried to flunk me too, since i didnt go, though i did take up his suggestion to read george mackey—one of the bibles).

    . as ‘lyonweiss’ says this is from an academic—-promote a solution that won’t affect you personallty and won’t take off for 1000 years. ‘jeffersonian democracy’—‘slavery is an abomination, but practially i need slaves like sally heming. and this is corroboarted by lyoneweiss’ own debunking of keynsian economics—it takes one to know one). If the 99% will all buy Piketty’s book then he can be one of the first superstars (r frank, cornell) of the heterodox movement (along with d graeber—mit, chicago school..). then we’ll all owe a debt —-hallelujah on e-stir—-and be rich at least on paper (or the internet).

    a grab bag of solutions may be all we have–think number theory—but i think promoting your ‘final solution’ (or dean baker’s) is a bad habit (even if you don’t call it such). (i actually have the 2 solutions, which are mirror images—watch your money (free market) or buy your life on earth (utilitarianism) (incUyding all externalities). ,

  7. April 21, 2014 at 1:39 pm

    As William Greider observed, the problem is not that capital is privately owned, the problem is that most people don’t own any. We already have many forms of ownership that can change this. Ownership can be distributed much more equitably by actively promoting less common forms such as ownership by employees and other stakeholders. Ownership can also be conditional, with time limits and progressive transfers of ownership, or owning buildings but not land, and so on, as discussed earlier.

    Do you know if anybody has done work on the legal and human rights aspects of this? Questions that occur to me are: What is possible in current regimes of property rights in human rights instruments and constitutions? What are the limits of changes that can be made in laws without changes to constitutions or human rights charters? What changes would be needed in those constitutions anc conventions to enable effective changes to property that we would like to see?

    • April 22, 2014 at 1:27 am

      Much can be done under present law. In fact many alternatives already exist, they’re just not used much. Shann Turnbull has done quite a lot on this. His 2007 paper has a lot. There may be later work, I haven’t checked. Jeff Gates had spelled out the case for employee-ownership in the US.

      Gates, J.R., The Ownership Solution. 1998, Reading, MA: Addison-Wesley.

      Turnbull, S., A framework for designing sustainable urban communities. 2007, International Institute for Self Governance. p. 15, http://papers.ssrn.com/abstract=960193.

      Turnbull, S. A New Way to Govern. in Organisations and Institutions Network, 14th Annual Meeting on Socio-Economics. 2002. University of Minnesota: http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=26239.
      Turnbull, S., A New Way to Govern: Organisations and Society After Enron. NEF Pocketbooks, ed. D. Nicholson-Lord. Vol. 6. 2002, London: New Economics Foundation, http://www.neweconomics.org.

      • April 22, 2014 at 7:12 pm

        Many thanks.

  8. May 2, 2014 at 8:11 am

    The basic problem with both this set of prescriptions and Piketty’s is that they are purely economic in nature, while the problem is in the realm of political economy.
    In the end, increased inequality is the goal of capitalism. If you have a setup where private individuals own the sources of wealth, and the point is for them to make profits, invest the profits, make a return and so increase the amount of their capital, repeat ad infinitum with the power of compound interest, with the motivation being to maximize wealth, this is an engine for increasing inequality over time. If you add in the real-world tendency to increasing returns to scale and for the large fish to buy out the small, the engine’s power is far greater.
    But the key point is the motivation. Those with the most don’t want to have less, they want to have more. And their wealth gives them excess political power. If we look at the struggle to reduce wealth concentration, which was as Mr. Lyon notes successful for a time in the years post WW II, what stands out for me is:
    First, the struggle part; it was the product of a massive political effort by the lower classes.
    Second, that it came out of massive crises, depression and world war.
    Third, that it represented a fallback by the wealthy, the best compromise they could salvage to save their skins. The upheavals were so great, and the masses so upset, that the wealthiest really feared some sort of revolution.
    Fourth, that it didn’t last that long. Once the crisis was over and the political mobilization of the lower classes lost momentum, the wealthy elites were determined to regain the ground they lost and return to a gilded age. And they have been very successful.

    Taken together, this suggests to me that mechanistic solutions for making the wealthy somewhat less wealthy in a system that otherwise looks like what we have now are basically pointless. Taking wealth away from the wealthy is easy economically; you can define any number of ways of doing it. That’s not the issue. The point is that they don’t want that to happen and they have, and will in the future have, the lobbyists and bribes–ah, campaign contributions–to get the laws they want rather than the laws we want. If you don’t break the sources of the wealthy’s political power, then even if you can wave a magic wand and implement whatever solution you prefer for moderating their disproportionate wealth today, tomorrow they will arrange to have that solution quietly un-implemented and the dack re-stacked in their favour.

    Any solution which does not involve either a change in the very nature of ownership sufficient that elite owners of capital can’t emerge in the first place, or a change in the nature of governance, like a radical democratization of decision-making, sufficient that elites cannot isolate and capture key decision makers to skew the rules in their favour, or both, cannot stand for long even if it could be implemented.

    • May 5, 2014 at 4:13 am

      PLG – I have no problem with the thrust of your comment.

      The point of my article was to broaden the discussion beyond ” ‘capitalism’ is bad” and “we must tax the capitalists” – a pretty unproductive discussion. I wanted to introduce a little more insight into HOW capitalists gain their advantage. With that insight, we can immediately see other ways in which to reduce their advantage.

      I completely agree we need to broaden the discussion further – to the POLITICAL power enabled by wealth. And to do the job decently we’ll need to attend to our tattered social fabric, our relationships and our values.

      You’ll note that I did raise the issue of ownership. I think it is a fundamental social convention that can be one of the most powerful ways of transforming our societies. There is potential for radical democratisation too, briefly summarised in Sack the Economists, and discussed at slightly greater length in The Nature of the Beast. I think “Sociocracy” has the greatest potential of anything I’ve come across so far. Most of us in modern, fragmented societies have lost the social skills to function in such grass-roots democracy, but we can aspire, and learn. There are many changes short of that long-term prospect that would improve our politics. You can find Nature of the Beast at my blog site http://betternature.wordpress.com .

      As to “struggle”, well they’ve gained so much power again that wresting it from them will again be a struggle. So yes, let’s try to do the job properly so our descendants don’t have to keep repeating the struggle. However I don’t think this issue can be solved once and for all – it’s selfishness versus cooperation, an innate tension in the social beings we are. I don’t see that as reason for despair though – that yin-yang tension gives life its richness, as well as its challenges.

      • May 5, 2014 at 4:24 pm

        Fair enough. I’d agree that “once and for all” is an awfully tall order–I think the “permaculture” people are deluding themselves, for instance. I think of it more as which direction the slippery slope runs, as it were. The way things are now, people trying to co-operate or make things work in an equitable way are struggling against the current. Things are set up to make selfishness easy and effective, co-operation difficult and ineffective. So if nobody does anything special, things just get worse. What we need is a system that does that in reverse, so that just “going with the flow” implies things getting better, and trying to set up or maintain hierarchy and private profit is a frustrating struggle.

        I do think grass-roots democracy is an essential, core part of that. On the topic of which, have you seen
        http://www.loomio.org ?
        They make a tool for doing direct democracy online–not just allowing everyone to vote, but allowing everyone to raise issues, discuss and propose solutions. I think it could be quite important, and it seems to be going places.
        Cheers!

      • May 6, 2014 at 12:15 am

        Nothing in the Earth’s living systems is “once and for all”. Permaculture, like anything else, will require continuing adaptation, as the world changes. That doesn’t negate its value.

        Yes, what we need is a system that supports cooperation and discourages selfishness. Just because it will be hard to create doesn’t mean we shouldn’t think and aspire.

        Thanks for the loomio link. On my blog http://betternature.wordpress.com/2014/03/05/a-science-of-economies/#comments, I’ve also mentioned Sociocracy http://www.sociocracy.info.

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