"People's Capitalism": Is this a good idea?

Great Debates
1

In the past I’ve advocated for a Basic Income Guarantee: Every citizen is periodically given a sum of money by the government, and this income is guaranteed to all regardless of income or willingness to work. An example of a Basic Income in the United States is the Alaska Permanent Fund which as of 2010 had an annual payout of $1,281.

Why am I revisiting this issue? I’ve discovered a new twist to this idea which I think is worthy of our discussion. People’s Capitalism.

This might be an easier idea to sell politically than previous Basic Income proposals. For one thing, it’s technically a loan, not a handout. And it need not invoke the dreaded “T” word that so many voters have become alergic to lately: Taxes! The author, James Camus, is invoking George W. Bush’s 2004 campaign slogan of an “Ownership Society” and wants to make it a literal reality, where we are all owners of stock.

2

What happens when the National Mutual Fund suffers a net loss… for 5 years in a row? Does it go bankrupt? Then what happens? Do we start all over again, with tax dollars?

3

You have bumped into the fundamental debate of the future. Our selfish individual capitalism up against state capitalism. I don’t see how we win. They can make collective decisions that benefit an industry with no delay. It is a lot more responsive. They can protect industries and jobs. we don’t care about that. If they expire so what.
They can divert money to their infrastructure and technology. We divert ours to the pockets of the extremely rich. If their bankers did to China what our bankers did to America, they would be in jail. They execute bosses that poison citizens. We protect them.

4

I doubt it would go bankrupt. We’d take a financial hit for awhile, but that’s not the same thing as bankrupcy.

5

Who decides which companies the National Mutual Fund invests in? The state?

It sounds to me like Communism wrapped in Capitalist terminology. If I understand the proposal correctly, everyone’s earnings are taxed, and their money goes into this ‘mutual fund’, which in turn is used to finance the means of production - presumably by some governmental entity deciding which companies get funding?

One of the key requirements of capitalism is that capital has to be free to move. A company has to attract capital. If a company fails or is failing, capital has to be free to move to other productive uses. And this has to be done competitively, with companies bidding with each other for investment money in an open market. If you short-circuit that and give government the right to fund business through some taxpayer funded ‘mutual fund’, you’re giving government complete control over the means of production.

6

We could always set up multiple mutual funds to avoid the dangers of centralized control, and have them operate independently of the will of Congress or the President kind of like the Federal Reserve does. That might be a way of avoiding the dangers you’re talking about.

7

It defines "capitalist as someone who derives most of their income from investment. This means that under this plan, all adults would derive most of their income from this fund? How is that going to work?

Taxes: Since inflation would be controlled by levying higher taxes, it would involve invoking the T word.

Loan, not handout: Most people would be able to easily see through it. Saying it’s technically a loan, not a handout would not help.

National mutual fund: Since it says it would make every American a capitalist and a capitalist is someone who derives most of their income from investment, this means that the NMF would control most of the investment in the country. The government would control the NMF. So the government would be controlling the majority of the investment. On top of this, you have to add all government spending besides the NMF. This would result in the government controlling the vast majority of the GDP. This is starting to look an awful lot like there would be 5 year plans.
“Within two decades, National Mutual Fund dividends could provide a livable income for all”
No argument is provided for the two decades timeline aside from wishful thinking.

8

If an institution cannot fail, then it’s not capitalism. There is no risk.

But let’s see how this works. I get my dividend check every month. How does that encourage me to work? What niche is this Government Mutual Fund filling that is missing from the private investment markets? Seems like the only niche it’s filling is a fund that is influenced by politics and that can’t go belly up.

9

Are you kidding? Government is a lot more responsive than the free market?

Name a government agency that has been shut down due to lack of performance.

Show me the mechanism whereby government agencies are tested for efficacy and re-engineered if they do not appear to be meeting their goals.

Explain to me why the Rural Electrification Administration continued to exist and even grow in budget decades after rural America was 99% electrified.

Tell me why the Wool and Mohair Subsidy, put in place to protect the manufacture of military uniforms, continued for decades after uniforms stopped being made out of wool and mohair.

Explain to me why ethanol subsidies continue years after we’ve discovered that corn ethanol brings no benefit to consumers or the environment.

Explain to me how the Department of Education continues to get increases in funding, despite having failed at every single one of its stated goals when it was created.

Would America be a better place today if the government had protected the jobs of telephone switchboard operators? How about buggy whip makers? Maybe it should have bailed out the Tucker automobile company, or provided funds to keep the Edsel factory open?

Would it have been a good thing for the government to protect RCA and Zenith and Electrohome from having their television market share eroded by Sony and Toshiba? Do you think that would have served the people well?

How about typesetters? Desktop publishing wiped out the manual typesetting industry. Perhaps we should have protected those jobs by putting a tariff on laser printers and a tax on toner?

Ah, let’s kill the rich. That’ll fix everything. Of course, China’s humane policy of executing business people has created a paradise on earth with a pristine environment, wouldn’t you say? I’m sure China has a much better environmental record than the bad old USA, what with it’s rich people and all. And everyone knows there are no rich people in China.

10

So… An unaccountable board of smart people making all the investment decisions for the country? Moving trillions of dollars around between companies with no Congressional oversight?

I’m sure that will end well.

11

I dispute the notion that everybody needs to work for a living. I think our Work Ethic has served humanity well for a very long time, but in this age of increasing automation we need to reconsider our approach to it. It used to be that we needed 60% of our population to work in agriculture to provide for the population. Now it’s only about 2%. Manufacturing work came in to fill the gap for awhile, sucking up the displaced workers from agriculture. Then manufacturing got more efficient, and we don’t need quite as many people to work in that field. Then the Service Sector came in and soaked up a lot of the lost manufacturing jobs.

But now we’re seeing service sector jobs being automated out of existence too. Bank tellers are being replaced by ATMs. Automated drink dispensors are rendering the traditional “soda jerk” into a thing of the past. What about burger flippers? Burgers (at Mcdonald’s, at least) aren’t flipped anymore, they’re cooked in between metal plattons that cut the time in half. This is great, in a sense. We can get more stuff with less people working. But it’s bad that some people are deprived of the benefits of this increased productivity. Without a job, most people don’t have a source of income, and people need an income to survive. This plan is intended to allow everyone to reap the benefits of improved technology.

12

If all you want to do is redistribute wealth, then it would be a lot more efficient to just tax the “rich” and give the money to the poor. Let the market work, and then milk it. What you are proposing is to put the market under government control and then distribute the profits. That’s been tried numerous times, and it doesn’t work.

13

If that’s what you want, keep arguing for a basic income. No need to centralize the bulk of investment decisions through several planning offices which will not be allowed to go bust and will either be unaccountable or infleunced by the legislative of executive branches.

Even mouth breathers at Fox News will be able to see it’s a disguised version of a basic income.
The service sector is not being automated out of existence. Some jobs in the service sector are being automated out of existence.

14

If you want to redistribute the wealth, cut taxes to the rich. Make it easier for them to ship jobs overseas, hell give them a tax break for doing it. Them allow them to avoid taxes on a massive scale. Let them hide money in the Caymans if they want to.
Wait, that was done and the result was a huge redistribution of the wealth. It got moved to the top. That MACE was redistributing the wealth. It was done the last 10 or 12 years to great effect. The concentration of wealth in America greatly exacerbated in the last 12 years. That was redistribution.

15

What’s your point as it relates to the OP? Blalron wants a minimum income. Mace says there is a more efficient way to achieve that end than the OP proposes. All you do here is complain about capitalism, international trade and the rich.

“They can make collective decisions that benefit an industry with no delay”
Quite true, but this often has the result of slowing down creative destruction. That benefit is lower than its opportunity cost.

“They can protect industries and jobs” from the process of creative destruction. 200 years ago, most people used to have jobs in the agricultural industry. Do you believe the state should have intervened to assure the proportion of people employed in those industries did not lower? If not, why?

16

No…it’s a bad idea. It’s basically a trick to try and get through a sweeping entitlement that you know you couldn’t get through overtly because people wouldn’t go or it. But then I figure you knew that, right? And just figured that you could fool the idiot right wingers who would leap at the chance for anything with ‘Capitalism’ in it. :stuck_out_tongue:

[QUOTE=gonzomax]
If you want to redistribute the wealth, cut taxes to the rich.
[/QUOTE]

Hilarious. So, tax cuts to the rich are redistribution of wealth now? The poor are entitled to that money, so by cutting the taxes on the rich that means you are taking something (those evil rich folks money that they are keeping from the deserving poor, presumably) away from the poor…right? :stuck_out_tongue: And people on this board are genuinely puzzled why folks have issues with the fringe leftwingers.

No, it’s not. The basic problem here is that you haven’t got a clue what ‘redistributing wealth’ actually means. It means taking wealth from one group and giving it to another. If you happen to have a cheese pizza that I want, and I take it from you, then that’s redistributing the pizza. If you keep the pizza that I want, that’s not redistribution, since it wasn’t my pizza to begin with. I am not entitled to your pizza just because you have it and I want it.

You see the difference? No, of course you don’t. What am I thinking?

Yeah, it might at that. In the same way that a lot of the convoluted gun grabbing legislation was able to sneak through because people didn’t fully realize what it meant and hadn’t taken the time to find out. I’m pretty sure that such a plan would get scrapped early on, but it COULD get through, since it relies on people being too stupid to know better…and that’s always a good bet.

Essentially I agree with Mace (no shocker there since I generally do concerning economics matters):

[QUOTE=John Mace]
If all you want to do is redistribute wealth, then it would be a lot more efficient to just tax the “rich” and give the money to the poor. Let the market work, and then milk it. What you are proposing is to put the market under government control and then distribute the profits. That’s been tried numerous times, and it doesn’t work.
[/QUOTE]

If you just have to do it, then do it the right way…up front and via direct taxes (i.e. raise the taxes on everyone, but focused more on ‘the rich’…let me know how that works out for you btw). Not in the sneaking, underhanded way that is an attempt to get something you know is not popular passed and implemented because it’s really the only way you’ll ever get it through. Do the ground work. If people REALLY want ‘Basic Income’ then generate it through direct tax revenue by increasing taxes to fund the program. It will be less distorted (which doesn’t mean it won’t have any distortions or ill effects…just the lesser of two weevils)…

-XT

17

I can name two that came close, one I work for. The first one was National Oceanic Services, NOS. They do the charting of the US coastal waterways. Not sure how close they really came though.

The other what was called the National Aeronautical Charting Office, NACO. I do work for them and we were damn close to being shut down. Close enough that we were actually absorbed by other branches and parts of our work was closed down.

Show me the mechanism whereby government agencies are tested for efficacy and re-engineered if they do not appear to be meeting their goals.
[/QUOTE]

I believe it’s called an A-76, though I never really payed that much attention to it when it was happening to us. We were tested for efficiency, and found to be good, but they still wanted us gone for reasons I don’t know. We have changed, some departments have been removed, others have been contracted out. We’ve also been shuffled between groups two or three times in the last five years. It’s gotten to be where I don’t even know the actual office I work for.

Every US aeronautical chart is done just outside of DC in my office. For two years or so they wanted to close us down but no outside company wanted to take on the liability. We’ve hired very few people in the last few years and have been re-engineered a couple of times. While a lot of people don’t hear about it it does happen.

18

It wouldn’t work. You would find that inflation would constantly adjust so that your minimum government income would effectively be always just a bit less than you need. People who are clever and innovative would still get wealthy by inventing stuff and starting new businesses, as would the people who have desirable skills who work for those businesses. But the vast underclass of people doing nothing but living of their gubment checks would constantly be frustrated that it never seems to be enough.

[/quote]

Then you create a fundamental moral hazard that rewards laziness, apathy and stupidity.

19

Oh please. It is a simple fact of existence that a large percentage of people will never be successful beyond the barest minimum definition of “not homeless”. For any number of reasons including average or below average intelligence, lack of interest, or poor quality of schooling, cultural limitations, lack of connections, or just plain bad luck. While I don’t think they should be given a total free ride, implying that poor financial performance is due to some lack of character is absurd and you know it.

20

Would you at least agree that laziness, apathy and willful ignorance (if not stupidity) should be penalized?