NationStates Jolt Archive

Inspired by the various threads about perfect countries and what not...

I have an alternative way of allowing investments than having the super-wealthy throw money around.

-First off, there are no super wealthy; the most a person can make will be limited to somewhere around $2 million(I might have a vote on it for more or less). This includes payback from investments, which as you'll see is a moot point.

-Next, all the money they would have been paid if they could set their salary at whatever they want will be put into a community pool. (Basically, once all the operating, security, and expansion costs of a business have been met, additional money is taxed)

-When you want to start a new business, you can present your idea to the community, and people can decide whether or not they like it enough to give it an investment.

(Since this pool thing will probably be overflowing, it can also be used for other things like improving public facilities and services, giving to charities, or giving everyone massive tax rebates. The tax rebates should be at a universal rate, and they might not be counted against the income limit.)

Comments?

Hooray! Another one!:rolleyes: :headbang:

Actually, if you want to limit wealth, get rid of legal entities. If you want to own a business, fine, the business is yours. If you want to sell your business, you can do that too. If the business goes bankrupt, then you have to pay the bills.

Basically, once all the operating, security, and expansion costs of a business have been met, additional money is taxed

Therein lies your biggest problem. If all the money a business makes beyond a certain point is going to be taken away from it, it will have no incentive to make money beyond that point. Your "pool thing" will not be overflowing, because no one will willingly put themselves into a position where they are forced to contribute to it.

Your idea would seriously stunt the economy, and production would drastically fall to abnormally low levels due to the "profit ceiling" you have set. Why would any business willingly incur costs for profits that are going to be confiscated from them anyway?

If a business can't maximise profits, it has no incentives to reduce costs. It has no insentives to increase production either.

So you're saying once a business has made breakeven, it will shut down? The business does have the option of expanding itself or it could also choose to pay its employees more or give better benefits. The business is allowed to do whatever legitimate things it wants with its money before taxes.

Or maybe as an incentive to contributing to the pool, the business has the option of drawing a certain amount back out should it fall on hard times.

(Also as a note, I should say the income limit per person is to be divided evenly over their work year so the managers can't quit and shut the place down after 4 months at 500k a month.)

<Snip>

Comments?
Been reading up on alternative forms of government lately? Your idea have been debated for at least a generation amongst anything from social democrats to communists to anarchists.

Not that that makes it a bad idea.. But unless you do this in combination with worker-owned business, you'll most likely kill the work ethic.

Edit: Sorry, didn't see all the comments.. Normally this idea involves a community/national bank, with guidelines layed out in something like an economic constitution.

I expect it probably could be made to work logistically.

It would entail a probable reduction of the goods and services available though. In some ways this could have positive benefits (for instance a community who all benefit or loose together might be better able to cooperate to protect the environment once the 'profit incentive' involved in not protecting it were removed).

The problem is that products and services that are deemed 'undesirable' for more subjective reasons (for instance moral reasons) by a community would also not get made, and further many boutique goods and services might also no longer be produced because if few members of the community actively desire a product or service and the financial returns are not entirely assured the community probably would not approve the enterprise cost outlay. Luxury goods and services above a certain cost would also be on the outs because there would not be anyone who could afford them (there being an absolute limit on income).

At the end of the day, I'm I wouldnt want to only be able to consume goods and services whose production a majority of my fellow community members approve of; it seems to me that the result of implenting this idea would include some circumvention of my personal freedoms (in excess of what the law currently would allow) based on the moral veiws of the majority within my community.

I'm not convinced any possible benefits would justify this one negative consequence.

I'm not saying a majority of the community would have to approve of something, but each person would have a sort of investment power they could lend to whatever cause they want.

Also interesting is another community funding something to be built in your own, and reaping the excess money for itself. I'm not quite sure what to think of that, but it would mean you could still have porn shops even if you live in an uptight puritan town that wouldn't fund it themselves, as long as the porn shops could stay in business once established (which is kind of funny to think about).

As for luxury items...... I suppose people could use their investment power to buy a shared object. Like say a bunch of friends decide to buy and share a yacht for vacations. There is nothing actually wrong with this because the money still goes towards supporting a business (and if they happen to be the ones that set it up to begin with, their community will get the money from others buying its services). Admittingly a lot of rediculously extravagent luxury items will lose their market, but I think its worth losing them if their cost is an unbalanced system.

I'm not saying a majority of the community would have to approve of something, but each person would have a sort of investment power they could lend to whatever cause they want.
Which still requires some level of public concensus, in the sense that there would need to be some way of auditing/monitoring investment power. Whilst there might be enough people willing to approve say a pornography business being started up, there may not be enough people willing to have it publically known that they support such a business starting up.

Also interesting is another community funding something to be built in your own, and reaping the excess money for itself. I'm not quite sure what to think of that, but it would mean you could still have porn shops even if you live in an uptight puritan town that wouldn't fund it themselves, as long as the porn shops could stay in business once established (which is kind of funny to think about).
This still wouldnt address financially risky enterprises with diversely located markets. While it might be possible to profit making product X provided one can make the product available in enough makets, there might not be any community where enough people believe the risk is worthwhile.

As for luxury items...... I suppose people could use their investment power to buy a shared object. Like say a bunch of friends decide to buy and share a yacht for vacations. There is nothing actually wrong with this because the money still goes towards supporting a business (and if they happen to be the ones that set it up to begin with, their community will get the money from others buying its services). Admittingly a lot of rediculously extravagent luxury items will lose their market, but I think its worth losing them if their cost is an unbalanced system.
Kind of discriminates against the 'socially disadvantaged though'. In fact this would strongly favour many sections of society whilst disadvantaging others. People fortunate enough to have a close knit extended family would be advantaged over those from very small or dysfunctional families, people belonging to cooperative social groups (for instance churches) would be advantaged over those who do not belong to such groups. People with a large social network of people they trust and get along with well enough to consider property sharing with, would be advantaged over 'loners' etc...

So you're saying once a business has made breakeven, it will shut down?
If a business could only ever breakeven it would never start up to begin with. Businesses only enter an industry to make profits. But you aren't talking of breakeven but of a cap to profits. In that case, the business will only expand to the profit limit, never above, therefore no "pool".

The business does have the option of expanding itself or it could also choose to pay its employees more or give better benefits.
Yes and both entail costs. Why would a business incur costs if it couldn't increase its profits?

Or maybe as an incentive to contributing to the pool, the business has the option of drawing a certain amount back out should it fall on hard times.
But businesses have reserves for this anyway.

I have a random idea for a better society. I have it every day in fact.
Kill Them All! Kill Everyone! Worldwide Genocide! Yeah!

Alright, lets say each person gets an amount of money called a fnord. The fnord is their share of their community pool. They can do whatever they want with their fnord except give it to themselves or another person directly. They can give it to charity or pool it with others for various things, but they can never have it directly. A popular use for fnords is investing.

You and many others, not necessarily from your community even, invest in a business in another community. You now 'own' a certain percent of this company's profits, although this percent doesn't go directly to you but rather to your community. As a note; because the business is located in another community, you only get 6/10ths of your percent of its profits, the other 4/10ths go to the community hosting the business to insure it isn't being totally drained. If you invest within your own community, you keep 10/10ths. (remember though, when I say you keep something, I mean your community gets it)



The business does have the option of expanding itself or it could also choose to pay its employees more or give better benefits.
Yes and both entail costs. Why would a business incur costs if it couldn't increase its profits? The point of a business, to those involved in it, is to benefit those involved in it. What is the point of increasing profits if the people involved don't see the money? Unless the people at the top of the business are already making the maximum income, why not expand further and up their own salaries? If they are making maximum, what about the people just below them? The people at the top have an incentive to expand their business.

<Snip>

The point of a business, to those involved in it, is to benefit those involved in it. What is the point of increasing profits if the people involved don't see the money? Unless the people at the top of the business are already making the maximum income, why not expand further and up their own salaries? If they are making maximum, what about the people just below them? The people at the top have an incentive to expand their business.
No. You're wrong. The point of a business, when it's small, is to make the owners & management rich. When it's slightly larger, the focus shifts to making the investors rich. At that point, enriching the management is simply a means to getting a management willing & able to make the investers rich.

When you remove the investor group & put a loft on how rich the management/owner(s) can become, business will stagnate. This is why companies under the system you propose need to co-own their place of employment. If they did that, then it wouldn't be feasible the business would stagnate.
I know it's pathetic, but it's none the less true. I sometimes get a strong feeling that business managers takes perverse pleasure in NOT improving conditions for employees.

Regardless, it's not feasible to have human case-to-case decisions on who recieves funding & who doesn't. Nothing would ever be produced that way, as a large number of people are always against something or other.

Alright, lets say each person gets an amount of money called a fnord. The fnord is their share of their community pool. They can do whatever they want with their fnord except give it to themselves or another person directly. They can give it to charity or pool it with others for various things, but they can never have it directly. A popular use for fnords is investing.
In light of these amendments I retract my earlier statement (quoted below).
I expect it probably could be made to work logistically.
What's to stop everyone donating their fnord to charity organisations that pay all their employees the maximum salary for doing nothing particularly productive except the basic minimum required effort needed to ensure the charity meets any legal requirements in place? Why go to all the hassle of running or working in an actual business complete with the productivity requirements it needs to meet to stay in business, when they could run or work in a charity organistion taking max rate salaries and donating whatever is left to some random cause?

Of course once everyone skives off productive endeavours in favour of getting sweet salaries in return for administering the distribution of charitable funds, there wont be any money being made to go into the pool to be distributed as fnords that can then be donated to the charities in order to seat up sweet as bare-effort jobs at max salary. At which point everyone is skrewed.

If you invest within your own community, you keep 10/10ths. (remember though, when I say you keep something, I mean your community gets it)
I may not be following you correctly but why would you care what someone else is getting?


The point of a business, to those involved in it, is to benefit those involved in it.
The point of business is to benefit the owners by making profits to increase their capital which can be given out as dividends as rewards for their investment. The workers of the business at all levels are just employees, and their wages are costs.

What is the point of increasing profits if the people involved don't see the money?
But profits do go to those involved, the owners. They also go to retained profits which increases the owner's equity in the business.

Unless the people at the top of the business are already making the maximum income, why not expand further and up their own salaries?
Why would management want to increase the costs they need to pay to their workers? How could you justify this policy to the owners? What would be the incentive for the owners to do this? The only concern of an owner is to maximise profits, so why would he or she want to pay his employees more?

The Similized world: The investors may have the ability to control the manager's salary, so if they feel they aren't maximizing the potential of the business, they can punish them with lower pay.

Also, you can't use your fnord against the formation of something, unless I guess if you put it into a political campaign to ban it. It doesn't matter if large numbers of people are against something, because if a small group wants to open a porno shop, they can invest in it and there is nothing the majority can do to them besides trying to take legal action.

Of course once everyone skives off productive endeavours in favour of getting sweet salaries in return for administering the distribution of charitable funds, there wont be any money being made to go into the pool to be distributed as fnords that can then be donated to the charities in order to seat up sweet as bare-effort jobs at max salary. At which point everyone is skrewed. After the recession hits and they realize they don't actually have an economy, they'll probably wise up and form some actual businesses.

I may not be following you correctly but why would you care what someone else is getting?Well, since the amount of money in your fnord is based on the wealth of your community, its in your best interests to have more paid to it. I say the 4/10ths thing in other communities to make sure they get something out of hosting a business rather than being drained utterly.

Why would management want to increase the costs they need to pay to their workers? How could you justify this policy to the owners? What would be the incentive for the owners to do this? The only concern of an owner is to maximise profits, so why would he or she want to pay his employees more?They can't get anything out of profits (well the investors can say they won't pay them as much if the profits are too low), so they might as well pay their employees more and fix the place up. There is no direct personal benefit to a business owner to increase profits (besides investor pressure), so they could care less about costs so long as the business is running smoothly.

Also, new point to consider. Instead of a fixed income ceiling, there may be a scaled one so that huge business leaders can be paid more. (This is up for debate because it could in theory lead to superwealthy, and I don't know exactly what they could do with their wealth in this system...)

They can't get anything out of profits (well the investors can say they won't pay them as much if the profits are too low), so they might as well pay their employees more and fix the place up. There is no direct personal benefit to a business owner to increase profits (besides investor pressure), so they could care less about costs so long as the business is running smoothly.
Then that goes back to the question of why you should start a business in the first place if the income recieevd stops at point X.

Because, making $2million a year and making your own decisions is much more fun than making $35k slaving under an idiot.

After the recession hits and they realize they don't actually have an economy, they'll probably wise up and form some actual businesses.

Well in the event of such a recession it is unlikely there will be any of the community fnords left to start actual businesses.

It might appear rational to conclude that people would realise the detriment to themselves and act to avoid it, however that all too often doesnt appear to be the case in reality.

The fact is all too often if someone perceives there is some way of benefiting, they tend to percieve that others will take the possible benefit and that the only result of not doing so themselves will be burdening themselves while others reap the benefits of that burden.

Faced with the possibility of missing out on a benefit that others will recieve at their cost, the percentage of people who will choose to take the benefit appears to be enough to render such structures as you are proposing unworkable.

Well, that and the situation you described wouldn't be allowed to happen because fake charity type things are scams... And depending on how much a fnord is worth (like say its worth less than a yearly salary of any decent sort), not everyone would get into it anyway.

If you think about it though, even if people did set up bogus stuff to get paid a lot, they're going to want to spend their money somewhere, so there is still a demand to be filled. Then it comes down to seeing if founding your own business will get you more money than trying to make a scam charity (and I guess weighing if you want to work harder for it).

Well, that and the situation you described wouldn't be allowed to happen because fake charity type things are scams...
But such charities would not have to be fake. So long as some money is being distributed for some charitable purpose, how is it a fake?

And depending on how much a fnord is worth (like say its worth less than a yearly salary of any decent sort), not everyone would get into it anyway.
Even if it worked out logistically not everyone would get involved anyway, but the point is not whether anyone would get involved, but rather if enough people would get involved to either undermine the system entirely, or to make it more trouble than it is worth in terms of lost productivity.

If you think about it though, even if people did set up bogus stuff to get paid a lot, they're going to want to spend their money somewhere, so there is still a demand to be filled.
Sure there will be demand for goods and services, but that doesnt mean that enough people will be willing and able to meet that demand given the resource strain created by those who would prefer to find an 'easier way'.

Then it comes down to seeing if founding your own business will get you more money than trying to make a scam charity (and I guess weighing if you want to work harder for it).
Well what are you going to found the business with if all the community fnords have already gone to charities? Remember by this time last year's fnords have been distributed and invested (for the most part in 'charities'), and the amount in this years pool is so insubstantial that in order to meet the start up costs of a business, one would need a very large group of people to pool their fnords in order to meet the costs.

While the idea might work out very well if it could be made to work, I just dont see that it can be made to work; I'm not convinced that there will be a way to prevent abuse, ensure producer/consumer freedom, and still retain a reasonable level of productivity all at the same time.

But such charities would not have to be fake. So long as some money is being distributed for some charitable purpose, how is it a fake? The administration costs couldn't be above a certain percent, probably a fairly low one at that. Since you'd only be getting back a small percent of the fnord you put in (and if the system is widely known as abused it will probably just be you and whoever else is being paid by the charity who contribute their fnords to it), the fnords have to be pretty damn valuable to be worth it.

For fnords to be valuable, there needs to be a big pool, and the only way there can be a big pool is if there are successful businesses contributing to it. If there weren't any successful businesses to fund the pool in the first place, it wouldn't be worth it at all to live off a charity scam, so the entire thing starts off with enough successful businesses to make it worth it. Those businesses will then be fed by the demand the scammers have for their services, and the people running those businesses will make more money through honest work than the scammers can possibly make because the scammers are inherently limited to the money left over after the honest people are paid.

Well what are you going to found the business with if all the community fnords have already gone to charities? Remember by this time last year's fnords have been distributed and invested (for the most part in 'charities'), and the amount in this years pool is so insubstantial that in order to meet the start up costs of a business, one would need a very large group of people to pool their fnords in order to meet the costs.
I guess you could start it up by getting investments the old fashioned way from the money people make in their cushy jobs. The thing is, when there is a demand like that, you'll be able to make more money servicing it than you will getting money from a fund thats completely dependent on successful businesses anyway.

This might work perfectly well in theory, but you shouldn't forget that is people you're trying to get to follow your rules. And looking at the state of our world right now I get the impression they're not very good at that.

So I've come up with a solution that will not only eliminate world hunger, but also world sadness and take away any 'reason' there might be to go to war. The one solution to this whole mess that is our world.

Chocolate. Heaps of Chocolate. Distribute it evenly (more or less) amongst all the nation of this world, and people will be too busy eating chocolate to exploit others, they'll grow fat and they'll be happy.
Hooray! :D

Can it be special chocolate?

-First off, there are no super wealthy; the most a person can make will be limited to somewhere around $2 million(I might have a vote on it for more or less). This includes payback from investments, which as you'll see is a moot point.

-Next, all the money they would have been paid if they could set their salary at whatever they want will be put into a community pool. (Basically, once all the operating, security, and expansion costs of a business have been met, additional money is taxed)


So there is a limit on income but not on how much a person can own?. I see no difference with how things work right now. People with their own companies and high income are already heavily taxed. What do they do?. They simply let the company incur the costs which are tax deductible. A manager needs to be well presented to find contracts, so the company must pay for their clothes, a car for mobility, and business travels which if are long term will require his whole family to be there, the house belongs to the ocmpany etc.

In the end, the manager is only payed a minimal salary but perks and other things do increase the real amount of things that the owners do receive. This happens in real life and it is huge loop hole that cannot be closed simply because it is so difficult to control. Do not expect this to change at all in this other type of society.

Of course companies my not be owned by by a single person, but by the 10-20 persons who gave the fnords to start the company. So the company arranges to give the other owners their needed supplies and cars for mobility. There are just too many ways to give money that you control.


Now, if you say that once the company is created only the community owns it, then you go back to the original problem: products that are only liked by a minority will just die and never been built. If the original builders do not keep control of the company, then the community can just replace them immediately and change the focus of the company the next day.


You and many others, not necessarily from your community even, invest in a business in another community. You now 'own' a certain percent of this company's profits, although this percent doesn't go directly to you but rather to your community. As a note; because the business is located in another community, you only get 6/10ths of your percent of its profits, the other 4/10ths go to the community hosting the business to insure it isn't being totally drained. If you invest within your own community, you keep 10/10ths. (remember though, when I say you keep something, I mean your community gets it)

You and many others, not necessarily from your community even, invest in a business in another community. You now 'own' a certain percent of this company's profits, although this percent doesn't go directly to you but rather to your community. As a note; because the business is located in another community, you only get 6/10ths of your percent of its profits, the other 4/10ths go to the community hosting the business to insure it isn't being totally drained. If you invest within your own community, you keep 10/10ths. (remember though, when I say you keep something, I mean your community gets it)

This was so funny I just had to quote it twice :). Isn't the whole point of this to create an egalitarian society where people get paid for what they produce?. Allowing communities to get income from other communities just by investing there will just shift the problem from person to community. You'll still end up where a person/community/evil capitalist is making money out of the work of the other poor perons/communities/nice workers. And you can be sure that you will end up with exactly the same class distinctions at the end.

We may end up having to put like a flat tax on businesses so they can't spend all their earnings written off as costs and say they made no profit, therefore contributing nothing back to the community pool. However, even in the case of buying stuff under a business account, money is being moved and the economy keeps going. I'd like to minimize the problem, but I'm not sure as to how that can be done.

The community does not control a company, the people that invested in it do, the money goes to the community though. If a product isn't marketable in today's system, chances are it won't be in the new one, but thats just a fact of life.

If they can't make money by investing in other communities, what reason do they have to do it? If you could start a successful porno store in Catholicsburg from your home in Liberania, would you do so if there wasn't any money to be made in it?(not assuming the comedic value) I throw in the point that the hosting community should get a share of the profits to put a damper on the money drain from one community to another. If the people of Catholicsburg get furiously addicted to your porno, they should at least get some of their money back so they don't complete lose their economy to you.

After all is said and done though, there may be some national level that will shift money around between community pools to insure they can remain competitive.