[qsort]

> Did you expect a new country wise economic model to be purposed in this article?

No, I didn't, but I'm frankly growing tired of cookie-cutter article like this one that just enumerate problems that have existed since the literal dawn of civilization.

The entire "economy bad" brigade is, as parent comment puts it, "r/im14andthisisdeep". They see problems everyone else sees, but they don't have any actual insight, just empty rethoric.

[dbingham]

There are quite a number of solutions on offer - they just have a difficult time gaining traction in our media (and therefor in the public debate). Part of that has to do with the fact that a majority of those with economic and political power - those who have succeeded in the current system - still refuse to recognize that the problems are systematic. They refuse to recognize that the problems are intrinsically caused by our economic and political systems and necessitate systematic change to those systems. And since these people wield economic and political power, they have the ability to prevent the conversations about these problems and their solutions from being held in the halls of media and power. Thus, the solutions are only discussed among fairly niche political and academic communities who have a hard time broadcasting the ideas widely.

But if you go looking for it, there is a wide array of work that has been done divising ideas for the systematic change we need to solve these problems. I have a whole bookshelf of authors proposing alternatives. Projects like The Next System project, and the Democracy Collaborate, have been working on divising ways to grow alternative systems with in the confines of the current one.

The challenge of course, remains funding. Because those with the wealth got that wealth through the current system and continue to benefit from the current system.

So actually making change is going to take either a mass popular uprising (electoral or otherwise) or enough people with enough wealth recognizing the problems and being willing to give up their wealth and power to solve them. Knowing that the solutions will forever disempower them and their peers.

Edit:

To provide some clarity of the sort of solutions on offer, I'll provide my favorite. Stop prioritizing capital, start prioritizing labor. Right now, Capital basically gets to call the shots - because we allow for any kind of contract in business formation and you can't start a business with out capital and we don't restrict what capital can demand. This allows capital to take advantage of that power imbalance at the time of business formation to demand control. If instead, we restricted what capital could demand to say - a reasonable interest on a loan - and legally structured businesses as institutions democratically run by those working in them, this would have the effect of empowering labor and disempowering capital.

People would still have the ability to make money from their money, but it would vastly reduce the current multiplier effects on the growth of wealth, and thus the tendency for wealth to concentrate. It would tend to spread wealth out to a much wider proportion of the population - because the people doing the work would get to vote for the leaders of their businesses, and those leaders then have a much, much strong incentive to take care of the people doing the work. Likewise, the people doing the work would have a much stronger incentive to take care of the communities in which they operate, because they are much more likely to live in those communities than distant investors. It has the effect of reconnecting businesses with their neighbors and communities in a much more real way, and empowering those involved in the business who are most aware of the effects it has to change those effects.

Would this system be perfect? Nope. It's really a pretty gentle refactor of the current sytem (though one with wide ranging effects). Would it be better? Yeah, I really believe it would.

There are many other effects this change would have - I've wanted to write a book on it for years, but haven't been able to find the time or bandwidth. Someday. If I ever get to take a long leave of absence or get to cash out, someday.

Another alternative you could consider, one I've played with as a thought experiment many times, what would happen if we simply banned people from making money directly from their money in all forms? It's a challenging thought experiment, because where do you draw the line? Money is just a representation of property, so how do you define money made from money versus, say, renting a machine you own? But it's a worthwhile thought experiment - could we devise a system where you could only make money by working, and not by simply owning property or holding wealth?

There are many more alternatives out there, from gentle refactors to whole rewrites. Some fleshed out, some just thought experiments. And everything in between. They should really - all of them - be a much bigger part of our public dialog than they are.

Further edit: Many threads are on-going but I've been at this all morning so I'm going to call it a day and go make lunch. I've appreciated the dialogs, and maybe I'll write that book some day. If I do find the time to write that book, I know exactly where to come to harden it against criticism. If I can convince a forum full of capital investors and would be capital investors that making capital investment illegal is a good idea, then I'll be able to convince anyone!

[qsort]

Not one single line of what you wrote is a concrete and actionable thing you would do. It's frankly a whole bunch of rethoric. I'll pick the bits that seem like they mean something real:

> legally structured businesses as institutions democratically run by those working in them

This already exists, they are called cooperatives, many of them actually work pretty great. Try to guess what happens when they grow and they need to hire employees...

> what would happen if we simply banned people from making money directly from their money in all forms?

No banks, no loans, no credit cards. No way to protect against inflation with financial instruments as basic as a target-date fund.

Oh, and 0% public debt, of course.

> Money is just a representation of property

It's not and you know it's not, you're just playing with words.

[dbingham]

> This already exists, they are called cooperatives, many of them actually work pretty great. Try to guess what happens when they grow and they need to hire employees...

They continue to operate. Mondragon has 80,000 worker owners. And yes, it has a challenge in recent years where the worker owners have created a class of non-owner employee. But it got pretty big before that started happening, and there's no reason to believe it wouldn't continue to function just fine if that wasn't an option.

There are many other worker cooperatives functioning very well at scale with zero non-owner employees. My proposal is essentially that we make this the requirement. That any business formed must be formed as a democratically run worker cooperative. This is perfectly actionable. Governments define the legal structures under which businesses may form today, and continue to regulate those structures. Right now, those structure enable the investor ownership relationship, and most worker cooperatives have to use those structures and bend them to allow the worker ownership relationship. It's a relatively straight forward legal matter (with wide ranging consequences) to change that structure.

> No banks, no loans, no credit cards. No way to protect against inflation with financial instruments as basic as a target-date fund.

Like I said, this is a thought experiment. Not fleshed out. And it's not the same as the proposal I outlined above for a worker cooperative based democratic socialism. I don't think you actually read my post, I suspect you just skimmed it and then reacted to certain sentences.

[qsort]

> My proposal is essentially that we make this the requirement

So basically we are abolishing the ability for any business to hire employees? This would be terrible, especially for the poor. Owner and employee are different risk profiles, it's neither useful nor beneficial to impose by law that nobody can be an employee any longer, especially for those who can't afford the risk.

It's also very easy to route around that obstacle if it were made law: just fire everyone and hire them back as contractors, oh, no, sorry, democratically run worker cooperative employing one worker.

You are completely throwing away many layers of protections that are afforded to workers in a system of regulated employment relations.

> Like I said, this is a thought experiment.

It's a thought experiment predicated on paying an enormous social cost that nobody is willing to pay, to get to a point where nobody wants to be. If the first step of your plan directly implies getting rid of all credit, then I frankly don't think it's really a good plan.

[dbingham]

> Owner and employee are different risk profiles, it's neither useful nor beneficial to impose by law that nobody can be an employee any longer, especially for those who can't afford the risk.

The owner doesn't carry the risk - the business does. That's the whole point of a limited liability corporation. And there's no reason those liability protections couldn't be strengthened further.

Plus, this is seriously underestimating the risk a poor employee takes. Someone living pay to pay check who has no information about the state of the business and stands to lose everything if they get fired risks a lot more than a business owner who has all the information about the state of the business and can keep a comfortable cushion for themselves to fall back on should the business fail (and can choose the moment at which to end the business to be sure they don't eat into that cushion).

Who's taking more risk here? The employee, not the business owner.

> It's also very easy to route around that obstacle if it were made law: just fire everyone and hire them back as contractors, oh, no, sorry, democratically run worker cooperative employing one worker.

You could pretty easily tweak contract law to get rid of this workaround. Even so, this isn't an easy workaround. No business of reasonable size can afford to fire all of its employees. And if those employees are co-owners of the business no single employee has the power to fire all the others.

> You are completely throwing away many layers of protections that are afforded to workers in a system of regulated employment relations.

And replacing them with power. They don't need those protections when they are in control. They can devise their own rules.

> It's a thought experiment predicated on paying an enormous social cost that nobody is willing to pay, to get to a point where nobody wants to be. If the first step of your plan directly implies getting rid of all credit, then I frankly don't think it's really a good plan.

My proposal is a separate thing from the thought experiment. The thought experiment is an example of the sort of innovative thinking we should be engaging in to come up with new alternatives, but for the most part - aren't on a large scale.

My proposal is a fleshed out proposal that I could work. Sure there are pieces of it that still need to be further fleshed out - like exactly how the transition would work. But I you can I must hang out with different crowds if you don't think anybody wants to get to a place with less inequality and where the average person has a hell of a lot more control over their day to day life.

[qsort]

> Someone living pay to pay check

Someone living pay to paycheck can not afford to be an owner in the first place. The structure being LLC or whatever makes no difference: the vast majority of business enterprises just fail.

You are effectively forcing everyone to be a business owner even when they might have no will, interest or ability to be one, something that disproportionately damages those who would putatively be helped by this system.

> You could pretty easily tweak contract law to get rid of this workaround.

Yes you can. You can do that in my world, where regulated employment, you know, exists, and you can easily show how an operation like that is fraudolent.

> And replacing them with power. They don't need those protections when they are in control. They can devise their own rules.

How would they be in control? Magic? The invisible hand? How would a law mandating that everyone be an owner, assuming for the sake of argument something like that is possible and enforceable, make a minimum wage worker in control of his own destiny?

It doesn't work, it's a pipe dream, and it's ironically the same argument used by hyper libertarian right-wing types.

> if you don't think anybody wants to get to a place with less inequality

Pointless rethoric. Literally everyone wants that, like everyone wants an extra million in their bank account.

I'm disagreeing that what you're proposing will get us there.

[mostertoaster]

Yeah this same thing you’re saying has been tried. Just newer words for the same thing.

Unless you mean it should be an entirely voluntary system? More likely you’re thinking like the Bolsheviks and you’ll cause 20 million people to stave with your ideas.

Remember Stalin was as evil as Hitler.

[dbingham]

No, that was centralized state socialism - it was authoritarian and centralized.

What I'm proposing is more akin to distributed democratic socialism. Our government is still democratically run. You still have independent banks (formed as credit unions) or crowdfunding to start businesses. The only difference is that once a business hires that first worker, then decisions start getting made democratically. And they continue from there. The state isn't running any of the businesses and there's no central planning arm.

To my knowledge, this has never been tried as a whole economic system. But worker cooperatives exist and are functioning just fine in the current system. Ever bought Equal Exchange chocolate? That's a worker cooperative. Heard of Mondragon? 80,000 member worker cooperative that's functioned successfully for decades across multiple verticals in Spain.

What I am proposing is that we do away with the traditional investor relationship and mandate that all businesses must be formed as democratic worker cooperatives funded either by regulated loans or some form of crowd funding.

[furgooswft13]

This is all bog-standard bolshevik/communist propaganda dressed up in modern lingo. Your "co-ops" are just "soviets" (literal definition "council"). These "worker councils" were officially democratic as laid out in various USSR constitutions, and even the names of some communist bloc countries such as East Germany (German Democratic Republic) and North Korea (Democratic People's Republic of Korea).

In practice of course, none of the freedoms of decision making we typically ascribe to western democratic nations existed despite these labels. The reason, as always, is that significant coercion and force is required to get people to give up control of their property and wealth. This inevitably leads to not only authoritarianism, but also wealth being transferred to the state instead of the people.

[dbingham]

No the co-ops I'm talking about are businesses democratically run by their workers and they exist in the current economy with out coersion. Ever heard of Mondragon? 80,000 worker owner cooperative operating out of Spain for decades. Had an Equal Exchange chocolate bar? King Arthur Flour?

There's no reason you couldn't write the laws of business structure in such a way that all businesses have to be run democratically by their workers. Essentially you do away with the partnership, LLC, and Corporation and replace it with the worker cooperative. What you get is an economy of democratically run worker cooperatives competing with each other in a free market economy. No central planning. No government control. And this is different from the worker councils you're talking about which are, essentially, an effort at democratic, distributed economic planning.

[furgooswft13]

Laws imply coercion and force, by definition.

If you and your hippie friends wanna band together and start a commune somewhere and commit mass suicide (or something), I got no problem with that. Just don't force everyone else to join you by gun point (the logical endpoint of enforcing laws).

[nradov]

Many states already have usury laws which limit interest rates but in practice that doesn't give labor any more power relative to capital. Lowering limits on interest rates would just result in capitalists ceasing lending to risky businesses.

A better solution would be to increase taxes on income from interest and capital, and use that funding for education and social services.

[dbingham]

It would have to be linked to a requirement that all businesses be formed as worker cooperatives, democratically run by their workers. That's what would give labor the power.

The usery laws are just about preventing banks from exercising undo power over those worker cooperatives at the formation stage.

[nightski]

Why would anyone ever try a high risk innovation play to propel society forward if there was no reward? Most businesses fail. This would encourage people to just work at BigCo instead of trying to start new things.

I feel like innovative companies such as SpaceX or Moderna would never happen under that economic model for example.

[dbingham]

Yikes. You... uh... must have a social circle that looks very different from mine.

I know any number of people who would eagerly start a high risk innovation play as a worker cooperative, because the money reward isn't what they care about. They care about making change in society or seeing a technical advancement become wide spread.

For most of them, they just need the chance - a floor under their feet so they can't fall too far if they fail and enough funding to get going. And, given how much crowdfunding has succeeded in todays world of concentrated wealth - I believe crowdfunding could provide that in this system where wealth is much, much more distributed.

The other piece of if is, with worker cooperatives every single employee of the company is fully bought into that innovation play. And stands to see the rewards created by it. Not just the investors and company founders. If anything, it increases the effectiveness of these companies, because everyone involved in them is incentivized to give it their all. Everyone involved stands to see the rewards of success.

[nightski]

So all of that is possible in today's economic model. You don't need to make capital investment illegal for that to happen. Looking forward to the next crowdfunded carbon capture worker cooperative. Heck the SEC just raised the crowdfunding limit for startups to $5M so time will tell.

I do find it interesting that your social circle is willing to bet their entire net worth on a risky startup where the reward is a salary cut in the worker cooperative + some savings account level interest. The "funding" bit is the key. You waived over it with crowdfunding, but now it's like buying lottery tickets with low payout. Pay $20 for a 20% chance at $40 in 10 years! You'll make the world a better place!

[KittenInABox]

Even in the example you provided a labor-led, democratically funded entity can only receive 5M while capital-led, private investor funded entity has no real limit.

[nightski]

Investing in startups is hard, as I am sure Y-Combinator would attest. The layperson is not prepared to invest in them. To vet the companies, their leadership, the feasibility of their ideas, etc... Especially with a low payout. I can understand the SEC's hesitation as this could easily lead to scams. Just look at kickstarter and all the things that have gone down there.

Really what the parent is proposing is something like -

Here is a savings account. You can throw chunks of money in it at startups that have a high chance of failing. But if they succeed you'll only earn bank level interest since it's not capital investment. So you have a small chance at earning bank level interest.

Where is the incentive?

[iammisc]

> still refuse to recognize that the problems are systematic

I think you're reading into other's worldviews too much. Most people likely agree it's systemic. Many would not be convinced by the proposed solutions, because they do not think they would improve the situation. Moreover, large numbers of people do not think the situation can be improved, that this is just the natural state of the world (for which they have thousands of years of evidence to point to).

[dbingham]

They don't have thousands of years of evidence. The modern economic system has only existed about 200 years. It's precursor was around a couple hundred years before that. Prior to that, the economic system looked very different. And there was a wide range of economic systems prior to that.

[iammisc]

I wrote:

> that this is just the natural state of the world (for which they have thousands of years of evidence to point to).

You write:

> And there was a wide range of economic systems prior to that.

That is my point. every single one of those 'wide range of economic systems' (including the ones directly intended to produce equality) produced inequality.

[dbingham]

That didn't seem like the point you were making, what you seemed to imply is that some form of the current system has existed forever.

But lets work with your new point. Saying "all the economic systems we've tried produced inequality" with the implication being there's no point in attempting to devise new ones is rather like saying "all materials we've devised produced some amount of friction". Sure. But some produce a hell of a lot more than others. And it's still worth searching for new materials that produce less friction so that they can be used in applications where friction is a detriment.

Some economic systems produce a lot more inequality and environmental degredation than others. Our current system has produced a lot more than most. And a lot of the proposals on the table would almost certainly produce less than our current system does.

[nradov]

Which other systems are you referring to? Feudalism, fascism, and communism all produced more inequality than free-market capitalism. Note that equality or inequality involves more than just income and assets.

Environmental degradation is more a function of overpopulation and technology than the economic system. With free-market capitalism we at least have the potential to price in the environmental degredation externality in a fair and consistent way through taxes. That approach has been underutilized so far, but with most other economic systems it's not even an option.

[iammisc]

> That didn't seem like the point you were making, what you wrong seemed to imply some form of the current system has existed forever.

My meaning was very plain. I said many people would be unconvinced that anything could be done to achieve equality. I then stated they could point to thousands of years of human life (which, as you correctly stated, contained many economic systems). If you put both points together, you'd see that I was saying essentially that 'no human system tried has achieved equality', so many people would believe that there are few changes we can make to ours to achieve this goal.

I'm going to expound on this idea more. Please consider everything I say before jumping to conclusions this time.

> Sure. But some produce a hell of a lot more than others. And it's still worth searching for new materials that produce less friction so that they can be used in applications where friction is a detriment.

Correct. But there's more than one knob. Some systems produce little inequality, but lots of destitution. Others produce lots of inequality but little destitution. By all objective metrics, ours produces little destitution, and while it produces inequality, it is a different form of inequality than many other systems. For example, marxism and communism in the forms tried produce more equality, but utter destitution for large swaths of the population (it's a race to the bottom). Our system of free markets, even in its heavily corrupt form, produces inequality, certainly, but little destitution, by all objective metrics. Moreover, of the inequality we create, it is a shifting inequality. Studies show that family fortunes in the United States do not form dynasties as they do in other economic systems (like monarchist mercantilism, for example). Most family wealth dissipates by the third or fourth generation.

If some inequality that ends up being redistributed is the price we pay for less destitution, then I don't see why equality ought to be prized.

> Some economic systems produce a lot more inequality and environmental degredation than others. Our current system has produced a lot more than most. And a lot of the proposals on the table would almost certainly produce less than our current system does.

Okay, and as I said, simply optimizing for 'equality' and 'environment degradation' would not lead to a good economic system. There are other goals you're completely ignoring. WE can create a system that's perfectly equal and great for the environment, but leaves everyone destitute.

For me, there's a hierarchy of needs here. First, destitution must end, then we can talk about equality. But ultimately, if the world is extremely unequal, but no one is destitute, then that economic system is good. And we're very close to that by continuing with current trends