ECONOMY: UTOPIAN THOUGHTS OF JK
It is not what we have but what we could have by now
if we had started a generation ago: this is a revealing measurement of the performance
of our political system. The political system has the power of laws thereby has
the power to control our economic and military systems. A favorable comparison
of the U.S. with a similar nation in development, such as Great Britain over say 100 years, this does not vindicate our political
system. Both could do much better. Our
nation when measured by standard of living is 12th, and all of the nations above us lack the advantage of as large
a home market for the development of industries and most have less per capita resources.
Our democratically elected representatives, capitalistic system (hereafter dercs, rhymes
with jerks) could do much better; moreover, there are different systems that would yield much, much better results.
Throughout this skeptic’s
website I have laid the conceptual foundations. The essay on social justice picks up where Plato ended in The Republic on how to create effective government
leadership. And the essay on the stock market analyzes the economic burdens associated with capitalism, who it violates the
efficiency concept, transparency. Elsewhere there are numerous examples
of the harmful effects of the profit-motive system upon the policies of politicians and upon the medical field. Of the 7 types of government,
Plato stated in The Republic, that democracy was the second worse form.
The uniformed vote produces a legislature dominated by dercs. I have built upon the Greek philosophers foundation to
describe a system of value and the conditions for the good life. These are the preparations
for what follows.
I have buried the dercs in over 40 papers; here I come to build Elysium
Fields. And to this end I want you to envision the effects of education and wholesome
media programming upon the values of the populace. Education as envisioned by
the Greek philosophers entails a much different citizenry, one that expects the best of each citizen
including those in leadership positions. Continuing with the Plato-like proposals
in the essay on social justice, this essay develops a picture of how good it ought to be.
This is the fourth in a family of interconnected essays describe the foundation
for would be by today’s conditions would be a utopian society. Each builds
upon already covered materials and though each stands alone together they build a vision out of the wisdom of the ancients. This essay on economics to be fully implemented requires a moral foundation, a value foundation, a political foundation, and an educational foundation.
Education is a corner stone of the Marxist system, for Marx held that socialism for to succeed required the socialist
man, one with quite different motivations than what had been produced under capitalism.
So too do I hold that the people must be improved for my suggestions to work properly.
Pushing the utopian clock forward, I will
assume that there is a rational populace and quality leadership with utilitarian ethics. Plato called such leaders Guardians. The goals of the
people and the performance of Guardians would of course be significantly different than those of today. There would be major differences in the allocation of resources and labor consistent with the ideas
developed in the discussion of higher and lower pleasures in the essay on value. Remember, there is no free lunch: each frill, each bit of unnecessary labor, each waste
of materials comes at a cost that is borne by everybody. Greater freedom is obtained
by reducing consumption and thus the workweek. Now to describe how the Guardians would cut the
fat and improve quality of life:
1). There is no need for advertising. Products would be rated
by an independent testing facility like that of Consumer Report. Ratings would be standardized and available on the packaging
of the product. More detailed information and comparisons of products would be
available on the Internet.
would not be permitted that corporations adopt practices that create a greater burden to the consumer, and thus society. Interchangeable parts, designs to facilitate repair, making products to last are all
things that would occur with Guardian leadership and removing the profits as the measurement of success.
3). No need for private insurance,
government would set up coverage for major expenses.
4). No need for a large legal profession. There would be a panel of one trained judge and two educated citizens. Those arrested would become wards of the courts, which would direct the investigation of the crime. Then
the panel would gather the results of the investigation, meet with those involved, and then come to a decision.
5). Much fewer bookkeepers, for there would be no need to keep records for tax purposes, and most of the other
functions would be done through simple record keeping that is part of normal business procedures.
6). No need for a stock markets, futures
markets, bond markets, brokerage houses, mutual funds, etc.
7). No need to have a military that
consumes more than 1% of the GDP. 1% would, given our greater output, support
a military the size of Russia.
8). No need for the vast collection
of retail establishments. Like dining out, shopping is one of the principle leisure
activities of people. Retail establishment would resemble the large discount
stores. Automated checkout scanners would be used. People who have developed the higher pleasures find shopping a lower pleasure.
9). No need for the automobile to
be the principle form of transportation, for mass transit can provide move people between location efficiently, safer, cheaper,
while permitting people to do other things other than watch the road.
10). No need for corporations to make a
profit[i], since growth of a corporation would be done through funding comparable
to that obtained presently through our banking system. Currently business average
a 10% return on sales after all expenses. Thus every item purchased on an average
costs an additional 10%. Most of this is either distributed to those who haven’t
worked for it in the form of stock dividends and the remainder is parked in investment accounts.
11). No artificial Consumer waste. The media and social patterns of reinforcement encourage the purchase of the latest
fashionable objects (and thus the discarding of serviceable furniture, clothing, and such).
12). No conspicuous consumption, for
rational people (which make up the utopian populace) would not want things that are in excess.
In our society excesses are reinforced with social status. Moreover, excesses would not come easy, for there would be no connection to the money rivers.
13). No one would earn more than 3
times the income of a laborer.
14). No investments, no estates, no
ownership of more than what one uses. There would be no class of property, business, and resources owners. The wealth of the nation is the nation’s.
15). Eateries would be designed more
like the cafeterias, for the primary purpose to feed. Eating, like shopping,
is for the masses a principle form of recreation. In the utopian world other
more frugal, enjoyable, and healthful activities would occupy the leisure hours.
16). Housing would reflect the cost
of materials and only a small premium for choice locations. Most people would
live close to employment.
18). Education would gain by the greater
reliance on programmed texts an emphasis of improving reasoning skills.
19). The media would serve the people
better by not having to waste so much through advertisements. The Internet and
mail would be free of ads and so would magazines and newspapers. 17 minutes an hour is presently lost on television through
advertisements. Programming is more concern with ratings than with content. By having those who value learning, university professors, control media, there would
be a shift from consumer-slanted contents to educational contents.
products and services entail working fewer hours to obtain the same standard of living, and having more people freed from
jobs and these people now plugged into productive work, entails a redistribution of the work load—few hours. I am assuming that the average person would make (the worth of 40 hours of labor in an efficient economy)
$800 per week and that in such a society goods would make up 75% while services such as medical, laundry, public transportation,
and use of restaurants at 25%.
1). 2 hours, there would be no expense of advertisement, which I am taking to be 8% of
the cost of the goods being purchased.
2). 1 hours, for corrupt marketing and manufacturing practices. Instead of seeking to maximize profits, the
companies will be seeking to obtain top ratings and thus making products that would last longer and perform better.
3). 1 hours (40/12). The average persons spends about
$250/month on property, medical, and automotive insurance, or about 1/6th of his income, this could be reduced
by about 30% through a variety of cost cutting ways.
4). 1 hour, about 1 in 40 either are an attorney or works
for an attorney.
5). 1 hour, people working in accounting and bookkeeping,
about half their jobs could be terminated. Much of the labor is devoted to records
for taxes, for the SEC, for bank loans, etc.
6). 2 hours, because there is no need for a business to
have a surplus of cash. Profits average around 8% profit. Another 2% of are GDP is consumed by brokerage houses, mutual funds, hedge funds, etc.
7). 2.5 hours, for the military consumes about 7% of the
GDP, 1% would be enough (.06 x 40).
8). 3.5 hours, for the average person spends on a vehicle,
gas, insurance, repairs about $500 per month and that efficient mass public transportation would run about $100 per month.
9). 12 hours, approximately 30% of the populace is engage
in the distribution of goods. In an efficient society there should be no more
than 5% and there would be a saving of about 75% on real estate ((¼ x 40) + 2 real estate savings).
10). 1 hours, no interest paid above inflation for corporate
loans (I am figuring corporate finance charges costs at 5% of the goods purchased)
11). 1 hour, the early disposal of goods (not recycled
through a second-hand store).
12). 1 hour, the gradual accumulation of items beyond
need. Their loss of value through aging on shelves, in garage, and storage locker.
13). 1 hours, the elimination of idlers and the limiting
of earnings to no more than 3 times that of the minimum wage.
14). 1 hour, the elimination of private owners of resources,
businesses, and other properties not lived in by the owner.
15). 2 hours, comparing cost to that of efficient mass
16). 2 hours, having property valued at approximately
the costs of the materials to build it, with only a modest premium for choice location.
35 hours TOTAL (Obviously, I am a bit overly optimistic).
The weekly costs of essential items given a very efficient economic system:
$30 FOOD; $35 HOUSING; $10 UTILITIES; $20 MATERIAL ITEMS; $20 MEDICAL; $50 RECREATION & PUBLIC
TRANSPORTATION; $45 PUBLIC WORKS (government programs) = $200.
Assuming labor produces (is valued at) $20 hour of value in our new efficient, socially just society,
that entail that each person only need to work 10 hours per week to make the required $200. One needs only two work 10
hours per week in order to live comfortable in a transparent society. Moreover,
every able-bodied person, including students above the age of 18 would work. We
could add another 2 hours to decently support the non-workers (children, and infirmed). Thus of the $800 per week of value of labor based on a 40 hour week, 30 hours could be trimmed via
efficiencies and full employment. I am assuming that given the increase in non-working
hours, people will not hire others for house cleaning and gardening or choose activities that would require more hours of
work. On to this I would add 2 hours per week for the increased vacations of
4.5 weeks per year. Every able body person would have only to work14 per week. With a deeper better education and an understanding of how to live the good life as
presented by the Greek philosopher, life would certainly be more enjoyable with so many more hours of freedom.
The issue of
motivation must be developed, for this has been the Achilles heal of socialism.
To be fair to Marx and Lenin, they believed that the revolution would come in an industrial country with a large population
of wage labor. Lenin was in Germany during WWI in anticipation of the
revolt happening there. The socialist plan failed when zealots such as Stalin
took the reigns of government and their plans for stimulating the masses to greater productivity crashed on the rocks of human
The communal society, the socialist factory and store, the capitalist factory and story, the university
and public school, the church and a monastery, they all need to have effective incentives to increase productivity and improve
quality of services. While some people are of good nature and enjoy their labor
and serving people, most people prefer doing much less than their maximum. (Of
course, simply by shorting the work week to 2 days would entail a quite natural increase in productivity.) The state at the top must in its economic calculations provide for the conditions and the rewards to stimulate
productivity. Resources must be allocated so that the management and supervisors
can arrange these reinforcers so that work becomes less onerous and superior performance is rewarded. We are a social animal and thus often labor hard for the sake of the group; however
some groups peer condition sloth—just go to your local bar. We all have
encountered lazy wives, worker, bureaucrats, children and so. Incentives ought
to shape all the individual and the group so that the burdens are distributed evenly.
To answer what I have in mind as solution for the propensity to do only what is required, what I
call the bureaucratic syndrome, I will proceed from example. For the factory,
labor can be rewarded according to productivity by tracking output and comparing it to others in similar factories. Groups of workers in the packing department at a DVD factory can be compared to those in other DVD factories
or within the factor if there is more than one assembly line. Those packing departments
which are rated in the top 25% as to output would receive rewards such as larger daily bonuses (in our computer age performance
can be effortlessly monitored, and thus the greater effect of condition can be obtain through daily remuneration). Conditions at work could be
improved so that there would be greater peer conditioning thus establishing a sense of belonging. Associated with the work place and/or industrial park would be a gymnasium, theater, and other recreational
facilities. Increasing the pleasure at the location of work entails a greater
identification with that place. Having rewards for a factory
being rated in the top 25% would further improve productivity and create a team spirit.
Moreover, by having greater worker input and by the elimination of owners, there would be far less alienation of the workers from their product and place of work. By living in a socially just society, their develops a sense of team, a feeling that the state is the parent
and the material things therein are family property, and from this relationship there would be even less alienation. The development of and appreciation of a just society would be augmented by an educational
system (including its extension in the media) that promoted eudemonia (the love of honor).
The right combination of factors can drive people to make extraordinary efforts. like those on a football team or premed
undergraduate students. The manipulation of reinforcer can significantly
increase productivity from our current levels.
The myth of the essential rule of profits: Profits as they are currently used are a poor reinforcer. First in most cases they are in time long removed from the behavior that produces
them. Second they do not extend very far, for normally only top management
receives a share of the profits. Third they are often excessive: the management that controls the profits often approve for themselves millions in stock options and other
benefits. Fourth it distorts performance, for it motivates top management for
the more immediate programs at the expense of the “long haul.” Fifth the drive for profits diminishes productivity. The cutting of wages and benefits, the hiring of people at the near the bottom wages
for their type of work all contribute in the development of an attitude of the workers that is hostile towards their place
of employment. And it has
resulted in waste through the various ways that manufactured good are less perfect than they ought to be and in the dependence
upon advertising to promote distribution. Profits in the capitalist system are
not the ideal grease for efficiency.
Lesson from history: Adam Smith realized that the involvement of government with the
wheels of commerce in the main was so motivated by self-interest that in most instances the masses fared better without their
government’s assistance. However, Adam Smith stated repeatedly that the
government’s primary duties included promoting the public wheal in addition to maintaining the domestic tranquility,
defense, and foreign conquest. If English government held high standards, then
he certainly would have supported it intervention in the market place. Turning
to socialist countries, they failed primarily because of ineffective leadership and a populace that never came close of evolving
into socialist man. These governments had a particularly difficult task
given their starting materials. But they would have failed with a better starting
point if the socialist representatives were no better than people we elect for Congressmen. How can they run a planned economy
when they can’t properly run our bureaucracy?
That is exactly happened to the democratic centralism, it deteriorated like our government,
from some exceptional leaders to within a generation the squabbling of political parties and political hacks. Our government
evolved into one similar to the British one whom we had overthrown.
Consider the automobile industry. The durable
chrome bumper has been replaced by fragile plastic ones. Instead of there being
a few standard transmissions, engines, power window motors, and so on each automaker has their own version. This impedes the replacement-part industry and allows the automakers to charge higher prices for the parts
they offer. Parts failures promote parts sales and vehicle sales. Moreover, engines would be made to last as long as reasonable additional costs in materials and manufacturing
allow. The object of product when it is guided by utilitarianism is that for
a product the net benefits for society are maximized. Corporations, and thus
its workers are reward for producing top rated products.
[i] Corporate profits after
expenses (which includes capital expansion) average around 10%. Most of those
funds are used in ways that produce scant returns for society. They are used
to buy out other companies, dividends to stockholders, and bonuses to directors.