Pragmatic Conventions For A Free Socialism (A Collection of Humble Suggestions)
The goal of a Free Socialism is to eliminate unethical barriers to voluntary exchange in a way that provides access to capital without reliance on a small wealthy investor class, and in a way that better ensures that when an individual performs labor for another it is not due to physical coercion or fear of not having access to the basic resources necessary for survival. Many feel that a small number of private individuals owning most of the value of the natural resources denies the rest of society their natural inheritance, as a creature that is evolved to depend upon those resources, and the wealth that accumulates in increased land values due to a surrounding community’s activities. This is an unethical obstacle to voluntary exchange because it often leads to desperate individuals who live in fear of lack of basic resources and that have nothing to sell in the market but their labor. These desperate individuals are often taken advantage of by a small group of wealthy investors who are motivated to extract the most labor value they can for the least amount of pay. This advantage often leads to an investor being able to earn money from the labor of as many individuals as they have resources to fund. Through years of reinvested profits the wealth of the investors will tend to grow explosively compared to the wealth accumulated by the average worker that is only able to accumulate some fraction of their own labor value. This explosive difference in wealth can lead to nearly all aspects of a society being controlled by a small number of wealthy individuals.
1. A Free Socialism could through democratic voting at the local scale distribute the value of the natural resources to every individual through a land value and resource extraction tax. Some countries that tend to not allow for private land ownership, such as Singapore and Hong Kong, are often noted for hosting very successful free markets in a way that demonstrates that these taxes are unlikely to cause economic dysfunction.
2. These payments to each citizen could be used to build alternative sources of funding for productive activity they better share the portion of the profits organizations give up in exchange for funding. This could be accomplished without outlawing traditional equity investing as some state managed socialist economies have attempted to do in the past — which has often led to dysfunction and authoritarianism. A Free Socialism can preserve the proven problem solving power, diversity, freedom, and efficiency of market arrangements while addressing the concerns of dispossession of natural resources, poverty, and over dependence of most of society on a small wealthy investor class.
3. Regional democracies can vote in land value tax that is paid out to each individual equally or proportional to the distance each individual is from each rental site. Participants could use a web app to bid the amount they think should be paid per square meter at their locations and others. These bids could then be aggregated to calculate the actual tax at their locations and the UBI they are likely to receive. A system that estimates the impact on their expected UBI due to changes in the amount and cost of land being rented could help participants to explore different bids and strategies for community development. In this way the unimproved land value could be determined without the need for full time land assessors or market transactions that separate the value of the land from the improvements.
4. Qualified voluntary-only citizen investment funds could be offered by private organizations where each participant would only be allowed to pay in up to their UBI, or alternatively, the highest UBI paid to any participant. This arrangement should produce a substantial source of funding where the profits are spread throughout the society. If most of the value of the natural resources were to collect in these funds and earn interest then in several decades they may contain enough capital to fund most of the need for finance within in a society. With support from government, these funds could operate tax free with the expectation that they would eventually lead to a substantial reduction in poverty, crime, and the need for government funded social services of various types.
5. Funds could be aggregated into a stock market that only allows managers of qualified citizen’s funds to participate. These markets could be a source of IPO scale funding for participating companies.
6. Qualified mutual aid organizations could take custody of some portion of a beneficiary’s UBI and right to participate in the citizen’s funds. This could include distributing the investment right to private donors or splitting the investment right between the organization and the donor. This could allow wealthy individuals to earn some return on their contribution over long periods of time where the investment would not be transferable through inheritance. An organization that paid out $20k/year of benefits for 60 years and received $3k/year in UBI investments from a beneficiary that earns 7% annual return would see those investments grow to $2.6 million while only paying out $1.2 million. Operations could initially be funded by grants and other donations where loans could eventually be taken out against their investments. Regular loan payments could be collected from donations or drawn from the their investments in emergency situations. Government services could be reduced in proportion to the success of the mutual aid organizations. Ongoing monitoring of the effectiveness of the mutual aid organizations and some ability to provide supplemental government aid in cases of failure could help to avoid abandoning the most vulnerable to ineffective private programs while encouraging the formation of more innovative, efficient mutual aid services. Government may supplement the services as needed by issuing grants to mutual aid organizations or providing services directly.
7. A free or lower cost land rent may help members of a community who are especially in need in ways that prevent them from building wealth or accessing effective mutual aid organizations due to low return on investments or other problems. It could allow poor members to keep more of their UBI by not requiring them to pay the full land value tax (if any) at their residential location if they should have less than a certain amount of wealth. A community may even guarantee all members a livable UBI using a type of Negative Income Tax scheme where those who’s income is bellow the threshold would receive additional UBI that allows them to reach that threshold and those above that threshold by some amount would receive less UBI. All participants could still be allowed to pay into the citizen’s funds the unadjusted UBI amount or whatever other amount the community might decide on.
8. UBI given to children could be locked until the age of 18. There could be some requirement to place the UBI in a qualified fund of the parent’s choosing. If $3k/year were invested at 7%, at the age of 18 each child would have accumulated just over $112,000. This money could be used for school loans where addition annual UBI payments could help to cover loan installments until the child is able to work. They could also use the funds to back low interest home loans where the installments could be taken out of the funds when needed.
9. If a $3k/year UBI where invested at 7% interest for 50 years a husband and wife would each have just over $920,000. While the funds are accumulating they could still be used to back low interest loans for major life purchases along the way.
10. Having more wealth on average may lead to members of the community preferring to work as worker/owners in cooperatives where they have more decision making power and the right to share profits.
11. Workplace democracies might find that citizen’s funds are especially willing to fund them and desirable to receive funding from since they may refrain from taking control of decision making power in the organization and they would distribute collected profits to a large number of average citizens. A stock market that aggregates capital from many citizen’s could even provide IPOs scale investments and exit events for citizen’s funds that invested early.
12. A society where all members take more interest in increasing the value of the land, growing the economy through skillful investments, preferring to operate workplace democracies, and having more money in the hands of each individual to shape the institutions in their community may function with greater collective intelligence than societies based on more traditional forms of capitalist equity investing that tends to concentrate resources and decision making into a smaller number of hands that may often be far removed from important local information.
13. Over several generations of wealth accumulation and worker self-directed enterprises the economy may shift towards more labor intensive enterprises and more sustainable practices and materials. Sustainability and craftsmanship may often lead to higher cost yet higher quality goods and services. Communities with substantial affluence may engage in more socially focused practices where goods and services are part of a cultural dialog and a foundation for strong personal. relationships that greatly enhance quality of life in ways that automation and more anonymously produced goods and services may not. Providing the average individual with a substantial increase in wealth may be what is required to create a shift towards an economy of this type with slightly higher costs of living due to automation and low sustainability practices and materials being used less often, as opposed to being the default that is resorted to by both producers and consumers out of desperation.
14. Eventually, many government services may become optional and the average individual would have more resources for purchasing private replacements. Even if a state no longer existed that offered tax benefits to citizen’s funds, the participants might choose to preserve these types of investment arrangements in order to better distribute profits and decision making in a way that may resist counter revolutions that seek to reinstate less voluntary governance that engages in forceful wealth redistribution and other acts of aggression. Avoiding other sources of funding could be thought of as a voluntary anti-tax.
15. A functional Free Socialism of this type could enable a variety of alternative forms of voluntary exchange including voluntary only communist communities that deemphasize private wealth accumulation (see Public Wealth Communism). These and other forms of alternative types of voluntary exchange could safely and easily be experimented due to guaranteed access to a UBI and the citizen’s funds if one should choose to leave a community. Like other mutual aid organizations, a participant’s annual UBI and right to place it in a citizen’s fund could be transferred to a voluntary intentional community for as long as the member chooses to participate, substantially reducing the cost of free riding.