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| SOCIOECONOMIC DEMOCRACY. Advanced
Socioeconomic Systems to Help Build a People's Century Robley E. George Center for the Study of Democratic Societies Introduction It seems there have always and everywhere been two major thrusts of progressive political activity. Determined or hesitant, but always present, they can be found throughout the Ages, in the United States of America, and throughout the "globalizing" world. These two thrusts are the ubiquitous demand for more and more meaningful democracy and the equally ubiquitous search for a more sustainable and just socioeconomic system that resolves rather than creates and perpetuates serious, unnecessary, and costly societal problems. Combining these two active thrusts produces, or certainly suggests, what has come to be called Socioeconomic Democracy. It is respectfully submitted that the present state of the nation and the world, intimately interconnected and interrelated, make the realization of some form of Socioeconomic Democracy absolutely essential, not only for human progress but for human survival. Socioeconomic Democracy is a theoretical model socioeconomic system wherein there exist both some form of Universally Guaranteed Personal Income (UGI) and some form of Maximum Allowable Personal Wealth limit (MAW), with both the lower bound on personal material poverty and the upper bound on personal material wealth set and adjusted democratically by all participants of society. Many of the details, implications, and ramifications of Socioeconomic Democracy have been discussed in the book Socioeconomic Democracy: An Advanced Socioeconomic System published by Praeger (2002). The essence of Socioeconomic Democracy may be traced back at least to many of the thinkers of ancient Greece, such as Thales, Plato and Aristotle, to all the great religions of the world, as well as Tom Paine (who gave the United States of America its name and the inspiration to perform the new experiment) and Tom Jefferson (who made the experiment official), and on down to include the many progressive thinkers of the nineteenth and twentieth centuries. All have pleaded for humanity to think about ideas similar to these. It appears it is now time for humanity to act. Basic Elements of Socioeconomic Democracy UGI. In the idealized state of the model, each participant in this democratic socioeconomic system would know that, regardless of what he or she did or did not do, a democratically determined Universally Guaranteed Personal Income (UGI) would always be available. Put another way, society would guarantee each citizen some minimum amount of purchasing power, with that amount determined democratically by all of society and with citizenship the only requirement for eligibility to participate. Depending upon the degree and direction of technological development, this democratically set, societally guaranteed minimum income for all could be sufficient to satisfy the typical individual's minimum subsistence needs. Alternatively, society might democratically decide to set the guaranteed amount at only a partial subsistence level, for a variety of legitimate reasons. There are as many different forms of UGI (ranging from Basic Income (BI) to Negative Income Tax (NIT)) as there are reasons to establish some form of UGI. It is noteworthy that the state of Alaska is at present the only governmental entity in the world that has a form of UGI, namely the Alaska Permanent Fund, which provides each and every resident an annual sum determined by revenues from the state-owned oil fields and recently ranging somewhat under $2,000 per year per resident. MAW. In the ideal theoretical model, all participants of the democratic socioeconomic system would understand that all personal material wealth above the democratically determined allowable amount would, by due process, be transferred out of their ownership and control in a manner specified by the democratically designed and implemented laws of the land. Hence, a rational, self-interested, and insatiable (as the neoclassical saying goes) extremely wealthy participant in the democratic socioeconomic system, who is at or near the upper bound on allowable personal wealth and who further desires increased personal wealth, would be economically motivated, that is, have economic incentive to actively increase the well-being of the less materially wealthy members of society. Only in this manner can these (still-wealthiest) participants persuade (a majority of) the also rationally self-interested less wealthy participants of the democratic society to vote to raise the legal upper limit on allowable personal wealth -- thus allowing those wealthiest participants to legally acquire and retain the increased allowable amount of personal net wealth and worth they so crave. There is, in fact, strong economic incentive for those who are pegged at or are near the upper limit on allowable personal wealth to be successful in improving the general welfare. For if the current level of MAW is not producing sufficient improvement in the general welfare, as democratically determined, there is the possibility and indeed probability that the democratic society might democratically decide to reduce the MAW limit even more in order to enlist even more still-wealthy participants and their extra wealth in the noble task of improving the well-being and welfare of society in general. Democracy. There is a simple procedure by which each individual participant in a democratic society (or each member of a democratic legislative body) can directly vote his or her particular preference for an amount, magnitude, or quantity of something in question, with the democratically determined, societally or legislatively desired amount unequivocally resulting. As if to emphasize the significance of the discovery, Duncan Black and Economics Nobelist Kenneth Arrow independently and more or less simultaneously established the important mathematical result and procedure a half century ago. Their now classic social choice contributions have provided the theory which shows that the median value of the participants' (voters') preference distribution is the amount the democratic society as a whole is "for" -- assuming the minimal operational one participant, one vote; majority rule decision-making process. Only the median value can command a majority's favor in pair-wise votings with all other amounts. Roughly speaking, this means that the democratically determined amount is such that half the voters want that much or more while the other half want that much or less. It is by this simple, mathematically correct process that the society-wide lowest tolerable level of personal material poverty and the highest allowable level of personal material wealth can be established and adjusted over time as democratically desired in the democratic society. Variations of Socioeconomic Democracy First, observe that if a particular participant in this democratic socioeconomic system were opposed to a societally guaranteed minimum income for all, for any reason, that participant could vote to place the lower limit on UGI at zero. If a majority of participants so voted, it would be the democratically determined desire of that society to have no UGI. Similarly, any participant who would be opposed to a maximum bound on allowable personal wealth, for any reason, could vote to place that upper limit at, say, infinity. If a majority of participants so voted, it would be the democratically determined desire of that society to have no upper bound on net personal wealth. Four basically different possibilities are therefore immediate. There could be democratically desired and established societies wherein there exist nontrivial bounds on both UGI and MAW, or where either one of the bounds is nontrivial while the other one is, or where there are no bounds on either fundamental societal parameter -- just as currently exists, though in this case at least societal approval of the extreme disparity would have been consciously and democratically given. Beyond these four significant variations are the possible variations in the magnitudes and the degree of "tightness" of the UGI and MAW bounds. Different societies may all want to institute some form of Socioeconomic Democracy but differ in the amount they democratically decide is appropriate for them at that time and under their circumstances. Approximations to Socioeconomic Democracy Then there are all the practical political approximations to Socioeconomic Democracy. For example, there are the numerous alternative systems for guaranteeing some minimum amount of general or restricted purchasing power or guaranteeing some minimum amount of goods and services that would more or less approximate the ideal theoretical concept of UGI. One particular long-established principle of any civilized society is universal public education, at least for a certain age range. Universal guaranteed public education is a very real form of universal partial Basic Income, with the service in lieu of income being the governmentally funded and provided public education for people of certain ages. Universal guaranteed medical care, likewise available in almost all self-proclaimed civilized societies, is another approximation to UGI. Instead of unqualified UGI, various approximations could (and actually do) stipulate satisfaction of particular requirements or qualifications. Thus all so-called means tested and/or targeted welfare programs (in the general sense) are approximations to UGI. Seemingly the closest thing to a limit on personal wealth is a tax on personal wealth. Depending upon the parameter settings (e.g., the tax rate on wealth and the level above which a wealth tax applies), which could all be decided democratically, the effect of such a tax could slowly approximate what a MAW limit, set democratically, could accomplish almost immediately. Another familiar form of an approximation to a tax on wealth (which in itself is an approximation to a limit on personal wealth) is the Inheritance tax or Estate tax. Of course, here also the particular parameter settings for such systems would, in a democratic society, be set democratically. Approximations to democracy, like approximations to anything else, can be fairly close or fairly distant. An approximation to all participants of society democratically setting the UGI and MAW limits would be having only those citizens at least 18 years of age, say, vote to decide the magnitudes of the two bounds. Another kind of approximation to the democratic ideal is the situation characterized by different political parties and candidates advocating different amounts for the two bounds, depending upon their particular understanding of the general will of the society. If democratic procedures were followed to determine ascendancy to political power, it would seem the winning political party might, in some sense at least, be said to have spoken (approximately) for the democratic society as a whole. Certainly a democratic legislative body could use the democratic procedure and establish UGI and MAW levels that could be said to be an approximation to the democratic desire of the whole society. In passing we note that with such a representative democracy, it would at least now be clear just who is being represented by the representatives. Feasibility and implementation of Socioeconomic Democracy The serious study and objective comparison of alternative future possibilities provide the opportunity to make a contribution toward desirable societal development. Complementing this opportunity is the necessity of establishing that the alternatives considered are in fact physically realizable and implementable. Suffice to say here that the major general areas of voting procedures, administrative and legal technicalities, parametric economic analysis and simulation, as well as political considerations of instituting some form of Socioeconomic Democracy have all been extensively considered. Socioeconomic Democracy is quite feasible -- requiring only an informed, functioning democracy. For example, consider the political aspects of implementing some form of Socioeconomic Democracy. Bounds on guaranteed personal income and allowable personal wealth democratically set can not be realized until at least a majority of the voting citizens in a contemporary politicoeconomic system learn about, understand and favor such a democratic wealth and income distribution boundary controller subsystem. Actually, of course, it can be anticipated that something more than a majority of the citizens of a society will have to favor a democratic resolution of the matter before a democratic resolution of the matter can be realized. Especially if a constitutional amendment is required. It is difficult if not impossible to recall any historical economic system change of such magnitude that was subjected to such informed public scrutiny prior to peaceful, voluntary, and democratic societal acceptance and adoption as by definition must be the case with Socioeconomic Democracy. Such necessary public discussion of the matter would eventually democratically resolve not only whether some form of Socioeconomic Democracy should be established but more importantly would go a long way in determining where the bounds should be set at under the prevailing circumstances. In any case, coalitions of political parties, committed to passage of the necessary legislation, is one possible adoption procedure open in some societies. On the other hand, being an alternative to all existing economic systems, Socioeconomic Democracy provides a well-defined, humanistic, just and democratic focus about which a new or rejuvenated popular political party could (re)organize and (re)capture political power. Prior to the legal establishment of an actually democratic bound-setting procedure, these political parties could, as earlier mentioned, propose specific magnitudes for the bounds, which would reflect their understanding of the general will of that society. At least for the necessary transitional phase, this last scheme might be considered an quite reasonable approximation to the ideal theoretical model. It should also be clear that the possibility of a just and democratic socioeconomic system, which would actually benefit all citizens of society, provides strong economic incentive for all rationally, self-interested citizens to actively participate in the political process -- something currently considered not worth the time and trouble, in the minds of many and indeed a majority, since, under present circumstances, it isn't seen to be relevant to their lives -- which is perhaps the point in presently existing politicosocioeconomic systems. Ramifications and Benefits of Socioeconomic Democracy As described in the book Socioeconomic Democracy: An Advanced Socioeconomic System, it can be shown that numerous serious and acknowledged (not to mention all the presently unacknowledged) societal problems would be reduced or more or less eliminated with Socioeconomic Democracy -- simultaneously. These problems include (but are by no means limited to) automation, computerization and robotization; budget deficits and national debts; bureaucracy; children; crime and punishment; development; ecology, environment and pollution; education; the elderly; feminine majority; inflation; international conflict; intranational conflict; involuntary employment; involuntary unemployment; labor strife and strikes; medical and health care; military metamorphosis; natural disasters; planned obsolescence; political participation; poverty; racism; sexism; untamed technology; and the general welfare. One example must suffice. Consider international conflict -- that is to say, war, a perennially popular form of planetary pollution. The enhancement of societal well-being possible with Socioeconomic Democracy ipso facto provides an effective and positive deterrent to international warfare, here assumed undesirable and to be eliminated. The simultaneous resolution of a large number of serious societal problems eliminates at once many causes of -- and equally important, many excuses for -- war. Beyond this, other beneficial effects can be anticipated. For example, those participants in the democratic socioeconomic system who are personally at or near the societally, that is, democratically, set upper bound on allowable personal wealth would no longer have personal economic incentive to promote war or military intimidation, whether involving their own country or other nations. They could no longer gain personal wealth by such action and could well lose it, especially if their society democratically decided to further reduce the allowable personal wealth bound to finance involvement in the hostilities. Democratically set, governmentally guaranteed personal income for everyone also provides many direct deterrents to warfare. Among other strong effects, it would eliminate any economically "handicapped" class which, of course, has historically provided warring nations with a convenient pool of combatants. Such guaranteed income also solves the very real and almost always neglected problem of necessary income for all those who presently derive their personal income from warfare, its threat, preparation, or promotion, either directly or indirectly. Yet if some war is absolutely necessary (say because of different nations adopting Socioeconomic Democracy at different times) both democratically set MAW and UGI bounds, and the economic incentives they create, would go a long way to insure that all military personnel are provided adequate care, financial, medical, and otherwise, to meet all requirements for a deservedly dignified and healthy life, both during and after military service -- as opposed to outrageous present-day neglect and lack of attention to veterans' needs -- for, surely, obvious reasons. June, 2003 |