De-growth with Only Positive Effects
no trade-offs or burdens to be apportioned within society
As things stand, it is the case that to prevent the collapse of the economy — and therefore civilization itself — there really is a ‘need’ for constant, unending economic growth, an imperative to produce and consume ever more stuff. More technically, in every nation output must be maximized in order to maximize employment, total income, and the collection of taxes (at whatever rates exist). It has now become completely obvious, however, that for civilization to survive, much less thrive, humanity must find a way to transcend that ‘imperative’.
For the record, I do have an M.A. in economics (Atlanta University — now Clark Atlanta University: 1988). My (published) Thesis (in political economy, where philosophy and economics intersect) focused on money and distributive justice.
To be clear, I have developed an alternative monetary paradigm that would (by accident, actually ) put an end to that ultimately self-defeating societal ‘imperative’ once and for all — with only positive effects: that is, it would involve no trade-offs or burdens to be apportioned within society. [My impetus for the paradigm was seeking a way to make the economy more just via a (‘livable’) “democratically distributed income” (DDI), i.e., one for which any (adult) citizen could become eligible, that would not involve taxes/public debt in any way (for reasons of justice, political feasibility, and Occam-esque simplicity).] It could be adopted by any nation (though I do use the U.S., where I have always lived, for illustrative purposes).
What follows will be rather dense in places, but I did want to convey in as few as possible (11), brief as possible paragraphs how fully developed this proposal is. Please: trying to pigeonhole this paradigm ideologically would be a waste of time that could only hamper ‘getting it’. For instance, one part of the paradigm that is off-putting to many people is that the absence of “trade-offs” and “burdens” would extend to even the richest people and the largest corporations: there would be no redistribution of anything nor any cost imposed on any employer; yet, there would be no unemployment or poverty for any (adult) citizen at any level of total output and the level of total output would be governed, passively but effectively, by demographics — and only that.
The paradigm is somewhat similar to Modern Monetary Theory (MMT) — its normative aspect — but it does not involve debt in any way or using taxes to withdraw money from the economy. Public debt/taxation would in fact be eliminated (see below). No person, committee, or organization would have any means, much less the authority to determine how much money (as currency) would be created or how much money (including currency and money created by banks in issuing loans) would be withdrawn from the economy: the supply of money (in total) would be fully self-regulating.
Creating money (as currency) will be addressed below. As for withdrawing money from the economy, by design a sufficient amount of money would be collected from the profits of corporations. They would be paying no taxes and no limit would be imposed on revenue, investment in the business itself (plant and equipment), or the compensation of any/all employees (sans bonuses), but a limit (based on profits) would be imposed on the accumulation of cash and extraneous assets. Other outlays would be restricted to legitimate business expenses. As now, the profits of proprietorships/partnerships would be the income of the owners of those enterprises. Individuals, however rich or not, would have to be indifferent to have any money collected. (Hopefully that would become a ‘badge of honor’ in the culture — though, unlike corporations, individuals could also contribute to not-for-profit entities.)
The DDI would be a guaranteed — bulletproof, actually — minimum income. Money (as currency) would be created as needed to fund it. The total amount of the income would simply be the amount of it multiplied by the number of people eligible for it. To avoid inflation, the income would have to start at something close to the current minimum and be increased gradually, but it could eventually equal the current median income, if not the average, or even more than that. Whatever its final amount, it would replace existing incomes as it increased over time. Universality of eligibility would be achieved by paying the DDI to three groups of people.
Least shockingly, it would be paid to retirees and to adults too incapacitated to work. It would replace, in the U.S., Social Security. [The Social Security Administration (and its equivalent in any other nation) could be extracted from government to become the Administrator of the Currency — and thus be independent of both government and the banking system (though a nation’s central bank or its central government could also administer it).]
The third group being paid the DDI would be — brace yourself — people employed in ‘minimum pay positions’. That is to say, for people employed in such positions their pay would not come from their employers (a business or government, not-for-profits being another matter), but would be the DDI. Whatever the amount of that income might be at any time, employers could designate any position to be a ‘minimum pay position’. However, an individual could choose to remain in/accept such a position or not based on (negotiated) total compensation: in the labor market employers would find themselves using benefits (as well as general working conditions) to compete for people to fill those positions. So for those positions the ‘arrow of competition’ (who’s in competition for what) — a neglected but hugely significant aspect of a market-based economy — would be reversed. All benefits of all employees, whether being paid the DDI or not, would have to be ‘in-kind’: goods/services, not monetary/financial, with the money going directly from the employer to the providers of the goods/services. (At the transition to this paradigm people would have sufficient knowledge of the total compensation for positions of interest to them, which knowledge would be passed along into the future.)
To ensure that there would be no unemployment or poverty, government would be an ‘employer of last resort’, offering jobs paying the DDI without benefits. That would make such jobs essentially free to government (while giving anyone employed in one that incentive to seek a job that included benefits of any kind). The DDI could also be paid as easily as not to one legally responsible adult in a household with at least one legally recognized dependent living there (the same income regardless of the number of dependents) — which in the immediate term would greatly affect the labor market, but opportunities for employment are supposedly going to be shrinking drastically in the near future.
To ensure that demographics would govern output, money (as currency) would also be created as needed to fund government — all government, from local to national — forevermore at the current per capita rate of total government spending: that rate multiplied by the population of the nation each year (including non-citizens who were residents). [I have devised one approach to apportioning that money.] That would put an end to using taxes/public debt for that purpose — unless spending exceeded somewhere the allotted amount, due to a public emergency or whatever. Taxation would at least be reset at zero. That would immediately provide a significant increase in disposable income for everyone. Given how regressive the total tax bill is in many nations (including the U.S.), in a relative way the poorest people in such nations would benefit the most from ending taxation.
The economy (the process of producing/acquiring goods/services) would become fully self-regulating, with total output governed by demographics. (Regulation within the economy, i.e., relating to the environment, workers, and consumers, would still be a matter of concern in the political process).
The paradigm is eminently actionable: though there are plenty of details that would have to be worked out, it could be implemented with a single legislative Act. Even if working it all out took an ‘economic convention’ (composed of elected or designated persons or a combination of both) a whole year, that would be as nothing. As noted, it could be adopted by any nation (though a nation’s financial infrastructure could make it more of a challenge) or a group of nations agreeing to share a common currency (without compromising the sovereignty of any nation). It could even one day, perhaps, form a single currency shared by every nation on the planet — with all peoples enjoying the material well-being of the most materially well-off.
For more about the proposal, “A Most Beneficial Economic Change” is a “2 min read” here in Medium with links to more articles, each from a slightly different angle within the field of economics — with nothing that I publish here behind the paywall.