Sweeping Welfare and Social Security into the ‘Dustbin of History’
a revolutionary conservative (in the Burkean sense) proposal for the U.S. economy
[This is an overview. Details are provided in other articles* here in Medium (but not behind the paywall).]
[Spellchecker disappeared, so typos of that kind might be present.]
Karl Marx famously argued that quantitative differences, if large enough, can become qualitative differences. That idea (or something like it) underlies the liberal/progressive/socialist** economic agenda. Adherents of those perspectives insist that at some point (different for different people) inequalities in income/wealth become an injustice. That justifies using redistribution to right that wrong.
In contrast to that position, this proposal entails an explicit assertion that differences in income/wealth, no matter how large, are not an injustice. Rather, redistribution — arbitrarily taking from some to give it to others — is an injustice.
Make no mistake, however. This is a revolutionary proposal. Its adoption would transform our nation. The existing economy would become fully self-regulating. It would provide a distinct material benefit for being a citizen of the nation: no unemployment or poverty for any (adult) citizen. It would even provide a way to eliminate taxes/public debt for funding government — all government, from local to central. All of that would be accomplished without imposing any cost on employers and without redistributing anything. Welfare and Social Security would indeed be swept into the “dustbin of history” (as Trotsky would say).
One byproduct of this proposal would be to make our economy more environmentally sustainable (because demographics would govern, if loosely, total output). For this writer that is a selling point. I like Nature more than I like cities. Even so, increasing sustainability systemically would not require people to act any particular way. That outcome would further undercut possible opposition to the proposal from the left.
To be perfectly clear, all of the benefits cited above would also be achieved without imposing any limit on income/wealth. Even so, there is one part of this paradigm that might be a deal-breaker for a conservative: while there would be no limit on income/wealth, there would have to be a limit, for people and businesses, on hoarding money.
People and businesses could retain plentiful pools of money (how much to be determined), based on income: the higher the income, the larger the pool. Just like today, both could also still convert money into other means of storing value by purchasing assets. With this paradigm, though, there would be a constant, vast flow of money (as currency) into the economy. Without some mechanism for retrieving money from the economy there would eventually be such an accumulation of money in it that the result would be disastrous — like too much rain falling on a farm. (Imports would also drain money from our economy, though exports, of course, bring money into it.) It is of the utmost importance that the amount of money that would be retrieved would depend on the operation of the economy, not any person, committee, or organization.
On the other hand, given that pools of money could be accumulated and assets could be purchased to store value, there would be no reason for any person, however rich or not, to have any money collected for retrieval unless someone were to be completely asleep at the switch or indifferent about it. As at present, the profits of proprietorships/partnerships and corporations that were not publicly traded would still be the personal income of the owners. As a practical matter, money would presumably only be collected from very large, publicly traded corporations.
Full disclosure: while there would still be no limit on the remuneration of employees of any business, for publicly traded corporations bonuses of any financial kind (money, stocks, etc.) would have to be disallowed. That is necessary to ensure that some money would be retrieved, for the good of the economy as a system. Those businesses could still invest unlimited amounts of money in themselves: plant and equipment. Like other businesses and individuals, they would face a limit on how much cash they could accumulate. Unlike other businesses and individuals, publicly traded corporations would also face a limit — some multiple of the limit on cash — on other assets they could hold. Again, that is only to ensure the functionality of the economy as a system, by preventing too much money from accumulating in the economy. Given all this proposal promises, that is surely a reasonable limitation.
This proposal might look similar to MMT, but it is not. In MMT the central government and the central bank still seek to ‘manage’ the economy. It even calls for the central government to run a surplus to control inflation (LOL). Also, MMT relies on debt for creating money.
Rather than MMT, this proposal is more like a permanent ‘quantitative easing’ for the benefit of ‘the people’, i.e., the citizenry — but with built-in protections against inflation. That is to say, the necessary money would simply be created as needed. The amount created, though, would be determined by — and absolutely limited by — demographics: no individual, committee, or organization would have any say in how much money would be created.
Besides (presumably) funding all government (in order to eliminate taxes/public debt for all people and businesses), the money would provide a (livable) guaranteed minimum income for eligible citizens (which, if not retired but able to work, recipients would have to work to receive). How much money would need to be created (once this paradigm was in place) would depend on how much would get returned to its point of origin.
That “point of origin” would be the administrator of this paradigm. It could be the central bank or a newly created monetary entity that would be separate from both the central government and the central bank. Either way, the administrator would have no discretionary authority of any kind. It would simply follow the few, simple rules that would govern the creation, disbursement, and retrieval of money.
While this proposal would have built-in protections against inflation, in this world today no nation’s economy can be completely shielded from what is happening globally. With this paradigm in place, the guaranteed income and funding for government could possibly be increased to account for inflation coming from elsewhere on the planet because doing that would not impinge on any business as an increase in costs (or a hit on profit). It could not induce a domestic inflationary spiral.
So this proposal would make our existing economy stably self-regulating, with no unemployment or poverty for any adult citizen and (presumably) no taxes/public debt (while as a byproduct increasing sustainability). All of that would be accomplished without imposing any cost on employers, without redistributing anything, without imposing any limit on income/wealth, and without requiring people to act any particular way. It could be implemented with a single Act of Congress. If that isn’t a revolutionary yet conservative proposal, I’ll spit in the devil’s eye.
*The best place to start for more information is “A Most Beneficial Economic Change” (a “2 min read” here in Medium with links to other articles about the proposal — with nothing I publish here behind the paywall, given the few pennies I expect that would earn me).
**Marx insisted that his own analysis and predictions were strictly materialist, not qualitative in any way.