A Perfect Social System

The political and economic system seems settled after long time evolvement. For most people’s acknowledgement, capitalism seems to be the best solution for the modern society. But the keep-coming economic crises make people wander: are there possible any better solutions? Some people might say that the crises have helped economic reconstruction and technology renovation. But can’t we just do that in a gentle way? Are you sure all the structures formed during that time are better than prosperous season? And what about the countless new technologies died because of depression?
Marxism was supposed to solve such problem; but now we know, despite many advanced and great theories, it’s too immature; it disregards human nature, neglects power balance, and defies natural selection. History tells us: no one is omniscient, one or two man’s intelligence is just not enough to draw the whole picture of perfect society. Now some smart people might say: “Hey smart ass! Then how dare you name the title ‘A Perfect Social System’? ”
That, my friends, is a very good question. Well, the title has two meanings First, there is no system stay perfect as time goes by, what we should do is to build a social system that is self-perfectible. And when I say “we”, I’m thinking about doing this kind of like Linux, which began with a Finnish kid’s extracurricular, and has been taken part by others, eventually developed into the world’s major operating system. So the actual title should be “Together, let’s come up a perfect and self-perfectible social system”; it’s all about catching the eyeballs
Before further discussion, I think we should understand the real reason why economic crisis emerges once for a while. According to Karl Marx, it’s because the supplies have surpassed the needs; all the crises have something in common: over evaluation and overproduction, which lead to economic downturn because the system needs to rebalance itself(http://wpolitika.wordpress.com/2008/10/19/the-financial-crisis-and-karl-marx/). Well, I dare say he is not quite right. Imbalance and rebalance without interference is the soul of free market; and balance economics is not like balance the pH value of some mindless chemical solution; every capital, there is one person or group behind. We can picture capitalism as a sea flower and each of its tentacles is formed by bunch of capitals engaging with each other. It is extraordinary beautiful most of the time; but as long as one single tentacle has been attacked, all the tentacles will retract into its body immediately and it will take several hours for it to blossom again. That’s right, every capital is profit targeting, it’s selfish, has no honor, can’t make a stand; and the crisis is more like shrink or collapse rather than rebalance.
For example, say people started to get short on money. They had to stop house mortgage payments, and showed little interest to buy new houses, which led to many foreclosures and the burst of housing bubble. Now in theory, that could only cause cheaper houses, bankruptcy of Fannie Mae and Freddie Mac, some investment banks’ stocks falling out, and people’s life getting little tight. So I don’t have a house, so what? I can use the house money to buy many other stuff, right? Get yourself a nice car, and buy a dozen condoms, life will still be enjoyable.
But no, the reality was that the stock market went downhill, countless factories closed, companies bankrupted, and people were now really in poor. Not only that, it had to go international, the whole world was pulled into a giant financial mess. I think this is probably the kind of scene Karl Marx had seen, and from which he tried to find the reason, but actually it’s just the devastating result. The real reason is that the financial system by far is still too fragile; and we really need some pillars in our economy.
Somebody might say now:”You mean non-private (government own, state own, etc.), large scale enterprise? Oops! We’ve already tried that one before, so many times!” Yes, you are right; it’s not working so far. If you compare capitalism as a building made all by cement with quite few metal; then current China’s economy is like a building composes of wood, bricks, stone, cement and golden alloy; besides, it’s infested with rats and bugs called golden-digger. In each condition, the building can’t be built too high; and the later one shall soon run out of gold before it even reaches its height limit.
There are two things about non-private corporation that still need to work out. One is motivation, the other is corruption. Right now the best solution seems to be the government takes part in as a stockholder and the company remains private. But that just workable for temporary enlisted pillars, and you won’t expect them to voluntarily offer losses for the good cause; further more, once they realize that they would be longtime pillars, soon not only lose their edge, also would all turn into breeding grounds of corruptions.
I do however come up a way that no one has ever tried it before; if this one could work, we may even save the labor unions for non-private companies. That is: how about we let the parties take over those corporations? Of course today’s party form is still not good enough for this job, so let’s talk about political system adjustment first.
Since we got rid of king or restricted king’s power, people have accustomed to treat government as public business. And hence there are two default rules about governors: they shall be good and shall not try to make fortune out of it. Intelligence? Capability? Devotion? Ok, that’s just too harsh. However, have you ever tried to look the other way, think of it as a big giant private company? You know, like: people are shareholders, senators and representatives are border directors, and present is the CEO of the country? Have you ever dreamed of one day when they ever failed us, they would apologize: “Sorry, I’ve already done the best I can!” instead of “Look, I tried, all right!” And the present campaign slogan would be much like: “In Your Guts, You Know He’s Nuts!” instead of “In Your Heart, You Know He’s Right!”?
Let’s continue with the basic question: why do people choose politics as their profession? We can directly ignore power non-balanced countries such as China, and look into the more democratic countries. Well, most of them might start as trying to make the world the better place. But to raise enough campaign funds, to put down some imprudences, to achieve certain political goals, they have to make unwilling compromises here and there. Meanwhile they still have to maintain positive figures, also bear the temptations of power abuse all the time; never mention they get little chance to let their inner beasts come out and spread some legs. Soon they would be just lost one by one, no longer know about what they are really doing anymore. In the movies, we can often see some rogue secret agents express their feelings: ”After all those years I have served my country, I deserve little something payback.” Hell, some of them even stole the whole nation (such as China)! Well, the same goes to the politicians. Of course, I’ve never been there, all those things I just learned from TV. But for the love of god, if they can, let’s just allow them to make as much legitimate money as they want from their administration.
to be continued...

 

Here is how it works: tax payers shall now have the right to decide the flow direction of one small part of their tax money. When they pay their taxes, they will receive a card, which they can use to show their support or opposition to specific party or official from internet or from designated location such as city hall. And the salary for government executive or employee is no longer a fixed one; it shall be more like normal company worker’s paycheck, that is basic salary plus bonus, the more support count from tax payers the more the bonus. And the support count can be summed up to the higher level district as long as the party wins that area’s election. For example, let’s say Republicans run the Hollywood and receive certain amount of tax payers’ support, but the rest of Los Angeles and LA itself is in the hands of Democrats, so Republicans inside LA gain no such bonus except for Hollywood officials. But if Republicans secure the governor position of the California State, then the whole state’s tax support for Republicans can be counted at this level including those support from Hollywood. But if LA, CA and the presidency all in the hands of Democrats, then tax payers support in CA means nothing on this matter once out side of Hollywood (and other Republican seized areas in CA).
That’s great right? If you are really a people’s savior, and really know how to oversell yourself to the public, then you can make great deal out of it. But that’s not all of it, don’t forget those pillar companies. As I said before, to run them well, we should change the form of parties that administrate the country. Also I try to bring more balance into the system, here’s how it goes.
We always say: where there is light, there is shadow; where there is yang, there is yin. When we balance both, it’s called harmony. (Wait! Isn’t that the current Chinese government’s slogan?) In order to do that, we will assemble two special parties; their purpose is to administrate the government (and run pillar companies). They are more like two set corporations share same fixed assets; and all personnel are salary backed. Those who lose their elections won’t be just out of jobs, they will automatically fulfill their duties as opponents’ shadow. That is no matter what the winners are doing, as long as it is administration related, they should be there and watch. Of course they have no right to interfere; their sole purposes, besides suggest representatives impeach their counterparts, are to prove those hopping around monkeys are just idiots.
Well, same goes to the pillar company management. Each party sends one or group of professional managers, and let the workers decide which side is going to lead the company; the defected automatically assume monitoring positions. Since those enterprises are more profit-targeted, there should be some rules to enhance that feature. Such as: workers’ average salary and managers’ average salary also welfare shall maintain on some level depended by company financial status; and as long as the company is in deficit (those caused by new technology or advanced product investment should be left out), if it was worse than former election turn, then the other party shall automatically take over next turn without election, and every year there should be some firing quotas. As for company profit, the leading party can keep certain percentage, the rest goes to national treasury. If you want to make new investment, you’ll have to file your application and review by certain Representative or Senate committees, and then get appropriation from treasury or loan from bank.
Is that enough for you? Well you can always get extra rewards by expose each other’s crime. But after all it is public business, so the catch is that every member in the two administration parties is obliged to disclose all their properties and financial interests. And unfortunately you can’t spend it all; this time each party will have to pay their own campaign money, no more fund raising from outside; so the situation like some mob bosses sit together and discuss: “He is going to be mayor, she is going to be governor, it is going to be the president” may never happen.
In order to prevent the two parties grow too powerful, we should treat each like a conglomerate which consists of one parent company and bunch of child companies and lots of grandchild companies instead of one big giant corporation. Each district office shall have their own money chests, and after the amount adjustment, they can have full disposition over the funds. And lower district can also choose to ignore unofficial orders from the higher; such as if they say: “You should leave that company alone, we’ve already make a deal with the other side”, you can response:”Bite me! I’ve already spilled my urine around those walls”; or if they say:”You should stop hanging out at the bar, and bringing different women home every night!”, you can say: “What are you talking about? I own that bar, man!” As for same district, more than one candidate in same party toward election is allowed; provide you have very high tax support count, or get consent from certain amount of party members (large district), or upheld by certain amount of district population (small district).
There is also one important restriction. That is the administration party can no longer have infinite members, and the members are no longer required possessing with same goal, same purpose, same vision. There is only one kind: competent and get paid. Well, at least this could make election debate much easier; you don’t always have to come up different governance policies. If the other side said: “We are going to raise taxes toward rich people”, then you could say: “My shadow meant to be, you are too soft, we are going to rub them dead!”
As for recruitment, all new fishes shall start with shallow area, like a village, a town, or one block of a city. If you want to join the ruling class, first thing is to go buy yourself a soapbox and start manipulate people, after getting enough signatures (in big cities, people may not know each other even in the same building, so to prevent phishing scam, you might need go to the police station first, get some token of verification, or bring an officer with you), you can then go to one of the party and register yourself as election candidates. Have you beaten the others in that small district (Since it’s a small area, you shouldn’t have financial problem for that), congratulations, you are now officially an intern, which is pretty much same as normal members, only you get big chance to be washed out by others; and since it’s a small area, you might not have too much things to rule for. So you can still keep your previous profession in places like a village, a town or a block of small cities. You are even allowed to serve your duty right at your working place, and your shadow also doesn’t need to follow you all day. However if you are an employee, then drive people on your working place might not a good idea, so we shall pass some legislation to let you keep your job by half of the salary and doing at least half of the work.
All right then, you might ask: what about the other parties? Can we have other parties? And how should we squeeze them? Why, of course we can have other parties, and we can just leave it the way it is, so far I think. But they no longer can be administration parties. (Two is a charm, three might be too much waste, and cut the profit too thin.) Their goal is Representatives, Senators. Actually this is a very good thing, finally we can complete separate legislation from administration! And in this way they may no longer need to make compromises from time to time: “So the bill didn’t pass, so what! As long as my voters saw how hard I’ve fought for them.” You see, they can also gain their bonuses from tax payers’ support. And besides that, they can always make the two parties cough some dough by fining their naughtiness.
As for the election of Representatives and Senators, we may still have the fund raising issue, because we’ve decided no longer accept large sized check donation. So I come up an idea, it’s called snowballing. Say you want to be the Representative, but you don’t have too much money to make the campaign, that’s OK, you just go get registered, so that tax payers can show their support to you. When you accumulate enough support count, such as 1,000, you can go cash it; and using that money you may continue with your preaching till you gain 2,000, then you can go cash it again…
Well, that’s pretty much the whole idea about political system, but as for financial system, we may still have one major issue on our hands, that is the stock market. Now please see it from your heart: today’s stock marketing like an investment business to you or more like a national gambling business to you? It’s so volatile, combine with gambling instinct; all you need is one butterfly to cause a huge financial hurricane. So what we should do is to reduce some of its gambling tendency and resume more of its true nature. To resist speculative funds, the stock you buy in should not allow to be sold out any time any more; you’ll have to wait for some period of time, otherwise it will cost you triple or quadruple transaction fee. But if the stock belonging company made a foul play or was hit by major incident then you can sell that stock immediately and reclaim the transaction fee later. And To reduce some risk, all stocks now will be backed by the government. When one stock goes down below some point, government will step in and buy all the shares on that price. And if that stock can’t raise certain price level in a certain period of time, the government shall take over the company and then bankrupt it, sell it or hand over to the two parties to “pillarize” it.

 

So how do you think? It was originally designed for China (http://bbs.cenet.org.cn/dispbbs.asp?BoardID=30&ID=405854&replyID=&skin=1) (I’ve posted it on several places, that is the only one left, even the save on my own computer has gone somehow; must be another accident). After all her system has already corrupted, why not give it a shot? And all they have to do is break the Communist party in half, and take time to improve themselves gradually.
By the way, the above content involves much American stuff, that’s just because everybody is familiar with America; there is no any implication what so ever. And although most of the measures look more advanced, but they haven’t been tested anywhere yet. So for those more democratic countries, please take great precaution if they want to try something above; After all, they’ve already gone so far ahead.

 

a small patch

changes to:

To resist speculative funds, the stock you buy in should not allow to be sold out any time any more; you’ll have to wait for some period of time, otherwise it will cost you triple or quadruple transaction fee.And after one day or two, you’ll have to wait again.

 

I have had several ideas my self, and tried to spread them, so I can appreciate your idea. The problem is that your writings are just too long! Most people on these forums are not going to rake the trouble to read it. You need to go back and shorten it, condense it, make a quick summary at the top so people can get the basics without having to read the whole page.

I read your idea, and I think it is essentially a good one, in some ways. But the supporters of the left will generally not be in favor of it, because they want to tax the wealthy and not have the wealthy (who make up a smaller portion of the voters) decide how the money is spent. And your idea could potentially open up new routes of corruption (not that the current system does not have corruption problems). Small parties could allocate money to shell corporations.

Do you really think allowing democracy in China will make things better? Look at India or Japan. Japan is a democracy, but is essentially governed by unelected bureaucrats. There are many homeless people, and housing is unaffordable. India is improving, but there is still much poverty (more than China) and blatant corruption in the congress.

But I support people like you trying to think of creative solutions to the current problems.

Since you are writing about China, I want to share my specific opinion about that country. When you make the market more free and move towards capitalism, under no circumstances should all the land be privatized!!! At least a third of the land should remain owned by the Chinese government. The government can then rent some of this land out in 10, 20, or 50 year leases. This will provide an eternal source of revenue for the government without having to rely entirely on taxation. I think it is very unfortunate that other governments in the Western countries do not own more land that they could rent out as an additional source of revenue. And I think the Chinese should seriously consider a land value tax for any land the government does sell. If the Chinese government sells all its land, the decision will be essentially unchangeable.

 

Could you be more specific, more detailed please? And adding some examples would be very nice.

 

I think, in many ways, Wall Street is merely a "scapegoat" for the problems that have been going on.

Yes, many of the traders on Wall Street are parasites that obtain money without contributing anything. This has been a legitimate complaint since the days of Confucian social values in China. But there is not really any good way, or enough valid justification to stop them. I do not think the trading on Wall Street is the actual problem. The stock market is reflective of the rest of the economy. I think all too often economists put too much emphasis on how the stock market is doing, rather than looking at everything else.

The main problem, at least in the western countries, is that many people cannot afford houses. And that many banks and financial institutions cheated others out of their money by falsifying information.

In this forum, we all know very well how much society and government likes to demonise things they do not understand and fear. Wall Street is only the most vissible problem. The real source of financial fraud is much more dispersed and less conspicuous.

Something indeed needs to be done to begin solving the problem, sooner rather than later. But some serious thought needs to go into exactly what the problems were (and how much each problem contributed).


Basically, I think your analysis of the problem is good, and touches many important points, but your proposed solutions are not quite as thorough.


One big problem is that the American system effectively is based on cheap labor and debt. Debt has become so normalised that the entire monetary system is based on it! And no one seems to question this logic. Why not base the monetary system on real assets rather than debt? The argument that one persons debts are another persons assets is another example of the fallacy of composition: such an argument simply cannot hold for a society as a whole. Imagine lending yourself money and writing yourself a receipt, then thinking that receipt constitutes your own personal savings!
Both cheap labor and debt are in many ways like a pyramid scheme. It cannot go on forever, and a current failure to recognise what their future effects will be will eventually result in the systems crashing down. (note that cheap labor is unsustainable in the USA in a completely different way than it is in China)

A problem China may have is that much of its money is based on assets whose market value assumes that international trade will continue as it has. Obviously this is likely not a valid assumption. For this reason, even a small downturn is likely to hit China twice as hard- both reduced incomes and the triggering of a rapid currency devaluation. This might seem implausible now, but it could wipe out the savings of the middle class, and trigger a cascade of corporate failures (corporations that have too much debt tied to collateral).

 

As I said, In theory, what the stock market should have reflected is "that many people cannot afford houses. And that many banks and financial institutions cheated others out of their money by falsifying information."

But what you get was people started to pull money out of stock market like avalanche. Because all the stocks are commonly many times over valuated! That's not gona help for a steady economy.

However, I have to admit I've been misguided by the wrong impression about 1997 Asian finacial hurrican. I was young back then and didn't pay much attention. For that I thank you, that's all what discussions are about!

I know what you were thinking, you were worried if we do that, people will start to diversify their moeny into other fields such as real estate, collections, gold, or even just save them in the banks instead of gambling; and let along other usage, those company may not have enough fund to investment new technologies and new products. am I right? If I'm wrong you should pardon me, my brain is no longer sharp as before, because some group I think you might know who finnally felt threatened and destroyed it just like that! hell, I could've saved the mankind.

Still I come up amendments for that, we can bring more companies to the game, and chage the cooling time I mentioned above as an variable. For exampe, Companies like Coca Cola, Walmart, banks, KFC, EMS which have less technic value can have as longer cooling period as you want. Others like Microsoft, Intel, Amd, Apple, AstraZeneca, Abbott can still enjoy zero cooling time. Well, what do you think?

 

I just think there are fundamentally three kinds of investments:

1. Productive investments in business, factories, research, development

2. Speculative investments in gold, commodities, fast stock market trading

3. Parasitic investment in owning land, owning natural resources


The first type of investment should be encouraged. The second type of investment essentially does not benefit society, but does little harm. The third type of investment can potentially be very detrimental to society.

Trying to make a differentation between which type of investment something is can be difficult, because a typical business is often a mix between all three of these categories. For example, a oil company likely will own the land and mineral rights, while spending money to drill a well, while simultaneously holding on to most of its oil waiting for the price to improve. The drilling of the well benefits everyone. The company makes a profit and everyone else gets oil. But other activities of the company are not necessarily beneficial. In some cases it may be very impractical for a company not to own the land under its operations, but at the same time, by owning the land, it is exculding others from using that valuable land. The collection of rent/income from the mere ownership of [unimproved] land does not benefit anyone, except the owner.

Another example is if someone owns land, then builds an apartment on it, then renters move in. The construction of the apartment is beneficial, but not necessarily the ownership of land. Yet the rents being collected will reflect both the cost of construction and the ownership of the land. In other words, apartment rents would be much less if the regional land was freely available.

You live in China? What I think will happen is that as a select group of individuals in China become wealthier, the land prices and land rents will increase. Eventually, businesses will no longer be able to be competitive with the other parts of the world where the land prices are already high. Higher land prices mean higher cost of living. Workers must be paid higher wages so they can pay higher rents for their apartments. Meanwhile, the wealthy land owners have little incentive to put their land to productive use because the potential income is too low relative to their tremendous wealth. This phenomena has happened in Britain and in Japan. It will eventually happen in China also, although it is likely two or three decades away.

As China seeks to modernise, it should avoid copying everything it sees in the Western countries. Capitalism and democracy have both advantages as disadvantages, good aspects and bad. China should look carefully at the different Western nations (especially India and Japan). China should embrace the good and reject the bad, at the same time being careful before making changes that will be impossible to reverse. Three things that are nearly impossible to reverse are privitisation, movement of different ethnicities, and devolution of power from the government. China can freely experiment with everything else, but needs to be very cautious and thoughtful before changing those three things. Some Chinese people imagine that by simply turning into a capitalist democracy they will become like the USA. This is very doubtful.

 

I think your way of classification is reasonalble. But if it can be more technology oriented, it would be better.

drill a oil well could benefit everyone, but you can't decide it's technical value. And you will get a lot of profit out of it, so no need specifically encouraging.

Say if average oil company's cooling time would be 30 minutes. But If your company possesses most advance drilling technology, then you may enjoy 27 minutes cooling period. But if both your equipment and method are outdated, you may receive one year ahead warning then chages your cooling time to 33 minutes.

Speculative investment does little harm only under certain regulation.

But I think you alreay knew all of that, don't you?

Yes, I live in China, and I hate this regime. So I won't discuss with anyone about anything that will direct benefit China. Only one day you were in my shoes would you understand.

 

My opinion is that technology is overrated. Although in the long term it can actually define the economic structure of society, in the short term those who develop technology rarely reap huge benefits. The technology industry and research is a much smaller portion of the economy than most people imagine.

Yes, I understand you hate of your country. But look at the USA, Japan, or India. Are things really that better? Japan has a growing number of homeless people that cannot afford to rent an apartment. Yes, better than China, but it is not exactly a paradise. If China converts to a democracy, it might just continue to be effectively be run by bureaucrats, like Japan is.

I hope all the countries of the world, including China, can turn into wonderful prosperous paradises. Just remember that democracy is only one of the components for a good country.


I feel that the stock market is more a reflection of the economy than the other way around. But the stock market is just the most vissible part of the economy, so people unjustifiably think it is also the most important part. A HUGE part of the economy (China might be the main exception to this) is in the form of bank mortgages on land. That is where you should be looking.

 

I agree with an earlier poster on this thread, while you may most certainly do as you please, try to be more concise with your main focal points and then as questions and or rebuttle arises, the details of your plan may be invoked. I had to skip much of it, can you just tell me what your plan considers for crime as a significant drag on tthe economy. If you have adressed this maybe you could copy paste it for me. You can do want you want of course but I was just lending a suggestion on how to get more people to participate in the debate. You will have a chance to explain everything you want to as questions and new ideas are submitted by conflicting views. But about crime and tier two please?

 

First, I like to thank you for your valuing of my opinion, I realy appreciate that. And although may be not so perfect, I actually do have some thoughts toward crime. But this thread seems mainly about economic and political system, I have the right no to answer that question. You know, I might be dead soon, so I won't hesitate to add one more reason for you to sick of them. When I survive my next exposure, I will gladly share with you of my thoughts.

Best regards

 

Why, is your life in danger? I know you are Chinese, but I thought you no longer live in China. Do you have chronic health problems, or is someone trying to kill you?

 

I like this idea but I was always wonder about make every new purchased of investment on the stock market short term, that way you don’t get all those people panic and sell out at the same time. But then many would say it is unfair because a person that can sell the stocks at the time of a threat would win and others would have to wait till there time is up so they can sell. But it would be a nice buffer.

Ok I have never played the stocks but maybe somebody could answer this. When you triad online is selling your stocks that much quicker then let’s say back in the 80’s before the rebirth of the internet ? Did we loos a small buffer for panic attacks and melt downs ?