A Blueprint for Economic Utopia (Guest Post)
When I first created this site I aimed to be the only contributer. The site's design, programming, graphics and content would all be entirely written, made, by me. However, I received a very exciting document in October of 2011 and I really feel that this should be shared with the world. So, here it is, the only ever guest post on WhiteAlien.com:
The usual excuse offered for not curbing corporate, banking and individual greed is that operatives will move to other countries and jobs will be lost. This is nonsense. The following method shows a system that will prevent this happening for two reasons.
Firstly, the system will cause such a large increase in the spending power of individuals that the corporate world will stay put in order to benefit from it.
Secondly, once this system is installed in any one country then all other democracies will vote for the same system for their own country at their next election. Non-democracies will eventually follow suit or face exclusion from trade.
The Toplis Solution to the Socio-Economic Problems of the UK (and all other democracies)
Currently the two biggest problems in UK society are greed and laziness. There is nothing wrong with laziness in itself provided that the lazy do not expect others to supply their wants, but when the lazy become greedy they resort to crime. Unfortunately, however, when the non-lazy become greedy they resort to financial looting, which is a moral crime and must be classified as a legal crime.
Any society produces a total income (Gross Domestic Product) which is shared amongst the members of the society according to rules set by government but amended by the ability (or power) of an individual or a sub-group within society to take more than their fair allocation.
In a democracy, government is controlled by politicians who are, as shown by results, good at getting elected but not necessarily good at governance (there are, of course, many excellent people in government but they are not in positions of power).
The two party political system fails to tackle the basic problems (a third party only succeeds in muddying the water). Typically, a right wing government will see the greedy increase their allocation of the national income whilst a left wing government will increase the allocation to the lazy. Additional allocations to the lazy do not reduce the allocations of the greedy because they are able to protect their incomes by the use of power. Likewise, additional allocations to the greedy do not reduce the allocations of the lazy, their incomes are protected by appeals to the conscience of society (and, actually, by the fear of revolution). The losers under both systems of government are the majority, those who are neither particularly greedy nor particularly lazy, they have no power and nobody represents them, they are too busy working honestly to organise themselves.
My own guess would be that 5% of the population can be classified as greedy financial looters and 5% can be classified as greedy criminals, 90% are not particularly greedy or criminal but some might have sympathies towards one or the other. Under a Conservative government, probably the wealthiest 20% become richer but the poorest 5% do not become poorer. Under a Labour government, the poorest 20% become richer but the richest 5% do not become poorer. With a system of alternating governments the middle 60% become continually poorer as they are financing the increasing wealth of the others. My system is designed to help this middle 60% in particular, but also the 30% who gain and lose alternately. I have no interest in helping the 5% who are looters or the 5% who are criminals, they can reform or rot in prison.
Neither political party is prepared to make radical changes, they only make minor adjustments – first one way, then the other. (The only governmental success in the UK during the last 30 years is on the roads where the number of deaths has been halved.) What is needed is a government prepared to introduce radical changes instead of mere adjustments. Revolution is not necessary, except in the way of thinking. All that is required is to think of the following:
The common unit of measurement within a society is money. Money is like water, there is enough of it for everybody but it is not fairly distributed. Water is constantly circulating, evaporating and then falling as rain (worldwide 140,000 litres per person per day, far more than any individual’s needs). The people who don’t get enough suffer from drought and those who get too much suffer from floods. Money is the same, there is enough for everybody but too much of it falls in the wrong places, those with too little suffer badly but so do those getting too much although most of them don’t actually realise the damage it is causing them.
Money was invented as a means of simplifying trade and was intended to remain constantly in circulation, like water. But, there were those who prudently chose to store some money for the future when times might not be so good just as some people would store water when it rained for use when it failed to rain. This was sensible until greed took over, too many reservoirs can cause water shortages elsewhere, too much money-saving can cause poverty elsewhere.
Spending money creates jobs which prevents poverty, storing too much money has the opposite effect. Many governments understand that spending money creates jobs but instead of releasing money from storage they are just printing money for spending, somewhat like trying to manufacture artificial water in order to avoid releasing it from a reservoir.
Financial Institutions & Capital Markets
Financial institutions are responsible for most of our financial problems and in recognition of this the UK government has issued a 363 page report (Sep 2011) concerning banking. New legislation, hailed as the biggest change to banking for a generation, will protect the banks’ retail business from risky speculation and will be implemented by the year 2019. This allows eight years for some of the best brains in the world to work out counter-measures. In other words there will be no changes.
It does not require 363 pages of drivel and eight years of wasted time to regulate the banks. They, and the others, can be dealt with immediately by implementing the following:
*Selling short (contracting to sell shares not owned in the hope that the price will fall before the date on which the seller is contracted to deliver the shares, so that the seller can buy the shares at a lower price) is undisguised gambling and is to be abolished.
*Sales of shares will be taxed at 100% of the profit if sold in the first year of ownership, 80% in the 2nd, 60% in the 3rd, 40% in the 4th, 20% in the 5th, zero thereafter. This should remove gambling from the stock market which is an investment market not a casino.
*Commodity trading must be abolished. A government agency can ascertain the needs of the country and contract directly with the suppliers.
Incorporated businesses and other similar organisations fall into two groups, those that are immensely rich and powerful and therefore behave exactly as their executives choose and those that are impoverished and follow the dictates of the financial markets. The first group are able to provide products for consumers who are brainwashed by advertising, at prices decided by the group, from income at a level determined by the group. The excess profits accumulated by the group are lent to the consumers to make up their income deficit so that they can purchase more of the group’s products. This is the “company store” operating at a global level, the market is controlled by producers not consumers.
(Siemens were recently reported to have withdrawn a deposit of 500 million euros from a French bank. That is a lot of money hoarded by a company using underpaid and overworked staff to produce unnecessary but overpriced gadgets for selling to brainwashed and indebted consumers. The banks, of course, lend that same money to those conned consumers. Undoubtedly, Siemens have many more such huge cash hoards at other banks. Siemens are only one of thousands of these offenders.)
The second group have been impoverished by the financial markets. Historically, businesses earned reasonable profits which were largely invested in renewing equipment, expansion and other improvements for the benefit of the business. Since shareholdings became a target for the financial institutions, these institutions have taken to valuing shares according to the return they are able to make on their investment in those shareholdings. In the UK and USA this return is regarded on a short term basis and is the amount they expect to receive in dividends. Therefore, the larger the dividend payment, the higher the share price, despite the obvious fact that payment of dividends actually reduces the true value of the business. This encourages executives to declare dividends at a level considerably higher than is prudent, especially when the executives are receiving bonuses based on the performance of the share price. This, in turn, forces the business to borrow money to continue operations. (In Germany, shareholdings are still generally valued according to the value of assets within the business and this explains why Germany still has a worthwhile industrial base and is able to resist the Chinese, for the time being.)
Legislation is required to prevent the first group of businesses from accumulating cash mountains and also to prevent the second group from bankrupting themselves.
*Executive remuneration including extras such as bonuses, pension contributions, doubtful expenses etc. should be limited to a multiple of the lowest paid worker within the organisation for which they are responsible (or perhaps a multiple of the national minimum wage). A formula would be required possibly based on the assumption that the chief executive of a factory employing 500 people would be limited to 10 times the lowest paid worker, perhaps 20 times for a group employing 20,000 and double for a 5 person business. People who are executives of more than one organisation would be limited to an averaged multiple.
*These entities should be forced to pay their debts and to reserve funds for required investment before they pay dividends to shareholders. Executive bonuses should be paid last.
*To avoid the accumulation of unnecessary funds, any cash generated surplus to provable needs should be taxed at 100%.
Pension funds represent an enormous source of funding which is entrusted through legislation to gamblers. Pension fund administrators are paid astronomical bonuses for making paper profits from gambling with hard working individuals’ retirement nest eggs. When they make losses, they are not penalised in any way. Typically they use computer programs to indicate the right shares to buy and as all the funds are using similar programs, they all invest in the same shares thus ensuring continued rapid price increases and therefore huge annual bonuses for “experts” who have been shown in tests to be unable to produce better returns than children aged 6 and monkeys pointing at lists. They gamble with other people’s lives without the remotest possibility of ever losing personally. They cause stock markets to rapidly become vastly over priced and when the inevitable crash occurs, it is only the fund (our pensions) that loses, not the administrator. Then they start again from a much lower level and draw more astronomical bonuses until the next crash.
*All pension funds should be held by the government and used for infrastructure projects. Fixed rates of return should be applied to individual funds. This means that future generations are paying the actual pensions out of their tax payments and this is only fair as they are benefiting directly from the better infrastructure.
Infrastructure projects should be projects that will benefit future generations obviously to include roads, railways (or a much better method of transport such as personal computerised cabs on a high speed nationwide monorail sytem), non-toxic power generation, hospitals, schools, leisure centres, environmental improvements but also relevant research (surely scientists can find something better than batteries for storing electricity?)
Historically, large numbers of individuals were encouraged to save small amounts of money at the banks. The banks were then able to lend large amounts to small numbers of businesses requiring capital and this system worked. However, in time the very successful businesses were able to generate vast amounts of cash and therefore no longer required bank loans, instead they were lending money to the banks. The banks then lent the money to individuals in order for them to buy the goods produced by the businesses. This is the root of the financial problem as, quite clearly, the businesses are making excessive profits by over-pricing their goods and under-paying their employees, the banks are making obscene profits by acting as middle-men and the majority of individuals are becoming poorer all the time, not only are they paid less than their fair share of the total income but they are also paying too much for the goods they want and, on top of that, they are paying enormous “penalties” to the banking system.
It is easy to suggest that people aren’t forced to borrow money and therefore it is their own stupidity that makes them poor, because this is true. However, society generally goes to great lengths to protect people from their own stupidity with warning signs at dangerous places, trading and safety standards for everything except bank loans. Protection from the banking system combined with protection from personal stupidity can only be achieved through legislation.
*The only personal debt allowed should be a mortgage on a first property, limited to three times annual income. (House prices rise in accordance with the ability of buyers to pay for them which is limited by the amount they can borrow. House prices are not based on building costs.)
*Credit cards should be allowed only for convenience and should be paid in full monthly, or should be replaced with debit cards.
Equality amongst individuals is one of the least fair ideas ever dreamt of. We are born unequal and no legislation can ever change that. Individuals need the “carrot and stick”. Natural ability and hard work (at school to improve abilities and at work) should be rewarded with higher living standards. A problem occurs when individuals derive an income greater than their wants and therefore begin to hoard money beyond that which is prudently set aside for possible future circumstances. Money must circulate, there is nothing anti-social in spending for luxury, one person’s extravagance is other people’s employment. Therefore hoarding should be controlled.
*An individual’s total savings should be limited to, say, £50,000 until age 25. This limit should then increase annually by an amount equal to the national average annual wage until age 60. Savings would be defined as cash etc, shareholdings and any other types of investment. Excludede from savings should be primary residence, furnishings, first car, hobby items etc. and perhaps shares in the organisation employing the individual. Any surplus above the limit should be taxed at 100%. 100% may seem like a very large stick, it is. The whole point is to eliminate greed and if the tax is set at anything less than 100% then the greedy individual will simply hoard more and more even though he is paying high tax, the object of the exercise is not to raise taxes but to make hoarding of cash pointless.
Society sets the rules and everybody must comply, there is no room for compromise.
Capital taxes such as Capital Tansfer Tax will no longer apply because the accumulation of capital has been prevented. Death duties will not be required as any transfer on death to an individual with too much capital will automatically be caught in that person’s capital limit. Many minor taxes are punitive and should be abolished, income and corporation taxes are no longer necessary as all entities are forced to spend the majority of their income. Therefore the only tax required would be a simple spending tax, at a level to be ascertained, which would apply to everything. This form of taxation has the added advantage of helping domestic manufacturing industries to compete with cheap foreign imports, especially from countries with hidden subsidies for their export industries.
The intention of the tax system is quite clear and there is no excuse for trying to manipulate it. Therefore tax avoidance (at present it is quite legitimate to arrange matters so that the minimum amount of tax is paid, often using tax havens, trusr funds etc.) is to be re-classified as tax evasion (a crime) and is to be punished with tax at 100% plus a fine equal to the tax. The tremendous brain-power currently wasted on manipulating the system would be better used for the benfit of society in some other way, perhaps (with re-training) researching alternative energy.
Pension funds pay for national infrastructure projects. Taxation pays for public services. Limits on public sector incomes would be applied in such a way as not to encourage the building of empires at taxpayer expense.
Total working hours per person can be regulated and then varied in order to balance the labour force. This, combined with the amount of circulating money and budgetary changes to the tax rate, will mean that there is no longer any unemployment. With full employment there is no excuse for criminality.
Reduced working hours and higher incomes will result in vastly increased leisure activity. Infrastructure projects will therefore include local sporting facilities, theatres, colleges for adult education, social centres etc.
The intention of the law is quite clear and those who choose not to adhere to the law should be punished. There should be no evasion of the law due to technicalities, or due to clever lawyers.
Punishments should serve three purposes, revenge for the victim, a deterrent to other would-be criminals and persuasion of the criminal not to re-offend. Therefore punishments should be geared, at least partly, to fit the criminal – for example, fines should be much higher for the rich than the poor, criminal hermits should not be placed in single occupancy prison cells but perhaps placed in old-fashioned stocks in the town centre.
Persistent offenders, those who do not wish to exist within the framework of society, or those who seek to destroy the society, cannot expect protection from the society and should be excluded from it, in whatever form such exclusion is deemed desirable.
It is the duty of the private sector to provide the products required by society. It is the duty of government to regulate. In a democracy, the government is elected by the people and as the government is regulating the society it is quite important to get the correct government. As both right and left wing policies have now been dis-continued, the entire system of party politics is obsolete. The society should become a one-party state with no fixed manifesto except as outlined above. The party would only accept potential candidates who are trained and qualified to act as members of parliament. Elections to the lower house should be fought between individuals on a constituency basis. Elected MPs would then elect the Prime Minister. The upper house should contain a good mix of hereditary members (the best possible members of government as they are trained from birth) and those promoted to the upper house following exceptional careers in the lower house.
Possibly some members could be directly elected in a national election.
The monarchy must be retained. The monarch is so immensely rich and powerful (in law, though not in practice) that the position of monarch cannot be corrupted and this is the safeguard of government (seldom the case in countries where presidents are elected). This monarchy does not require special provisions in the limits on the wealth of individuals, as so many of the monarch’s personal assets are in reality held in trust for the nation.
The people entitled to vote should be limited to those who are qualified to vote. Voting for the wrong candidate can be very dangerous and just as drivers of vehicles are required to pass an examination of their abilities before they are allowed to take charge of a potentially dangerous object so should potential voters be required to pass an examination to show an understanding of politics. Government, sociology, economics and politics should be required subjects at school resulting in a voters exam. It is important to have the right people in government, not only because they will be responsible for regulating the changes we are making to the economy but also because I have tackled here only the two main threats to our society, greed and laziness. These are the problems of today, in the future other problems will come to the fore and the government must be able and willing to tackle these matters before they become serious.
Governments say a great deal about transparency but all they mean is that they will publish details of only certain matters, chosen by themselves. Too much is made of privacy regarding personal finances, especially tax returns, allowing those with something to hide, to hide it.
For near total transparency, the following is required:
*Every individual at birth and every organisation when formed (no exceptions, i.e. this includes government departments, businesses, religions, clubs, fraternities etc. and even the freemasons) is issued with a unique identification number. This number is to be used wherever feasible for matters involving that individual or organisation. The number becomes the bank account number, suffixes can be added for multiple accounts, prefixes for bank and branch etc. The number becomes the telephone number using suffixes for extensions or multiple gadgets (incoming calls are automatically blocked unless the number is listed in the individual’s electronic phone book), the e-mail address, the postal address, insurance reference, national health number etc.
*Detailed annual accounts from all organisations and tax returns from individuals are published on the internet allowing interested parties to read and comment. Banks etc. would publish details of all holdings.
*Cash transactions should be made more difficult. In this world of electronic transfers and debit cards the use of cash is largely unnecessary – perhaps paper money should be abolished and the maximum value of a single coin set at £1.
Correction of Past Errors
Every individual and organisation is compelled to produce a statement of wealth. Any amounts exceeding the limits outlined above are confiscated and used to eliminate the national debt. The remainder is used to train the unemployed (including the financial parasites who will no longer be employed) to make a useful contribution to society, mostly involving infra-structure projects.
With the cancellation of the national debt and the other adjustments to incomes caused by the above measures, all individuals will be better off. Those with debts will be given a certain time to pay them off as there can be no cancellation of personal debt, such a measure would be very unfair to the thrifty who have little or no debt.