"If we will not endure a king as a political power we should not endure a king over the production, transportation, and sale of any of the necessaries of life." - Senator John Sherman.
In my last article I brought up the topic of wealth inequality in the cryptocurrency space, which was accurately described by Nouriel Roubini as "Worst than North Korea."
In this article, I explore why this is a problem and what are some measures we can implement to alleviate the problem.
Concentration of Power.
In any human system, power tends to concentrate if left unregulated. This is a huge problem for democracies because a central goal of democracies is to achieve a society where political power is widely, and fairly distributed.
Regulation of Political Power.
As this is the case, many regulation are put into place to prevent this slow concentration of power. They come in many forms, such as placing a duration in which public official can serve, the office of the presidency being the most powerful, and yet the one with the shortest tenure.
Competition over Political Power.
Elections provides a way for individual to compete for political power in an open and transparent way, for the benefit of the citizen.
Political Power and Economic Power.
The need to regulate political power is well understood and accepted in most societies. Economic power, however, often seems to be a force that is supernatural, one that is often obscured by mathematics and only understood, and, be channeled by a selected few.
This harkens back to the early days of divine rule of kings, where the justification for absolute rule is derive from superhuman forces, something beyond the capabilities of human understanding, and thus, human control.
This dangerous myth of economics hampers the growth of societies, just as the myth of divine rule has hampered the development of human civilization.
Economic Governance to achieve a competitive market.
However, we are not completely blind to the need to regulate economic power.
Just as the peasants demanded that their feudal lords fed and house them while they toil away for his benefit, we have demanded minimum rules to prevent the abuse of absolute economic power.
These usually come in the form of anti-trust laws, which prohibits the formation and the breaking apart of, large corporation that could use their economic power to eliminate competition.
This measure, however, is usually ineffective. Corporation that were broken apart largely employed the same people, the same business practices, and competed for the same pool of customers.
This means there was no meaningful differentiation between them, and thus one of the smaller parts gets 'competed' away, and subsequently, brought back again by the same corporation. The law only served as a nuisance and not much more.
Taxes as Economic Governance.
The progressive income tax is another form of Economic Governance. It is a way to redistribute wealth create by a society. Although workable, it is not just.
When someone produces more, it is only be justified that he retain more of that wealth. But under a progressive income tax scheme, those who produce more are punished. The reason behind this is because those who have the means to produce more are concentrated in the hands of a few.
This concentration of the means to production is akin to the limited understanding of political systems by the few. Because this knowledge of political system is not widespread, it can be argued that those who do not have it, should not be able to participate in it.
A better approach towards Economic Governance.
However sound this logic is, it goes against the ideals that a democratic government aims to achieve. Instead of relenting, we have created methods to distribute this knowledge of the political system. This is achieve through schooling of the population, even if it is at a cost to the state.
This same logic should and must be applied to economic power if we are to have a stable and functioning democracy that serves all of its citizens instead of the selected few.
This translates to providing the means and the goods necessary for every individual to be economically productive, including education, and, productive capital.
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STOPI could not agree more, and experiments have shown that "participatory budgeting", where citizens can submit and vote on proposals on how to use public funds improves the satisfaction people have of the use of public funds. This might seem rather obvious, but it's relevant in today, where there is a growing distrust of government institutions, seen for example in decreasing voter participation.
However, one thing that is too often missed is that we already have massive institutions of economic democracy that need revitalization: trade unions, cooperatives and credit unions are based on principle of one-member-one-vote.
Hopefully we can have a surge in voting participation in these institutions leading into their modernization and revitalization.
Interesting, do you have sources for the 'participatory budgeting' you mentioned?
It is also interesting to note that @dan is actually against the idea of one-person one-vote.
I think he has the similar line of thinking of John Adams and Alexander Hamilton
"John Adams and Alexander Hamilton observed that a man
who is dependent for his subsistence on the arbitrary will of another
man is not economically free and so should not be admitted
to citizenship because he cannot use the political liberty which belongs
to that status. "
This is a randomized experiment from Indonesia, were 49 towns were chosen to take part, half were randomly allocated to use elected representatives and half participatory budgeting to allocate 9 000 dollars to improve the village. How they used the money didn't differ much, but the satisfaction on how the money was used was much higher among those using participatory budgeting.
Here's the source: https://www.povertyactionlab.org/sites/default/files/publications/2012.04.23_Direct_Democracy_FINAL.pdf
Capitalist manifesto offers great insights on how to reform the trade union movement. Instead of using laws to ban things, have trade unions enable and reward employee stock-ownership, for example by offering legal aid.
Hopefully employee stock ownership could be one thing that could bring the right and the left together: it's quite rare to find an idea supported explicitly by both Ronald Reagan and Bernie Sanders after all!