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Socioeconomic Democracy and Energy
by Robley George
Fundamental structural improvements in the socioeconomic systems of the planet’s peoples are required to satisfactorily resolve the Earth’s multifaceted energy problem. Socioeconomic Democracy can contribute significantly to the reduction or resolution of the many problems of energy.
Socioeconomic Democracy (SeD) is a model system wherein there exist both some form of Universally Guaranteed Personal Income (UGI) and some form of Maximum Allowable Personal Wealth (MAW), with both the lower bound on personal material poverty and the upper bound on personal material wealth set and adjusted democratically by all participants of society.
Some of the history and evolution of these ideas are discussed in the book Socioeconomic Democracy: An Advanced Socioeconomic System [1]. Both brief and more extensive introductions to Socioeconomic Democracy are available at the website of the Center for the Study of Democratic Societies [2].
Basic elements
UGI. Society will guarantee each citizen some minimum amount of purchasing power, with that amount determined democratically by all participants of society. Depending upon the degree and direction of technological development, this democratically set, societally guaranteed minimum income for all could be sufficient to satisfy the typical individual’s minimum subsistence needs. Alternatively, a different society might decide to set the guaranteed amount at only a partial subsistence level.
Society will guarantee each citizen some minimum amount of purchasing power…
There are as many different forms of UGI (ranging at least from Basic Income [BI] to Negative Income Tax [NIT]) as there are reasons to establish some form of UGI. The debate about the growing need and demand for guaranteed income can be found at the website of the Basic Income Earth Network (BIEN) [3], with links to organizations around the globe. The recent Socioeconomic Democracy: A Democratic Basic Income Guarantee [4] indicates how SeD resolves the few major dilemmas impeding the realization of guaranteed income.
MAW. Likewise, in the ideal theoretical model, all participants would understand that all personal material wealth above the democratically determined allowable amount would be transferred out of their ownership and control in a manner specified by the laws of the land and with resources bring used to promote the General Welfare.
Hence, a rational, self-interested, insatiable, and law-abiding (as the neoclassical saying goes) extremely wealthy participant in the democratic socioeconomic system, who is at or near the democratically set upper bound on allowable personal wealth and who, naturally, desires increased personal wealth, would be economically motivated to actively increase the well-being of at least some of the less wealthy members of society. Only in this manner can these participants persuade (at least a majority of) the rationally self-interested participants of the democratic society to vote to raise the legal upper limit on allowable personal wealth.
There is strong economic incentive for those who are at or are near the upper limit on allowable personal wealth to be successful in improving the general welfare.
There is strong economic incentive for those who are at or are near the upper limit on allowable personal wealth to improve the general welfare. For if the current level of MAW is not producing sufficient improvement in the general welfare there is the possibility and indeed probability that society might democratically decide to reduce the MAW limit even more in order to enlist even more still-wealthy participants and their extra wealth in the task of improving the well-being of society, not unlike Gates, Buffett, Turner and others have recently done. A democratically set MAW limit provides the least painful source of funding for any desired UGI.
Quantitative Democracy. There is a simple procedure by which each individual participant in a democratic society (or each member of a democratic legislative body) can directly vote her or his particular preference. Duncan Black [5] and Economics Nobelist Kenneth Arrow [6] independently and more or less simultaneously established the mathematical result and procedure a half-century ago.
Their now-classic social choice contributions have provided the theory which shows that the median value of the monotonically arranged participants’ (voters’ or legislators’) preference distribution is the amount the democratic society as a whole is “for” — assuming the minimal operational “one participant, one vote, majority rule” decision-making process. This means that the democratically determined amount is such that half the voters want that much or more while the other half want that much or less.
Variations
If a particular participant in this democratic socioeconomic system were opposed to a societally guaranteed minimum income for all, that participant could vote to place the lower limit on UGI at zero. If a majority of participants so voted, it would be the desire of that society to have no UGI.
… any participant who would be opposed to a maximum bound on allowable personal wealth could and should vote to place that upper limit at infinity.
Similarly, any participant who would be opposed to a maximum bound on allowable personal wealth could and should vote to place that upper limit at infinity. Four basically different possibilities are therefore immediate. There could be democratic societies wherein there exist nontrivial bounds on both UGI and MAW (i.e., UGI not equal to zero and MAW not equal to infinity), or where either one of the bounds is nontrivial while the other one is, or where there are no bounds on either fundamental socioeconomic system parameter — just as currently exists. Beyond these four variations is the range of possible variations in the magnitudes and the degree of “tightness” of the UGI and MAW bounds.
Approximations
Then there are all the practical political approximations to Socioeconomic Democracy. For example, there are the numerous alternative systems for guaranteeing some minimum amount of general or restricted purchasing power or guaranteeing some minimum amount of goods and services that would more or less approximate the ideal theoretical concept of UGI.
One particular long-established principle of any civilized society is universal public education. Universal guaranteed medical care, likewise available in almost all civilized societies, is another approximation to UGI. Instead of unqualified UGI, various approximations could (and actually do) stipulate satisfaction of particular qualifications or requirements. Thus all so-called means tested and/or targeted welfare programs are approximations to UGI.
Seemingly the closest thing to a limit on personal wealth is a tax on personal wealth. Depending upon the parameter settings (e.g., the tax rate on wealth and the level above which the wealth tax starts to apply, which could be decided democratically), the effect of such a tax could slowly approximate what a MAW limit could accomplish. Another familiar form of an approximation to a tax on personal wealth is the Inheritance or Estate tax.
Approximations to democracy would include having only those citizens at least 18 years of age vote to decide the magnitudes of the two bounds. Another kind of approximation is the situation characterized by different political parties and candidates advocating different amounts for the two bounds. Certainly a democratic legislative body could use the democratic voting procedure and establish UGI and MAW levels that could be said to be a close approximation to the democratic desire of the society.
Feasibility and implementation
Socioeconomic Democracy is quite feasible, requiring only an informed, functioning democracy. For example, consider the political aspects of implementing some form of Socioeconomic Democracy. Bounds on guaranteed personal income and allowable personal wealth cannot be realized until at least a majority of the voting participants in a contemporary politico-economic system learn about, understand and favor such a system.
It is difficult, if not impossible, to recall any historical economic system change of comparable magnitude that was previously subjected to such informed public scrutiny prior to peaceful, voluntary and democratic societal acceptance and adoption, as must be the case with Socioeconomic Democracy.
Such necessary public discussion of the matter would eventually resolve not only whether some form of Socioeconomic Democracy should be established but as importantly would go a long way in shedding light on and determining where the actual bounds should be set under the prevailing circumstances.
In any case, coalitions of political parties committed to passage of the necessary legislation are one possible adoption procedure open in some societies. Clearly being an alternative to all existing economic systems, Socioeconomic Democracy provides a well-defined, humanistic, just and democratic focus about which a new or rejuvenated popular political party could (re)organize and/or (re)capture political power.
Ramifications and benefits
Numerous serious societal problems would be reduced or more or less eliminated with Socioeconomic Democracy. This is the result of the effective personal self-interested economic incentive of the still-wealthiest members of society to seriously improve the welfare of the remainder of society.
These serious problems which would all be reduced with the realization of Socioeconomic Democracy include those associated with automation, computerization and robotization; budget deficits and national debts; bureaucracy; maltreatment of children; crime and punishment; development; ecology, environment and pollution; education; the elderly; the feminine majority; inflation; international conflict; intranational conflict; involuntary employment; involuntary unemployment; labor strife and strikes; sick medical and health care systems; military metamorphosis; natural disasters; planned obsolescence; political nonparticipation; poverty; racism; sexism; untamed technology; and the General Welfare.
One example must suffice. Consider international conflict, that is to say, war, the perennially popular and productive form of planetary depletion, pollution, poverty and profit.
The enhancement of societal well being made possible with Socioeconomic Democracy provides an effective deterrent to international warfare. The simultaneous resolution of a large number of serious societal problems eliminates at once many causes of and many excuses for war.
Beyond this, numerous other beneficial effects can be anticipated. For example, those participants in the democratic socioeconomic system who are personally at or near the democratically set upper bound on allowable personal wealth would no longer have personal economic incentive to promote war or military intimidation or preparation, whether involving their own country or other nations, for private profit. They could no longer gain personal wealth by such action and could well lose it, especially if their society democratically decided to further reduce the allowable personal wealth limit to stop financing involvement in hostilities.
Democratically set, governmentally guaranteed personal income for everyone also provides many direct deterrents to warfare. Among other strong effects, it would eliminate any economically “handicapped” class, which, of course, has historically provided warring nations with a convenient pool of combatants. Such guaranteed income also solves the very real and almost always neglected problem of necessary income for all those who presently derive their personal income and personal wealth from warfare, its design, threat, preparation, or promotion.
Some energy implications
Energy waste and pollution caused by war are dramatically symbolized by the familiar cloud of black smoke ejaculated from the exhaust of a lumbering military tank when it starts to move, any place on the planet. The total waste and pollution of war is infinitely larger and more multidimensional.
Energy savings would result from the reduction or resolution of a variety of other crucial energy-sucking societal problems. For example, consider “crime and punishment.” Clearly, both “low-end” and “high-end” crime would be discouraged by the economic incentives created by SeD. This saves all the energy presently spent, and all the pollution presently produced, attempting to bring the socioeconomic system-created “criminals” to “justice.”
Then there is “planned obsolescence,” with its philosophy of attempting to guarantee regular income to corporations from sales of new products to replace old ones deliberately designed for a limited useful lifespan, beyond which they can and frequently do contribute to the mountainous and by now almost majestic trash fills.
There is the consumer society, promoted to further help guarantee corporate income.
There is the consumer society, created and encouraged by contemporary socioeconomic systems, promoted to further help guarantee corporate income. That this process uses up limited convenient energy and produces considerable inconvenient pollution must be realized and the implications acted upon.
Of course, all conflict uses and wastes energy; certainly the strife and strikes of labor/management struggles are no exception. All conflict also produces multidimensional pollution. Many of the legitimate demands of labor are democratically satisfied with SeD.
Then there is the cooperative energy, the synergetic energy and the spiritual energy that Socioeconomic Democracy economically encourages. Why just survive, when we can thrive?
Robley E. George is with the Center for the Study of Democratic Societies, a research and educational institution dedicated to the examination and explanation of the properties and possibilities of democratic societies and democratic socioeconomic systems: http://www.CenterSDS.com
References
1. George, Robley E., Socioeconomic Democracy: An Advanced Socioeconomic System. Westport: Praeger, 2002.
2. Center for the Study of Democratic Societies. http://www.CenterSDS.com.
3. Basic Income Earth Network (BIEN). http://www.etes.ucl.ac.be/bien/Index.html.
4. George, Robley E., Socioeconomic Democracy: A Democratic Basic Income Guarantee. http://www.usbig.net/papers.html.
5. Black, Duncan, The Theory of Committees and Elections. London: Cambridge University Press, 1958.
6. Arrow, Kenneth, Social Choice and Individual Values, 2nd Ed. New York: John Wiley & Sons, 1963.
[4 apr 07]