Tuesday, February 12, 2008

Keeping the Capitalist System, But In a Sane Manner

I'm torn between my socialist heart, and my capitalist head. Meaning, I do feel socialism is the appropriate way to go. Sharing. Caring. And all that Jazz. The problem is that it doesn't work. It tend to work in small groups (the family being the best example), but it falls apart when applied to larger groups (like states). So logic implies we should go capitalist. Just create conditions in which people can compete, and let them compete. It's ugly, but it is working. The problem is that it isn't really working. It is not working in the sense that lately we see obscene and grotesque situations of large amounts of money in the hands of few. This is very wrong. So, I've come up with the following suggestion to fix the work:

The suggestion is to have a limit on the amount of wealth any person can have.

That's it. Very simple. Let's see how it works. So, I suggest this amount to be something like 10 Million Dollars. Why ? Because for most people this is like infinitely rich. And for the few that would go over it - tough luck. You'll have to stay under this. I think the nice thing is that for most people who go over 10M$, the main motivation is not about the money. So, even if they would have to depart from a lot of the money, they still would be motivated to succeed.

What will happen to someone over 10M ? The simple way would be for the state to tax the hell out of him. The result would be that he would need to give up a lot of wealth. Granted, these people are not stupid, and will find ways to spread it to friends, relations, and other tricks, hoping to keep the control. But, of course this can work up to a limit, so ultimately this would create a situation in which they won't have control over more than say 100M$. Still much much less than the wealthy and influential people of today.

BTW, I think the same should apply for companies. We should set a bar for a company size (say 1 Billion $?). This would cause such companies to split, or to give back money to their investors. Either way, it will be good.

Of course the end result of all of this would be much more fragmentation of wealth in the economy. While you can find some anecdotal examples of where this may be bad, as a whole I think this is extremely good. And the nice thing about it is that (a) most of us will still work in a capitalist system, needing to rely on our efforts to make our wealth, and (b) the state will not have control over the division of the wealth.


At 2:26 PM, Anonymous Krystyn said...

Good words.


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