Capitalist Ice Cream: The Flavours

There's a wide range of issues facing society that get dragged into the phantom ideological divide of left and right when the reality of life is that it doesn't care. Solutions exist. Some are better than others. Better is defined by how well it achieves its objectives. Those objectives are mostly subjective.

Largely though, the basic aims of a government and society, and the tradeoff of living in large populations of people with differing personal priorities, is to maximize the amount people can achieve and move beyond achievement that one individual could accomplish on their own. That is to say, build a mutualist environment in which everyone gains. Interpersonal trade is gainful and not zero-sum.

Minimum Wage

A big topic in capitalism is the government setting wages. This would be largely seen as "government interference" but let's take a step back and look at the wider context. What does it mean to earn a wage?

The expectation of the wage mechanism is fairly simple: someone works a job and then they get paid. There is a big assumption here: work a job, earn a living, live in society. But, if you don't earn a living wage you by definition cannot survive. You will not be able to afford the combination of food, housing and transportation required to continue working that job and provide for yourself.

So what happens if you don't earn a living wage? Someone has to pick up the slack. As long as the person is alive then by definition someone has to subsidize their insufficient income. They obviously aren't getting food and shelter through magic. Everyone else has to pick up the slack. This represents a corporate subsidy. It's not necessarily the government paying for it; perhaps it is the spouse, the parents but it can just as well be welfare cheques.

The point is that a business is having job positions filled and pay a wage that must be subsidized by people outside of the business. This should be considered a failed business if they require this sort of external money injection to survive. Solution? Implement a living wage for the minimum wage. Implementation? Phase it in over a 5-10 year time frame to allow businesses to survive. Point is, when businesses complain this will "cost the economy 10 000 jobs", actually what they really mean is "this will save society $100 000 000 a year through reduced welfare payments".

Wage Market

It's largely accepted that you get paid what the market will pay you. The interesting question here would be trying to figure out the objective. Someone works a job, they get paid. Okay but presumably the argument is that the compensation paid for labour somehow reflects the output of that labour. Does a wage market achieve this?

A wage market is all about supply and demand. A large supply of a particular type of labourer and the lower the wage they will earn. Unskilled menial labour may earn $5 USD/hour in the United States (Note: I think it funny that America pays wages so low it is illegal in Canada but we only complain about non-western nations with labour practices that would be banned in Canada). Highly sought after top-end software engineers can earn (with 5 years experience), on average, $130 000 USD/year.

One issue is that the compensation is not in direct relation to the worker's output. No matter how productive they would be paid the same under this system. In fact, it is reminiscent of discussions surrounding communist systems in which everyone is paid the same. Now, it's not exactly like communism: higher skilled individuals in a particular profession can fetch a higher compensation. But where they work does not affect their income. So why target jobs to maximize your value addition to a business? It doesn't matter. Does this mean that our worker productivity is hampered by the unwillingness of corporations to pay people what they are worth to them (rather than the market)?

Another is related with negotiations. Since compensation rates are argued via wage market realities they are not in relation to a particular job. This leads to unions that ask for the highest wage possible without concerning themselves with the specificities of a particular business's cash flow. Similarly, from the other perspective, businesses seek to lower wages blindly without any thought to loss of productivity. This is where we might see outsourcing even if the offshore workers produce absolutely nothing while getting paid, so long as they're paid less than Americans.

Tribal Economies

A continuing issue in Canada is the existence of six hundred something nations. Only a small portion (around thirty) have self-determination and self-rule, the rest are federally administrated (or just in some weird administrative limbo). At the heart of the concern is that the culture of these disparate communities are too foreign to interact with that of non-native economies. There are also underlying racial and ethnic undertones to the discussion but let's put those aside for a second. We assume to approach the issue in good faith only on economic grounds.

Foreign administration of these nations is largely a pointless endeavor born out from original British imperialism. It has no economic value to modern society and is in fact a significant drain on Canada (for everyone, not just natives). So what would be a simple solution? Let them rule themselves.

Provinces are able to handle a separate tax structure, land ownership and government as a layer just underneath the Federal government. Switching native lands over to this system (much like Nunavut, a very well run territory) would remove the bureaucratic overhead and allow business to flourish. As a part of the equalization programme, these territories (with additional rights for resources to reflect more similarity to provinces) are able to do as they wish without concern about "status indian" or approval from government or quintruple accounting of every dollar spent.

The concerns at hand are the construction of roads, hospitals, schools and then allowing banking institutions to lend money for business growth. Most banking is banned in native areas (individuals cannot obtain mortgages to even purchase a house) which seriously damages small business growth. The lack of a tax structure (separate tax revenue, ability to collect taxes for their own government, lack of an independent government in the first place) causes problems for development for something even as simple as charging builders' fee for the construction of condominiums and then collecting property tax. A simple way for most cities to earn money off prime real estate, almost all tribes are disallowed this income by law.

Additionally, it is assumed that since many of these tribes are communist, or semi-nomadic or whatnot that they cannot earn business income. I say... why not? Mongols in China/Mongolia can do it but an advanced western country like Canada cannot?

I do caution though that six hundred tribes means six hundred solutions. That is almost the best argument for self-rule for these nations. Imagine the bureaucratic nightmare to do anything semi-decent to run these communities.

Democracy: Push versus Pull

Introduction

We're in an era of capitalism and democracy, in its various forms, all across the world. The previous century was dominated by questions such as education (elite academies with poor man's libraries versus public schooling), healthcare (private hospitals and insurance versus state-run or single-payer systems) and one of the largest was participatory government (military dominated like nationalist or fascist states? Command economies like the Soviet Union? Market approaches like the United States?). Some of these have settled, others continue to linger. But, let's focus on the question of democracy; how it is today and how it might move forward tomorrow.

Push and Pull

Since the mid twentieth century most have assumed that electoral democracies are the only way forward. While their effectiveness has certainly been demonstrated, if only by their survival versus systems such as Soviet-styled communism, there is, as always room for improvement. But first, let's take a hard look at what it means to be an electoral democracy and then let's look at other societies hoping to become more democratic over time.

Europe and North America are defined by their belief in the vote-based democracy, the so-called electoral democracy. Every set number of years people gather to cast a secret ballot which determines the next set of leaders in office. This happens in its various forms, from proportional representation and coalition governments like in Scandanavia to winner-takes-all systems like British Commonwealth countries.

In contrast, East Asia is dominated by single-party systems such as South Korea, Japan or Singapore. Opposition parties are almost entirely meaningless, in most places having only won once in the last fifty years and only because their leadership was taken over by the first party to make them more palatable (ie. becoming the same party). They rule mostly by competency and resignations. Poorly performing leaders or officials can be sacked or resign in disgrace.

Overall, these systems represent a set of democratic policies that can be defined as "push" based. People are expected to use their own time and energy to "push" ideas to the government. Usually this consists of: the vote, referendums and petitions.

That of course leaves us with a question of, "if you defined push then what is pull?". A "pull" based policy is one in which the government spends time and energy to elicit opinions from the public. There has been some growing examples in the twenty first century. Many parties conduct opinion polls. But only some countries, particularly East Asian ones (such as China), base performance on opinion polls. A Chinese Communist Party official who fails a polling of the population over a competency check (for instance, if he/she were in charge with implementing public transportation then an opinion poll might be conducted in the city to see if the population is satisfied with the result) then the person can be sacked outright. This is an example of a "pull" based policy; the time/energy to make a decision was expended by the government but based on the people's thoughts.

The Pull Future

So, what is the future of democracy? Hopefully one in which it continues to survive. There's something that can be argued where quality of life is improved simply by the degrees of freedom one can in enjoy: in clothing, in lifestyle, in cuisine, in language and everything else. But, in order to survive a democratic society must strive to be better than its competitors. The world is always watching and it never cares what is moral or correct, only what survives best.

A significant improvement to Western electoral democracies is the adoption of pull policies. One issue that has remained since the very birth of democracy is the time investment versus reward. There are few people in society in which voting makes a significant enough difference versus the time cost. One must research political parties. Then after knowing their policies they must then seek out information on the consequences of those policies. That is usually not simple; most required doctorates in economics, political science, engineering and so on to understand. So then after so much investment what can one do? Cast a single ballot. So for the vast majority of the population, it is simply not worth the time, rationally speaking.

But, for a select few, such as high-power lobbyists or individuals who have direct connections to the government, they have a lot more incentive to vote. They might have money to invest in political campaigns of politicians, thereby allowing them to shift votes in the government to their favour. Such an example might be the corn lobby in the United States. For the average corn corporation (ie. the executive staff, not the workers) to invest time in corn subsidies can be worth thousands to millions of dollars a year. For the average American? Maybe a piece of a penny to fight those subsidies. So why would anyone bother? Thus, corn subsidies live on.

This uneven gain from time invested is the exact root of the problem in Western-style electoral democracies in developing sound policy. With the highly educated societies, with thousands or perhaps tens of thousands, of intellectuals in each discipline, the government relies on at most one or two to develop far reaching policies. How should fishing regulation be determined? Ask one man; ignore ten thousand others. That is the unfortunate reality of a push-only based democracy.

So, what is a pull-based solution? In this instance, we must have a government spend an equal amount of time eliciting the thoughts of every citizen. Rather than develop fishery policy on its own, one can develop it, post it to every single university across the country and have it reviewed. Imagine for instance an engineering environment. When one produces product changes, it is first posted for review so that other engineers can review it. Then changes are made until it passes the review. Then finally it is submitted. Why is government policy a one-shot no-review process? That is ridiculous when you consider that even changes to inspection regulations can result to the deaths of many citizens.

(You might argue there is a review process, in that Congress or a House of Commons might "debate" policy. Of course this is usually a foregone conclusion. Either a politician will accept that policy or not and it is done based on political stripes. In any corporate environment this is considered the most toxic way of producing products. Why should we have our government operate in a fashion well known for being the worst possible method? Expert reviews of each political party's policies makes far more sense.)

With the internet, with digital communication, with electronic processing, this is the century of pull-democracies. Government shouldn't wait until there are riots before acting. It can and should consult the population wherever it can. Whether it is building roads (civil engineers and urban planners) or power plants (capacity planning) or anything else, it shouldn't rely on individuals to expend energy of their own volition when it is almost never worth their effort (cost versus benefit ratio). It has to be up to government to figure out what the people want, it should not be up to the people; it gives undue power to radicals.

Global Outlook

Government models are lead-by-example paradigms. Should we become successful in designing a well oiled government that responds properly to the population's demands, others will follow suit. But, we have to build a government model that works. We cannot afford to simply stagnate in a presumption of our superiority while others change and evolve and grow beyond us in democratic prosperity. Countries which were previously thought to be lagging far behind are no longer. We shouldn't hide behind self-made democratic indices, we need to move forward on our own democracy or be left behind.