Objective of Housing Policy

Summary

Landless housing is a concept where individuals purchase housing but land is never bought or sold, so that house prices correlated only with the material/labour cost of constructing the house. The idea centers around the concept that price should reflect the quality of the good. Location, inextricably tied with any housing built on top of it, would affect price and so this concept breaks that pricing model. Then, it may be asked, would that make sense?

As an extension to the idea that the quality of housing is the only determinant of price and not the location, the objective of housing policy is explored. In reality, most people would not explore history for economic policies but the concept of private land ownership has been one of the most significant factors in destroying large empires in the past. From the Roman Empire to the Qing Dynasty, the most successful societies have been ones that heavily regulated and provisioned housing on intelligent policy, carried out by a competent bureaucracy. Private landownership typically led to the "Crassus" problem, where a single person could own most of the land and force large swathes of the population into poverty.

Long Description

This article considers these housing policy objectives:

• Maximize Number/Quality of Land Owners
• Matching Individuals with Desired Housing
• Equally Distributing Social Services
• Avoiding Economic or Social segregation

Maximize Number/Quality of Land Owners

It's preferable for people and for the government tax system for everyone to be land owners, that it is affordable to be so and that they are of the highest quality possible. All of this, for the least amount of resources expended. This is the primary reason for eliminating land trade; a lot of money would go into purchasing land but other than this it does not translate into real material wealth.

Essentially, money that goes into the sale of land does not convert into anything. It does not improve the land; it only gives the right to improve land. It does not produce any products; in fact, it takes away available money from purchasing luxury goods. It does not make use of the land; a highly free land market means that people are also free to purchase land and then do nothing with it.

So, the elimination of the land market frees up money for development and luxuries, a portion of which will translate into superior housing (either more space and/or higher build quality). At worst, there is no decrease in quality/quantity of land owners since all housing is strictly cheaper, however if individuals are willing to pay half a million dollars for a home now, then logic would dictate that they would continue to be willing for a superior house.

There are several methods of tackling this issue:

• Reducing the Cost of Housing
• Improving Income

Taking away the land market would cause a definite decrease in house prices but it also removes the ability to "invest" in housing. Real estate ends up being much like capital purchases, individuals will spend money like businesses construct offices because housing depreciates over time (rather than appreciate despite the decreasing quality of the structure). This would result in old housing becoming low in price and thus becoming regularly replaced by more modern housing.

The expected result is an increase in construction work, renovations and development. There can be several issues that mitigate the benefit. First is corruption in the construction industry. As a rule, there's no way to separate government interference and the construction industry because everyone requires getting permits to build anything. Remove those permits and you have significant urban planning and environmental problems. Then, really the solution is to reduce corruption. The best tools in this regard is transparency (publicly accessible records on the web for all construction, all bidding done openly on a publicly accessible website, an auditor general with a yearly report) and a public that cares.

Second, varying incomes of individuals during their life time may cause hardship later in life when they are still paying rent. Generally, people would have to lower the amount of rent they pay. Rent control and proper zoning would tend to create sufficient housing at a reasonable price (an aim to keep rent prices below 20% of income, or so). This requires good urban planning. It would be useful for government to produce an urban plan and for a standard statistics agency and budget office to produce the expected outcomes of that plan. Western democracies are at a point where it no longer needs to have government state projected numbers for plans because there is sufficient number of skilled individuals who can work in budget offices and statistic bureaus to produce all these numbers.

On the flip side of controlling house prices and pushing for continuous new construction (of higher and higher density structures as population increases), government can work to improve income. This is a broad topic not addressed here but essentially, generally attempting to improve the economy would alleviate land ownership problems.

• Eliminating land trade will free up money for housing quality and ownership
• Zoning to drive toward higher density in more contested areas
• Transparent construction bidding/permit granting process using new technologies (such as the Internet) to lower corruption

Matching Individuals with Desired Housing

Ideally, people would get the exact housing they desire. Practically, land is scarce and there may not necessarily be sufficient housing to provision it to all individuals who want it. It's important to note that free market for land is merely a way to decide how this housing is provisioned (an important consideration if someone is of the mindset of "but if you don't have a price, how much do you pay for the housing?", the question ignores the assumption of a premise: that housing needs floating price component).

Pushing for higher density housing in areas that are more contested would be a government policy. This would help to, over time, provide more housing for people who desire it. Normally, with a price system, locations that are more desirable (due to natural geography) would fetch a higher price. The higher price forces individuals with lower income to stop consideration those locations. It does not, however, as many seem to believe actually change the supply of housing. Whether housing costs ten times the material/labour cost or one time the material/labour cost, it is land owners who reap the benefits and they have no incentive to build additional housing with additional income.

Many individuals may not actually have a preference and care only about the quality of housing. Most natural geographic conditions only vary with proximity to water and nature preserves. All other artificial conditions (quality of school, rate of crime) are caused by pricing issues and should not exist in the first place. Putting price pressure to perpetuate the problems would be counter-productive.

But, how much free market is reasonable? Is it more pragmatic to have government construct housing? Historically, housing arrangement has always been somewhat government controlled but mostly with respect to land and not the actual housing. So then, is it more efficient to provision land via a government program or through a semi-free market?

If it was done through a government program, in order to match the objectives listed, then we should expect that provisioning is done by stated desire and then by socio-economic background of each family. The aim would be a fairly even distribution of the income ranges in an attempt to create greater class mobility.

• Drive higher density housing in more desired locations
• Provisioning land by desire and socio-economic status

Equally Distributing Social Services

Even in more socialist countries such as Sweden, neighbourhoods tend to have areas with richer social services and those with poorer social services. In the case of Sweden, all schools are equally funded initially but then additional local grants are provided and distributed by local government. That secondary distribution is uneven. In the case of Canada, schools receive local income from local government based on municipal taxes (property tax for instance) in addition to provincial funding. Provincial funding might be very equitable but obviously local tax income will not be so.

In the United States it is even worse. Though there is a state education budget, local taxes make up a much larger proportion of school income than it does in Canada, leading to significant differences in house prices. Buying the same quality of house in Palo Alto (California), due to school quality, will be nearly triple or quadruple the price of a home in north Waterloo (Ontario). Yet, the school quality in Waterloo is not inferior to that in Palo Alto because of superior government policy. Palo Alto is not waterfront property, it is not a pristine beach, it is not near some magical nature preserve. In fact, it's pretty crappy land near a bit of marsh. On the other hand, north Waterloo is near open fields, forests and a slow flowing river. So, we can see that artificial environmental conditions cause just as much price fluctuation as natural ones but there is one difference: we can control artificial conditions.

What is there to do? One of the primary solutions is evolution of power versus devolution of power. That is, we move tax income up to the state/provincial level and then redistribute based on local cost of living and per capita equalisation. That is, a person living in Cupertino (California) would receive the same school funding per capita (adjusted for cost of living) as someone in San Francisco. The greater expectation is that funding difference due to cost of living is specifically due to issues with remoteness, transportation costs and economy of scale due to population density.

To believe that "location" is a set of factors outside the control of a democratic population is to ignore the power that people wield. Government is there to do a job for the people, to make their lives better, not to sit and watch and ensure the "free market" exists. The free market is a tool used to make lives better and if there is a better tool then it should be used. Unequal funding of schools is not acceptable. Class mobility is an important aspect of the American economic system.

• Equalise funding of schools, roads, police through state/provincial level funding
• Preferable to have a digital public online accounting book for funding per school, funding for roads in an area and so on (some places may have already implemented this)

Avoiding Economic or Social segregation

One of the effects of free market price of land is that it necessarily provisions housing accord to income/wealth strata (more the latter than the former). This means the creation of neighbourhoods of specific wealth levels. Economic segregation of this nature leads to differing crime rates, higher level of corruption in the government (it's easier to identify rich neighbourhoods to focus political efforts on) and other social problems that manifest itself in the long term as a decrease in social mobility and the entrenchment of poverty.

There are a number of tactics to alleviate this issue in a "fair" manner.

The government could sprinkle different quality of housing in the same neighbourhood to allow people of different wealth strata to coexist in close proximity. Then policing resources, education funding and infrastructure building would have to be spread evenly as there is no specific location for political capital to be focused upon.

The government could institute price controls, or specifically, rent control. Keeping rent in line with mortgage rates for buildings keeps prices stable. Profit for landlords then becomes a question of quantity of housing. With rent control they can only increase profit by providing more housing rather than providing the same and charging a higher price. Without rent control, the incentive is to price rent as high as possible until people can no longer afford to live. However, rent control must be instituted in wide areas, such as at the county scale.

The government could change permit grants. Specifically, as house prices start moving upward, zoning laws should shift to start including the construction of higher density housing. Many price issues in the United States arise simply due to enforced low density housing to keep a certain "style" in a city. That is an admirable goal, but it is problematic if rent prices increase to the point, as they are now in San Francisco, to be one of the highest in the world for housing quality comparable to that of places for a tenth the price. It is not as if incomes have gone up similarly so the only result is pricing out the poor from having housing.

Land could be provisioned on a multi-slot basis. There are a specific number of slots for each type of wealth strata (it's a fuzzy line between any strata of course, a public algorithm may be helpful, or perhaps a public application system). Any particular neighbourhood cannot "tip" into a specific wealth strata. The algorithm should take into account the monthly changing economic structure of the population (such as a growing number of upper middle class, as a percentage of the population, means any specific area can have more of them). Of course, the provisioning should be blind to the usual list of characteristics (skin colour, religion, etc). That normally should be obvious but as single ethnic neighbourhoods still exist for reasons due to social exclusion, it should still be a consideration in government policy.

• Mixed neighbourhoods of varying house quality levels
• Rent control and zoning as a combination policy to keep price levels low
• Provisioning housing based on socio-economic status to keep neighbourhoods mixed

Overall Policy

So what is the incomplete list of ideas?

• Eliminating land trade will free up money for housing quality and ownership
• Zoning to drive toward higher density in more contested areas
• Transparent construction bidding/permit granting process using new technologies (such as the Internet) to lower corruption
• Drive higher density housing in more desired locations
• Provisioning land by desire and socio-economic status
• Equalise funding of schools, roads, police through state/provincial level funding
• Preferable to have a digital public online accounting book for funding per school, funding for roads in an area and so on (some places may have already implemented this)
• Mixed neighbourhoods of varying house quality levels
• Rent control and zoning as a combination policy to keep price levels low

There are probably more policies to throw into this package, land is a contentious issue. It has been one of the largest factors causing the decline of many previous empires. Free markets for land typically brought about their downfall, so it would be wise to ensure that land ownership does not result in the same problems for the United States.

In the modern world these problems are mitigated for the United States because it is a young country and thus has a lot of open free space. Three hundred million people may seem like a lot for a population, but picture that China, of somewhat smaller size than the United States, has 1.3 billion inhabitants. Suddenly, three hundred million sounds like a lot of free space. Land issues arise when it becomes more scarce.

Also heavily mitigating the issue is that land is not the primary wealth generator today than it was just a few centuries ago. So then, super-landowners aren't as much of an issue as they would have been when agricultural income made up the vast proportion of national gross domestic product.

Rationale

Living location is a sticky issue. Individuals don't simply choose to say that today they will live in New York City and tomorrow they will live in Chicago and the next day they will live in Seattle. A person's living location is a function of the property they desire, the location of their job and the wealth they have at their disposal to use for moving expenses. Those are, at the least, some of the large factors that affect living location.

So, living location is a matter of choice of small variations. Whether to live in one neighbourhood or another two streets away. It is not a matter of "New York City rent is high, I will move to Dallas". And will your family move with you? Your relatives? Your job? No, they will not. So it is not a decision one can simply make. But, free market for housing makes that exact assumption.

However, if price simply reflected material/labour cost, that is fair. Material costs usually varies only by transportation costs. Labour does not vary much either. And, you are paying for the quality of the house. That is expected, at some point, someone must pay for this. You can ignore land prices but you cannot ignore construction prices.

Most people, especially in lower wealth strata, never move far from where they are born. They simply don't have the wealth. So to state that they should choose to live somewhere cheaper ignores... everything. If someone is in the tech industry there's really only a few cities to choose to live within. You cannot choose to live in Hamilton (Ontario) and expect that you will have a job magically.

Of a more pragmatic nature, there is the issue of "relative" and "absolute" prices. When land is no longer a consideration in price it is somewhat "unfair" that someone living in the middle of a desert out in Nevada pays the same price for the same quality of housing as someone in prime real estate in the middle of San Francisco. The keyword is "unfair" because the relative price difference of the two locations is zero.

However, what of the absolute prices under free market? The desert location would be (for instance) ten times cheaper than the prime real estate in San Francisco. That is "fair". But what are the actual prices under the free market system versus that of the semi-free market system (the material/labour cost is still free market)? Without land in the price, prices would drop. Or, people are willing to pay up more money and thus acquire higher quality housing in prime locations and so housing quality rises in both the desert and the prime real estate. So, does it matter?

A good analogy would be healthcare. A mid-range US healthcare plan costs 7000 for a single individual. A plan comparable to that of any Canadian healthcare government plan costs in the range of 12000-15000 depending on the state. Canadian healthcare plan costs on average 2300 for the government and another 500 for private spending. So we'll say that it is $12000 (USD) vs $2800 (CAD, which at the time of this writing is worth slightly more than USD). But the Canadian healthcare plan is unfair. No matter your risk factor, age and such, it still costs $2800. But, obviously, it is four times less the cost for the same quality. So, does the relative price unfairness really matter?

Although it might seem like a question of "end justifies the means", it's not quite so. It's hardly diabolical to ask people "do you wish to pay the same but much lower price?". People are suffering less due to the means and suffering less due to the accomplished ends. It is superior in all ways.

Tools

A website for transparent and public tracking of construction bidding, permit granting to create a paper trail for auditing (either by the media or an auditor general).

Tracking house prices and rent relative to local income. Preferably detail down to the neighbourhood (aggregated data to avoid personal information leak).

Tracking home ownership levels and amount of housing owned per capita.

Website to track housing availability, showing housing acquired and wealth strata distribution per neighbourhood.

Online tracking of state/provincial budget, with detail down to the funding of each school. Preferable, but obviously would take time to create an automated system for this.

Landless Housing

Summary:

The economic realities of housing wrestles with concepts such as rent control, land value, renting and assisted housing.  All of these policy ideas are different methods of provisioning housing to different people according to different criteria.  The concept of landless housing has one primary goal: provide the most housing at the cheapest possible price with no loss in quality.

In short, the concept forgoes assigning land value, it always belongs directly to the government, but the property built on top can be owned privately (if privately purchased) with price dependent only on the labour/materials that had gone into the construction of the structure.  If a house was built for $600 000 CAD or USD, then it was due to the labour/material cost totalling $600 000.  Market price still affects labour and material costs.

A person only pays for what is built, for a price at which it was built and nothing else.

Long Description:

Housing management is typically a package of policies that deal with land management, fees with land use, taxes on owning land, tax breaks on renting/leasing, taxes on commercial land owners, taxes/fees associated with different uses on land, rent controls, government transfers based on economic goals or assisted housing etc.  The list is long and complicated.

Landless housing is a concept that envelopes the policies that revolve around purchase price.  Essentially, the shift in the current model of housing management is to eliminate the idea of "owning" land.  Generally speaking, housing development typically involves paying a fee to the local municipal government for development rights, as well as purchasing the land from previous owners.  Speaking in contemporary terms, this has resulted in farmland being sold off for suburban development due to the low income of farmland.

Environmentally speaking and also with respect to economy of scales, municipal governments typically lose money on large sprawling communities in the long term.  Due to the short term nature of city politics, most politicians/city councillors do not take this into consideration.  Instead they rely on the short-term income earned from development fees and land transfer tax income (and other fees/taxes collected) despite the long-term loss due to services provided to the urban sprawl (snow removal in cold areas in northern United States and Canada, sewage and trash removal and so on, also look toward the string of city bankruptcies due to poor development choices by Californian cities).  What would be more optimal is to maintain farmland (better even if let fallow) for future food production to guarantee food security in the future and to have high density housing to gain the benefits from mass transit and provide more economic opportunity for small/medium size businesses to thrive (such as small daily bakeries).

The decreased cost of purchasing housing, due to the absence of land value, means that more of the money spent on housing goes directly into quality.  This frees up private wealth to be put towards better, higher quality housing, either larger housing or simply higher quality materials.

If the concept of landless housing is combined with assisted housing and rent control then the ultimate result would be a policy package that would do the following:

• Housing prices reflect the material/labour value of the home constructed
• Rent is based on initial house price, with the ability to increase rent with inflation (such as the CPI + 1 percent maximum increase per year)
• Assisted housing allowance can be targeted for a percentage of the housing in the area in order to prevent poverty from becoming geographically concentrated

In order to move from the current model of land value to valueless land, the government (likely provincial governments in Canada and state governments in the United States) can slowly purchase land and then leave construction bids open.  The simplest method would be have construction bids open, people to express interest and the winning bid goes ahead on the land (as chosen by potential buyers who risk a deposit with the winning bid).  The government is only enforcing that land does not factor into the price (there are likely other ways to perform this).

Economic theory, in various schools, usually predict a "lack of housing supply" if there is rent control, or that repairs are not conducted properly etc.  In reality, rent control allows landowners to charge prices far above the value of the housing (if it was initially built for $500 000, they charge a rent of $8000 a month, far beyond what a mortgage would cost) and the increase in income would unlikely be used for anything but profit.  It is more likely that rent control merely correlates rent prices with the price of the housing, with respect to the cost of the mortgage.  In fact, it is more likely that due to the lowered price of housing, a higher number of individuals would become home owners and for renters, their prices can be predicted to help housing stability.

With landless housing implemented, people would purchase homes from contractors or the government at a price that reflects only the price of labour and materials.  Renters pay a rent that would correlate only to the mortgage payments and inflation, rather than market fluctuations.  The most important difference is that older homes depreciate in value because land holds no value.  This would significantly shift economic behaviour since housing is no longer an investment (after all, a house requires greater repairs or renovations as time goes on, why would it make sense to go up in value against inflation?).  This last point has significant implications.

In general, commercial/industrial businesses should benefit from structures whose value is separated from land.  For instance, a manufacturer would think when a factory needs to be replaced (say every 25 years), then the factory depreciates in value each year (capital depreciation).  Then at 25 years, (if for some reason this occurs) the factory owner does not need to purchase land to build another factory.  Another example could be small businesses such shops, which would likely benefit much more.  A failing business can have their shop (say it is a restaurant) sold but only at the actual value of the material/labour (basically initial cost, with inflation calculated, subtract the necessary repair costs unless the repairs were already done) and then the business is replaced.  This allows greater fluidity in the small/medium business sector.
Looking to the far end of the concept, no land is traded any more. Businesses construct and own structures until they are no longer useful and then decide to either redevelop the area or release it to another business to develop if they cannot do so (such as lacking the financial resources). Housing and small shops will be as high density as possible to leave as much land open for future farmland or left fallow for ecological purposes. Private construction is likely to be left to private entities but the government can assist using new web technologies to provide a simple platform for open construction bidding (probably most useful for housing projects). Government construction projects would strictly be required to be done under the openness of the Internet to prevent as much corruption as possible (although this by itself will not eliminate corruption it gives a handy paper trial for the auditor general).

Rationale:

The primary rationale is to have individuals pay for the actual cost of what they purchase.  As structures become older and require greater repairs to keep stable, they will depreciate in value rather than appreciate, eliminating a strange economic phenomena in current society in which housing of lower quality can sell for a higher price than housing of a higher quality.

Property values and house prices do not track with neighbourhood conditions any longer.  Instead, it tracks with exactly the quality of housing.  Much like buying a cast iron pot in Richmond is not any different from buying the exact same cast iron pot in Scarborough, buying houses of the same quality will not shift in price.  Land value would normally increase or decrease with respect to community conditions (such as crime or school quality) but Canada is meant to be a country of equal opportunity.  No matter where you are born or raised, you should have the same opportunities.  Property taxes will likely be replaced with a slight increase in a combination of sales tax, income tax and corporate tax rates (likely easiest to simply raise the highest income tax bracket, or increase sales tax slightly or hike large corporate tax rates, all of which probably requires a fraction of a percent increase to cover the loss of property tax income).  Or property taxes are simply flat, based on the square footing of property owned, used to pay for services (waste collection, sewage/water, snow removal).  Ideally, roads/school would be handled solely by the province/state in order to more evenly distribute financial resources.

Tools:

Anywhere it says "Statistics Canada" replace it with Bureau of Statistics for the United States and pretend that the department has already been formed in the United States Government.

Statistics Canada should begin to track housing prices and the associated portion of the price being the price of the land of the property rather than the housing itself.  This gives a good sense of how much money is actually going into labour/material costs of building these structures.

Housing prices are already tracked by various real estate agencies, so whether Statistics Canada tracks housing prices for stability issues may not matter.

There should already be statistics on house ownership but it would be good to keep track of house ownership quality (rooms in a house, square footage, lot size and amenities).  This would require a return to the mandatory long form census, which will hopefully return in the event of a more scientifically-minded Canadian government coming to power in the future.

It would be nice for government structures to depend only on material/labour cost to construct once land has been purchased by the government.

Least Correctional Service

Summary:
The idea of "Least Correctional Service" is to sentence a convicted criminal with the least possible correctional services necessary to prevent recidivism.  As any government spending is "opportunity cost", the money saved can instead be used to deter crime.  Additionally, a convicted criminal will "shift" out of correctional services rather than simply finish a sentence.  In this sentence, if they were originally placed in prison, then they shift to a lighter prison, then a half-way prison, then a curfew and then finally full freedom.

In short, it is hoped that by placing a larger emphasis on analysis of correctional services and their efficacy, the justice system can base decisions more on science than on tradition to lower the overall recidivism rate and cost less money.

Long Description:
Today, the justice system bases punishment on tradition or case precedence.  Adjustments made to the punishment system rests largely on politics, with (in general) the right-side of politics favouring heavier punishments and the left side of politics favouring lighter punishments.  The concept of "Least Correctional Services" implies that rather than favouring heavier or lighter punishments, the decision is based on the efficacy of the sentence.

When a person is convicted of a crime, the severity, the motive, context, background of the individual and anything else that may be relevant are all taken into consideration.  This wealth of information is then used by experts, likely to be judges, in addition to whatever tools may be useful (such as computer software to perform statistical predictions), to craft the "optimal" sentence.

To define the "optimal" sentence, a definition of "success" is necessary for the justice system.  The definition used in this article is "reach the lowest possible recidivism rate given the current budget".

Correctional services has two main aspects in the LCS model.

• Be immediately placed in the least restrictive correctional service possible
• Convicted shift between more and less restrictive correctional services

As an example, let us pretend there is a person A who is convicted of assault and theft.  It is determined that A was attempting to steal money from victim B to pay for a drug addiction.  According to statistical analysis, past response to such criminal activity, that the LCS model determines this person be placed into drug rehabilitation and curfew, only allowed out to work at a day job.

Upon a 6-month review, it is determined that A is responding poorly to drug rehabilitation and has trouble finding a job.  Therefore, it is determined they enter a more invasive drug rehabilitation program.  Or perhaps, upon a 6-month review, it is determined that A is responding well to drug rehabilitation therapy and therefore is scheduled for restrictions to be softened by the next review.

A large proportion of the lowest levels, such as rehab, community work, curfew relies on a job placement program.  Any such job placement program should also be available publicly, at large, so that everyone can be given aid in finding a position that matches their skill level.  A lack of jobs in an economic downturn is a different topic.

Under this system the most powerful punishment is farm prison and the least is an enforced curfew.  Breaches of conditions results in worsening conditions.  Good reviews result in lifting of restrictions.  Farm prisons, rather than other types of prisons is the worst punishment possible to avoid prison gang membership and criminals training criminals in prison.

At first this system will have broad recommendations of punishment for "classes" of convicted criminals.  For instance, all people who match broad characteristics will receive 16 months of farm prison.  The ideal goal is to have individualised correctional plans.


Rationale:
The idea of LCS is to remove politics and emotions from the justice system and instead give it a clear goal for society.  In this way it can efficiently spend resources to reduce crime and create a higher quality of life in a country.  Pointlessly sentencing people to long sentences, or being "tough on crime" has had no statistical effect on crime nor any perceivable difference in deterrence.

However, it is known that these tough on crime policies are exceptionally costly to the point where justice systems fail.  It can be seen in British Columbia where thousands are now being released because there is insufficient funding, or in California where the same has occurred.  Even a state, such as Texas, has turned away from jailing people for long periods of time simply because they have run out of money.

It is not sustainable to maintain a justice system that continues to spend so many resources to achieve so little.

Tools:
The LCS model requires a lot of data.  The most likely candidate to collect this information is statcan, in an anonymous aggregated manner, to maintain the integrity of the data.

In essence, it is trying to compile data with respect to recidivism rate:

• How does recidivism rate change with type of crime?
• How does recidivism rate change with motive of perpetrator?
• How does recidivism rate change with level of punishment?

As we determine more relevant characteristics then StatCan will be given a mandate to track those additional pieces of information.  The cost of maintaining such data is hopefully offset by the decrease in cost of the justice system.

In additional, an expansion of the job placement program in Canada should be made so that it is more accessible and can be used by anyone, rather than simply suggested to people on Employment Insurance.  Generally this would be a job board where all employers post up jobs, and people have a one-click button to apply (and send a resume/CV to an employer to review).

Aboriginal Provinces

Summary:

North America has had a long standing problem with an oft ignored and abused collection of ethnicities that are usually known as "Aboriginals" or "Native-americans" or "Indians".  In recent times they still suffer problems due to a high rate of poverty and all of the associated characteristics that is typical of an impoverished community (aboriginal or not).  In Canada, they make up the vast proportion of the poor and so tackling the poverty issue would have the greatest impact in reducing poverty in the country.

The general idea is to turn aboriginal treaty land into small provinces.  They will run their own governments, assembled with rules each tribe/band decides themselves.  They will have their own system of taxation decided by their government.  They will be included in the Federal tax system but, as they become part of that system, they will also be included in the Equalisation Formula to ensure they receive a fair amount of tax dollars for services.  The provincial borders are as static as today's provinces allowing natives to finally use their land as security to obtain mortgages (or for their people/governments to rent out land for commercial use without fear they will "lose" land).

With an additional set of anti-poverty programs, the eventual goal is to have Aboriginals enjoy the same standard of living as the average Canadian (barring differences due to increased cost of living for more remote locations).



Long Description:

A long-standing issue with Aboriginal groups have been with land rights.  In general, a lot of times, Aboriginal bands must give up land and sell it to various corporations or government, or are otherwise forced into those situations.  As a first step to solidify the holdings of the various Aboriginal groups would be to convert treaty land up to a "territory" or "province" status.  The government of these provinces forever owns the land, thus can impose property/land tax as they see fit and never lose land in return for commercial development.

The next issue is self-governance and the implications for taxation and Federal control. As a source of data, the government had compiled statistics about spending, sources of expenditures and reasons for differences in expenditures between Aboriginals and Non-Aboriginals, which can be found here. The various Aboriginal tribes will choose their own band councils, which will be equivalent to a provincial government, in whatever manner they see fit. In turn, that government will then choose to tax residents of the province as the constituents have indicated.

However, with this system of Aboriginal lands as provinces it will mean that they are subject to the Federal tax system.  In general, the Federal tax system already tries to ameliorate heavy taxation of the poor via basic exemption and other tax reduction techniques.  Obviously, Aboriginals will enjoy these same benefits.  But, as these lands will now become a part of the provincial system of Canada, it also means they will enjoy the Equalisation Program.  Rather than a Federal Indian Affairs minister and the associated bureaucracy dictate or approve how a band might run their land, they will receive funding like the Equalisation Program, the healthcare program and so on, just like any other province and put these funds toward providing social services to the residents of the province.

Of course, it should be understood that communities with high levels of poverty have difficulty in developing economic opportunities to increase household income levels. Financial institutions are more reluctant to give business loans, foreign investment is not likely to target non-affluent neighbourhoods and crime/abuse tends to perpetuate problems unless actively combated.  Therefore, there should be a transition period in which additional anti-poverty programs are put into place to target these issues, a program which shifts down as Aboriginals finally enjoy a standard of living equal to the average Canadian.

A slew of spending on anti-poverty usually revolves around the construction of schools and universities (as shown in the data, extra funding is likely required for Aboriginal communities due to being more remote on average compared to non-Aboriginal communities), healthcare (poor health is definitely related to poor economic performance, and the spending shows that Aboriginals only receive 65% of what non-Aboriginals receive) and housing (it is hoped that the ability to obtain mortgages will resolve some of the housing situation with Aboriginals but it is also likely necessary to continue to spend a large amount of money to "get it started").

Finally, there is one point that should be addressed because it can create a serious political roadblock to the adoption of these programs (although the blog's title is politically untenable, there is effort spent here to at least make it less untenable).  The data does not reflect any higher incidence of corruption or waste on the part of Aboriginal leadership in comparison to non-Aboriginal leadership.  And secondly, looking at StatCan data here, we can see that Aboriginals work just as hard as any Canadian and rather have statistics typical of communities suffering high rates of poverty.  We should let Aboriginals succeed.

At no point should "third party" governance ever be a solution to native problems.  If this point seems unusually stressed in comparison to previous posts it is because third party management is of such a ridiculous and illogical nature that it needs to be stressed.  It would never occur in non-Aboriginal governments no matter how terrible the situation (eg. would East Vancouver be put under a Federally-appointed third party manager?), therefore we should never propose solutions that we would never impose on non-Aboriginals.


Rationale:

The rationale should be obvious.  While these programs speak primarily about Aboriginals being lifted to the average Canadian standard of living, the anti-poverty programs would include non-Aboriginals as well.  It is merely that Aboriginals make up such a large percentage of the Canadian poor that they would logically receive the vast proportion of anti-poverty spending.

All Canadians should enjoy a government that they vote in, not a third party manager and all Canadians should enjoy a high standard of living.

Tools:

The greatest tool is of course Statistics Canada who can start to collect "province" specific spending, and collect data logically to reflect the performance, tax revenue and expenditure of native tribes. 

The second greatest tool are the residents of the new Aboriginal provinces.  They will finally have the ability to dictate their will to a local government who is beholden only to them and not the Federal or Provincial government.

It is difficult to judge the effect of various social programs but Statistics Canada can try to keep geographic data on low-income incidence and perhaps a second "absolute poverty" statistic.  Then one could compare the performance of different Aboriginal provinces versus their choice of social programs.

(It's rather strange that no government has ever requested an absolute poverty statistic and an absolute poverty statistic should indicate the year in which it was composed to reflect that more modern societies typically include a larger basket of goods as basic necessities)


What I'd like to talk about later:
Corporate Tax Revisions and Business/R&D Grants
Healthcare - Preventative Care
Nursing Home Funding
Incubator Program
Informed Voter Metrics

Artificial Intelligence 2

Trying to Keep Prices Reasonable

The difficulty in designing a rational AI player in a free market economy (no crime, all contracts honoured, everyone is rational) is that it may not give the results we would like, versus a script based system with a controlled economy.  Prices can move too high or too low.

The situation is discussed in a previous post, each individual runs on an artificial intelligence to attempt to maximize wealth in a rational manner.  However, the ultimate result gave rise to the following situation:

Every individual begins as a farmer.  They would stochastically (randomly) choose to try out another profession.  Those who produced common wares who had early success could build a store of wealth.  Any subsequent competitor had to price themselves against someone who had a store of wealth who could engage in a price war, take a loss over a period of time, driving competitors out of business and then engage in monopoly pricing again to rebuild the store of wealth.  This process would repeat to the point where one person would sell a single product over a long period of time worth many many turns of food production and never worry about competition.  There would also be a less successful group of "rich" individuals.  Everyone else remained very poor.

Here are some ideas (not necessarily mutually exclusive) that could be used to bring prices down so that there can be a daily market for goods (which would make street markets more interesting in game) and reduce the level of wealth disparity.


Saving Rate
Individuals have a stochastically chosen saving rate, where a given amount of disposable income is put away into savings thereby lowering the available amount of disposable income that can be used to spend.

Maximum Spending Limit
Additionally, individuals may have a budget limit which grows slowly from day to day.  The amount of wealth used to purchase goods grows slowly from day to day.  Rather than add the entire disposable income from each day to the pool, only a portion of it is added and the rest is used as savings.

The starting budget is based on disposable income gained in a day.  Subsequent budgets have disposable income "refill" the budget, and if there is still more additional disposable income, the budget only grows slightly at the margin.

Price Expectation
A person can make a snap judgement on whether they believe the price will rise or fall the next day.  Based on this they will purchase or not purchase a good, with a fuzzy decision making mechanism (ie. they have a percentage chance of purchasing or not purchasing based on the strength of their belief).

A person can also expect the price per unit of aggregate bonus (health and happiness quantified as a number and added together) to be within a certain range as an absolute number or as a percentage of their income.  So if the price per unit of aggregate bonus is 5% of disposable income, but they expect it to be 4%, then there is a low chance for the person to purchase the good.

There can also be, which is most likely to arise in a barter system, a price expectation based on equivalent opportunity cost labour input in terms of possible food production.  That was a verbose statement but simply put: if instead of producing that good you spent the whole time farming, how much food would you have gotten?  If you made a pot, then let us picture instead of making the pot, the person had farmed and the person who mined the clay had farmed, how much food would you have had instead?  Then, convert the food into the equivalent units of wealth (perhaps based on the current average barter price).  This allows you to set a price based on "real cost of input".  However, it's somewhat problematic in that, how much of a profit margin is acceptable to a person (because a price at cost or below makes the endeavour pointless for the seller).


Assumed Bonus from Wealth
Another method to create a certain price range is for people to value holding wealth in a way where they can measure it against a purchase.  The benefit of purchasing a good is the health/happiness bonus it provides.  A shelf, for instance, could provide +1 health.  A bath gives +2 health.  A bottle of perfume gives +1 happiness.  So if holding 100 units of wealth is considered equivalent to +0.1 happiness, then spending anything over 1000 wealth for a good that gives +1 aggregate bonus would be "not worth it".  This would set a hard upper limit on prices and may not be desirable (especially since units of wealth can be defined however you wish in a developing economy, such as having units in terms of seashells or in horses or in gold coins).



Price Per Unit of Aggregate Bonus
An easy way to differentiate different goods is to think of them in terms of "price per unit of aggregate bonus".  If a good costs 120 wealth and gives 6 health+happiness,  then we can think of the price as "20/bonus".  Another good may cost 90 and gives 2 bonus, thus it has a price of "45/bonus".  We would purchase the 120 wealth good.

This helps to differentiate between goods and their bonus values, which helps to deal with unreasonable prices in a market with many different goods.

Item Goal List
There are issues with attempting to figure out reasonable pricing especially when some items are legitimately much more expensive than others.  One such example is housing versus household goods.  Another may be raising a horse versus buying daily food.

There should be a priority to the list of goods that an individual wishes to purchase.  Then money is set aside for each category, perhaps according to a budget.  Then, we attempt to find the lowest price for a good in that category.  Then, finally, we apply a rule to guess at whether that price should be accepted or not (with respect to price expectation and reasonable maximum price).

This way, an individual can intelligently "save up" for a big-ticket item, rather than always balk at the price of a house because milk is so much cheaper.


Trying to Make Luxuries Cost More Than Common Variants

Another issue that arose from the free market that was not discussed was the heavily depressed prices of luxuries which occurred for two main reasons.  Luxuries lasted forever but common wares had to be constantly repurchased (therefore driving up demand for common wares and driving down demand for luxuries).  Second, the lack of disposable income due to high common ware prices hampered the luxury market to the point of oblivion.

Product Stratification
For luxury goods, unlike common goods, you could possibly have more than one of the same type and gain bonuses from all of them. 

As an example, imagine a category of goods as "dining tables".  The health/happiness bonus from "dining tables" is based on the best table a person owns (best is based on aggregate bonus).  If one owns twenty "common" dining tables, then they can only receive a single bonus from the best common dining table.  But, if a person owns a luxury dining table, after a set amount of time it becomes an antique dining table.  At this point, it always gives a bonus whether it is the table in use (then it gives its full bonus) or not used (then it gives a highly reduced bonus).  This makes it useful to buy another luxury good of the same category once an old one as achieved "antique" status.  To limit the bonus, only one luxury item can be trying to achieve antique status at a time.

Shopping Algorithm
The current algorithm attempts to fulfil a need through a common item before ever considering a luxury item.  They should be considered side by side, with a pricing analysis that takes into account the bigger bonus possible from a luxury item (for instance, the price per unit of aggregate bonus discussed above).

Artificial Intelligence 1

As a secondary topic close to my heart, I like to touch on artificial intelligence and a concept I have been toying with for some time has been a video game in which you lead a particular group of people from the stone age to the early modern age (before industrialism comes into play) in a real-time strategy format.

The idea is to have a fairly low level game play, akin to Dwarf Fortress, where you lead people with a growing population and technological capability.  As the game progresses, more of your society is automated to allow you to focus on the "bigger picture" thereby maintaining the same APM (actions per minute by the user, a metric used to measure how much a user has to be moving about clicking the mouse to play the game competently) when the player has ten people in the nomadic stone age period and even when he is leading armies of thousands of soldiers in the early modern age.

It is the automation that is of most interest to me, intellectually, versus the grunt work of developing the whole game (graphics engine, game engine etc).

So in that vein I wanted to discuss a bit about trying to automate the economy to allow the user to handle less "industries".

The Game Economy

In the game, the player controls a group of people.  The technology tree is split into three categories (fantasy, steampunk and mundane) to represent different paths for the player to take.  No matter the path the general idea is that technology gives the user access to produce a new type of product or to automate their economy in some way.

A society is then composed of a number of industries, a standing military and the government coffers (which includes non-money items such as a stockpile of weapons in case of war).  So for instance, once you move beyond the stone age an early settlement might be represented by:

Oat Industry: 6 workers producing 50 oats a year
Horse Industry: 2 workers producing 1 horse a year
Military: no standing soldiers

A user would then think to open up a new industry/modify a current industry, assign labour to it and watch the output level change.  The user could also train people into standing soldiers or reserve soldiers, trading labour time to increase the military skill of people (all the way to putting a person in the military permanently).

An Automated Economy

As an experiment, I attempted to create a "perfectly rational" person who decided on his own what to produce, whether to change his labour and at what price to sell his products.

The AI experiment had the following format:

A constant population of 100 individuals all of whom start off as farmers who produce "food".
Four types of raw materials exist.
Four types of "common wares" exist, each requiring one of the four types of raw material to produce.
Four types of "luxury wares" exist, each requiring one of the four types of raw material to produce.

The decision model of each person, using nothing more than a script-AI, was the following:

Attempt to purchase enough food to eat for the turn.  If he produces food, then reserve that much food for this purpose.
Attempt to purchase raw material for my job if I have a job. (Always choose the lowest price)
Attempt to purchase common wares with left over money; I only need one of each type. (Common wares break down after awhile)
Attempt to purchase luxury wares with left over money; I only need one of each type. (Luxury goods break down after awhile)

Produce as much of my product as possible (farmers always have max production, others might run out of raw material)

At the end of the day change the price of my product if necessary (all prices are in food, mirroring ancient Egypt):

If I couldn't sell all of my daily production of product, lower the price.
If I sell exactly my daily production of product, keep price constant.
If I sell out my daily production of product, raise the price.
Depending on how profitable I am, I can choose to switch my job.

The outcome was usually that one person would become incredibly rich, a few select people selling wares would become rich and everyone else would be in abject poverty.  This isn't exactly an outcome that is useful for the player, as anybody would much rather run the economy themselves and it would still be more efficient.

There are a few ideas to help mitigate the problems.

General Improvements

Individuals should have a list of products they may wish to produce.  They then swap labour time, at the margin, between the most profitable output and the least profitable output.  When switching into an industry where it requires materials to produce the product (such as requiring clay to create pottery), then the individual may decide to acquire the material themselves rather than purchasing it.

Structural Differences

Early and ancient economic systems were not capitalist or free market arrangements and after seeing the result of some of the issues with low number of products and constant population (both of which were characteristic of ancient societies), it might be that automation technology should more closely match ancient solutions rather than using modern free market solutions (which work substantially better in a modern society).

For instance, the first farming arrangements in which people did not simply stash items for the whole human herd, was to have family stashes with a "big man" who tried to distribute output fairly.  Tribal arrangements were an evolution of the "big man" to a permanent seat of authority who arranged the redistribution (this would be represented by the player deciding how to distribute goods and how much to keep for public purposes).

Ancient Egypt, a more complex society than tribal arrangements, had state-run farming alongside estates who were tasked with running more farms who had to pay a harvest tax.  The food then was used to pay for the Pharaoh's staff and then it was used to pay for public works (such as the pyramids), as a sort of "yearly stimulus".

Generally the idea would be that the automation might be closer to what a player would wish to do rather than more realistic.  That is, a player assigns farmland to certain estates who then automate the process of food production, tweaking different levels of food according to imperial decree to meet your harvest tax and then they pocket the difference (with some corruption perhaps).  This frees the player from having to zone out land for farming, expanding farms, collecting people to work the farms and distributing the food to the workers (picture how one might expand an industry in a real time strategy game or Dwarf Fortress, where you build workers, then build farms, then create stockpiles and so on).  The player simply receives a sum of food which can then be used to pay for public works and the military.

Criminal Justice Equality

Summary:

In order to achieve greater equality before the law, the justice system should provide an equal level of defence and prosecution for every case in the justice system as much as possible.  It should also strive to be as accurate as possible, whatever the method may be.  The proposed concept here is to always use assigned defence lawyers, banning the use of private defence lawyers, equalising the pay between prosecution and defence and the use of judge panels rather than jury trials.

Long Description:

Currently the justice system guarantees a person accused of a crime a lawyer but it is well known that assigned defence lawyers will likely be lower quality than private defence lawyers.  In fact, it is usually the case that defence lawyers assigned by the court system are likely to be the worst lawyers, or the most inexperienced lawyers and very rarely would they be high quality lawyers working for such low pay.

In order to remedy this problem, the justice system should not create a divide between those who can afford expensive high quality lawyers and those who cannot.  Instead, the Crown/State should assign all individuals a random defence lawyer who are paid on the same scale as crown prosecutors.  It might be possible to share the same pool of lawyers for defence and prosecution but they may also have to split the pools.  It is only important that the pay scale is similar between the two jobs in order to promote the same level of quality between the two tasks.

Additionally, jury trials are likely to be less accurate in adequately examining evidence in difficult legal cases than judge panels.  They would also be more prone to be swayed by emotional arguments which should have no bearing on determining guilt or innocence (but that may determine the severity of the sentence).  While jurors typically pay a high level of attention in trials, they necessarily lack specialised knowledge to understand evidence leading to a situation where defence/prosecution will bring in conflicting views by experts.

It would be preferable to have a standard pool of experts on particular fields of evidence to offer their opinion and statistical information (such as the statistical accuracy) of evidence, rather than ones chosen by either the prosecution or defence.  Additionally, it would be more helpful for there to be a judge panel rather than a jury.

The judge panel could be composed of several variants, the effectiveness of each could be determined via pilot projects (although such a scheme would temporarily lead to imbalanced levels justice):

* A main judge and several part-time judges
* Multiple full judges, the number depending on the level of the court (for instance the Ontario Supreme Court would have 3-5 judges)
* A judge and number of professional jurors who have specialised knowledge in analysing evidence and understand some sort of sentencing science (it would be a new field of study in trying to determine the effectiveness of different types of sentencing on people)



Rationale:

There are three main reasons for this type of justice reform:

• Every citizen is afforded the same level of legal representation in the criminal court system (and hopefully this would expand to the civil court system)
• Sentencing becomes more scientific which will be a step above the established case precedence style of sentencing (which gave us consistency, a point which should not be overlooked) or at least scientific data should be collected on sentencing
• Eliminating the need for jurors, which is a waste of labour hours in the work force and is an expensive loss for the economy

Tools:

First, the system in place for determining the pay scale of crown prosecutors (or state attorneys) will be extended to a second pool of lawyers, the defence lawyers (crown-appointed defenders might be a good name).  As a phase-in period the salary of defence lawyers can be capped until it matches the highest levels of crown prosecutors before a full ban on private criminal defence lawyers.  Defence lawyers are an important aspect of society and so they should be held to a high standard.

Data should be kept on convicted criminals, the sentence received and the recidivism rate, as well as the type of crime committed.  The data itself will be collected on every convicted individual but the published data would necessarily require aggregation to make it anonymous and conform to privacy principles.

The most important metric is keep data on wrongful conviction rates by different styles of justice system.  It is more important to eliminate false positives (wrongful convictions) than it is to improve the rate of catching criminals.


What I'd like to talk about later:
Corporate Tax Revisions and Business/R&D Grants
Healthcare - Preventative Care
Nursing Home Funding
Incubator Program
Informed Voter Metrics