The occupy wall street movement has gained considerable traction in getting many people together towards a single goal. The problem is that there is no single goal. The occupy wall street protesters are having serious trouble giving a list of demands to the powers that be.
Their major complaint
The major complaint of the protesters is the elephant in the room. The rich of the world own the world. The free market capitilism that seeked to emphasize property rights and give everyone a chance to flourish has failed the world, and we seem to be right back and stuck with the medieval class system.
Let me explain:
In the days before the now you were born into a class, unable to escape because that is what you were. You were bound to take on the trade of your parents and there was no other option. Indeed we all got a chance when that changed. Anyone could become hugely rich and succesful right?
NO! The answer to this question is of course a little more complicated than that. The real problem is that being born into a rich family still has massive advantages. Nepotism, "who you know", vast amounts of resources to explore and try new things all contribute to the thrones of the upper classes.
However it is very true that many of the rich didn't start out in rich families. Old money is not squarely to blame. I think there is an essential problem with society. We emphasize idea people who are obsessively hard workers. Middle class folks with different values lack one or both of those qualities. Not everyone wants to slave to huge amounts of money, even if they don't want to admit it. Many will tell you that this bias is fair, and to a large degree it is. The problem comes when the rich become insanely and ridicoulously rich.
The rich are generally good for the economy. Rich people get more rich by keeping their money in circulation, making risky investments and creating employment. It is almost as if the rich are necesary. A rich person may employ 5 maids, a butler, a baby sitter, a chef, a pilot, and thousands of employees of their businesses. They create jobs and pay massive amounts of tax. So what is the problem?
The problem comes because a rich person, though having vast amounts of wealth, still pays a relatively low taxes. Taxes are something that are calculated on a per person basis. Though the percentages may be similar to medium income groups, the rich hardly feel the pinch of taxes.
The problem is then reduced to one of fairness. Is it fair that a small percentage of the world's population controls the vast majority of the world's wealth? Fairness is a tough question because many of the rich work extremely hard for their money. Many of them worked hard and became qualified so they could be rich.
They don't work harder than a single mother who has to support 2 children. It is infinitely difficult to describe fairness in economic terms. Should we be giving more money to single mothers who work as waitresses?
The goals of social evolution say no. We want to be better off. The rich have an area affect that is supposed to leave us better off. A rich man may own a fast food chain that employs thousands of single mothers. This blurs logic and even common sense.
But it still doesn't feel fair. To us sitting here in the middle class it doesn't feel fair. Watching people on tv taking shits on golden toilets while we worry about our retirement surely doesn't feel fair.
I apologise for the bunch of little paragraphs, but I myself am failing to rationalise the movement that is occupy wall street. It stinks of desperation and seems void of real solutions. Their requests for free college education seems to be a good ideal, but other than that some of the economic unreform they propose is stupid, because it will reverse all the progress we have made as a modern global scoiety.
As I've said before, I agree with free education and to an extent with free healthcare, but I also believe that one will feed the other. Free education will mean more doctors. More doctors will mean more met demand for doctors. Consequently healthcare will be cheaper, because there are ample amounts of healthcare professionals to meet demand. More educated populations will have more educators, and this will mean cheaper education that will have positive results. Why don't we have more universities. Maybe it's because we don't have enough educators to fill the gaps.
The core of any society in my opinion is education. The more educated a population is the less pay will be given to the educated because there is a healthy market of proffesionals. More open business practices will result in more businesses, stiffer price competition and less exploitation.
Further more I believe that one of the ideals of any constitution should be property ownership. This is a rather lofty ideal, because it's unrealistic to give property away. Maybe there should be more control over property markets. Without property ownership it is difficult to pass wealth from generation to generation. If there is inadequate infrastructure and zoning property markets get flooded with demand. The real estate market booms and the elite property owners take advantage of those lower down in the chain. There is a trickling effect with those at the mid level of the middle class getting stuck in infinite debt in the attempt to own property or never owning property and leaking their hard earned money into rentals.
Should we possibly say that the rental charges of properties may only be a certain percentage of the value of property, or a formula involving current debt owed on a property, linked with the value?
The truth is that buying a property and paying the minimal bond installments will currently mean paying almost double for a property. Should the interest charged not be underwritten like insurance? What I mean is, instead of fixed interest rates interest is calculated based on the individual risk of a buyer, coupled with property value and growth? If a bond is about carrying risk then surely this could be a solution!
I guess the only remaining elephant in the room is whether we should be taxing the rich more. I think that the answer is to a large extent yes. I would say that any asset, product and service should be given a standard value attained through a calculation. A set of needs based goods and services should be determined, and all these needs based goods should have a standard price. Instead of throwing away the free market system, such needs based goods should carry a profit tax where such profit is above the standard calculated value. Excemptions could exist, for instance if such goods or services offer other luxury accompanying servcices, or exclusivity as the goal of the needs based product. For instance a toilet is a neccesity, but one made of gold should not be considered a needs based good and should be excempt. Other excemptions could include a reinvestment exclusion, where profits are exclusively reinvested for growth of the business or the product that will benefit the consumer.
Luxury goods are unaffected by these policies. The reinvestment excemption encourages growth of production capacity and discourages exploitation. The profit margin tax that businesses pay should be published publicly, so that consumers are aware of the level of exploitation that they are exposed to. The bad publicity will also serve as discouragement for exploitation. Because the tax taxes profits, it is impossible for businesses to pass the taxes onto consumers, because increasing prices will increase the taxes.
Needs based goods will be cheaper, and consumers will have a choice to spend more on luxry goods. A farmer that sells butter could sell butter as a luxury product, provided that the product deviates substantially from the production of regular butter, and it can be shown to be as such. Normal butter however cannot be claimed as a luxury item due to it's similar production method to other normal butter. If a block of butter of 200 grams is defined as having a profit margin of 10%, butter charged at a 15% profit margin can have 3% taxed away. Shops like woolworths can claim luxury butter, based on production or packaging methods, allowing exclusivity to still thrive.
A further effect of this will be that producers of goods who have found massive efficiency improvements will be forced to pass these advantages onto consumers. If a butter maker has found a way to make artificial butter in a factory at extremely low cost they will not be able to charge the same amount for that butter as a normal butter maker. There is still an incentive to increase efficiency, because efficiency drives increases in production capacity. More bread, butter and milk for cheaper.
This method could drive privatisation, because essential services and goods won't be exploited by the rich. The providers of these goods could still be rich, but for the right reasons. The burning question you might have is what this tax will feul, because privatisation sure will mean reduction in personal taxes in favour of citizens choosing and paying for private services themselves. Some things can't be privatised. Governments still need to provide healthcare and education for the poor, social programs and grants for important medical and other research, a police service, a military service and infrastructure. But I digress.
There are two kinds of rich folks, and we should always remember that. There are those that became rich by taxing essential goods with massive profit margins, and those that innovated and changed the world for good.
The point that I am making is that if we are exploited on needs based goods and services such as housing, medical care and education we all get screwed, except for those right at the top licking the cream off of captive markets our unhappines and feelings of unfairness and gaps in wealth will only grow stronger, to breaking point.
Asking government to provide needs based goods with tax money may not be such a good idea either, because it centralises industries and could close the doors to innovation. Governments face no immediate competition, and their incompetence in many things is generally tolerated, not prefferred.
There are other social problems that need to be dealt with. It is my opinion that there should either be no sale of bad goods or services, or that they should be taxed into oblivion. Homeopaths, churches, liquid weight loss products and all other manners of pseudo scientific or religious systems do not add anything to the economy, because what they sell hold no real benefits. If you want the placebo effect you should get it from real doctors. If we continue to let people pour money into these bad investments in health and well being we will see decline in the way we live.
Camping out on a street seems like an extremely dumb idea to me. Even though my ideas above may seem stupid to someone well versed in ecomomics, my point is that we should think more radically without pointlessly excerising freedom of speech to make unrealistic demands. The credit problems were not caused by too much available credit, but too much use of it. People want to be better off but then they don't save for retirement or buy stupid crap. A little bit of personal responsibility would have a gone a long way. A little bit of education and constructive debate would have gone much further. A camp out fueled by idiotic confusion and lack of personal responsibility will get nobody anywhere.