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Social Capitalism with the variable Schmid-Tax
Economic System of the Next Generation
By: Mark Schmid
Version: 2009.12.29
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The way I see it, there are basically three main problems of today's world:
- Limitation of Growth
- Overpopulation
- Environmental Destruction
- Poverty and unjust Distribution of Goods
- Fluctuations in Economy and Employment
1.) Limitation of Growth
Sooner or later we will have to admit it and act accordingly, no matter how good we are at suppressing obvious problems: The world we live in, our planet earth has a fixed and limited size. For thousands of years, in fact, since mankind came to be, this size did not matter, or was in fact mostly even utterly unknown. That's why all of our current religions, traditions, and hence also our economic systems do not consider and cannot handle the fact, that our space and our resources are limited and that eventually, we will therefore have to stop growing, will have to stop increasing the world population by having more than two children. At least if we don't resort to killing ourselves by the masses in another world war and if there is no more sicknesses or natural disasters which kill large parts of the world population.
Most of mankind's most serious problems of today are a direct or indirect result of or severely aggravated by the limitation of growth given by our finite sized world and our inability to accommodate and deal with this fact responsibly. Perhaps we still are controlled by instincts much too much and evolution has simply not had the time yet to deal with the overpopulation, survival rate and life expectancy of mankind of today.
2.) Overpopulation
Overpopulation of the world with too many humans is most likely quickly going to become one of the biggest problems of humanity. Although human overpopulation of our entire planet has never been so big as it is now, human overpopulation is not a new problem. On smaller local scales, human overpopulation has led to countless famines, war over land and other resources, emigration, expulsions of an entire people, etc. Yet despite the invention of contraceptives, which are our only smart weapon against overpopulation and human's natural instinct to reproduce - other than bloody wars or outbreaks of sicknesses which kill millions, we seem to be incapable of stopping the increase of our numbers, incapable of stopping to reproduce more than would be good. Even China which has created numerous strict laws to stop its overpopulation, such as sanctioning parents which have more than one child was by far not as successful as it wanted and should have been.
Because overpopulation is such an old problem that could previously only be solved with bloody wars and sicknesses which decimated millions alive, it seems very unlikely that overpopulation could be controlled by a legal or an economic system. However, when looking at wealthy western nations such as Switzerland, one can see that unlike in China where overpopulation cannot be controlled, even with a strict legal system and contraceptives, the birth rate is declining and overpopulation is no more a problem. To the contrary! Big companies start complaining about not enough (cheap) human workers! So it seems, that contraceptives, in combination not with a strict legal system as in China, but in combination with overall wealth which guarantees education, such as in Switzerland, is the only working solution, again, other than bloody wars and sicknesses which decimate millions alive, which leads to the much needed declination of the population.
So what is the prerequisite for overall wealth? Correct: A very good economic system which works so well, that everyone is wealthy and nobody must live in poverty.
While this is partially true for Switzerland, one of the richest countries of the world, this does not mean that the Swiss economic system, which is just basic capitalism as almost everywhere else, would be superior to other systems or even sufficient. I should know because I have lived in Switzerland almost all my life. The overall wealth of most Swiss people has much less to do with a good economic system which distributes wealth evenly, than with extreme overall wealth which makes everyone or almost everyone wealthy, even if the economic system is imperfect. I consider Switzerland to be just lucky that it has such high overall wealth, despite its economic system which is no different than that of any other county and by far not to be a model for the rest of the world which must make do with much less overall wealth, - and without a Swiss banking secret.
What applies to the competition of jobs under pure capitalism and to job winners and job losers also applies to entire nations. With the competition of capitalism, not every country can be a winner like Switzerland, the USA or other wealthy western nations. Not every country has a Swiss banking secret or a currency like the US-Dollar which the whole world depends upon and of which it can print new bills at leisure and on the government's demand. Under the current system, some loosing nations and people must pay dearly to allow for the wealth of winning nations. Thus, to control overpopulation we need overall wealth for all humans. We need to stop poverty. And to achieve this we need a new economic system which allows for everyone, without any exceptions, to become wealthy. And this rules out any currently existing economic systems.
3.) Environmental Destruction
Environmental destruction is directly related to overpopulation. The more people there are, the more people need resources, food, water, heating, land for farming, houses, cities, factories, energy, etc. Although it is true, that ignorant wealth first increases environmental destruction, wealth is our only long-term hope and weapon against overpopulation. To stop environmental destruction, we need not only to become aware of how resources can be saved, so as to consume and destroy as few natural resources as possible. Even if this is very important, it is not all that is needed, because even when bringing it to an extreme, we will never reach a point where a human being consumes zero resources. We must at the same time also reduce our numbers, our overpopulation as quickly as possible, but with a long-term solution, not by bloody wars or sicknesses which are only short-term fixes.
For this, as stated under 1.) Overpopulation, we need an economic system which assures wealth for everyone. Every country must reduce its population as quickly as possible, without bloodshed or injustice, in other words, by the free will of the people concerned. And this is possible only by voluntarily not having any children, which happens only when all people, without exception, are wealthy enough. So everyone must get wealthy and this can be achieved only with a new economic system.
4.) Poverty and unjust Distribution of Goods
So far we have seen that overpopulation and environmental destruction are humanity's and the world's biggest problems. We have also seen that overpopulation cannot be stopped despite contraceptives and strict legal systems such as in China. While Switzerland is very densely populated and thus is very advanced and leading in environmental protection, one must only take a look at some woods or at biodiversity in Switzerland, to see that despite even Switzerland's best efforts, with so many people, natural resources simply cannot be saved.
So both previous problems, overpopulation and environmental destruction boil down to, among other things, reducing the number of people in a long-term and lasting way. To achieve this, we should not revert to world wars or rely on sicknesses as has taken place countless times in human history for obvious ethical reasons. And since reducing overpopulation does not work with contraceptives and legal laws alone as tried in China either, but only voluntarily, if everyone, without exception, becomes wealthy, such as it is the case in Switzerland, we need a new economic system, which successfully battles poverty and unjust distribution of goods. Countries where the vast majority of people are wealthy, such as Switzerland, are the only countries where the population declines naturally and voluntarily, without any laws made for this purpose at all, at least when not considering immigration, due to a voluntary reproduction rate of less than two children per couple. So wealth seems to be a key factor in reducing excessive human reproduction. And mind you, Switzerland's wealth has nothing to do with a superior economic system, Switzerland's economic system is basic capitalism just like many other countries'. There is poverty in Switzerland as well. The fact that it is rare, discriminated and hard to see when compared to other, much poorer countries has nothing to do with Switzerland's economic system. It and Switzerland's overall wealth has much more to do with a good working mentality, the Swiss banking secret, and probably also some good luck.
So what is really needed in every nation, even in wealthy countries such as Switzerland or the USA is a new, better economic system which assures wealth for everyone.
5.) Fluctuations in Economy and Employment
Fluctuations in world-wide economy and overall employment are certainly not the world's biggest problems. But it is a big problem nonetheless and if there is something we can do about it with a new, better economic system, we should certainly try. Severe fluctuations, recessions and depressions both in world wide and in national economic and financial systems as we have seen ever since industrialization and the creation of stock markets, or even longer, are directly responsible for massive lay-offs and the destruction of jobs. The result of that in turn is a further decline in consumption, which leads to even less production and an even further slowing of economy. On the other side, a well-working economy creates many jobs, jobs in turn re-distribute money to the poor or simply put money in the pockets of the poor by creating new value. This in turn furthers consummation, which in turn furthers production, which then creates even more jobs and accelerates economy, etc.
It's obvious, that humans behave like herd animals and will always save their money if they are afraid of or even affected by economically unstable times or recessions and that in turn, they will compensate during times of economic boom with much more consummation not only for having had to save money in times of shortage, but also as compensation for working very much and hard during times of economic boom. This nature of humans and our economic system is responsible for very strong fluctuations in economy and employment rates which in turn cause a lot of totally needless trouble.
If our currently existing economic systems had to be described as physical objects, one would have to describe them as something like a rubber-padded coin or pen stood on its side or tip. It always wants to fall on one side or the other. Eventually it always bounces back up, but only to fall on the other side next, going from boom to recession or depression, back to boom again, etc. Because of the side-effects of these fluctuations, this is clearly not wanted, and if a physical object would behave in such an unwanted manner, such as the first suspended wheels of an automobile for instance, one would not just watch fascinated as is done with our economic systems, but one would start thinking very hard about a remedy. In the case of the suspended wheels of automobiles one eventually added a shock absorber to counter excessive suspension and wheel movement. In the case of our economic systems we will have to think of a remedy as well. If we can't stop the fluctuations altogether, we should at least try to add the best possible shock absorber we can come up with in order to stop the chain of consequences which make an economic downturn and an economic upturn accelerate themselves.
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