Monday, March 12, 2012

One Consideration on Economic Growth

Recalling my first lessons on Economics, one instructor misled me with one of his "first order" presumptions, saying that we can start out with the idea that all people are inherently lazy and build our understanding of how the world works from that base. He was wrong, yet this lesson stuck with me for years and I did not easily shake off this presumption. He was wrong, but I accepted it and even saw my laziness as more acceptable since the generalization was not denied. He was wrong, as I later found out that the least important people in any study of Economics are the lazy people. He misled me and I wasted too much time in trying to pull myself away from that presumption.

The same might have happened for people who were introduced to psychology with simplified generalizations on the theories of S. Freud. If the generalization that all human activities are centered around sexual ambitions and predilections, that introduction can really taint and even injure the efforts of students in pursuing understanding of psychology and true human nature.

My dearest hope is that I do not mislead any reader, not mislead any student of Economics. My considerations here, at this root discussion for the 11 topics of my discussions, must be firmly rooted in solid thinking. I will take my time then to develop those thoughts and ask for the readers to criticize and challenge the course of my thinking.

To understand the systems and networks and ongoing functions of an Economy, studying the driven, hard-working, visionary people can truly indicate some valuable lessons. Seeing how they interact with each other, how they feed off of each others' successes and idea can truly enlighten our understanding of how the innovations occur, how the daily routines can turn to fortune for some, how ambition really is to be marveled after.

Now to the new presumption that we watch the most energetic Economic actors, add the observation that the population keeps growing. With the growth of the population, more food is needed and better distribution systems are needed. More educational services, health services, transportation, entertainment, housing, etc. are all needed in greater abundance to serve the growing populations, for one city or locality, or one province, or one nation, or for the whole world. We see that the Economy is pressured to grow in volume, in mere size.

Those most energetic actors, each taking a unique perspective may see opportunities to hone their skills, produce greater amounts, or more desirable qualities in their products, employ greater production methods, buy at a low price and add value to sell at a higher price, each envisioning ways to benefit from the pressure to grow the overall Economy. They are each acting on a profit motives, or seeing themselves creating value, or possibly improving the situation around them (of their community or their family or of some limited facets of living for themselves and others). There is pressure for a growth in the Economy simply by the increasing population. The growth will not occur unless individuals act to improve the situation, improve ones own self, or ones family's or ones community's situation. By this greater value can be created, and we can even see a profit motive developing in those forward-looking individuals.

Tuesday, March 6, 2012

Proposed: An International Income Cap for Individuals

Over the course of this blog, I will put forward arguments supporting the creation of an international individual income cap. To illustrate, international trade agreements could include tenets that require countries to tax all individual earnings after the first 10 million Euros (or equivalent) at a 100 percent rate. In that way, no individual would be able to earn more than 10 million Euros in one year.

All the implications of this income cap need to be dealt with in extensive examinations. I intend on doing that by discussing the following topics over the coming days. I expect that I'll have to work out many different issues under each of these topics, write multiple articles under each topic.
  1. Profit motives, value creation and self-improvement are paramount and foremost for THE GROWTH of our market-based economies.    
  2. Market-based economies work best when sellers and buyers both realize their own gains from the exchanges.    
  3. Monetary profit opportunities are permitted under social norms and values, and within the social systems created by the culture, history and the consensus of a society.    
  4. In market economies, great majorities of people become dependent upon earning monetary incomes from employment by business owners (subsistence farming vanishes in market economies).    
  5. Business owners do and must take economic advantage of employees in the creation of economic value if they are to continue their businesses. Business owners should not be allowed to recklessly profit based upon this advantage over employees.    
  6. The rights of individuals should not be violated by others . . . neither because a majority votes to do so, nor because some potential economic profit may be gained by doing so.    
  7. Business owners, corporations and the ultra-rich too often take unnecessary risks with employees’ lives and rights, the lives and rights of others, and societal and public resources. High monetary incentives, and the social status associated with wealth, seem to become focal objectives for business owners, corporations and the ultra-rich. The risks created and placed on others have been and continue to be ignored as a result of seeking these high monetary incentives.    
  8. We live in a Regulated-Market Economy, not in a Free-Market Economy.    
  9. Society can regulate greed and regulate the associated risk-taking in some ways, especially once society members agree that The Market does at times fail in regulating itself.    
  10. Human rights are unalienable rights. Our laws endow corporations, unions, political organizations, government bodies and other legal entities with some abilities. If human rights are extended to those legal inventions, then those rights are being alienated from the people. 
  11. An excessive income gap creates a second class of citizens.
To comment on these 11 ideas, please visit the survey.

I still do not clearly see how I will move from proving these 11 ideas to be true to the recommendation that an income cap be placed on individuals. My hope is that the effort of working out these ideas will lead me to such a leap. Hopefully too others will see the blossoming of this idea and contribute what criticisms and other links are necessary to better round out this hypothesis.

All my best,
Auntie Greed