Post #33 – How Australia Can Avoid Being the Next Greece and Create a ‘Good Society’ Pt. 2

As noted by journalist John Kelly in a recent article,

Just in case anyone hasn’t noticed, our economy, the former darling of the OECD, is fast becoming a basket case.

There’s probably no need to be that dramatic, but us Aussies have some tough hurdles coming up. Now Benjamin Franklin once said that the definition of insanity is doing the same thing over and over and expecting a different outcome. So I present an alternative: Part. II. Let’s get down to the nitty-gritty, shall we?

As stated in my previous post, the economy in my society will be structured along socialist lines and all economic ‘enterprises’ would be either self-employed individuals, worker-owned cooperatives or in rare cases state owned corporations. This would predominantly apply to public utilities or monopolized entities (rail, water & road infrastructure, electricity generation, waste management etc).

So in regards to the two former enterprises listed, I would argue that the goods produced and the services provided will belong to the individuals (or ‘the collective’ in regards to a co-op) who actually do the work. Under a capitalist system the owner of the capital exploits the labour of the workers and the natural environment for their own personal gain; in a socialist economy it will be cemented in law that there is a distinction between ownership of a company’s profits and ownership of a company’s capital goods.

So what this means is that anyone who works to produce those profits owns a share in them – but that does not entitle them to a share in the company’s capital goods. The positive aspect of this particular economic system would be that not only do you have a democratic say in the company’s allocation of resources and its economic decisions, but you also have a share in the profits.

This allocation of profits would be detailed in the company’s business guideline and legal responsibility under the direction of the state. The profits could be provided to the workers after every business quarter, for example, or added to their super funds. How much more invigorated would you be to work hard knowing this could increase your pay packet, right?

The catch is though that it is proportional to your labour contribution – and the worker does not own a stake in the capital. This way, small (and family owned) business and start-ups are not threatened and stifled. See, even the Liberal’s who blabber on about nothing but ‘helping small businesses‘ couldn’t hate this idea, right?

However, if these companies do happen to grow in size and take on more workers, the founder of the business loses his controlling stake in the business (gradually though, dependent on the number of employees – the more workers employed, the smaller the founders’ stake becomes); but not the claim to the capital. So the founder of the business will always be listed as such and never loses his control over the capital of the business unless he chooses to relinquish it. The business owner still makes all the business decisions but must pay the employees a share of the profits proportional to his work (plus a base wage).

So I have just detailed a pretty seismic change in my ideal society. The founder of a business surrenders control and ‘ownership’ of the enterprise as it enlarges to the point where he or she is no longer contributing the majority of the labour. This in turn would provide a disincentive for business owners to significantly expand their business beyond a certain size or monopolize a particular field of economic activity.

To counter the argument that this would provide a negative mood of ‘business confidence’ in the economy, I’d stress that in a world of advancing technology and individualist economic pursuits, many day-to-day tasks can be provided by the self-employed and cooperative businesses I detailed before. All other aspects of the economy deemed too important or large for either of those two businesses are handed over to and controlled by the state. Wouldn’t it be better if aspects of our modern society we depended on – like the Internet, mobile phone infrastructure, water, gas, electricity – were all monopolised by the state for the benefit of the masses? Monopolies, when done right, work! You need compare the relatively cheap, reliable and linked public transport in Sydney to the increasingly privatised train networks in south-east England to see the benefits of state-owned enterprise. For another example, imagine if the immense wealth Australian’s spent on cellular network infrastructure for our mobile phones was actually all pooled together for the benefit of us all? Our bills would be much cheaper and you wouldn’t lose reception five minutes out of town.

On the day we find out our Speaker of the House spent $5,000.00 on a chartered helicopter flight from Melbourne to Geelong with tax-payers money, it begs the question of where this leaves our spoilt politicians? Politics still functions as before, but this economic paradigm detailed is to be enshrined in law first. Once this happens, the ‘left-right’ paradigm and political donations provided by corporations and interest groups cease. This is because there is little chance for influence or corruption in an economic system where power cannot legally or politically be concentrated by a select few. Unions will also cease to exist in an environment where economic democracy is extended to every individual in that society. Think about it – no more corrupt and failing unions, no more ridiculous campaigns by Get Up!, no more envelopes stuffed with cash handed to politicians on the side for sweet deals and no more meddling in public affairs by shady think-tanks.

‘Okay Jamie’, I hear you moaning ‘this all sounds swell, but even if you were able to convince the rest of Australia to join you in creating this ‘new society’, what if the rest of the world didn’t want to adopt the ‘Ozzie way’?’

Well, if this were to be adopted only in a country such as Australia (as I will concede, other capitalistic states would most likely be hostile to adopt such measures – please refer to the cards dealt to Greece by the powers that be after rejecting further austerity in a referendum), the modern day corporations functioning within the state will be told to either voluntarily liquidate, or transform to function in the new economy.

I’m not an complete arsehole though, so I would state that corporations would be adequately compensated by the state (using various assessment criteria) if there was no place for them in the new economy. It’s recently been done before in the past, particularly in South America. As other economies and businesses outside Australia will be hostile to this seismic economic transformation, high tariffs and protectionist policies will be introduced to provide an environment of stability until the system is completely adopted.

The economic and political power of Australia will be utilised to influence other nations to adopt our economic system, or at the very least lead a global charge to introduce a global system of progressive tax on the very wealthy, and transnational corporations.

So there you have it people – it may only be a start, but this is my response to the question frequently posed to me: ‘Well it’s all good and well to whinge about it, but what’s your solution?’

This is my solution to avoiding some of the pitfalls that face Australia in the future. Sure, it doesn’t address all of them, but it puts us in a much better position to deal with the very serious problems we will face going forward.

This post is my answer to the greatest question facing humanity today. It may not be perfect, but it’s a start. I know I’m only one dude, but revolutions have to start somewhere, right? So join me – little by little we can put in place something that’s awesome; something that the human race, as a collective, can congratulate ourselves on and say, ‘why didn’t we think of this sooner?!’

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2 comments

  1. Macquarie bank has a profit share system and all that has led to is a ‘millionaires factory’ where every one, including those who did not contribute a rat’s ass , get a slice of the profits the company make. I don’t see how that is a better society – profits should go back to the investors who gave them the capital to invest with in the first place, or they should be taxed higher if they are making such gains.

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  2. But why should an investor who is contributing nothing but money be rewarded for the work of others? Also, I would argue that the bonuses provided to the workers at a bank such as Macquarie do not properly represent their intrinsic value, but rather their it is a reward for their ability to circumvent their wealth of the commons for their own benefit. Furthermore, under the changes to businesses that I had put forth a corporation like Macquarie Bank would struggle to exist, hence nullifying the possibility of creating a ‘millionaire factory’. It would either be broken up or it’s role as facilitator of finance would be given back to the state, or further reverted to focusing on micro-finance. I see no reason why the principal investments of a bank like Macquarie can’t revert back to the state or to the producers/users of a specific commodity/product or infrastructure. For example, some of their major investments currently include infrastructure and food, they are nothing but middle-men and their role in the economy can easily be diminished or gotten rid of completely.

    A shareholder society is a dangerous thing and engulfs the middle class in the same blind pursuit of wealth that the 1% aim for. It would be better to restructure society to focus on collective wealth, rather than individualist wealth accumulation.

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