If it was possible to replace the entire economy in one fell swoop, what would be the best model?
It is pretty obvious that the current one isn't working for the majority of people and favors a narrowing few, which is why the rich get richer, as the poor give them more and more. But, it is also obvious that nothing is going to change, unless we change it or history repeats again and again like it has to redistribute wealth - war.
There must be a better way, right?
Now, I am obviously "crypto biased" in that I believe that if anything is going to improve the economy, it is decentralizing the monetary system to create an open and transparent marketplace for trade in all things important to us, but this is going to be an uphill battle as, no one with any power from the current system is ever going to want that. Even though, it isn't a complete solution either, unless it is set up with a fair few protections in place to make sure that the same thing we have today, doesn't happen again.
For example, what if there was a "salary cap" on what a CEO earns - where for example, A CEO can't earn more than 100x their lowest paid employee and 200x the lowest paid person in their entire supply chain? For example, Tim Cook from Apple:
Cook's total compensation for 2021 included a $3 million annual salary, $82.3 million stock award, and a $12 million cash bonus, according to company filings.
That is 100 million dollars. A worker at Foxconn that assembles iPhones earns around 400 dollars a month, which is about half the recommended salary for someone in China.
Using this as the metric as the low base, Tim Cook would be able to take a total of 4,800 x 200 = $960,000 worth and the lowest paid Apple employee would get a minimum of 9,600. Sounds fair? Not really, but there would also be another 99 million to distribute amongst the employees from Tim Cook's salary alone. Somewhere in there, there is an equilibrium point that straightens the curve out a little, rather than almost vertically hockeysticking at the top end.
What about those stock awards that amount to 27x the salary? How come some people get awarded like that, whilst others get no ownership at all? Perhaps it would make sense to have some kind of standardized stock option model, if Tim Cook gets 25x his salary in stock options, so does everyone else. Will they dump? Well, that depends on whether they can afford to hold, which comes down to their salary and living conditions.
Apple has 500,000 people working in Final assembly, which means that if Tim Cook gets the 1M and then 27 M in stock options, the workers who are earning 5000 a year will each get 135,000 worth of Stock (1/200th), which amounts to, 67,500,000,000 dollars of stock - yes, that is 67.5 billion dollars worth.
Does Tim Cook want his workers to dump to improve their living conditions?
Apple annual gross profit for 2021 was $152.836B, a 45.62% increase from 2020.
Almost half their total profit for 2021.
That is untenable, isn't it? Shareholders would never go for this shit!
Now, the numbers don't actually matter here, it is the idea that requires consideration. Essentially, the world is going to keep facing violence in many forms caused by economic disparity until something is done that reigns in the runaway train filled with the world's wealth. But, in order to change course, the train has to get off the centralized track and decentralize control, meaning that the train disappears, replaced by many vehicles. For this to happen, ownership of assets has to be distributed far more widely and with less depth across the population, as this point agency, liability, responsibility and consequence on each of us.
But, we aren't even close to having this yet and we are not going to get close if we keep expecting the current authorities to do what is best for us, because they are incentivized to do what is best for themselves, and that is to keep things exactly as they are.
If in this hypothetical scenario we were able to replace the economy, much of the "bath water" is going to be related to the governments, financial institutions and systems and the way corporations are able to operate in the economy currently. So, it is no wonder why they wouldn't support the decentralization and visibility in the current economic processes, because it would mean the end of their existence.
But, this is just scratching the surface of what would likely get changed in a complete overhaul of the economy, if we were looking at it to be valuable for the most number of people, as inheritance laws, taxes, voting processes, education systems, healthcare, insurance, investing and every other aspect of our transactional lives would have to be affected. It would be impossible to plan it from scratch and get it right, so what would be needed is a system that is ably to dynamically flex with usage, ebbs and tides that will shift the parameters as required.
A decentralized, free economy, with a transparent platform that contains the base rules and monitors all data to ensure that no one person or group is able to take too much advantage over others, before the organic rebalancing takes place.
This is just a little thought exercise, but I wonder if we were to crowdsource a new economic model, what would most people choose? I suspect that because we generally do what we know, we will likely mostly choose the same thing again - because we just don't want to think that much about it or get our hands dirty with the responsibility. I mean, people are making this choice already now, as while most know about crypto, very few are "interested enough" to actually investigate it.
As said, this only touches upon a couple of points out of the million that would need to be addressed, but what things would you want to add that you think would make for a better economy?
It'll never happen.
Taraz
[ Gen1: Hive ]