BOOK TWO
III - NEW SHAPE OF CORNUCOPIA
7. WEALTH IN MOTION
Helots will make it possible to have all the labour force at work. We
may also protect the shareholders and moneyholders, manage a smooth transition
to optimize production/consumption of goods and ease wealth out of the industrial
production sector, but we will not have a permanent solution to the crisis
until we have found new fields where wealth may remain productive. The heart
of the problem is that the growing importance of the i factors will
not allow the expected compensation for wealth to be derived anymore from
the use of fixed capital; so, this compensation will have to be levied directly
from the workers themselves in the way that will be the least inefficient
and unpopular.
And why, may we ask, should workers part with a share of their income
in favor of investors, even when the foremost multiplier of production will
have ceased to be fixed capital, replaced in that role by the brain of the
worker himself? Let us explain one last time why it must be so, and why
it is not as terribly unfair as it looks.
Playing the free game
The purpose of keeping wealth productive is not to protect capital owners - there will be nets below wealth for that - but to make sure that the money game will go on amongst those who enjoy it, to provide the common man both with a model for achievement and a promise of gratification. We will need wealth as a "pot o' gold" for the foreseeable future, and the money game must go on. The game, after all, does not cost us anything anymore...
For ordinary folks, "Wealth" is an undefined state of beatitude second only to Heaven as a goal, and almost as intangible. The 13-figure Bum Cheque, for instance, is indeed "Wealth", but it is a mythical representation and would serve the same purpose as well with one zero more or less. It boggles the mind. This is so true that, were it not simply a figment of our shrewd imagination, this bum cheque would be no problem at all. We could do the way they did to rebuild Germany in 1945, for instance: get to work. Put the active population working overtime for 2 hours a-day, have them part with this money... and we get rid of the public debt within 2 years...!
God forbid! Get rid of Wealth, and you have sinned against something akin to Faith. The immediate impact would be felt not so much on our consumption patterns, as on motivation and initiative, and as a disruption of Power and Authority. We'll still need Wealth for the foreseeable future, not so much wealth itself as the drive towards it. The wealth-inspired drive that gives us for free the dream dimension, the authority and social stability we need... FREE.
We entertain misconceptions concerning Wealth; one is that Wealth confers something of a "first choice" on what is produced in our society and that, if it were not for the rich, we would all get more of many things. In fact, with affluence, this first choice has turned into a "right of first refusal" for most industrial goods ... while emerging humanism has severely limited the scope of the goods and services on which Wealth can exercise its privilege at all. Wealth does not compete anymore with you and me for access to current goods and services: it is totally dedicated to the power game.
This money/power game is restricted to top-dogs, and is not allowed to have any impact on the non-playing classes of society, because otherwise disequilibrium would occur between production and consumption and the system would collapse. Wealth-for-consumption and Wealth-for-power are not allowed to meet in daily life. We get the benefits of the game free, because although it is widely believed that the rich are getting richer, this is also a misconception. Through income redistribution, the old Marxist threat of wealth concentration has been pared quite effectively in our society; no more money accrues to the rich as a class, just the contrary... It's free, and what Wealth can survive the new rules of necessity must not be jeopardized, simply put into motion.
There is "Wealth-for-consumption", and it obeys the law of the" level of consumption income": enough money must be available for everything produced to be bought; if it is not earned, our way to put it in motion is to give it away. Then, there is also "Wealth-for-power", and it moves by its own rule that (Profits + Interest) = (Losses + Inflation). If the equation does not balance, equality is maintained anyway, thanks to our imagination: the discrepancy reflects on intangible indebtedness and we change the figures or add zeros to the Bum Cheque. Not perfect, but no other society has ever done better.
To put it in motion and keep this Wealth productive does not mean the
payment of interest. It has been well known since the Middle-Ages, that
"money makes no children" and that somehow, somewhere,
someone must lose the exact equivalent that his neighbor receives in interest.
It used to be the poor, but to-day equilibrium demands that the prospective
loser be someone who has wealth to play the game rather than an active consumer.
So, it has come to inside fighting amongst capitalists and entrepreneurs.
Since we will do our best to encourage initiative and favor Profits
over Interest, it is a sure thing that, if some progress (rather
than overall "losses") is to be our lot, average Interest will
at least be compensated by average Inflation. The negative yield
of Government deposits will not create this phenomenon: it will keep it
within reasonable limits! The Crafty Magician will not impose capital to
get rid of Wealth, but rather to put it in motion, to have it generate more
entrepreneurship, hopes and dreams.
Thrills and haven
Wealth, to remain productive, will have to make profits and show entrepreneurship, but the occasions to do that will not be in the industrial sector. Where will the wise money go? How will wealth keep productive? When we switch from Income Tax to inflation financing, the first reaction may be a rush on the market to buy anything durable likely to gain in value, such as Art of all types, or anything that promises a positive yield, even shares in the industrial sector, as the notion will dawn on investors that the average plus-value for everything durable will tend towards the inflation rate rather than "inflation minus x%".
But, after the first burst of activity, things will quieten down, because production will adjust to demand and frantic buying of anything will make for more losses than gains. The wise money will find little interest in joining the crowd of collectors. Some, then, may want simply to relax and enjoy it, in the peace and quiet of Government deposits, knowing full well that there is a price to be paid for peace and quiet in a society of entrepreneurship; they will have found the haven they were looking for.
Entrepreneurship will not disappear, though, nor the desire of some to
live dangerously. The high-rollers will move to other adventures for thrills.
Some will go on digging for gold or gambling on commodities - since Mother
Nature will always gladly oblige and introduce an element of risk in her
children's lives - or maybe marketing hula-hoops and similar 9-day wonders
for a quick buck. As the Industrial Age fades out and the human factor once
again becomes the senior partner in production, though, it is the idea-generating
process that will become the multiplying factor in a creative society. The
main demand will be for the production of intangibles, and the boom market
will not be so much for investments in creation and enterprises, as for
investments in the Creators and Entrepreneurs themselves. We need a system
that will allow investors to associate themselves productively with the
development of people, and for Wealth to participate in the profits of their
creations. The wise money will invest in people and gamble on brains.
The brain futures
Let the rich sponsor the creator. Do not think about "loans", but about partnership. Today, investors tend to make personal loans on the basis of people's actual income, which is not much of a bet and, except for loan sharks, should not be that profitable. With the State taking initiative for universal selective credit based on GIA, there will be even less of a market for personal loans. Wise investors, in coming years, will not lend money to people and ask for interest; they will gamble on what will be somebody's income in the near or distant future, and buy a share in these future earnings... This is what we may call "brain futures".
It is not new for people to invest in people and to participate actively in their eventual good fortune. Anyone who patronizes a young artist or buys his early works is investing in the latter's eventual success and fame; so any editor who publishes a new author, the manager who spends effort and money to launch a new boxer, so those who invest in the public careers of politicians. It is already commonplace to invest in talent. As profit opportunities become more and more a rarity in the industrial production sector, the investment-in-talent phenomenon will simply grow by an order of magnitude.
In principle, anyone, anytime should be able to buy a share in his neighbor's prospective earnings, becoming a shareholder in a private corporation that is exclusively created to exploit the talents of this individual. This could be done for anybody at anytime but, as it will become a significant market, the wise will of course apply to it the same rules for profit as to any other market: if you want to buy low, buy early!
The best way to achieve this result will be to participate in the educational process, and to sponsor the multiplying effect of education on the brain-multiplier itself, so "early" will mean as soon as youths will become eligible for Guaranteed Income. The real hot market, for brain futures, will be with new entrants in the labour force: l6-year olds who will pursue further studies and would appreciate an extra income until they reach 25 or so and achieve a higher income bracket.
A smart student, for example, might receive a lump sum, or weekly allowances, from l6 to 25, and then pay back 5, l0, 20% of his income between the ages, let's say of 45 and 55. This is a sound investment in talent. Reimbursements (dividends might be more appropriate) could come anytime as agreed, and would be a fixed proportion of the income of the worker during any pre-determined period.
As a protection for the worker, who should always remain his own man, there should be an upper limit to the proportion of one's future income that can be committed as "futures". Except for that restriction and the exclusion of money from inheritance, most conditions and clauses should be acceptable, regarding initial payment, period of disbursement, period of dividends, percentage of future income, clauses including or excluding windfalls from the worker's income, etc... All kinds of choices and options, such as the investor receiving l0% of the income of the worker between the ages of 45 and 55, or of his ten "best income" years between 35 and 55..., or anything else you can imagine.
The most interesting scheme may be for investors to sponsor groups rather than individuals, and so to spread their risk to make it a better investment. What safer investment could there be, even today, than a share in the eventual income, 20 years hence, of 20 students in medicine in good health? What could be a better investment than a share in the eventual income of two dozen Harvard majors with high-achievers' profiles and good family backgrounds? And this type of investment will become even more interesting, of course, as the market in industrial production loses its glamor.
How will it work? Anyone looking for an immediate extra income could go to a Brain Broker - or simply look up proposals in the local newspaper if he so prefers - and offer to sell shares in his future income in exchange for an immediate lump sum or a series of payments over a period to be determined. The broker would check the person's resume, ask for a medical and a psychological report, gather background information ... and then propose to the client, either to sell his "shares" directly on the market or to pool them with shares of others, in a package that will seem convenient and attractive.
It is mainly for putting these "packages" together that the brain broker would receive a fee from his clients, since finding investors should be rather easy: with few other outlets for investments, this should definitely be a seller's market. To be valid, all transactions should be registered with the State and all their details - (save the medical and psychological reports and the notes on background) - should be on computer and open to the public. Transparency is important in this case, if everybody is to get a fair deal.
Clients will be mainly young workers, turning l6 and becoming eligible for guaranteed income, who will decide to pursue further studies even though the Pragmatic Teacher will not have put them on the payroll for the education of their choice. Clients will also be workers who will prefer, for a while, to devote their leisure to something else than lucrative endeavors. These may be promising young professionals, or would-be creators, who would like to have a more substantial income while they cogitate on their own schemes... and can convince investors that they are a sound long-term investment as inventors, writers, artists...
Isn't there a risk that the "kids" will just take the money and spend it wildly? Of course, but this raises two questions. The first question, which I will not discuss here but leave to experts, is whether 16 is or is not the age of maturity for this type of decision. The second is whether consenting adults, of any age, should be led into the sinful temptation to mortgage so easily their forthcoming income. To this second question the social answer is YES. We are a long way from thrift as a virtue. One of the reasons we have to propose alternatives such as selling brain futures, is precisely because we are so hard put to imagine ways to get money and wealth rolling, short of spoliation or of natural and man-made catastrophes that we dare not contemplate.
The youngster who sells shares of his future income and spends it now may make his own life more happy, this we do not know for sure... but he will certainly do us a good turn. The investor from whom he gets the money would not have spent it, now or ever, nor would to-day's youngster have spent the money he will pay back to the original investor or his heirs at the moment of reimbursement, l0 or 20 years hence,because, by then, his own needs and desires satisfied, he too is most likely to be playing the money game rather than consume and to be looking for an investment.
With GIA and affluence, the money spent now will not put basic welfare
in jeopardy but, to the contrary, every cent of it spent will be a blessing.
We must understand that the best social behavior for somebody with money,
now and for the foreseeable future, is to go out and spend it ... Thank
God, youth is a good spender!
Bridging the gap
Getting money to roll, however, will not be the main advantage that our society will find in the brain futures market; the most important effect will be to help bridge the gap between generations. It is no secret that the generation of those born in the late Sixties and Seventies shares so little of the previous generations' interest and goals, as to appear like a new civilization coming in from the stars or a new barbarian invasion getting ready to make mischief. Investing in the brain futures will create a community of interest between the young workers and their sponsors. Give money to youth and they will like it, spend it, owe it, work for it.
It may look like a dirty trick to hook kids on our own values, but actually it will be the other way around; they will impose their values as soon as they have a voice... the voice that will come to them with money. Sad to admit, our generation has done a very sloppy job of integrating the next; maybe people who have been unable to "understand" their children will understand their own best interest at least, and behave so as to protect their investment.
Youth that owes money to the previous generation will get more breaks; it will get all the breaks that the monstrous baby boom generation, which fills and overfills the labour market, is now fighting tooth and nail not to give the new generation. Action on the brain futures' market may start as a matter of money, but will end up as a step forward in human relations. The investor will try to help his investment, but will also get involved personally with the person he has sponsored; this may become the basis of a new type of relationship between some Haves and Have-nots, between young and old, that we should not scorn merely because total altruism will not have presided over its birth. People who will share a common interest over decades will know each other better, and will develop SOLIDARITY. This way, our generation shall be granted what may be its last chance to bridge the gap, and we may be accepted as partners by our own children as they take the next step in human evolution.