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Thread: AN EXCITING NEW POLITICAL ECONOMIC THEORY! PLEASE FEEDBACK!

  1. #1 AN EXCITING NEW POLITICAL ECONOMIC THEORY! PLEASE FEEDBACK! 
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    Hey All,

    I am in the process of authoring a theory which i intend to publish. I am very excited about it. It is a system that is able to retain the greatest benefits of capitalism, and remove its greatest flaws and replace them with enormous benefits by putting markets through a transition.

    My idea essentially revolves around a social enterprise which fits into the current democratic capitalism political/economic model. This particular social enterprise would be universally owned and would be a parent company that would have subsidiary companies that operate to compete against private enterprises, to make a profit and grow into all markets. When the company could self-sustain its growth, additional profit would be placed into a global 'profit pot' which would be democratically decided how to be spent.

    This company would have a natural advantage over private companies due to its appeal, for being owned by the people that purchase from it, and the fact that with bigger profits, there will be more benefits for the consumer. This could be comparable to organic or fair-trade products for example, but i believe with much more hype and a willing to purchase. The company is also in a position to legitimately appeal for charitable donations to aid the growth of the company, something that would seem outrageous for a private company.

    This is where the idea gets exciting.

    If the demand is high enough in a particular market, the competitors profits will dwindle and in some cases may diminish. The company also has an advantage against its competitors, as it does not necessarily have to profit. Obviously the company aims to profit, but it could price its products with a lower profit margin to gain market share in the conventional manner, but could extend this for some time, so that competitors are also forced to reduce their profits. At which point investors would eventually lose interest.

    Now this would seem to make capitalism crash, as one enterprise would virtually monopolise every market and the conventional benefits of capitalism would be lost as competition is lost.

    This is where rational application comes in. At the point of competitors in a market diminishing, the social enterprise would be able to acquire them for the value of the assets the company holds, or possibly for much less. A bargain.

    At this point, the companies in said market would all fall under the universally owned parent company. You will be thinking now, that would still be a monopoly right?

    This would not have to be the case with rational application. All the companies within the market would all be made to compete against each other, each acting independently, with the profits of the individual companies going to the parent company, into the 'profit pot'. Thereby keeping the benefits of capitalistic competition maintained.

    For this to work, each company would have their own simulated shareholder group, from the parent company. This groupís role is to ensure that their company is acting competitively. This would be done through a transparent, objective and skilled analysis. They would act as any existing shareholder would act, retaining profit for re-investment, demanding higher profits, and sacking complacent chief executives and senior staff.

    This system would also counter the negative economic behaviour of companies in some markets, which is to actually resist fierce competition. Some industries create an unspoken agreement, in which the companies within a market are only mildly competitive, to keep profits safe year on year. Companies have also been raising there prices, in line with their competitors, so that they all benefit, at the expense of the consumers.

    Instead, this system would promote fierce competition. The motive for the company to succeed would be with the chief executive and senior staff as it would be with any private company. There could also be possibilities to give ceo's a share of entitlement to the profit of the company, as opposed to a share of the company, as a motivating factor, which reflects the private markets. This also allows for flexibility to maximise universally owned profit in relation to competitive performance.

    So imagine that this company becomes the dominant global force. Other important benefits of capitalism would not be lost. With access to a lot of capital, there would be 'universally owned' investment companies, as well as banks that would continue to invest. Investment could actually be increased from the somewhat overly cautious levels of investment today.

    Private enterprise could still exist from this. The investments could come in many
    Different forms. They could come as a loan, which doesnít even necessarily have to charge interest. The private company would then be encouraged to grow, creating more competition for the universally owned subsidiary companies in the relevant market, which is great. The private enterprise, if grown enough could then be bought for a good price, to reward entrepreneurs, or shares could just be bought for universal ownership. Alternatively, the investment could be own the basis of gaining shares for investment, as occurs in the private markets today. Therefore innovation and private enterprise would not be lost.


    Other possibilities include instilling ethical practice into corporate activity. This has not been achieved in private markets due to factors affecting cost and competition. Private enterprises of course act under the laws of the countries they are in, they also act ethically to the extent that is consistent with the market demands of the markets they are in. But countries laws and market demands differ. Acting ethically in most instances costs more. So it puts a company at risk, if they act ethically above countries laws and market demands at an extra cost, as they will be undercut by their competition. The cost of acting ethically is also apparent in countries not applying mandates for relative ethical standards, to attract investment, which would offer a higher return, due to lower cost. Countries would have to come to an international agreement on common laws and ethics; however this does not happen as ethical opinion differs across the globe.

    With this system, companies all over the globe would be self-regulated by independent ethics bodies, and mandated to act to the highest ethical standards on an level playing field, as rationally and secularly conceived. If companies donít meet these standards, then the chief executives and simulated shareholder groups would be held accountable. When the standards conflict with market demand and national public opinions, at least ethics will be pushed the highest acceptable and public debate will be perused.

    Consider what this really means. Imagine, in a set 5 year period, companies could be made to attempt to become carbon neutral, and use sustainable resources. They will be on a level playing field so wont be pressured by competitive factors. Their profit levels can be relaxed to invest into achieving this goal. Accumulated capital from the 'profit pot' can be used to supply the demand for renewable and sustainable resources industries. This can happen without having to come to hopeless international state agreements on who should pay and who should do what.

    Global warming can be stopped! Environmental damage can be reversed! The loss of bio-diversity can be halted! The use of finite resources can be slowed to a standstill!

    With all that said, id like you to imagine what could be achieved with a global pot of money, of all the profit in the world. Also, consider this figure from Forbes. The total profit after tax, of only the top 1000 companies worldwide, in the year 2009 (during a global economic crisis, amounted to over £160 per person on the planet! Wouldnít it be fun spending that money...?

    ...and the money would have to be spent, to keep flowing back into the global economy. This then gets recycled back into the profit pot...

    Worthy causes would become an enterprise, competing to improve the world.

    Hereís how I can imagine the money being spent...

    Poverty could be eradicated. All capital aspects of achieving clean water access for everyone could be achieved. The same for Hunger.

    Then Healthcare.

    Then Education. (At which every effort to break the glass ceiling could also be achieved)

    Then invest into development. Counter acting the negative effects described in dependency theory.

    We could eradicate tax, by subsidising public services, putting an end to one of the most controversial, restricting and divisive political controversies, the re-distribution of wealth. Thereby, increasing the wealth of the individual by an increase in disposable income, benefiting the global economy in the process.

    We could fund the ageing populationís pensions and healthcare to find a sustainable balance.


    One of the most exciting possibilities, for me personally, is that we can push forward the frontiers of science, increase our understanding of our planet and the universe, by vastly investing into innovation, the pursuit of knowledge and space travel.

    The concept of Universal ownership also applies to evolutionary allies and interstellar life, thereby providing an economic system that could grow to involve inter planetary trade, for the benefit of all life involved within the system.

    Obviously there is so much more to consider and I am intending to publish a book on the matter, considering rationality, politics, economics, ethics, development, science etc.

    For now, I would like some basic feedback on the idea and any comments, ideas, relating theories and most importantly, criticisms would be openly and gratefully received.

    Thanks


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  3. #2  
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    I'm just a student, so please see my feedback as a small annoyance.

    I think your idea is really socialistic and that you're aiming for the money to be spent on good causes such as healthcare and education. But what you're forgetting is the efficiency of those companies, monopolies which have the job to oversee others actions are not efficient, they are corrupt even. Plus, this would first have to be tested on a world scale, therefore this idea whole be practically impossible.

    I know your intentions are good, but good intentions can bring forth bad consequences.

    I'd say first think about the world of today, why are things working the way they are.


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