Sunday, April 7, 2013

Reasons for a Progressive Tax on Corporate Gross Receipts

Posted as part of a discussion of a progressive tax on corporate gross receipts, on Quora:

Good Morning, Tom Byron

Thank you for your thoughtful response to this critical question.  Our views may differ, but your critique gives us an opportunity to examine the issue in detail.  Since my answer on Quora will not appear as primary text, I will also post it on my Quora blog and invite you to be an additional author, so we can continue reasoning our way to a rational conclusion.


re: "Why is too big to fail a problem? Too big to fail is only a problem when public tax dollars are at risk. Many many businesses have failed and disappeared. Who decides how big is too big?  Bureaucrats? It is more likely that a large business would want to self-deconstruct into separate entities for better product identity."

Organizations that become 'too big to fail' are a problem, not only because they put public money at risk, but because they become uncontrollable.  Randall Forsyth, in a column titled "Too Big to Jail", in the March 11, 2013 issue of Barron's, wrote:

In a hearing of the Senate Judiciary Committee on Wednesday, he (Iowa Senator Charles Greeley) expressed concern to Attorney General Eric Holder that some institutions had become "too big to jail"  (... text omitted ...)  Holder agreed: "The concern that you have raised is one that I frankly share.  (... text omitted ...) But I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy."

Forsyth's column, including the omitted text, is available at:

Too Big to Jail: What Eric Holder told a Senate Committee - Barrons.com

Another aspect of the adverse effect of excessive size is our government's unwillingness to enforce our laws penalizing corporate crime.  An instance was described by Jack Willoughby in a column titled, "SEC spares UBS a Worse Fate", describing how the Securities and Exchange Commission, in an abject failure to meet its obligation to protect the public interest, exempted UBS Securities from a mandatory 10-year ban on its activities after it was found guilty of securities crime.  Corporations cannot be expected to stop criminal activity when they know they will not be punished.

Willoughby's column is available at:

SEC Lets UBS off the Worst Hook

These examples are but the tip of an iceberg of problems with firms that become "Too Big To Fail".

As you imply, no-one can decide "how big is too big?".  We want to give our entrepreneurs the freedom to grow.  Corporate growth can be good, and healthy, and desirable.  Some business must be larger than others (public utilities are an example), so it is impossible to make a judgment that a given size is good or bad.  Size is merely a method of description.  Since there cam be no objective measure of 'too big', we need a mechanism that uses the market to detect excessive size.

If, by the nature of its business, an enterprise must be large, it is not injured by a progressive tax on its gross receipts because all competing businesses must attain a similar size.  However, when a company grows beyond an economically justifiable size, the tax acts to protect the public interest without additional regulation.

re: "The Bell System was a classic monopoly. The company provided national access to a communications system with innovation and research.  Service was widely available and market penetration was in the high 90%.  Capital was invested in the network and growth was steady. It can be argued that rural customers were the last to receive telephone service. This was due to cost per mile for construction. These costs were shared across the rate paying public and regulated by Public Service Commissions. The cost causers were the cost bearers. Your rates were based on where you lived. It was economies of scale."

The Bell System is a good example.  When it was young, dynamic and growing, it was a boon to society.  After it matured and began perpetuating its own existence (something all of us would like to do, but are prevented by the cycle of life), it became injurious to society by suppressing alternatives.  As soon as the Bell System was broken up, alternatives mushroomed and the market blossomed with diversity.

re: "Profitability is the core driver of a capitalist system.  We are introducing an 'amorphous' societal influence of what 'feels good' for customers in the product they choose to buy."

We must not forget that competition is the leavening force in a capitalist system.  The quest for profit, though vital as a driving force, does not justify the elimination of competition.  Competition is a necessary ingredient the ensures quality products and fair pricing.  It is unwise to pay lip service to capitalism by endorsing profit while ignoring acts that diminish competition.

re: "Exploitation is paid for in the taxes levied on the corporation in consumption of resources. These are Federal Excise Taxes, local taxes, state taxes, etc."

Oh, I agree that there is no shortage of taxes.  Neither is there any shortage of ways in which they are avoided.  In corporations, transforming of profits into expenses is a fine art.  As a matter of fact, enacting a progressive gross receipts tax, without reserve or allowance, will be a major challenge in a political environment controlled by political parties that depend on the financial support of big business.  Still, even that's not cast in concrete.  In time, in the same way that we gradually came to acknowledge the earth is not flat, we will learn the folly of letting vested interests control our political leaders.

re: "The society determines the fairness of the product when they freely choose to consume the product. They arrive at a price they are willing to pay out of their disposable income. An additional extraction of fees for use of a product will go to the government for what? Reducing the cost of the product? For supporting social welfare projects? For subsidizing those who can't afford this product?"

The additional fees simply reduce the benefit of monstrous growth.  A progressive gross receipts tax has no meaningful impact on a company until it begins to exceed its economically justifiable size.  It is the one way society can eliminate companies that are "Too Big To Fail" while enhancing competition and automatically fighting inflation.

re: "How does layering an additional tax on a product not make it more expensive? Who pays for this added cost to the end-user of what they have decided was a fair price for a useful service?"

As you say, taxes are an expense of doing business.  They increase the cost of doing business, and that cost is added to all other costs to determine the price of the company's goods and services.  Taxes are always passed on to the consumer.

That is exactly the point of a progressive tax.  When a company attains unwarranted size by manipulating the rules in its own favor or dominating its competitors to the detriment of the public, the tax adds a cost to its operation.  It encourages the growth of smaller companies by providing an umbrella protecting them from improper domination.  It has the added advantage that it allows companies to meet the tax in their own way.  Some (like those that absorbed suppliers or competitors) may elect to spin those entities off, to resize their operations to a smaller tax base.  The option is theirs.

Fred Gohlke

Wednesday, April 3, 2013

Human Nature and the Will-To-Believe

An acquaintance asked me (in relation to the need to harness human nature by making probity an asset in our natural attempt to pursue our own interest), 'where does human nature come from'.


Oh, my goodness, what an immense vista this question opens.  Although I doubt anyone can answer the question with certainty, here is the best I can do after a lifetime of thought on the matter:


I'm 84 years old.   Questions of right and wrong, good and bad, and so forth, have dominated my mind throughout my life.   I can remember walking to and from grade school with my best friend, discussing these topics.  I have no way of knowing whether I'm more susceptible to such thoughts than others.  All I know is that they've always been important to me.

If one wants to consider such matters, our society gives us a wealth of material to ponder.  The difficulty is that the field is so vast, and the inter-dependencies so complex, that selecting and analyzing circumstances that depict our nature, even examples we can call 'good' or 'bad' is challenging.

As I've tried to think about the world in which I've lived, the goal of my examination has been to consider our nature and ways to harness it.  Over time, I've been forced to hone and whittle my ideas, seeking a basic concept that might be helpful.  If I've found one, it is that we must understand our nature before we can develop institutions that capitalize on our strengths and control our weaknesses.

In thinking about the topic of good and evil, which is a part of our nature, I found something that was, to me, startling.  I found there's a sensible reason why the strong take advantage of the weak (a circumstance I characterize as 'bad').  To me, the idea is very powerful.  It may be the first step in understanding why civilization developed as it did.  You may consider this idea 'common knowledge', and it may be so, but, to me, it was a revelation.  I will describe it from the perspective of 'goodness'.

We all have an idea of goodness, but there is no objective measure of good.  Each of us measures goodness in our own way. You may think something is good while someone else may think the same thing is bad.  I started out believing people are naturally good, but drifted to a more neutral notion as I grew older. Here's why:

Self-preservation is the first law of nature.  Before humans reached the cave-man state they did what they had to do to survive.  They existed like other animals.  They killed for food and they killed those who threatened them.  For them, killing was not a moral issue, it was a matter of survival.

It is likely that these beings existed in herds, that they hunted and sheltered together, instinctively.  If so, they might have lived like what we refer to as cave-men.  However, those beings did not become 'human' until they began to change their animalistic behavior.  The ability to make such a change defines what we call humans.

Assuming cave-men lived in groups, it is reasonable to imagine that the most effective survivors of the group were the strongest members.  We can also imagine that the strongest could and did take from the weakest.   It is equally likely that the weaker took whatever they could from the stronger, even if it was only 'leavings', to satisfy their needs.

But, need is relative.  It depends on many factors.  In the case of cave-men, it depended on the availability of food, an individual's size and/or appetite, the need to provide for mates and offspring, need to store reserves, and, perhaps, other factors.  It is not hard to imagine that, however primeval, different members of the group had different needs.

When these beings started to change their animalistic behavior, when they began to 'think', there is a high likelihood that their thoughts related to their needs.  At some point, those thoughts expanded to include opinions or judgments about the needs of other individuals in the group.  The concepts of 'good' and 'bad' must have developed in this way.

At some point in the existence of cave-men, the weaker members of the community recognized that, since they did not have the strength to take from the stronger members by themselves, they needed the help of others if they were to survive.  It would not have been difficult for the weaker members to recognize other members of the group who also suffered by their weakness.  In some way, these weaker members banded together to limit the domination of the stronger.  That banding together was the start of what we call civilization.

What is not stated, but must be recognized, is that the stronger members were members of the same group.  They did not stand idly by and allow the weaker members to take from them.  They participated in finding a solution, using their strength to assert 'ownership' to protect as much of what was 'theirs' as they could.

Ownership was claimed by the strong and the attribution of greed was laid by the weak.  This is the most important, but least acknowledged, aspect of the relationships which led to the origin and structure of civilization t.  Civilization sprung from the need of the weak to curtail the power of the strong.

If this is a reasonable estimate of the origin of civilization, several things stand out:

  1. The driving force for civilization (the organization of society) is the need to restrain the strongest members of the group.  If the weaker members of the group do not feel threatened by the stronger, there is no need to organize.
  2. Morality, or the concept of 'good and bad', can not exist in the absence of intelligent thought.  The squirrel, when he stores nuts for the winter, does not ask himself if he'd be wrong to store one more.  If he finds another and feels the need for it, he takes it.  For animals, there is no issue of good or bad, and the concept of 'greed' does not exist.   A moral sense is a mark of intelligence.
  3. The threat the weaker members of the original society felt had to result from deprivation of the resources needed for existence (probably food).   If the stronger were perceived as taking more than they needed while the weaker suffered, that condition must have been characterized as 'bad'.
  4. The mechanism society uses to restrict bad behavior is force.  By definition, a weaker member can not control a stronger one.  But, several weaker members, in unison, have enough power to control even the strongest.  In this sense, civilization is a banding together of the members of a group to gain the strength needed to control members exhibiting 'bad' behavior.
  5. When discussing these relationships, we use sophisticated terms to differentiate forms of undesirable behavior.  Thus, we call the taking of more than one needs 'greed'.  This tempts us to say civilization developed to limit greed.  However, the initial banding together of the weak must surely have been to limit the power of the stronger members of the group, not to penalize them but to ensure the survival of the weaker members.
  6. The evolution of the power of the stronger members has been characterized by increasing sophistication in the way leaders (i.e., the strongest) exercised their power, as described in a passage in "The Story of Civilization", by Will Durant:  "Slowly the increasing complexity of tools and trades subjected the unskilled or weak to the skilled or strong; every invention was a new weapon in the hands of the strong, and further strengthened them in their mastery and use of the weak."
  7. The civilizing influence of the weak in countering the excesses of the strong is always reactive.  The weak must identify the strong (and the effects of their strength) before they can band together to limit the power of the stronger members of society.

Over time, as the level of sophistication increased, the strong issued edicts and established rites that provided a color of right for their actions.  In modern times, in a notable application of the art of sophistry, they developed political institutions that appear to empower the weak while in fact increasing the mastery of the strong.  One conclusion we can draw from this is that we must question the institutions put in place by our leaders.  They are the people most inclined to enslave us.

~~~o~~~                     ~~~o~~~                     ~~~o~~~

One of the most powerful tools the strong use to influence the weak is our 'will-to-believe'.  The significance of the will-to-believe is not readily apparent, yet it ranks close to the will-to-survive in its influence on our lives.  The will-to-believe is not a doctrine, it is a human trait.  It is a part of what we are.  Since we can't know everything, we believe what we are told about matters beyond our ken.  Current instances abound, but more remote examples illustrate the force of this trait with greater clarity, thus:
  • If we are that told our emperor descends from the sun god, we believe it.
  • If we are told to dance in a certain way to please the rain god, we dance.
  • If we are told our king rules by divine right, we accept that doctrine.  Not all of us, perhaps, but enough of us that the force of our combined belief is palpable.
Why do we believe these things? We don't believe them because they are self-evident, we believe them because they are not.  We believe such things because they are given to us as explanations for some of the inexplicable phenomena that surround us.  We do not understand the phenomena ourselves, but we are willing to assume others more gifted than ourselves do understand matters that baffle us.  We accept their assertions, in part, because we haven't the knowledge to refute them.

You may not, in 2013, believe in an emperors' divinity, or the power of the rain dance, or the divine right of kings.  But you do know that such ideas had a profound influence when they were in vogue.  To understand why they were so influential, you must imagine yourself living when these ideas were accepted dogma.

If you had lived in the American Southwest 600 years ago, would you have danced for the rain god?  Were you a Japanese citizen in 900 A.D., would you have worshiped your emperor?  Were you a Parisian in the 14th century, would you have endorsed the divine right of kings?  In each case, almost certainly so.

More than dance or worship or endorse, you would have believed.  You would have 'known' the customs and beliefs of your time were right and proper.  If your dance failed to bring forth rain, you would have been sure, not that your belief was wrong, but that you and your people had failed to please the rain god.

The strength of a belief is not dependent upon the soundness of the precept but on the intensity of the will-to-believe.  While one may quibble with the label 'a will-to-believe', I've been unable to find a better term to explain the driving force behind Sinn Fein, Nazis, witch hunters, Kamikaze pilots, followers of the Reverend Jones, Palestinians, and those imbued with religious fervor.

The will-to-believe is not only powerful, it is strange.  It tends to be accompanied by an absolute certainty that which is believed is also true.  We start exercising our will-to-believe to fill the gap formed by our lack of knowledge, and then leap directly from ignorance to absolute certainty.

It is even stranger that this progression from lack of knowledge continues on through absolute certainty to destructiveness.  For it would be hard to imagine greater destructive force than that wielded by Sinn Feiners, Nazis, witch hunters, Kamikaze pilots, Reverend Jones, Palestinians, and those permeated with religious fervor.  The result of their terrible certainty is havoc and death; the destruction of themselves and the destruction of others.  In fact, the most destructive words in any language are:

           I BELIEVE!!!

In modern society, this trait inhibits our ability to question our leaders.  In the United States, we want to believe we live under government "of the people, by the people, for the people".  We've been told we have the greatest government on earth for so long, in so many ways, by so many people, that we want to believe it.  We do not want to examine the institutions that control our government.

In America, political parties control the choice of candidates the people may vote for in our so-called 'free elections'.  When the people vote for candidates chosen by political parties, control of the government is vested, not in the voters, but in the parties that chose the candidates.

A party-based political system is the antithesis of democracy.  It expresses our status as subjects of those who defined our options - those who control the political parties.  As long as political parties select the candidates for public office, the people are helpless because 'those who control the options control the outcome'.

The ability to choose from options provided by political parties does not give us control of our government, but, because we have a will-to-believe we have the best government on earth, we blind ourselves to our own subjugation.

~~~o~~~                     ~~~o~~~                     ~~~o~~~

On a personal rather than a society-wide level, insofar as the concept of natural human goodness is concerned, the concepts of good and bad can't exist for a single individual.  They can only exist in terms of others.  We exist in a constant and ever-changing mixture of good and bad.  The choices we make flow from our understanding of that mixture, influenced by our individual characteristics.  The less powerful among us may consider actions good that are abhorrent to the more powerful, but they are neither good nor bad unless they affect others and their goodness or badness depends on the effect they have on others.

A Japanese friend once told me, "Evil heart is something we learn after we are born", and I agree.  Good heart is, too.  For each of us, the idea of good and bad grows as we develop.  Initially, we see those who gratify our wishes as good and those who deny us what we want as bad.  We exist in a constant and ever-changing mixture of good and bad, starting with our parents who supply our needs (good) and control us (bad).  But we soon realize good and bad are much more complex than that.  The choices we make flow from our understanding of that mixture, influenced by our individual characteristics.  The less powerful among us may consider actions good that are abhorrent to the more powerful, but they are neither good nor bad unless they affect others and their goodness or badness depend on the effect they have on others.

That, it seems to me, is the essence of good and bad.  It also describes human nature.  It is certainly not profound.

~~~o~~~                     ~~~o~~~                     ~~~o~~~

The significant revelation of this line of thought is that it is natural for the most powerful members of society to put their own interest above the interests of others.  The tendency of the strong to dominate the weak is as natural a part of the human as breathing.  We are unwise to expect leaders to act differently.  Failure to understand that simple precept leaves us ill-equipped to improve society.

Since leaders are an important part of society, we must devise a means of selecting leaders that benefits all of us.  The institutions we use to select our leaders must be designed to recognize and protect us from the natural imperfections of the human spirit.  Hence, we must recognize our own weaknesses and harness them.  In other words, our political institutions must be designed to temper our 'bad' traits with our 'good' ones.

A well-designed political institution will recognize that some people are better advocates of the public interest than others.  It will be designed, not to divide the public into blocs but to find the best advocates of the common interest and raise them to leadership positions as the people's representatives.  To meet that challenge, given the range of public issues and the way each individual's interest in political matters varies over time, an effective electoral process must examine the entire electorate during each election cycle, seeking the people's best advocates.  It must let every voter influence the outcome of each election to the best of their desire and ability, and it must ensure that those selected as representatives are disposed to serve the public interest.

The political process must encourage the absorption of diverse interests, reducing them to their essential element:  their effect on the entire community.  It should have no platforms, no ideology.  The only question is, which members of the community are the most attuned to the needs of society and have the qualities required to advocate the common good.

Such an institution can best be developed by atomizing the electorate into thousands, or, in larger communities, millions of randomly chosen very small groups.  Each group advances the best advocate of the group's interests who are then randomly assigned to very small groups made up of the selectees from other groups.  The process continues until a desired number of public officials are chosen.  Each tiny group provides a slight bias toward the common interest.  As the levels advance, the cumulative effect of this small bias overwhelms special interests seeking their private gain.  It leads, inexorably, to the selection of representatives who advocate the interests of the entire community.

You will understand that this is just a start at laying the groundwork for formulating an alternative to the system we currently endure.  We can only hope to attain such a political structure when the thoughtful people among us add their insights to harness our nature for the benefit of all.

Fred Gohlke
04/03/13

Corporate Taxation, Employment

An acquaintance expressed the opinion that a progressive gross receipts tax on corporations would "kill jobs".  This is a counterargument:

I've lived long enough to see the results of unrestrained corporate growth and believe your assessment inaccurate.  When I was young, we had a small knitting mill in town (Warsaw, New York, population about 1,500).  That mill, in addition to the direct employment of 80 or so of our townspeople, also provided employment for another 20 or so folks in town:  The sandwich shop on the corner, a couple of local pickup and delivery services, the bank, of course, and. to some extent, the shops patronized by the the mill's employees.

That may seem like pretty small stuff - and it was - but it was typical of thousands of small businesses throughout the country.  Over the past 50 years or so, those small companies disappeared, replaced by a few large producers.  The sources of employment that were lost were not just the small companies but the support services, too, the little restaurants, the banks, the pickup and delivery services, the repair shops that maintained the equipment.  They all disappeared, too.

This process pervaded the country.  The automotive industry was marked by the loss of auto supply stores and maintenance shops as the manufacturers sought to control their markets - to the extent that it now costs $100 to replace the ignition key for my car.

Perhaps a better example is the brewing industry.  This table shows the percentage of beer produced in the United States by the top 10 brewers:

    1950 - 38%
    1960 - 52%
    1970 - 69%
    1980 - 93%

If you happen to check the details (link below), you'll note the increasing difference between the largest brewer and the tenth largest.  In 1950, the largest brewer produced about 3.5 million barrels more than the tenth largest.  In 1980, the largest brewer produced 46 million barrels more than the tenth largest, and that disparity grew to more than 90 million barrels by 1997.

The extraordinary difficulty of understanding the relationships between individual producers and society is illustrated by the effects of marketing.  Behavioral scientists taught our commercial leaders how to influence the public and they do so with great precision.

Furthermore, the mushrooming of mass communication during the past 100 years has allowed honing and refining the manipulation of the public so that it is now a standard feature of our lives.  During the 1950-1980 period, the total beer consumption more than doubled from 82,830,137 to 176,311,699 barrels, while population only grew about fifty percent over the same period.  This shows the enormous success of the application of the principles of behavioral science to the marketing of beer.

You can say this was destined to happen as the economy evolved, and there is merit in that argument.  But, evolution is not the problem, the problem is that corporate growth turned cancerous.  It stopped responding to society's needs and mushroomed at the expense of the people rather than in harmony with them.

Our elected representatives, needing corporate money to finance their campaigns, let the most aggressive companies grow without limit, ultimately becoming "Too Big To Fail".  The executives of these companies are very good at what they do and the growth of mass communications has made their manipulating influence inescapable.  Since the goals of these parasites are seldom in concert with the best interest of the humans among us, the ease with which they accomplish their goals scares me.  I'll be leaving this earth before too many more years have passed, but I can't help thinking about the terrible legacy I'm leaving for my children and grandchildren.

Throughout nature there are moderating influences to inhibit excesses, predators of all kinds are kept in check by other predators.  At present, in our society, we have no such moderating influence on predatory corporations.  There is no force to prevent 'excessive' growth - in part because there is no way to define 'excessive' growth.  The idea of a progressive tax on gross receipts is that it, very gradually, applies an inhibiting force the makes excessive growth less productive.

A progressive tax on gross receipts makes the acquisition of competitors less appealing for large companies.  It provides a counterbalance that discourages monopolistic growth after the maximum economies of scale have been realized.  It enhances competition immeasurably by preventing the suffocation of smaller businesses, thus increasing not only the direct employment of the surviving companies but the indirect employment of the support services that supply them and their employees.  It further blesses society by enlisting corporate support in fighting inflation.

Fred Gohlke
04/03/13

The details for the brewing industry are available at:
Shakeout In The Brewing Industry.

The details for U. S. population growth are available at:
US Historical Population, by Year

Corporate Taxation, Progressive Tax, Rationale

An acquaintance asked if the idea of a progressive gross receipts tax should be implemented worldwide.

I think that's a valid implication.  Even so, there is a wide difference between what 'should' be done and what 'can' be done.  Seeking to accomplish such a reform world-wide would be a major challenge.  It is better to concentrate in an area where success is possible.  In the United States, companies deemed "Too Big To Fail" provide the impetus for action (although, judging by the underwhelming response to this question, that may be an optimistic assessment).

Corporations, like other organisms, consider self-preservation the first law of nature.  Though the methods of self-preservation vary, they are generally applauded as "survival of the fittest".  However, carried to extremes, self-preservation can be destructive of the preserved entity's habitat.  Beneficial though Darwinism may be in a purely theoretical sense, if our society and our environment are the specifics being destroyed, we must do what we can to prevent it.


re: "... if tax were to be imposed on resource usage - then who would own the resources?  The government?  How will that be done then, as at the moment all resources are in the hands of corporations?"

Correct me if I'm wrong on this, but I believe, in the United States, the resources are owned by the people and allocated by the government.  The problem is that, because the large corporations control the purse strings of the political parties and the parties control the choice of candidates for public office, the large corporations control the government and are able to demand, and get, the resources they desire.  If the allocation is improper, the only way we can correct it is by devising an electoral process that lets the people choose the best of their number to advocate their interests in the government so resources are allocated for the benefit of the people rather than the corporations.


re: "Just trying to get a better understanding of how this 'gross receipts tax' would work"

The problem of corporations "Too Big To Fail" is a contemporary issue in the United States.  The question of a progressive gross receipts tax was posed because I'm not sure why this solution to the problem is not being discussed.  Among its many advantages, a progressive tax on gross receipts has the remarkable quality that, when a corporation grows beyond an economically justifiable size, the tax acts to protect the public interest without additional regulation.


re: "... probably the reason why it has not yet been considered by the government is that we are still putting money and profit/price over what would be best for life on earth and thus also ourselves."

Is not the reason more likely to be "because the large corporations control the purse strings of the political parties and the parties control the choice of candidates for public office"?  Does this not put control of government in the hands of the very people who put "money and price" above what is best for life on earth?  Theodore Roosevelt, in his State of the Union Address on December 3, 1906[1], warned the American people of the "unholy alliance between corrupt business and corrupt politics".  The circumstances we now condemn flow directly from that unholy alliance.  We would do well to break its grasp on our government.


re: "I mean it would only make sense to make sure that we don't use up all the resources and pollute the environment through what we use and produce in our system - yet that seems to be a point of common sense that has not actually hit the major players in this world - who ever that may be that is in charge of resource distribution and management."

In looking for sense in the modern world, one must not overlook the fact that, whatever the judicial rationale supporting the decision that corporations are persons, corporations are not human.  They have no natural life-cycle of birth, adolescence, maturity, death.  They have no morality except that of pursuing their own interest.  They have no future, except the extent to which they can self-perpetuate.  Using up all the resources and polluting the environment have no meaning for corporations.

We can say that those who direct the operations of corporations are human and 'should' want to avoid using up all the resources and polluting the environment, but when those worries are set against the almost incalculable benefits of power and recompense corporate executives reap, such concerns are minor, indeed.

Probably the most difficult thing to accept is that these executives are not vile persons.  Most humans would act as they do, however much we would like to believe otherwise.  The pursuit of self-interest is universal.  The ability to suppress immediate gratification for future welfare, particularly when the threat is based on reason rather than experience and the welfare is of generations yet unborn, is not abundant.  It exists in sufficient quantity to benefit humanity, but is widely dispersed.  We've yet to devise a means of aggregating that quality, so vital to the benefit of society.


re: "So, as long as we live in a system that is founded upon this crazy idea that profit comes before life - government will never make decisions that will actually really benefit the people, but will always make decisions that benefit only the share-holders of major corporations - and as you say, are the ones who are also in office, as the ones who will profit."

And that's the point.  The problems we endure flow directly from our political system.  If we wish to live in a system that is not "founded upon this crazy idea that profit comes before life", we must devise a political process that filters the large number of citizens to find those with the qualities necessary to advance our common interest.  We will probably find that a central feature of the process will be harnessing human nature by making probity a necessary quality for those who wish to achieve public office.


Lest I be misunderstood, I do not know what is best for life on earth.  What I know is, the people most disposed to seek such a goal exist among us.  We must devise a means of finding them and raising them to leadership positions.  It is unwise to allow control of government to fall into the hands of corporate executives who profit by the laws the government enacts.


It would be nice if there were a site where this topic could be explored in detail and, hopefully, attract other thoughtful people to help examine such questions objectively.  Quora does not support the in-depth investigation of serious issues and, being of modest internet ability, I haven't found a site that does.  If you know of one, I'd like to examine this issue and some of its natural extensions in detail.

Fred Gohlke
04/03/13

[1] Theodore Roosevelt (December 3, 1906)

Tuesday, April 2, 2013

The Wisdom of the People

 Posted in response to this question on Quora:

Democracy: Are Americans too stupid for Democracy?

Sadly, this question perpetuates a faulty assumption that goes back at least as far as Plato:  the notion that the people (American, or otherwise) are an amorphous mass that can be categorized as a single unit rather than, as is so obviously the case, a multitude of highly differentiated individuals: some good, some bad; some skilled, some unskilled; some with integrity, some deceitful; some leaders, some followers; some sociable, some unfriendly; some brilliant, some dull.

In fact, the people constitute a vast pool of talent containing individuals with the ability to resolve public issues in the public interest.  The problem we face is finding those individuals and raising them to leadership positions.  As with any complex problem, the key to solving it is to break it down.  Politics is no different.  The challenge of democracy is to sift through the many types of individuals among us, select those those best suited to serve as advocates of the common interest, and raise them to public office.

The tragedy of thinking the people "too stupid for Democracy" is that it leads to the fallacious notion that the people are a formless throng whose only political right is to vote their approval or disapproval of choices made by the vested interests that control the nation's political infrastructure.

In the same way that we gradually came to acknowledge the earth is not flat, we will someday see the people, not as a formless bunch of dullards, but as a pool of individuals, some with the leadership qualities that benefit society.  Devising a means of selecting them and elevating them to leadership positions is a challenge we have so far failed to meet.

We can not wait for a champion to arise and ordain such a process for us because true democracy offers no rewards for individuals or interests. Instead, the concept must find fertile soil among the people, take root, be cultivated, and grow in a process of gradual evolution.  The seeding and cultivation of this vital crop falls to those who envision a better future for society.

Can we venture outside our shell of unreason to conceive a means by which all the people participate in the political process to the full extent of their desire and ability, while prizing factions without ceding the control of government to them?  Can we devise a plan that provides a proper cure for the sick political system we presently endure?

Not only do I believe we can, I don't even think it's difficult, but it does require seeing the potential that's all around us.

Fred Gohlke

Voter Suppression

 Posted in response to this question on Quora:

Democracy: Is voter suppression effective?

I've been asked to answer whether or not 'voter suppression' is effective.  To better understand the question and in an effort to be responsive to the request, I've reviewed the questions Quora deems related.  Based on that review, I don't feel competent to answer the question as asked.  I have no personal knowledge of voter suppression at the polls and cannot judge its effectiveness.

However, in a broader sense, voters are suppressed in the United States because they have no mechanism by which they can proclaim their own political choices.  This form of voter suppression is exceptionally effective.

In America, the issues and candidates the people are allowed to vote for are controlled by political parties, and a party-based political system is profoundly undemocratic.  It expresses the people's status as subjects of those who define the options they may vote for; they are subjects of those who control the political parties.  As long as parties control the choices on which the electorate is allowed to vote, the people are helpless because 'those who control the options control the outcome'.

In such a political environment the question of whether or not qualified voters are "being kept from determining the outcome of elections" is moot because they have no effective participation in the selection of the choices on which they vote.

Until qualified voters have a way to participate in the selection of their representatives in government, their participation in maintaining the existing power structure can have no validity.  Until we enact an effective means for the entire electorate to participate in the selection of issues and candidates, to the full extent of each individual's desire and ability, we cannot stop the immense financial interests that control our political process from plundering us and our environment.

Fred Gohlke

Corporate Taxation: Gross Receipts Tax

Posted in response to this question on Quora:
 
Politics: Why don't we have a progressive tax on corporate gross receipts?

Viet Vu said:  "It needs to be noted that the firms choose to innovate and compete because it believes that it will, one day, benefit from a monopolistic profit - the highest level of profit any firm can make."

Firms seek profit because that's their reason for being.  They may dream of monopoly, but not achieving it does not dampen their ardor for seeking it.

Viet Vu said:  "It is certainly a good idea to create equality but a balance needs to be made between how free we let the entrepreneurs pursue monopoly and how tight we need to manage it (anti-trust laws)"

Balance is attained by making the Gross Receipts Tax progressive.  It then operates automatically, providing the lightest amount of management possible.  It eliminates the need for anti-trust laws and encourages entrepreneurs by ensuring they are not squeezed out of business by monopolies.

The tax starts at a very low level and gradually increases as the size of the enterprise grows.  To give you an idea of the concept, this example assumes the tax starts at 2% on gross receipts of one million dollars and increases by 1% each time the gross receipts increase by one order of magnitude (one decimal position):

    Gross Receipts  Tax Rate             Tax           After Tax Net
            1,000,000      2%               20,000               980,000
          10,000,000      3%             300,000            9,700,000
        100,000,000      4%          4,000,000           96,000,000
      1,000,000,000     5%         50,000,000        950,000,000
    10,000,000,000     6%       600,000,000     9,400,000,000
  100,000,000,000     7%    7,000,000,000   93,000,000,000

The tax will bring equilibrium to the economy because taxes are passed through to the consumer.  It does no injury to firms whose size is reasonable and proper.  At the same time, firms whose size is not economically justified price themselves out of the market.

Viet Vu said:  "Monopoly is bad for the economy overall and yet it is still what keeps the firms competing in hopes that it will reach that level some day. Destroying this incentive may ... mean a reduced level of firm activities."

Monopoly is not only bad for the economy, it is destructive - as shown by the recent financial collapse that threatened the world.  However much firms wish for monopoly, they will continue to innovate and compete in search of profit.  That's why they exist.  Preventing companies from becoming "Too Big To Fail" will not limit innovation and competition, it will encourage entrepreneurs and broaden participation in the economy.

~~~o~~~                     ~~~o~~~                     ~~~o~~~

Kim Amourette asked: "Wouldn't that imply that this tax should be implemented in every system world wide - as companies can always go oversees for earth resources and human resources?"

I think that's a valid implication.  Corporations, like other organisms, consider self-preservation the first law of nature.  Though the methods of self-preservation vary, they are generally applauded as "survival of the fittest".  However, carried to extremes, self-preservation can be destructive of the preserved entity's habitat.  Beneficial though Darwinism may be in a purely theoretical sense, if our society and our environment are the specifics being destroyed, we must do what we can to prevent it.

Even so, there is a wide difference between what should be done and what can be done.  Seeking to accomplish such a reform world-wide would be a major challenge.  It is better to concentrate in an area where success is possible.  In the United States, companies deemed "Too Big To Fail" provide the impetus for action (although, judging by the underwhelming response to this question, that may be an optimistic assessment).

Kim Amourette asked: "... if tax were to be imposed on resource usage - then who would own the resources? The government? How will that be done then, as at the moment all resources are in the hands of corporations?"

Correct me if I'm wrong on this, but I believe, in the United States, the resources are owned by the people and allocated by the government.  The problem is that, because the large corporations control the purse strings of the political parties and the parties control the choice of candidates for public office, the large corporations control the government and are able to demand, and get, the resources they desire.  If the allocation is improper, the only way we can correct it is by devising an electoral process that lets the people choose the best of their number to advocate their interests in the government so resources are allocated for the benefit of the people rather than the corporations.

Kim Amourette said: "Just trying to get a better understanding of how this 'gross receipts tax' would work"

The Gross Receipts Tax would work by increasing the tax rate on corporations as their gross receipts increase.  The problem of businesses becoming "Too Big To Fail" is a contemporary issue in the United States.  The question was posed because I'm not sure why this solution to the problem is not being discussed.  Among its many advantages, a progressive tax on gross receipts has the remarkable quality that, when a corporation grows beyond an economically justifiable size, the tax acts to protect the public interest without additional regulation.

Kim Amourette said: "... probably the reason why it has not yet been considered by the government is that we are still putting money and profit/price over what would be best for life on earth and thus also ourselves."

Is not the reason more likely to be "because the large corporations control the purse strings of the political parties and the parties control the choice of candidates for public office"?  Does this not put control of government in the hands of the very people who put "money and price" above what is best for life on earth?  Theodore Roosevelt, in his State of the Union Address on December 3, 1906[1], warned the American people of the "unholy alliance between corrupt business and corrupt politics".  The circumstances we now condemn flow directly from that unholy alliance.  We would do well to break its grasp on our government.

Kim Amourette said: "I mean it would only make sense to make sure that we don't use up all the resources and pollute the environment through what we use and produce in our system - yet that seems to be a point of common sense that has not actually hit the major players in this world - who ever that may be that is in charge of resource distribution and management."

In looking for sense in the modern world, one must not overlook the fact that, whatever the judicial rationale supporting the decision that corporations are persons, corporations are not human.  They have no natural life-cycle of birth, adolescence, maturity, death.  They have no morality except that of pursuing their own interest.  They have no future, except the extent to which they can self-perpetuate.  Using up all the resources and polluting the environment have no meaning for corporations.

We can say that those who direct the operations of corporations are human and should want to avoid using up all the resources and polluting the environment, but when those worries are set against the almost incalculable benefits of power and recompense corporate executives enjoy, such concerns are minor, indeed.

Probably the most difficult thing to accept is that these executives are not vile persons.  Most humans would act as they do, however much we would like to believe otherwise.  The pursuit of self-interest is universal.  The ability to suppress immediate gratification for future welfare, particularly when the threat is based on reason rather than experience and the welfare is of generations yet unborn, is not abundant.  It exists in sufficient quantity to benefit humanity, but is widely dispersed.  We've yet to devise a means of aggregating that quality, so vital to the benefit of society.

Kim Amourette said: "So, as long as we live in a system that is founded upon this crazy idea that profit comes before life - government will never make decisions that will actually really benefit the people, but will always make decisions that benefit only the share-holders of major corporations - and as you say, are the ones who are also in office, as the ones who will profit."

And that's the point.  The problems we endure flow directly from our political system.  If we wish to live in a system that is not "founded upon this crazy idea that profit comes before life", we must devise a political process that filters the large number of citizens to find those with the qualities necessary to advance our common interest.  We will probably find that a central feature of the process will be harnessing human nature by making probity a necessary quality for those who wish to achieve public office.


Lest I be misunderstood, I do not know what is best for life on earth.  What I know is, we must find the people most disposed to seek those conditions.  It is unwise to allow control of government to fall into the hands of corporate executives who profit by the laws the government enacts.


I appreciate Kim Amourette's interest in this question.  It would be nice if there were a site where it could be explored in detail and, hopefully, attract other thoughtful people to help examine such questions objectively.  Quora does not support the in-depth investigation of serious issues as can be seen by the need to repeat these comments at the "Answer" level.  Being of modest internet ability, I haven't found a site that encourages careful, objective examination of the serious questions that face us.  If you know of one, I'd like to examine this issue and some of its natural extensions in detail.

Fred Gohlke

[1] Theodore Roosevelt (December 3, 1906)

Critiquing The US Government

Posted in response to this question on Quora:
 
Democracy: Should the "99%" in the US be very angry at the US government today?

I'm pleased to see I'm not the only person who agrees with the answer posted by Yogan Wayra Zadronzny Barrientos.  His post has inspired an unusually high degree of approval.  However, devising a real plan of change is a daunting task.

If we can conceive a better political system than the one that brought us to our present pass, it might be possible to avoid the emotional (and possibly violent) rejection that is likely to ensue.  History is strewn with similar periods of excess, all marked by some form of greed (usually greed for power), and all ending in revolution.

I think scholarly discourse is the best way to avoid a recurrence of the cycle, but achieving it turns out to be more difficult than I anticipated.  The 200-plus years of our nation's existence have created innumerable tentacles of habit and belief that have a firm hold on our minds.  To loosen that grip we must pry back its fingers, one by one, with irrefutable logic.

The fingers can be pried back by a public critique of politics by people holding different points of view, who wish to determine the best form of government, guided by reasoned arguments.  Their purpose would not be to debate the issues but to reason to rational conclusions.  Frankly, I don't have a clue how to encourage others to engage in such a detailed examination of our political infrastructure.

Fred Gohlke

Democracy and Freedom

Posted in response to this question on Quora:
 
Democracy: From whose perspective is the degree of freedom of a society best judged?

Like beauty, freedom is in the eye of the beholder.  A prisoner with access to a well-stocked library may feel free while a well-paid executive may feel trapped by the demands of office.

Because of the diversity of human needs and perceptions, I don't believe a categorical response to this question is possible.  There is a general consensus that we must give up a portion of our freedom to enjoy the benefits of society, so I think we can say the degree of freedom of a society is best judged by a majority of the members of that society.

That's not a definitive answer, though, because some members of the society may feel improperly constrained while others feel they are enjoying complete freedom.

I regret I can't offer a more soul-satisfying response.

Fred Gohlke

Harnessing Human Nature

Posted in response to this question on Quora:
 
Democracy: What is the essence of the political forces fighting against the progress of democracy?

The primary force fighting against democracy is human nature.  Whether or not you consider human nature a 'political force' is an open question, but it's the place to start.  The progress of democracy is sporadic because learning to harness human nature in a productive fashion is a slow process.

Democracy will be more successful when we devise a method of selecting political leaders that makes integrity an important character trait.  If integrity is to be important, it must be vital to those who choose the candidates.  When we devise a candidate selection process that ensures office-seekers are carefully examined by peers seeking the same office, candidates will have to exhibit not only their ability but their probity, if they wish to be selected.

Fred Gohlke

Three Flaws in the US Government

Posted in response to this question on Quora:
 
Politics: What thing is most broken in our United States Government?

There are, in my view, three fundamental flaws in our government:  the way we maintain our laws, the way we tax, and the way we select our representatives.  Until we improve the way we select our representatives, we cannot sunset bad laws or improve our tax code.

(edit) As requested by Tom Byron, I offer the following:

1) The way we maintain our laws:  Nothing in our Constitution requires that laws be sunsetted.  As a result of that omission, a law passed by a bare majority of our representatives (and, possibly, desired by a minority of our citizens) stays on the books ad infinitum.  A less lamentable method would be limits on the life of a law based on the lowest percentage of approval by which it passes either house of Congress (or the various legislatures).  Revisiting marginal laws allows the people to express their approval or disapproval based on their experience with the law.

For example:

Less than 52% approval, a life of  1 year
   52% to 55% approval, a life of  2 years
   55% to 65% approval, a life of  5 years
     Over 65% approval, a life of 10 years

2) The way we tax:  Taxes should be proportional to the benefits the taxed entity realizes because of its citizenship.  Taxes should not be preferential; they should allow no exemptions or exceptions.

3) The way we select our representatives:  At present, political parties have usurped the right to name the candidates for public office, and those who control the options control the result.  The people's only recourse is to vote for a candidate selected by a party.  Since the goal of parties is to advance their own interest, they choose unscrupulous people by design.  If we are to improve our government, the first step must be for the people to select the best of their number to represent them in their government.

Fred Gohlke

Corporate Taxation: Policy

Posted in response to this question on Quora:
 
Tax Policy: If corporations are people and have the same due process rights as American citizens, then why don't they pay equivalent taxes on their income?

Corporations are entities formed to exploit the physical and human resources of a community.  They provide a means of attracting large amounts of capital to finance large projects.  Some are beneficial and some are a detriment to the society that hosts them, but it is not easy to tell which is which because of the myths surrounding their operations.

The suggestion that corporations exist for the benefit of their shareholders is false; shareholders merely hope to profit from the operation.  Corporations exist for the well being of those who control them; the individuals who benefit from the airplanes, three-martini lunches, yachts, season tickets and luxury boxes at sports venues, limousines, chauffeurs and plush offices afforded corporate executives, free of taxation and passed off as business expenses.

Corporation are not taxed like humans and are allowed to become "Too Big To Fail" because, since the inception of the income tax, the sophistry of people like Mr. Richter have successfully influenced our lawmakers.

Fred Gohlke

Critique of Electoral Systems

Posted in response to this question on Quora:
 
Democracy: What is the most sophisticated voting system to have ever existed? (doesn't matter if it was/is successful)

I'm sorry, Deepak.  I don't know the most sophisticated voting system ever conceived.  However, I will respond by commenting on voting systems, in general.

First of all, one of the best places I know of to consider various voting systems is

Main Page - Electowiki

The folks on the election-methods mailing list on that site discuss a wide variety of voting systems.  If you check them out, I think you'll find that, however sophisticated they may be, they are unintelligible to the layman.  Worse, from my perspective, they fail to address the most fundamental problems of democracy:

* They do not seek a practical method of letting everyone participate in the electoral process to the full extent of each individual's desire and ability.  Instead, they seek to empower political parties, which empowers the party leaders, and is the antithesis of democracy.

* They do not recognize that political parties can not serve the public interest because the party leaders are committed to advancing the interests of only a portion of the electorate.

* They do not even address the questions of the ability and integrity of candidates for public office, when those questions should be the focus of the candidate selection process.

There are other concerns, but those of the ones I find most unsettling.

I'm not sure a democratic voting system needs to be sophisticated.  We know there are among us a multitude of individuals with the ability and the integrity to advocate our common interest.  What we lack, at the moment, is a method of seeking among ourselves to find those people and raise them to public office as our representatives.  One method you may find interesting is a proposal of mine.  You can find it at:

Practical Democracy

To me, Practical Democracy is not particularly sophisticated but I do think it both subtle and powerful.  It lets those in the electorate who do not wish to participate drop out, it ensures that those who seek public office are carefully examined by their peers before they advance, it eliminates the influence of money on the electoral process, it eliminates political campaigning, and it lets parties advance their best advocates in a way that gives the advocates ample time to explain the public benefit of their perspective.

Fred Gohlke

The flaws of Top-Down Politics

Posted in response to this question on Quora:
 
U.S. Politics: Are there policies that have made it more difficult for voters to elect officials who will represent them?

The most fundamental policy that prevents voters from electing officials who will represent them is letting political parties dictate our political actions.  George Washington warned us of the danger of factions in his Farewell Address[1].  Yet, factions (parties) grabbed power because we, the people, didn't understand how they corrupt the political process.

Instead of uniting the people and advancing our common interests, parties incite antagonism among the people in order to divide us and increase their power.  They dominate us by the most basic principle of conquest:  Divide and Conquer.

Democracy is supposed to be a bottom-up concept; political power is vested in the people and rises, by their choice, to the officials they elect.  We have yet to achieve that arrangement of our political existence because Washington's "cunning, ambitious, and unprincipled men" were "enabled to subvert the power of the people and to usurp for themselves the reins of government".  They created top-down political organizations that let them set the agendas and choose the candidates for which the people vote.  These structures corrupt the democratic process because

     Those who set the options, control the outcome!

Not many people realize that letting political parties select the candidates for public office is profoundly undemocratic.  We must help them see that, as long as we let political parties choose the candidates for public office, they will select people who advance the party's interest, not ours.

If we are to elect officials who will represent us, we must start by devising an electoral process that lets each of us participate in the selection process to the full extent of our desire and ability.

Fred Gohlke

1. George Washington, Farewell Address,
Washington's Farewell Address 1796

Perfecting Democracy

Posted in response to this question on Quora

Democracy: Is  there  any form of  governance which could  serve as a better  alternative for  democracy?

I'm not qualified to comment on politics in India.  I can, however, respond to your interesting question about democracy, from the perspective of an American citizen.

The question is interesting because it calls attention to the meaning of democracy.  There is an enormous difference between true democracy - government of the people, by the people, for the people - and the pseudo-democracies that engulf us.

The pseudo-democracies are actually oligarchies because the governments are controlled by political parties and the parties are controlled by a small number of people.  These institutions are profoundly undemocratic.  They raise unscrupulous people to public office by controlling the options the people are allowed to vote on, and ...

... those who control the options control the outcome!!!

This travesty is working because we have been taught to believe political parties are 'right' and are inevitable.  If we are to achieve genuine democracy, the first step must be to learn why and how parties pervert politics.

A major factor in the perversion is political 'campaigning'.  Campaigning is a very expensive process and the costs are corrupting.  The parties need immense amounts of money and raise it by selling their only product - laws.

To make matters worse, campaigning has a corrosive effect on the candidates.  It is a training course in the art of deception.  It is centered on deceit, misdirection and obfuscation rather than integrity and commitment to the public interest.  Furthermore, campaigners are lionized by their supporters and suffer the insidious effect of repeatedly proclaiming their own rectitude.  These things have a debilitating effect on the candidate's character and a destructive effect on society.

The result of this corrupt process is corrupt politicians.  They cannot resolve national debts.  They led the U. S. into war with fictitious threats of Weapons of Mass Destruction.  They maintain laws allowing the growth of huge corporations that suck trillions of dollars out of the world's economies to the detriment of the humans among us.  They gut and repeal laws that protected us from monstrous banks and then called them 'Too Big To Fail'.  They are, as Senator Evan Bayh of Indiana said, unable to conduct the people's business, and, as Senator Ted Kaufman of Delaware said, under the suffocating influence of money.

To attain the alternative you seek, you must first make clear how and why the systems that claim to be 'democracies' fail to serve the people.   Until a nation understands its political distress is caused by what we've been taught is 'the best system on earth', the people will not support a change.

Then you must devise an electoral process that seeks out the individuals best suited to resolve the issues of the time.  The process must let those who do not wish to participate step aside, while advancing individuals with the integrity, the intellect, the energy to serve the public interest.

Don't scoff.

There is no shortage of such people among us.  What we lack is the means of seeking them out and raising them to public office.

Fred Gohlke

Learning From Disagreement

Posted in response to this question on Quora:
 
Politics: Is it a good idea to follow people whose political opinions you strongly disagree with on Quora?

For my part, I learn more from those who disagree with me than from those who don't.  However, finding such people merely opens a tiny crack in a door that must be swung wide if either of us is to benefit from the experience.  Knowledge is gained by discourse between people holding different points of view who wish to resolve their differences by reasoned arguments.  The purpose is not to debate the issues but to apply reason to reach rational conclusions.  Unfortunately (for me), Quora does not support the kind of in-depth discussion necessary to encourage those tiny shifts in perspective that broaden our minds.

Fred Gohlke

Democratic Responsiveness to Economic Circumstances

 Posted in response to this question on Quora:

Democracy: Is a pure democracy equally well suited to rule in times of growth and depression?

The term 'pure democracy' is imprecise, but I'll answer as well as I can.

If the term means public issues are resolved by having everyone in the electorate 'vote' on proposed solutions, the economic circumstances do not matter.  The organizations most expert in exploiting the media will sway public opinion to the advantage of the vested interests they represent, at the expense of the people.

If the term means the people have a mechanism by which they can select their wisest, most virtuous, and most experienced citizens to lead them, pure democracy will work equally well in either situation.  The people will choose leaders for their ability to address the circumstances and resolve the issues that face them.  (Obviously, this does not describe the kind of 'democracy' we endure in the United States.)

Fred Gohlke

Breaking the Iron Law of Oligarchy

Posted in response to this question on Quora:
 
Organization Design: How can an organization mitigate the stagnation and inefficiency implied by the Iron Law of Oligarchy?
Thank  you for asking, Zach.  I don't think it's easy to mitigate the Iron Law  of Oligarchy, but it can be done if the organization recognizes the  danger and takes steps avoid it.  That's difficult because those who had  the assertiveness, energy and ability to form the organization can be  expected to oppose provisions that challenge their leadership.

An  early step is to understand that the qualities required to lead a  dynamic, vibrant organization change with time and circumstance.  Those  who found the organization may not be the best people to make it  productive.  Traditionally, this problem is addressed by having the  membership vote on candidates for leadership positions, a method that  has achieved such sanctity its weaknesses are dismissed.

There  are at least two reasons the traditional 'voting' approach leads  directly to the creation of an oligarchical structure.  One is the fact  that those who stand for election are the most assertive individuals in  the organization and another is that, since such elections are  popularity contests, the incumbents have an enormous advantage.

The  only way to counter these flaws is to devise an electoral process that  sifts through the entire membership to seek out those individuals with  the qualities needed to meet contemporary challenges and raise them to  leadership positions.  In doing so, those who seek to avoid oligarchy  must recognize that, within their organization, are many people who are  unaware of their leadership talents because they are never placed in a  situation that allowed their exercise.  Some of them, when they discuss  current and prospective organizational issues with their peers, will  blossom.  They may start out unsure of their ability, but when their  reason is consulted and they learn they can persuade others of the value  of their ideas, they gain confidence.  In doing so, they grow and  benefit the entire organization.

[Those interested in the  philosophical underpinnings of this approach can check out Edward  Clayton's excellent description of the Political Philosophy of Alasdair  MacIntyre in The Internet Encyclopedia of Philosophy.]

To  eliminate oligarchs, the leadership selection method must ensure every  member can participate in the process to the full extent of each  individual's desire and ability.  That raises the immediate question of  how to give every member of a large group meaningful participation in  the electoral process without chaos.  One method is to create very small  groups of randomly chosen members and build a pyramid-like structure  based on their will.

Mitigating the Iron Law of Oligarchy is,  first of all, a matter of recognizing it is an inevitable result of the  traditional method of selecting leaders.  The only way to prevent it is  to change the way the leaders are chosen.

Thereafter, like any  other large problem, it can be solved by breaking it down.  The  resulting process must guarantee that those who are not accustomed to  the serious discussion of organizational issues are placed in  circumstances that allow and encourage them to participate  meaningfully.  The biggest hurdle will be overcoming a flood of  misdirection and obfuscation flowing from those proclaiming the sanctity  of the traditional method.

Fred

Improving Political Equality

Posted in response to this question on Quora:
 
U.S. Politics: How can American democracy become more egalitarian?
When speaking of equality, we must be careful to differentiate between political equality and economic equality.  Political equality means we all have the right to participate in the political process to the full extent of our desire and ability. Economic equality is a different matter.

When considering political equality, the most powerful force we can use to make democracy more egalitarian is our minds - but we may have to change them a bit:

* We think of 'the people' is a single entity.

* We are sure the people can't resist media manipulation.

* We are sure the people want to choose sides on political issues.

* We are sure voting means visiting polls and casting ballots.

* We are sure active political participation for all is impractical.

* We are sure politics is a dirty business.

There are many thoughtful comments on the question.  The insights described in these comments show the kind of reflective qualities we must bring to bear if we are to have equal political rights and opportunities for all people.

Unfortunately, Quora does not encourage the kind of comprehensive examination required to conduct such a deep analysis.  If anyone can suggest a site where such an in-depth discourse is possible and would like to engage in an exchange of views, please let me know.  In the meantime, I will start the process here.  Perhaps these comments will stimulate additional insights and answers.

COMMENTS:
* We speak of 'the people' as a single entity.  Plato, if not others before him, felt democracy could not work because 'ordinary people' are 'too easily swayed by the emotional and deceptive rhetoric of ambitious politicians'.  He failed to note that not all people are 'ordinary'.  We need look no further than the high-quality posts on Quora to see that.  Yet, Plato's faulty view of democracy survived and still dominates political thought.

We could look at 'the people' differently.  We could see them not as a single entity but as a multitude of individuals: some good, some bad; some skilled, some unskilled; some with integrity, some deceitful; some brilliant, some dull; some sociable, some unfriendly; some excellent advocates of the public interest, some egocentric manipulators.  From this, we might conclude there is no shortage of individuals with the integrity and ability we want in the people who represent us in our government, and decide we need an electoral process that lets us sift through the multitudes to find them.

* We are sure the people can't resist media manipulation.  Yet, when we look at ourselves, we see we can resist some (if not all) of it, particularly when it panders to a view we abhor.  Media manipulation works because it is one-way communication, designed by professional behavioral scientists to inspire an emotional reaction.  Emotional reactions are personal and unthinking.  Our resistance to manipulation increases when we think about the assertions and discuss them with our peers because we expose the deceptions and obfuscations that characterize such material.  This might lead us to integrate a way for the people to discuss political issues - before they vote - into our political infrastructure.

* We are sure the people want to choose sides on political issues.  We might consider an alternative, the idea that the people want to advance the common interest.  A few academics are starting to look at the possibility that the people actually prefer seeking consensus.  Esterling, Fung and Lee[1] found that when people discuss political issues in small groups, the discussion raises both the knowledge level of the participants and their satisfaction with the results of their deliberations.  Pogrebinschi[2] found that "... policies for minority groups deliberated in the national conferences tend to be crosscutting as to their content.  The policies tend to favor more than one group simultaneously ...".

* We are sure voting means visiting polls and casting ballots for options chosen by political parties.  When we look at voting from a different perspective, we see such a conception is enslaving because those who control the options control the outcome.  This may inspire us to devise a voting method in which the people discuss their political concerns among themselves and decide the issues on which they will vote.

* We are sure active political participation for all is impractical.  When we approach the matter from the perspective of finding the jewels among our peers, the problem is less intimidating.  Such an alternate view allows us to imagine a process that, knowing the jewels are among us, sifts through all the people to find the best advocates of the public interest.

* We are sure politics is a dirty business.  When we step back, we can understand why.  We can see that corruption pervades our political system because the parties control the selection of candidates for public office.  They choose candidates who have proven they will renounce principle and sacrifice honor for the benefit of their party.  When we add to this the corrosive effect of political campaigning on a candidates' character, we begin to see it's not politics that's dirty, it's the infrastructure that poisons those who seek public office.  That may encourage us to think about an electoral process based on careful selection by thoughtful people rather than the corruption inherent in a system based on campaigning for votes.

Fred

[1] Esterling, Kevin M., Fung, Archon and Lee, Taeku, Knowledge Inequality and Empowerment in Small Deliberative Groups: Evidence from a Randomized Experiment at the Oboe Townhalls (2011). APSA 2011 Annual Meeting Paper. Available at SSRN: http://ssrn.com/abstract=1902664

[2] Pogrebinschi, Thamy, Participatory Democracy and the Representation of Minority Groups in Brazil (2011). APSA 2011 Annual Meeting Paper. Available at SSRN: http://ssrn.com/abstract=1901000