Injustice and Justice.
Basic Truth. The fundamental truth of economics is that we are all dependent on one another, more or less on a daily basis, for our needs and desires, and this interdependence requires both labor and resources. The essence of an unjust society is that it allows some people to avoid their share of the necessary labor by controlling the resources.
In a sane society we would all contribute to making the economic pie, and in return we would all receive a fair share of the pie. But in our not-so-sane society there are many ways to get a very large hunk of that pie and contribute little or nothing to making it.
How to Get Something for Nothing. The first and most ancient is simply to control the resources. When a few control or "own" all of the resources, the world becomes divided into elves and trolls. The elves do all the work, and the trolls collect tolls for the use of the resources. The laws of our society are designed to give the lion's share to the trolls and as little as possible to the elves.
Since money is the means by which goods, services, and resources are exchanged, since it is the oil that lubricates the economy, another way to take without giving is to find a way to get lots of money without providing anything in return. Our society makes that surprisingly easy, considering the fact that it is essentially a form of legalized theft. We are so dazzled by money that we foolishly imagine that anyone who manages to acquire heaps of the stuff is a wonderful person regardless of whether or not anything worthwhile was provided in exchange. We need to recover from this delusion.
So we have a system that allows favored individuals to acquire enormous wealth without doing anything in return, and because wealth begets wealth, their control of wealth (and power) continues to grow. We clearly have an unjust and unhealthy system. But what do we need to do to create a just and healthy system?
Goals. First, we must acknowledge that while we can positively say that what we have is not just, it is impossible to agree on what would be a perfectly just system. But we can make several positive steps if we keep focused on our goals. What are those goals?
- Everyone contributes reasonable labor to the economy according to their ability and receives at least a living wage in return.
- No one with the ability to contribute gets a free ride.
- We maintain economic democracy. Economic inequality is undemocratic. That is because wealth that exceeds the needs of personal consumption is power. When wealth is concentrated in a few hands, so is political power. Concentrated political power destroys democracy.
So, in essence, what we want is a society that favors the elves and keeps the trolls in check. How do we do that?
The reason we have a society divided into elves and trolls in the first place is when workers do not have control of the resources needed for their labor. So workers must become owners, owners with genuine power over their workplaces.
Next, we must guarantee everyone a job at a living wage-the government must become the employer of last resort (ELR). Supporting the economy from the bottom in this way helps everyone; it ensures effective demand, provides a virtual minimum wage, and goes a long way toward eliminating poverty.
Curbing Free-Loaders. There will still be inequalities. What do we do to prevent the free ride that income from wealth provides? Sensible taxes are certainly part of the answer. Heavy taxes on unearned income as opposed to earned income (we presently do the opposite): inheritance and gift taxes, high taxes on capital gains, dividends and interest are a start. Transaction taxes and Tobin taxes to discourage speculation would help to ensure that the rich use their wealth in productive ways rather than the virtual robbery that is rigged speculation.
These are all revolutionary ideas, but they need not be the last word. If one thing does not work, then something else should be tried. The important thing is to remember the ultimate goal: a society in which we all pull our weight and no one gets a free ride.