Corporatism and Free Market Socialism
For most people taxes are the bane of their existence. Every week your paycheck is considerably less than it could be because somewhere some person decided that your money would be better spent on some obscure government program. Nobody likes to pay taxes but we recognize they are necessary for national security and public welfare. Public schools, roads, airports, farm and energy subsidies, courts, law enforcement agencies, and the military must be publicly subsidized. Each service and piece of equipment must be bought or bartered for. Since we aren’t communists one must conclude that taxes are therefore unavoidable. Not necessarily, a government which is able to invest a small proportion of its tax receipts in private equities over an extended period of time will earn for itself a renewable and sustainable resource that compensates for most, if not all, of the costs of its constituent government agencies and welfare programs.
Competitive State Capitalism (or Corporatism) is a system of public finance where municipal, regional, and national governments all manage permanent funds for the purpose of budget subsidy, dividend production, and improving government benefits (increased spending without a corresponding tax liability). Government investment and competition within the economy are focal themes but the vast majority of the commercial government systems persist under free market constraints rather than usurping market share through uncompetitive monopolies. In only some of its most extreme combinations can it be categorized as a form of Free Market Socialism but the overarching structure of the system makes options available to accommodate those of varying ideologies. Even fundamentalist free market capitalist countries will operate more efficiently and grow much more rapidly when privately owned business gain access to investment capital from government permanent funds and see their increased returns from lower taxes. All of the nation's corporations and income earning residents will pay much less in taxes after all of the countries composite governments, departments, and agencies fund themselves through independently (or institutionally) managed funds.
This system is modeled after Alaska and its Permanent Fund. The Alaskan Permanent Fund earns money from land rental and surcharges to energy companies (oil and natural gas) and reinvests the capital into securities and private equities. As a result of the funds success Alaskan's don't pay state taxes and receive an annual dividend check of nearly $1,000.00! Governments can set aside a small amount of income every year and invest it in private equities. After a number of years they will have enough revenues from their investments to eliminate a significant portion of their resident's tax liabilities. This process is almost exactly like citizens participating in individual or employer sponsored retirement savings plans except the time frames are much longer for governments making it much easier to accumulate useful sums of investment capital.
Reducing taxes should be a focal goal for every Permanent Fund System. After a cycle of 30 odd years of saving and investing, a government should be able to offset approximately 20% of its taxes with investment revenue. In this scenario the average return on investments needs to be 8% with an average inflation rate of only 3.0%. Even if these figures are overly opportunistic a lower return will only require a few more years of incubation before it generates the expected amount of principal. Higher inflation rates will also erode profits and future tax reduction but that too can be offset by delaying maturity of the fund. Compensating for 20% of resident tax liabilities is only the beginning. After three or four cycles a vast majority of the government's revenue will come from investments rather than taxes. Three successful cycles of investment should produce nearly 60% of taxes paid by investment revenue rather than income or property taxes. It may take close to a century but everybody expects their nation to persist for at least that long.
Look at the countries of England, France, and Russia. They have been organized as solid states for hundreds of years. Now consider India and China. Their histories go back many thousands of years. It would be a horrible miscalculation if it were determined that permanent funds took too long to produce benefits for citizens and tax payers. After 150 years, or 5 cycles of investment, a nation could subsist entirely off of permanent fund revenue without taxing any of its corporations or residents. These countries will not have to sacrifice funding for its militaries, its infrastructure, social services or emergency services in order to maintain zero tax liabilities for its citizens. Keeping the Permanent Fund System in perpetuity (with consistent contributions) will eventually allow future governments to directly contribute to the wealth and incomes of all their residents instead of taxing it. All surplus fund revenues after the costs of a budget are offset can be applied to dividend checks for all residents. Two hundred years after inception of the program participating governments would be paying its citizens huge amounts of money in profit sharing.
Lower taxes will generate more economic activity and promote more job creation, more home ownership, more innovation, and more consumption. Generally nations and jurisdictions with lower taxes are able to compete in domestic and international markets better and this will translate to improved living standards for residents. The only sacrifice made is a small increase in taxes for contributions into the permanent funds. If the tax rate was increased 3% and taxes were already 7% the new rate would be 7.21% not 10%. Permanent Funds are meant to operate over spans of decades and centuries so even a menial contribution rate of 3% (or 0.21% gross) will produce the desired results. There should be no doubt that commercial governments will have superior economies to countries wielding ordinary tax and spend public finance because of the exaggerated differences in future corporate and personal tax rates.
If corporations persist under an average (aggregate) 20% profits tax liability when only 20% of a nation's businesses are owned by any competing governments the remaining 80% that are still privately owned will not have any tax liabilities and will keep 100% of their profits. A 0% effective corporate profits tax will be instrumental in job creation and marinating full employment within the national economy. If the proportion of government market share is slightly more, like 45% (and still in the minority) then those proceeds plus revenue gained from currency, real estate, or bond trades should account for a large proportion of resident income tax liabilities as well. The tax savings earned by ordinary working class residents will bolster consumption making business much more profitable compounding the benefits of a commercial government infrastructure.
There is no way that two similarly developed countries of comparable size would remain equal if one were to evolve into a commercial government and the other would continue to rely on tax subsidized government programs. Not only could the commercial government expect an approximate 20% reduction in taxes after approximately 30 years, (and subsequent periodic 20% reductions) which would translate to increased consumption and profitability for domestic companies, but a country increasing their consumption by 20% will grow their economy much faster in terms of jobs and GDP than an equally sized nation with a traditional public finance system. Over the span of 30, 60, or 90 years a much smaller commercial government could overcome a much more populous nation in terms of overall economic activity. Lower taxes increases competition, raises salaries, improves benefits, and lowers costs for food and consumables. It would also be able to assemble together all of the strategic resources and technologies it needs to sustain its growth and improve their resident’s living standards. Like a domino effect, nations will be forced to convert to commercial public finance systems to maintain their economic and political hegemony.
The combination of vastly reduced taxes and strategic assets will make commercial governments more viable than traditional government regardless of how the permanent funds are capitalized. Nations will be forced to start practicing state capitalism to keep up with the more enthusiastic or motivated players. This will be true even if the competitor nation has uncompetitive or communist entitlements. No matter what the ideological objection is to state capitalism the practical effects are undeniable and exclusive enough to disadvantage those electing to abstain from competing. There is certainly enough variety in attributes and entitlements to placate most objections over jurisdiction, degree, and instrument class. Residents needn’t be fearful of becoming socialist if they prefer ardent capitalism. All that is required is to structure their Permanent Fund System around conservative political and economic agendas. Likewise, if a more equitable distribution of equity is desired then the more liberal commercial government entitlements can easily be applied. Public finance systems can be designed around any ideology to affect the most efficient allocation of resources and conservation of economic activity.
For most of history governments have always relied on taxes, tariffs, and tolls to fund their total expenditures for administration and operations. Income, sales, corporate profits, property, and capital gains taxes are the most reliable sources of revenue modern governments but they are also an impediment to economic growth within the jurisdiction and this endangers the wealth of its residents. The solution is a mandate requiring all municipal, county, state, and national government to begin saving a small portion of their tax revenue for subsequent reinvestment in private equities and securities. Most ordinary residents save a portion of their salaries or wages every year for retirement in hope of someday being able to stop working and live off of a pension. The same principals are at work when a government begins investing in private equities and securities as part of a Permanent fund system. Allowing voluntary participation would diminish the net national benefit but it would introduce many efficiencies within the domestic economy as cities, counties, and states should develop more competitive tax rates than neighbors and competitors alike. The introduction suggests a small 3% contribution but participating jurisdictions can always increase this amount to improve future benefit or hasten a permanent funds maturation date.
Systemic Risk:
Some may argue that investment revenue is too unstable to be depended as regular income for governments. Truthfully, tax revenue is often as unstable as investment revenue is. It is a myth that tax revenues are consistent and constant. If economic activity is depressed in a given jurisdiction it will cause the sales tax revenue, corporate tax revenue, and personal income tax revenues to fall. It is irrefutable fact that changing economic environments cause tax revenues to fluctuate which rebuffs the myth that tax revenue is consistent. Nor is it a constant as many politicians would have you believe. Overtaxing companies and families already suffering from terrible economic conditions will almost inevitably worsen their finances and cause all the regular tax revenues to fall even more. Theoretically this can create a positive feedback loop where taxes slow economic activity, resulting in a reduction in government revenue, requiring subsequent increases in taxes to compensate for the shortfall, thus making the economy even slower, and finally causing the system to seize or collapse in a state of hyperinflation. Without economic activity there are no revenues to tax and that bursts the myth that taxes are constant. If tax revenue is not as consistent, nor as constant, as the myth suggests investment revenue then begins to appear more favorable in a weighing of risk versus reward.
Tax revenue may still be inherently less risky than investment revenue but income from securities, real estate, and bonds does not cause the same resistance to growth as taxes causes. It may be true that taxes and government spending simply redistributes profits across a larger economy but taking money away from growing sectors to aid less successful or profitable sectors does slow the growth of the economy. This makes investment revenue more practical than tax revenue. Investment revenues can be increased without creating the same drag on the economy higher tax rates naturally cause, and greater profits for governments will in fact accelerate economic activity within the jurisdiction by decreasing resident tax liabilities and increasing their spending. When a jurisdiction makes investments into stocks, bonds, and real estate it will improve the economy by providing the extra capitalization to competitive industry. Supplanting tax revenue with investment revenue will be the single most important action a nation can take to guarantee its future economic and political hegemony.
A public finance system based on a combination of tax revenue, bond revenue, and investment revenue is much stronger than one relying primarily on taxation. Diversification matters! Ultimately all governments services are still backed by tax revenue making them secure but providing routine access to investment revenue will ease tax liabilities from residents creating healthier corporations and improving living standards. It is very likely that investment revenue will suffer just as much as investment revenue during an economic depression but a jurisdiction will certainly have more options for loss management when both are deployed as sources for government income. For those jurisdictions with mature permanent fund systems, which can rely on investment revenue for the totality of government operations, taxing can be reserved for last resort to dampen the negative consequences of diminishing investment revenues. Ensuring future government revenue is necessary for national security and switching to a Permanent Fund System must be prioritized according to the threat underfunded (or unfunded) militaries, law enforcement, and intelligence agencies pose.
There can be no doubt that jurisdictions that rely on a single type of income for government funding are predisposed to an inordinate amount of risk. In economic downturns property taxes, sales taxes, income taxes, and capital gains taxes can all suffer an extraordinary amount. It is much more likely that the jurisdiction relying on tax revenue as its sole source of income will have to react with severe cuts to government staff and services when it becomes diminished by the disappearing economic activity. But the same can be said of jurisdictions relying on investment revenue as their sole source of income. If there is upheaval in the markets revenues can suffer and government spending will have to be instantaneously cut.
However, if a jurisdiction uses a combination of tax revenue and investment revenue they are likely to suffer smaller fluctuations in government revenue due to the varied sources of income. The diversification of the investment portfolio can take into account economic factors affecting tax revenue and coordinated so that when one is likely to be depressed the other is likely to maintain (or elevate) value. Every jurisdiction will have to determine how much risk is associated with each company, industry, or sector and each administrative, competitor, or foreign jurisdiction and then create a spread on investments that counterbalance their exposures to tax revenue changes.
Sovereign Debt Crises:
Most governments don’t stay on budget. They tax 28 billion but spend 30 billion. They employ municipal bonds and treasury bills to compensate for the difference. This mechanism for public funding will not change. In some ways this is unfortunate because most of the traditional capitalist democracies are suffering under the threat of insolvency. National and municipal government public debts are at an all time high in most countries. Their dangerous addiction to wild spending and excessive borrowing will cause their bankruptcy. Insolvency, although often not a fatal disposition, will severely hamstring a government’s ability to provide emergency or necessary services. Their militaries will be crippled from underfunding, farming will be unsustainable without subsidies, and its infrastructure will crumble and decay. When the needs of a people go unsatisfied for long enough a government’s sovereignty can be challenged and then prove fatal to the political system. Commercial governments produce a second revenue source reducing the amount of money they need to borrow thus insulating them from the threat of coercion by other competitive nations. Better yet, the extra revenue can defray the cost of bond liabilities already accrued.
It is a simple fact that democracies don’t manage public finance well. They revolve in a cycle of borrowing excessively and then austerity for repayment. The pressure for welfare (and defense spending) is too great to resist for most politicians. it is balanced in weight only by constituent pressures for low taxes. The political reality is that both are necessary and the difference is always made up by borrowing. There is no king nor autocrat that can step in and prevent voters from selfishly voting themselves entitlements or tax breaks. Instead the democracy must rely on a sovereign debt crises to reign in government spending or increase taxes to an appropriate level. There is always a small chance that political compromise cant be reached with the people rejecting reductions in benefits or increases in taxes. The nation can suffer usurpation, revolt, occupation, or anarchy. Economic instability generally gives rise to political instability which can have a terrible effect on civil liberties and livelihoods. An adequately capitalized Permanent Fund System should help mitigate reliance on excessive borrow. It should also ease resident tax liabilities. Commercial governments should develop some innate protections against sovereign debt crises and subsequent economic or political instability.
Hyperinflation:
Vested jurisdictions can hedge against inflation by placing the majority (or significant portion) of their investments in foreign economies. Neo-colonial investments protect against situations in which the national currency losses value because the jurisdiction’s foreign borne investments generate proportionally greater returns. If country’s permanent fund is heavily vested in foreign economies when its domestic currency losses ½ its value then the incomes generated by the fund be 2 times greater than they previously were with a strong currency. Even if the permanent fund only accounted for 50% of the general budget at the time of inflation the resulting revaluation will allow it to compensate for 100% of its liabilities.
The need of the governments to print money to pay for regular services almost completely disappears in this scenario and that will eliminate most instances of hyperinflation. At the very least the government will be able to maintain all of their regular services. If hyperinflation cannot be avoided permanent fund assets will escalate even more in value and any surpluses can be applied as stimulus to the private sector (directly through industry subsidy and lower taxes or indirectly by giving residents dividend checks). This makes a return to previous consumption and levels of economic activity more likely with a quicker recovery and more stable currency. If hyperinflation strikes the domestic economy its dire effects will be softened when the majority government services can be guaranteed despite the dramatic loss in value of the national currency.
Money already captured in public pensions or Permanent Funds is extremely durable. Most funds can survive even the harshest of economic climates. In fact, despite the fact they may have earned terrific losses in short term values, the fact that new contributions will be vested in a depreciated market means that when the market recovers they should be in a better position than before the collapse. Pension funds, Permanent Funds, and Sovereign Wealth Funds can usually hold their assets long enough to recover any lost value during an economic downturn. The scope of a government fund is in decades or centuries and they should be able to weather almost any type of negative scenario. Even if the fund accrues losses in a critical payout phase responsible governments can create an insurance system to provide assistance until the fund can right itself. A Permanent fund system creates permanent wealth for a government and all its residents which can be used across generations for any purpose that forwards the peoples interest.
Maintaining limits on government entitlements to invest in securities, commodities, and private equities ensures that residents are not exploited, businesses are not co-opted for other than financial gains, it preserves free markets, and it protects the political integrity of participating governments. There are a whole host of different account attribute options and ways entitlements and investment options can be structured. There is a solution for every overt ideological objections within the open realm of competitive state capitalism. Fears of government monopoly and exploitation must not stunt an opportunity to create, through further inquiry, debate, and refinement, a nation completely independent from taxes. A properly administered Permanent fund system will prove that although government services are necessary, taxes are not.
Many nations have recently created Sovereign Wealth Funds to defray their national tax rates, to offset bond and retirement liabilities for government employees, to provide capital for stimulus and economic development, to stabilize their currencies, and even to forward their own foreign policy agendas. They are becoming more and more common as their versatility becomes more recognized. A government’s investment into securities, commodities, and private equities will make it more efficient, more versatile, and more viable. When governments compete in jurisdictions they do not administer law to they will naturally seek profits like any other ordinary commercial party. This book provides an outline on the organization and structure for profit seeking governments especially in cases where government ownership grows to proportions that rival personal ownership. The longer nations wait to establish their own network of permanent funds or sovereign wealth funds the farther they will fall behind those nations that already have.
Trust and Compatibility:
Central to commerce is the exchange of trust and only those nations with popular election systems have the political integrity necessary to compete as commercial governments. Dictatorial governments competing or investing heavily in its own economy resembles more of a communist system than a capitalist system no matter how the profit is managed or disguised. Authoritarian governments can bully and cajole domestic businesses into unsatisfying arrangements, resident’s property and legal rights can be marginalized without recourse, and foreign companies may face unfair competition. Trust is pivotal and a people must have the necessary political mechanisms to accommodate legitimate argument against government ownership or competition. The system of law hearing argument against commercial government must be administered by people and be accountable to the people. Thus only democratic political systems have the adaptability and integrity to employ commercial governments.
The general organization of democratic governments lends itself to preservation of the divide between industry and state. There is the separation of powers through a tripartite government structure. The executive branch will remain at odds with the legislative and judicial branches. The judicial will reign in overreaching legislatures and executives. The legislatures will protect the interests of their residents and create fair and equitable markets. Combining the tripartite government with the bi-cameral party system (at least two antagonistic parties) should mitigate conflicts within the same tier of government and create conflicts in opposing governments. Each regional government (state, county, or province) will be in competition with the other regions. Within the regional government each municipality and city will guard against unfair political advantage of competing municipalities regardless of their affiliation. The cornerstone of sound political economy is conflict and more fuel is thrown on the fire when governments are allowed to compete with each other and private industry.
In order to eliminate most of the graft and corruption potentiated by commercial governments the nation is dissected into administrative jurisdictions and competitor jurisdictions. A competitor jurisdiction is any political territory where the vested government or owning jurisdiction does not have direct control over legislation, regulation, and enforcement (although it can contribute representatives to a larger regional or national democratic government). Most commercial activity initiated by commercial governments will occur in competitor jurisdictions. Administrative jurisdictions are where the government and its officials have direct control over regulation and enforcement and generally governments will be forbid from competing in these areas (in all except the populist or communist configurations of commercial government). Profit seeking governments require additional measures of oversight and between C-G accounting standards, funding restrictions, constructive market share rules, and forced divestiture an even playing ground can be established and maintained so that all private companies and competitive jurisdictions feel as though they have an equal opportunity to earn profits and thus thrive within the economy.
When conflicts arise between governments and residents, or commercial parties and competitor jurisdictions, the normal regulatory apparatus of the states, provinces, counties, towns, cities, and nation, with their respective courts, will mitigate and diffuse any improprieties or abuses. Competitive interests of one jurisdiction will be held in check by the administrative interests of another jurisdiction. Most host jurisdictions will favor consumers with protective regulations and judicial decrees rather than alien government corporations. Employees of government owned businesses will almost exclusively have residency in the host jurisdiction and are less prone to take advantage or abusing their neighbors at the behest of another government’s appointed executive or elected judicial branches. It is expected that most competitive government corporations will be more responsible in their business practices or product lines simply because their managers are ultimately accountable to the voters of the owning jurisdiction. The fear of scandal will keep most government business managers and executives honest and forthright in their dealings with other jurisdictions or companies.
In most configurations of commercial government the national tier of government will be prohibited from owning positions in companies operating within the country. Its agencies and departments will be free of those conflicts lower governments inherit when first beginning to invest and become business owners. It will be the final means to negotiate difference between the competing states, cities, small businesses and Mega-corporations. The national government will continue to police against graft, fraud, corruption, and coercion regardless whether the perpetrator is private or government. All these checks and balances are in excess of the natural tendency of a people to guard against the improprieties of their elected agents. The press will remain privately owned and residents can continue to rely on their judgment and curiosity as the primary means to check corruption and to remedy abuses.
Governments always reserve the right to organize and operate business but they seldom do so for profit. The principle argument for nationalization or municipalization of services or products is public welfare. Government is the only business entity entitle to uncompetitive business practices. It can hold monopoly, conduct price fixing, and dumping in order to protect the general welfare of its residents. Conventional government incorporations don’t earn profits because they generally operate within the administrative jurisdictions of the owning governments. Often providing a service for residents is more important than producing profits. Commercial governments will have no incentive for funding failing businesses in competitor jurisdictions and as a result the larger market economy will be protected.
The only reason one government operates a business in another jurisdiction is to earn profits and reduce its own residents’ tax liabilities. The right to employ uncompetitive business practices will naturally be forfeited when operating within a competitor jurisdiction. A government competing in another government’s jurisdiction for market share will not be entitled to forward the general welfare of the opposing government’s residents as a reason to act in that jurisdiction. Alien governments are unable to operate nonprofit businesses within any jurisdiction other than its own. It must seek as much profit as the market permits and it will have to adhere to the municipalities’ ordinances and regional governments’ laws while doing so. No government will be eligible to earn profit from business transactions occurring within their administrative jurisdictions. Neither will they be able to deliver products to residents or businesses whose addresses are within their jurisdictions.
If the commercial government is eligible to own and operate a business it may make one contribution to its initial assets and must rely on standard modes of recapitalization from that point forward. Government corporations will have to price their product or service competitively to ensure they earn enough revenue to keep operations fully funded. Unprofitable businesses will be liquidated unless they find other investors or contract for a commercial loan. This will make it near impossible for government businesses to undercut privately owned vendors because they all face bankruptcy if revenue doesn’t exceed overhead. The most important reason for a single contribution system is so that government companies don’t have access to unlimited financing. Government businesses must be accountable to the market economy and limiting their funding to conventional methods will create parity between private and government owned businesses. This experiment would be disastrous if government businesses had an overwhelming advantage over private businesses and it is likely the whole market economy would collapse.
Competitive government owned businesses will be treated exactly like ordinary privately owned companies whenever they participate in commerce within a competitor jurisdiction. Government businesses will be subject to the same administrative regulations, the same city ordinances, and all applicable state, national, or international laws that private businesses are. Government will owe a fiduciary duty to their residents and they will be expected to earn the greatest amount of profits with the least exposure of risk. Representatives are expected to vote in corporate board elections and shareholder referendums with the sole intent on producing profits and marinating dividends. This should put other shareholders at ease with an influx of government investment. A huge proportion of securities are already owned by pension funds and sovereign wealth funds and most business welcome the government money as openly as they do private investors.
Collusion between governments will be strictly forbid so that representatives can’t negotiate for uncompetitive exchanges of services or products, so that laws do not favor one party over another, and enforcement is applied evenly and without prejudice. Commercial governments cannot leverage their own political integrity for the compromise of another region or nation’s integrity. Government businesses won’t ever be able to lobby government employees or representatives from competitor jurisdictions. They can’t make campaign contributions, nor donate PAC moneys, nor offer bribes or gifts. This is especially true for the elected representatives and appointed officials of the owning jurisdiction. It is imperative that private companies are not disadvantaged by government owned business’s natural proximity to representation. Government investment and competition will reform the traditional relationship between commercial parties and the state, where most instances of commercial influence on political campaigns will be eliminated by exclusions created by investment by the government, or as a result of business transactions with that jurisdiction’s companies.
The combination of exclusions should produce a system of politics insulated from commercial influence be it prompted by private parties or government parties. Simultaneously governments will realign their interests with those of the business community so that the most efficient regulations and most productive incentives are in place. Private small businesses and large public businesses can all be assured that they will not be exploited, nor marginalized, or discouraged, and that all markets will be accessible to them as they are for government owned businesses. Reinforcing the separation of State and Industry through restrictions on lobbying and campaign contributions is the greatest secondary benefit of a fully funded Permanent fund system. Public welfare will be intertwined with profit as a government’s ability to provide for its citizens is intimately tied to its success in business in competitor jurisdictions and as a result governments will reciprocate competitive markets and reasonable regulations. When governments no longer rely on businesses as the primary source of tax revenue they will be better able to apply scrutiny and an unbiased eye to industry regulation.
The many commercialized aspects of traditional government authority will not be compromised. The U.S. governments FDIC could still seize management of banks that become insolvent. The Federal Reserve could still rescue an ailing mortgage company, like Fannie Mae or Freddie Mac, or insurance companies like AIG by assuming substantial amounts of their stock. Likewise, a nation desiring to make a transition to a nationalized healthcare system (i.e. the United Kingdom) would retain the authority to do so. A government always has authority to act in otherwise uncompetitive ways to ensure public welfare or economic stability. Its ability to offer subsidized services to residents will never be compromised but all of their funding must come from the General Fund and not their Permanent Funds. This will preserve the integrity of moneys set aside for public welfare and moneys set aside for investment.
Managed Markets:
Disposable incomes for individuals or corporations can even be adjusted by changes in profits taxes and income taxes. Tax rates contribute to the perceived or practical value of money without directly changing the supply by making the currency more or less useful. States and cities will have a means to guide their local economies in agreement with or in contrast with national monetary and fiscal policies. These measures of influence will be in addition to manipulating interest rates through a central bank, legislating tax breaks on the national and regional tiers, and regulating industry.
Private/Public Finance Initiative:
A secondary goal to tax reduction is to reorganize government so that they no longer have permanent employees but rather each service provider or administrator is a private company competing in cost and quality for contracts. Ideally each of the providers will be a government owned corporation operating within a competitor’s jurisdiction. Governments will cease to collect taxes or have permanent employees but will have vast stores of capital that they can spend on government services and administration from these competitive government services providers. Public officials like Mayors and Governors will be more akin to CEO’s deciding on contracts from service providers rather than directly issuing commands to employees.
A Private/Public Finance Initiative (P/PFI) is utilized except that the majority of competing companies are owned by competitor jurisdictions. This means that most profits earned by performing government services for competitor jurisdictions will be recycled into lower taxes and dividends for their residents. Of course contracts must be reciprocated through bid systems and the larger national economy so that all jurisdictions are both consumers and producers in this system. Government services should be improved when jurisdictions face competition from other jurisdictions in regards to performance and cost. Private vendors may still be used but it can be expected that a greater number of jurisdictions will specialize in performing other government services which should give them undeniable advantages. This will produce the most efficient form of wealth conservation in terms of expenditures for public finance and is referred to as the C-G/Public Finance Initiative (C-G/PFI).
Later when nation’s integrate themselves into larger political and economic unions there will be supreme advantages for the country maintaining the most profitable and effective for profit public sector as their government owned companies will have an advantage in the larger shared market. Specialization in different governmental sectors such as defense, intelligence, tax collection, infrastructure and engineering, bureaucracies can occur within nations as well as states introducing economies of scale into the pricing of services and efficiencies in the performance of services. Ultimately it will also serve as a means to more intimately and permanently entwine previously independent jurisdictions.
Strategic Advantages:
During economic crises certain private sector actors and corrupt politicians may coordinate with foreign governments in an attempt to take advantage of domestic violence from protests or domestic terrorism from fringe organizations to install their own despotic or corrupt regime. Corrupt politicians and members of the owners’ class could even fund previously organized militias, mercenaries (evidenced by Libya’s dictators ability to effectively suppress rebellion with rented mercenaries), or rogue countries (renting active militaries through payment or negotiated treaties). The deployment of mercenaries is an old technology that was better lost than found but will unlikely be unlearned as the private-public finance initiative is already worming its way through public sectors across the globe (yes it can be an incredibly useful tool but is much less predictable or controllable then advocates care to disclose). Another strategic advantage of state capital reserves is that government owned businesses and investment capital can also be used to help manage the economy. Regional and national governments will have an almost inexhaustible list of tools that can be used to avert economic collapse (or provide necessary stimulation) without compromising the profitability of any individual company or jurisdiction. Permanent Fund managers can increase the amount of money in simple savings accounts thus manipulating the credit markets within their political jurisdiction, they can purposefully inflate business to business spending for economic stimulus, they can reciprocate price reductions for controlled deflationary measures, they can dictate lending standards for personal or commercial loans through their proxies and subsidiaries, or they can purchase equity in failing companies and make loans to flailing municipal jurisdictions (through structured bond purchases). As primary competitors in the economy these government owned business will have access to many more options for involvement than the public sector has and often these will be more palatable than government solutions. It will often be in the interests of the owning jurisdictions to offer freer market solutions during economic crises than for direct government intervention.
There are secondary benefits to government investment and competition. Jurisdictions will have assets they can leverage for political and commercial gains. Technologies (defense or commercial) and natural resources (oil, gas, and uranium) can be diverted back to the vesting nation. Positions in media (TV, Paper/print, internet, and radio) or utility companies can give intelligence agencies access to more people or more intimate aspects of a foreign economy through individual company financial records. Sensitive sectors and industries can be infiltrated. Government Investors can dictate board members through a coordination or combination of assets. Contracts for services or employment can be funneled back to resident owned companies preserving larger revenues for the domestic companies and more tax revenue for the host nation. Jurisdictions can leverage bond purchases to influence votes in the U.N, I.M.F., World Bank, and general elections, or they can use corporate revenue to make campaign contributions or run political adds. Assets can even be liquidated during embargo or wars. Mass movements and sell offs made by a coalition of vested countries can cause extreme unemployment, hyper inflation, massive deflation, stock market crashes, resource scarcities, real estate crashes, and government defaults on debt obligations. A rogue nation can be effectively crippled before allied troops begin amassing on its borders.
This is an imperative danger as private capital dwarfs that of public capital in immediately available cash and possibly leveraged capital, with a much more diverse and expansive selection of industrial capacity to wage insurrection (citing News Corps willingness to wiretap political officials and predisposition to propaganda). Private sectors and state governments rebelling could easily find capital sponsors from Asian or European countries and from domestic industries (such as banking/finance, durable goods manufacturing, and complicit military industrial manufacturers). Under the cover of thunderous protests and dangerous rhetoric be able to marshal public sentiment and possibly make the regional managers controlling production facilities complicit. The Private Finance Initiative will predispose this nation to unspeakable horrors after the public sector is dismantled and replaced by unmanageable private sector actors. We are on the precipice of disaster with a corrupt political system in crisis.
Too much of the wealth in this U.S.(and other Western Democracies) is concentrated in too few members with those citizens also exercising a terrible amount of political power. One percent of the US population owns 40% of the wealth and collects 60% of the incomes. The top 10% of the income distribution owns over 95% of the wealth and incomes. The currents might change quickly and a significant portion of the owners’ classes’ wealth will be naturally be protected to a diversification. This drastically contrasts greater extent than the poor and middle classes who don’t have large stores of cash available for emergency use (and for relocation) contributing to the general anarchy and mayhem that typically ensues after unexpected economic catastrophes. This will provide certain bad actors within the Wealthy class to fund mercenary insurrections in almost any theatre (orchestrated or independently). This applies to large corporations which are no longer tethered to a specific economy thanks to globalism and the erratic flow of finance. Most corporations are well diversified in foreign economies and the trend for relocation overseas has already started.
It is gravely important that the civilian government understand that the economy must be treated as a weapon against the revolting private sector and foreign interlopers. Commerce generally suffers an near fatal disruptions during instances of intense domestic violence they should not be overly cautious when defending themselves with violent economic policies. The damage can be reversed after the insurrection is squelched citing Iraq as an example where all commerce ceased to function during the sectarian violence but quickly rebounded after peace was achieved. Fear of ruining an economy is misplaced if the threat to the nation’s sovereignty is imminent and there is reasonable certainty that the economy will falter regardless of any emergency measures to salvage it. Healthy unemployment insurance and other emergency entitlements will float a stalled economy and protect the citizenry. The nation and its economy will be in a much better position when sovereignty is maintained and peace regained and where the government can initiate recovery actions through debt financing and other emergency acts.
A direct parallel must be drawn to cyber warfare. As the volume of state capital increase so will its relative value decrease in terms of strategic importance. Governments will always have access to future revenues through taxes so they may be more prone to accept more losses when utilizing state capital to conduct economic violence. Governments will also calculate the costs involved in conventional warfare versus the expected losses from capital warfare. In many situations capital warfare will simply be less costly in terms of human capital and equipment/munitions. Nations already authorize trade embargos which inherently cause loss in revenues and profits for domestic companies.
Like cyber warfare, capital warfare will need to be better developed so the most sophisticated tactics and strategies can be deployed with reasonable certainty in success. Like cyber warfare, a nation will have to invest in the proper regulatory and financial infrastructure to protect against competitor nations aggressions. More and more financial transactions occur through cables and circuitry making cyber warfare and capital warfare complimentary in regards to the economic institutions targeted and their dependent electronic records and computerized operations. Capital warfare should be studied through simulations and experimentation to extract the necessary data to draw reasonable conclusions on useful maneuvers and possible consequences. War will be waged through cyber attacks and economic violence quick after political coercions fail and long before drones are deployed and soldiers come in to administrate over the resulting occupation.
To avoid complete economic disintegration nations and states in crisis should bail out cooperating corporations with equity stakes distributed across or reciprocated among the many municipal, city, state, and nations forming the Allies or new economic union. Governments can leverage themselves by offering higher interest bonds to the international community capturing enough capital (within the zone of devalued currency) to earn a well diversified portfolio of equity positions in a wide variety of sectors, industries, and countries. The offer can be made to all corporations that wish to participate prior to the political or economic crisis and an agreement will be a predictor of possible future resistance or likely financial weakness.
Private companies facing bankruptcy and trying to avoid liquidation can accept a quick evaluation for IPO and then offer a significant portion of its equity publicly (very important for the integrity of the process) where the states and allied nations can be included in the bid process. Making allied nations eligible to participate in purchasing the emergency shares will increase the number of bidding governments increasing the volume of money available for bail out while simultaneously ensuring that governments don’t completely usurp the private sector. Obviously Antitrust laws will have to be adhered to or modified for the bidding and equity distribution process while simultaneously negotiating treaties or trade agreements with other nations willing to participate in the bail out program.
Governments in financial jeopardy due to tumultuous economies can leverage up through sovereign debt to form permanent funds and erase the extra costs in liabilities associated with downgraded credit ratings. Outstanding debts can always be amortized over a longitudinal period as long as spending is reasonably would down and the debt ceiling are consistently raised. There may be debate on limits on the portion of ownership stakes allowed and the different entitlements but the conversation and legislation can be reversed in a control burn after the expected crises is averted or dealt with. Organizing the procedure for a bid system for the between allied and unaligned (obviously eliminating antagonistic actors) nations prior to an economic meltdown will allow for the government to act swiftly so that confidence in the economy is maintained despite the actual catastrophe. Hopefully the participation by the combined public sectors of allies and those assenting private sector permitted to make competitive bids after being deemed financial sound.
The presence of governments on corporate boards will discourage board members from organizing an insurrection if it has not already been planned or implemented. The intelligence communities will gain access to financial date assets for use in thwarting the revolt or inciting an external one. Governments will also gain access the accounting data not normally reported on tax forms and other financial reports which will aid the regulatory and legislative process while empowering the law enforcement departments. Intelligence and law enforcement agencies can coordinate through the private sector to invoke or reciprocate similar forceful consequences in targeted nations or better coordinate cooperative initiatives. Permanent Funds make these actions more efficient effective and easier to orchestrate. Without their use governments will continue to be reactive and clumsy in their war against despots and criminals.
Corporations (and in the future governments) need not willingly accept the terms of the bail out and equity loss although it is in their best interests too. Evaluate public sector service is terms of services rendered and market costs recovered (possibly using the scaled economy of tax subsidy as a base for analysis) and simulate a bid system for auctioning off departments and agencies if nations willingly enter sovereign bankruptcy or are coerced after losing a war. This need not necessarily be implemented in current or near crises but the actuarial analysis and financial accounting models can be develop now for future use. The World Bank, IMF, and other transnational institutions already advocate for the insertion of the Private-Public Finance initiative and many state governments have already started renting or selling utilities and infrastructure so the public sector can defend itself by willingly monetizing itself and restricting eligible bidders or favoring certain consumers (possibly ratifying by popular vote).
Many citizens will feel more uncomfortable with the national government assuming majority or significant ownership in public companies. Distributing the equity across the tens of thousands of municipal, county, and state governments is a much safer and more profitable solution as corporate board representation isn’t concentrated in a small select group of governments and a more traditional socialist economy isn’t formed. All segments of a population stand to benefit from initializing a Permanent Fund System as the Financial Industry gains lucrative fees (almost guaranteed), consumers gain lower taxes and better government serviced Distributing the equity across the thousands of semi-independent governments will conceal or cloud economic movements stirred for national security purposes.
When military branches operate and engineer their own permanent funds (or gain representation and influence on state or national funds) they can ensure their presence within foreign (allied or unallied) military industrial complexes so that in dire emergencies necessary military weapons and supplies can be extracted and coordinated from a variety of offshore locations to equip ex-patriots, emigrants, mercenaries, and allied nations cooperating in the resurgent counterstrike. Defraying the cost of military adventures by recycling the profits earned from accelerating the industrial complexes with predispose more countries to come to aid of the ailing nation. This mechanism is also present for Intelligence adventures and emergency procedures.
Permanent Funds offer governments an excellent opportunity to orchestrate fiscal and monetary policy in a much more manageable way that through tax breaks and other less precise incentives. Any local, county, state, or national government can purchase bonds or preferred stock to convince and coerce the private sector into participating in government programs meant to stimulate the economy or perfect some deficient quality in industry. Bonds are the least intrusive means to guide the private sector. Governments should also be authorized to purchase securities in private sector companies as a means to stimulate the economy and effect the desired change. Common Stock purchases provide two extracurricular advantages in that shareholder votes can be leveraged to influence the corporate boards and threats of stock sell offs can be made to ensure private sector compliance with the public sector initiative. The biggest advantage gained by both the public sector and the private sector is that the money devoted to the economic stimulus is returned to the permanent fund with interest allowing more future tax dollars to be retuned as continual investment capital for small, medium, and large businesses with no subsequent tax liabilities.
Structural Variations:
Skeptical political engineers can install functional restraints within the Permanent Fund System forcing most jurisdictions to outsource management of their assets to 3rd party business managers. This will ensure that the economy is still motivated exclusively by profits rather than socio-political agendas. State capital may be flowing into the financial system but the primary decision makers will still be commercial for profit institutions, chiefly investment banks and influential private residents. Governments will continue to reap the benefits of large incomes while all their residents can be assured that they are not coerced into a uncompetitive or nonprofit economies against their wills. In fact some of the best adapted systems arise from “communist” entitlements with no substantial limits on investment being paired with “traditional” account attributes where the government cant directly influence or control the companies vested in. Commercial governments come in a rich enough variety to accommodate residents who stand ideologically opposite to government ownership of profit seeking companies.
Rather than owning secondary stock in public companies or primary stock in private companies, the jurisdictions can be relegated to government bonds, corporate bonds, currency trades, or real estate transactions. As long as government investment produces an adequate income the nearly inevitable goals of budget subsidy can be attained making non stock permanent funds as fiscally successful as typical permanent funds but government will no longer be allowed to influence corporate board elections of stock holder votes. They must continue to rely on the law and ordinance to bend corporations to the will of constituents. Negotiating for progressive corporate reforms from the position of bond holder or land lord is much harder if not nearly impossible. Governments will still partner with businesses but their involvement in the economy will be more mechanical with less direct contact with consumers or business owners. This is an extremely attractive attribute for more conservative voters. Government may continue to occupy its traditional role while still being able to eliminate its resident’s tax liabilities and leverage its wealth to forward their interests. Non stock variations of commercial government are still categorized by neo-capitalist, competitive state capitalist, neo-populist, and competitive communist although they are generally focused onto only one sector or segment of the economy.
Although the initial argument focuses on reducing taxes as a primary goal for the Permanent Fund System there are more uses for revenue and more methods for wealth accumulation. Although all assets in permanent funds will remain protected from misappropriation and abduction the interest earned on them need not be rolled over for 30 year periods. Instead the money can be immediately deployed by the legislatures for increasing government spending. This investment revenue can bolster defense spending, infrastructure spending, and welfare spending making the country safer, wealthier, and more fair. Tax rates can be maintained at the levels they were before the activation of the Permanent Fund System but spending can be ratcheted up in small and steady increments. The public sector can accomplish all the goals it deems worthy without any corresponding increase in taxes. Higher volumes of government spending will contribute to consumption aiding the economy in similar ways cutting taxes will but specific areas can be targeted which may add some efficiencies.
Permanent Fund revenues may also be used to produce dividends for residents. Instead of reducing taxes or increasing spending permanent fund returns can be distributed to eligible residents and citizens. This is the most progressive use for permanent fund returns as most revenues will be evenly distributed among the population regardless of their incomes and contributions through taxes. However dividends are simply the most powerful and efficient way in stimulating the local economy. It provides a natural growth in consumption within the economy directly correlated to the strength and vigor of the private sector. Increased spending and tax reductions can be trusted to accomplish this as fairly or quickly. The tax code doesn't treat all wage earners and corporate profits equally so abuse may occur when applying permanent fund revenues to offset them. Government spending by its very nature provides stimulation to the economy in unnatural and uneven ways (albeit useful). Dividends may even contribute to establishing a hybrid private/public sector welfare system where permanent funds invested in private equities generate the dividends paid to the poor spend them on private sector services.
Rather than centralizing the control of permanent funds within the legislators and Congresses of nations and states the composite departments and agencies within the individual jurisdictions. A departmental mode of capitalization would allow permanent fund managers to more easily navigate entitlement restrictions as each agency or department has a narrower focus than the larger government and when the funds are authorized certain sectors or instruments can be immediately excluded making adding legitimacy. Each department could incorporate a preset percentage of overbilling within their budget and apply the difference to permanent fund contributions. The departments could seek either tax reduction or increased spending as goals as both make the nation or jurisdiction more efficient in productivity and cost. Departmental Capitalization has a huge advantage when converting a nation to a private/public finance system as they can be more easily parsed into service providers for use in competitor jurisdictions.
Capitalism Improved:
Capitalist nations can employ state capital to defray taxes or create wealth for citizens while simultaneously suppressing government ownership to a gross minority position (so that the combined position of all governments interests are <49%) within each individual company operating within the national or regional economies. This way the owner's class keeps their franchise but everybody still benefits from lower taxes precipitated by government investment. Because entitlements are subjected to restrictions based on competitor and administrative jurisdictions, there is very little chance of economic or political compromise.
However, many commercial governments can employ state capital to forward progressive agendas through shareholder elections and votes, bond holder negotiations, industry practices and standards. Ordinary stock holders are diffuse and anonymous: they are able to skirt around public scrutiny or contempt. Resident or community stock holders come from recognizable jurisdictions such as cities, states, or nations and can be held more responsible for the actions of specific companies or industry. This flood of state capital into public and private companies should reform corporate governance and enable more responsible decision making to occur.
A government could exclude from their portfolios tobacco manufactures, alcohol producers, excessive polluters, weapons manufactures, those companies that abuse labor, exploiters of natural resources, and any company that regularly causes scandal. If the electorate of a particular state or city disagrees with any primary or ancillary effect of manufacturing, marketing, or selling a specific product then that government can abstain from investing. Certain electorates will be more sensitive to environmental concerns (i.e. pollution), production (i.e. unions or slave labor), or social concerns (i.e. abortion, alcohol, tobacco, guns, etc) and their governments can represent the people’s disposition in portfolio allocation.
Governments aren’t restricted to only negative actions. Positive actions are also possible. In the same respect an electorate excludes certain industries they may be equally inclined to focus on others. They may be preoccupied with other more beneficial sectors like defense, scientific research, banking, or green technology companies. Concentrating public wealth dollars into specific sectors can make them more competitive. It can lead to faster development of more services and better products, more capital for mergers and acquisitions, expansion, or reorganization. More consistent and stable rates of capitalization will make profound differences in how a company is managed. Specialization of investment will lead to more experience with those instruments and can translate to civic pride and purpose
An even more visceral effect of government influence on commerce is representation and voting in public companies boards. Governments can forward their social agenda by participating in company votes and installing board members. This is an awesome tool for shaping commercial standards and practices. Consensus can be reached with other likeminded regional or local governments and the combined proportion of votes can be significant enough to cause action in agreement with their social agendas. The dampened corporate influence on politics is compounded with the increased representation of the plural on corporate boards. The convergence of interests and reversal in roles between corporations and government alters the fundamental prerogatives in a conventional capitalist democracy but to the effect of maximizing benefits to both constituents and resident businesses. If social norms outpace industry regulation then the public wealth can be used to reform domestic industry from within.
A government can bend to the public will and only enter into business contract and transaction with private or public companies that have favorable reputations and histories. This will reward private and public companies when they make socially redeemable decisions or take actions that earn profit while protecting the environment or protecting consumers. Governments will primarily be represented in companies operating in an opposing political jurisdictions but an agenda can have repercussions expressed within their administrative jurisdiction. By manipulating current trends in corporate governance, businesses operating within their jurisdiction may make favorable changes when industry standards are upgraded.
Governments of similar sentiment may invoke initiatives within the corporate governance of companies operating within the administrative jurisdiction of the concerned government, or they may make regulatory changes that imitate their commercial-social agendas. One of the most poignant criticisms of conventional capitalism is that the shareowners of modern global spanning stock corporations are the anonymity of shareholders. The fact that most individual owners cant be singled out for culpability makes a corporation more likely to behave badly and treat laborers or consumers worse. They consistently pollute or usurp resources costing the government or communities huge amounts of taxes. Political jurisdictions are more identifiable and will face greater public scrutiny if as investors their company acts recklessly.
For higher governments there is more value in making changes that cause an immediate loss of profit because the government is also more likely to spend money rehabilitating or remediating a problem caused by dangerous or destructive products and processes. Bad loans require bail outs, chemical spillage requires cleaning up, pollution causes environmental damages and possibly catastrophes, non bio-degradable wastes occupies much needed space, and dangerous pharmaceutical or industrials can cause disability or death. In most instances it is the government that must spend money and resources containing or repairing the problems. Rather than burdening a commodity or industry with a green tax, governments can lobby companies from within. Immediate and gross changes will be probably be resisted but at least there will be momentum towards more sustainable processes or practices.
A government is also more likely to make riskier or more socially rewarding decisions because a government is guaranteed continued contributions into the fund and relies on a median average profit on investments for success. They will recuperate immediate losses with savings earned from less General Fund expenditures on managing pollution cleanup, environmental cleanup, or healthcare. Most governments will be concerned primarily with profits but still be averse to scandal. They will not compromise their positions as elected or appointed officials over a comparably small proportion or margin of profit. This will introduce concerns of public welfare into corporate governance on a large scale for the first time in economic history. Ultimately companies will become responsible to both stock owners and voters. This byproduct of government investment will become more exaggerated in the more liberal incarnations of commercial government but is still present in the most practical and conservative models.
These peripheral agendas are all compatible with the fiduciary duty however most permanent fund managers will continue to prioritize profits ahead of socio-political gains due to the fact that most jurisdictions will still only be able to invest in companies not acting within their administrative jurisdictions. There will be less incentive to forward agendas exclusively motivated by society norms or political standards. The fiduciary duty will ensure that permanent fund managers make fiscally sound decisions despite popular support for liberalization. Fortunately moral initiatives like environmentalism cause savings in operational costs by recycling or conserving resources so investor activism can directly improve a company’s bottom line. In other situations the increase emphasis on environmentalism can lead to technology and procedural innovation which also adds to profitability. In the absolute worst case scenario industry will be able to offset slightly higher operation costs cause by government management (and investor activism) with tax savings from fund revenues. Competitive State Capitalism should cause a noticeable trajectory to responsible corporate governance in both domestic and foreign government owned companies.
The deployment of state capital should also reform those jurisdictions still allowing corporations and rich citizens to dominate campaign finance and politics. A large number of companies can be prohibited from making campaign contributions in those governments vested with their stocks. After several decades of permanent fund investment there should be very few jurisdictions where publicly traded companies are still able to influence elections. One will have to take into account all business transactions the C-G corporations have with private business to extrapolate to the number of possible exclusions. Democracy was not meant to be tortured by corporate lobby and unscrupulous political donations. Commercial governments will purge themselves of the poisonous environment created by pay for play politics. When reform fails to take root the political parties can capitalize themselves in a similar manner the political jurisdictions do. When political parties gain significant positions within a private sector they can bend it back to public welfare. The subsequent re-alignment of corporate lobby and influence will prove invaluable within all commercial government ecosystems not already freed from their oppressive corruption.
Competitive State Capitalism:
A nation can be considered Competitive State Capitalist (proper) when the majority (>51% of market share in >51% of markets) of businesses operating within a nation are owned by municipal or regional government but where each can only seek profits within competitor jurisdictions. This scenario depends on a century or two of constant government investment (at the contribution rate forwarded in the premise) but is nearly inevitable if restrictions are not put in place (such as <49% gross ownership, and/or <49% gross market share). Personal wealth and property ownership is never discouraged but after a century or two of focused government investment it is almost a certainty that a significant majority of companies will be government owned. This definitely represents a new mode of economy: Commerce and public finance will be nearly indistinguishable with almost all corporate profits being applied to tax reduction and dividend production by competitor jurisdictions. This will accomplish the greatest amount of wealth conservation and make for the most efficient use of capital and resources within an economy.
With most profits captured by jurisdictions going towards reducing the taxes on their residents businesses the private sector should boom. Economy will be operating at an capacity not possible within nations still marshalling taxes from their industries and workers. Competitive State Capitalism retains many of the efficiencies of fundamentalist capitalism while ensuring a more equitable and competitive distribution of equity within the nation but without monopolizing business ownership or disenfranchising citizens with weaker private property rights. All of the standard options in account attributes and entitlements for permanent fund systems exist within Free Market Socialism as they do within the Capitalist permanent fund systems.
Competitive Nonprofit Economies:
Commercial Government Theory also explores the possibility of "Competitive Nonprofit Economies" with entitlements for jurisdictions to employ nonprofit intra-administrative corporations. It is assumed that if financing restrictions are placed on the nonprofit cooperatives then they will have to compete for operational revenue and profits the same way classic businesses do and a free market economy will be simulated. Non profits will no longer be shackled by tax laws discouraging them from accumulating assets to manage future operational costs but they will be regulated more strictly in terms of employee salaries and must persist exclusively from earned revenues and savings. Many of these intra-administrative Corporations (I.A-C) will have their own income generating assets to offset the costs of their public services. In this way they resemble contemporary Public Authorities like the MTA (Mass Transit Authority) and Port Authority (of NY/NJ) but unlike these examples there will be no continuous government subsidy. Such assets are dependent on a strong private sector for returns and this will help balance the more dynamic public sector with profit motivations.
Nonprofit Intra-administrative corporations will decrease the overall cost of government by shifting services to fee based companies outside the responsibility of tax revenue. Replacing government subsidized services with resident sustained services is a regressive form of government operation and taxation but most nonprofit government systems will allow jurisdictions to own competitive assets that increase their residents’ incomes by dividends which will be used to offset the higher cost of services. Nonprofits with income producing assets will help defray the regressive nature of the fee based public sector especially when combined with the permanent fund dividends disseminated to residents. Everybody will benefit from the lower cost nonprofit products and services while simultaneously avoiding the tax liability fou nd rampant in conventional public sectors.
Both traditional (public sector) and nontraditional (private sector) products and services can be offered by these nonprofit companies but Competitive nonprofit economies should still retain significant profit seeking sectors to placate and harness more industrious and competitive residents. It is especially important that personal property rights including business ownership are not abridged or usurped by the governments. The mixed economy will offer both competitive and nonprofit solutions within a market economy so that most ideological positions can be satisfied. The preservation of the private sector will ensure that taxes continue to be generated for the public sector not transformed or translated into nonprofit I-A.C products.
One of the more practical advantages of utilizing an infrastructure of competitive (profit driven communist) intra-administrative companies is that they are securitized and thus compatible with conventional capitalist economies for political and economic coupling. Having the majority of a socialist economy already parsed into market valued securities will allow the nation to unwind those entitlements should they become burdensome or unwanted. The equity can be redistributed to citizens through the free market or by some other mechanism more equal mechanism. Securitized competitive intra-administrative companies will also allow communist countries to integrate themselves politically and economically into larger Blocs with other communist countries. It would also be possible for capitalist or competitive state capitalist to merge with competitive communist countries for access to their home markets and those foreign markets they already own concentrated market share in.
Capital Eclipse:
For this first time in history states and nations will be responsible for both the defense of the nation and coequal wealth creation for residents. There will be other profound changes; commerce and public finance will become one and the same with corporate profits squarely conserved and recycled between jurisdictions. The economy will become exponentially more efficient with corporate profits used to defray resident taxes thus creating more profits and lower taxes in a positive feedback loop vastly improving standards for living. Contemporary governments rely on corporate revenues for taxes, be they from profits or employee incomes, and thus are not shielded from the twists and tumults of economic cycles. Competitive State Capitalist jurisdictions shall also be subject to the boom and bust in economy but at least these jurisdictions can take a more proactive role in a recovery or crisis management during recession or depressions. Those jurisdictions generating revenue from both investments and taxes will be able to continue providing emergency and social services despite disruptions in either one exclusively. Guaranteeing social services during emergencies will engender greater stability within the nation as populations will be less predisposed to extreme reactions in ideology or leadership.
Public wealth would no longer refer to park spaces or government administration buildings. Instead it will be partial or complete ownership of profit seeking businesses in competitor jurisdictions. They will own retailers, equipment suppliers, contractors, and manufacturing or distribution companies. Public wealth will be seen in terms of gross ownership and market share. In every instance it is private property held in common for all the residents of that region or locality. The public wealth of one community would not be wealth for another community. It is exclusively owned just like individual private wealth or corporate wealth is. It will be a source of pride and identity for the residents. It will be a source of income and collateral. Public wealth will not only be concentrated in the 50 state governments, it will be distributed among thousands of municipal, county, or city governments. There are nearly 90 thousand independent towns, cities, counties, and states in the United States (or other nations). Each one will develop its own fund and will be natural competitors to one another with commercial interests set at odds with each other.
Every reasonable financial planner espouses the need for individuals to dedicate a small percentage of their earnings to retirement savings. The idea is that after 30 or 40 years of consistently saving between 5 and 10% of their yearly income they will have enough principle to produce an investment income to replace their labor income. This formula must be applied to governments as well. No the government won’t retire from administering law and providing necessary services for residents but it can become self sufficient. It can free its citizens and residents from burdensome property, sales, income, and profits taxes. Using alternative forms of public finance will make the nation stronger, more versatile, and safer. It is just as reckless for an individual to neglect retirement savings as it is for a nation to squander its opportunity to initiate a Permanent Fund System.
Most commercial government systems preserve free markets and promote entrepreneurship. When governments are actors in a competitor jurisdiction where they have no responsibilities for public welfare and the administration of law, they will be an ordinary commercial party in every capacity. Municipalities, counties, and states become engrossed in the economies of rival municipalities, counties, and states. They will be investors, partners, and competitors with private businesses. Low taxes will spur growth, innovation, and enfranchisement. Public wealth will provide security and better guarantee sovereignty. The era of Competitive State Capitalism has begun. It has already started transforming the economic and political landscape of the world and will continue to gain momentum until it is the single most dominant theme in the global economy.
A New World Order:
Commercial Governments will quickly eclipse all traditional governments in economic activity and political hegemony. Their extremely low taxes and more competitive industries combined with the extracurricular influence provided by assets will prove to be a superior evolution in public finance and political governance. There are even more esoteric advantages for participating nations, states, or cities. Commercial Government Theory presents three main techniques to consolidate previously separate nations into progressively larger nations or unions and ultimately one world government system. Even if powerful nations and states are not aggressively trying to accumulate territory there will still be the tendency for profit seeking jurisdictions to reorganize themselves based upon permanent fund assets and eligible markets. Larger economic unions benefit from economies of scale, minimizing inefficiencies from non standard currencies, and universal labor and regulatory infrastructures.
Territorial Reorganization:
By incentivizing territory transfers between states or nations while guaranteeing continued democratic representation, families, cities, and states can decide which system of criminal and commercial laws or political organizations best suits their individual or collective needs. This engenders terrific personal freedom on homeowners and residents. Political affiliation will be an object of the market economy and subjected to the same competitive pressures that make other systems efficient. Correlating permanent fund assets and revenues with regulatory environments and available markets will make political associations a strategic choice and not a predetermined and immutable fact. Larger populations will ultimately make larger contributions into the community permanent funds making the jurisdictions more potent and viable in competitive terms. There will be momentum for jurisdictions to integrate and expand until their permanent fund’s assets are coordinated for maximum profits from all of the remaining available markets.
Market Reorganization:
The second method, called Market Reorganization, requires that adequately capitalized jurisdictions disassemble their institutionalized government departments in favor of contracts outsourced to competitive government corporations (C-G.C) or privately owned public works (P.W.) companies as part of a Public/C-G Finance Initiative. It is expected that after a long enough period government service providers will start consolidating market share in the same respect unchecked private (non-governmental) industry does. Foreign nations must open up their government services markets to foreign C-G or private P.W. companies in order for this system to be successful in terms of political reorganization but the competitive pressures put onto jurisdictions to outsource personnel for smaller overall budgets will complement the cost efficiencies gained by economies of scale. Jurisdictions will likely specialize in certain government functions and territorial political monopoly will be replaced by a functional industrial-political complex allowing most traditional boundaries to be circumvented or erased. National governments will still be prohibited from interacting with their own constituent governments but they are lawful competitors in foreign markets. This will accelerate the consolidation of market share within the global economy facilitating a quicker transition to a one world government.
Unity Reorganization:
The third method, called Unity Reorganization, allows national governments to enact semi-uncompetitive entitlements while prompting or forcing lower level (municipal and regional) governments to adopt the same Public/C-G Finance Initiative structure found in the Market Reorganization method. Although all public works C-G.C can participate in the market it is expected that the national government will eventually monopolize government services within its constituent jurisdictions. It will also have an opportunity to accumulate dominant market shares in the public sectors of affiliated or associated nations. In most instances market conditions will predispose the functional merger of operations between two countries but as long as one government is practiced in usurping responsibility from other jurisdictions the market share could be a result of hostile interactions. Regardless of the origin and motives of the power transfer the merger will successfully align the interest of countries while making many government benefits universal and industry regulations standard across the previous political boundaries. Obviously, the third method also relies on foreign nations opening up their public finance systems to C-G.C from other nations.
Violent military conquest is the worst method for accumulating territory and it so often proves itself inefficient at maintaining the assumed property over a longitudinal period that it won’t be covered as a legitimate option for attaining one world government. Colonial overtones were hinted to in the Unity Reorganization method for attaining one world government but exploiting captured territories will ultimately result in failure. Economic unions and supra-national political unions must be created with mutual consent. Democracy is a necessary ingredient for all of these techniques to be successful. The first method, Mutable Boundaries, requires residents to ratify all changes in political territory before they are made. This is especially true if and when the jurisdiction traded crosses regional or national boundaries. With the second and third methods all financial decisions on contracts for services from public works companies will ultimately be made by the duly elected mayor, governor, or president. This gives them legitimacy. Residents will ultimately validate the reorganization and consolidation of government services within public works companies by continuing to vote for the politicians authorizing their use.
One world government doesn’t necessarily mean one world nation. It could just as easily refer to a collection of governments each prescribing to universal standards for democratic representation, codified laws, and government services when territory transfers occur between them. Standardized emergency services, government administration, industry regulators, militaries and law enforcement or intelligence agencies shared between local, regional, and national jurisdictions start eroding the cultural or economic differences between populations and nations. Participating cities, states, and nations start being part of a larger more comprehensive system where historic or traditional political boundaries are broken down into modern and more practical jurisdictions based on coordinated assets from permanent funds, available markets to earn revenues in, and even streamlined public finance (i.e. shared government services). Commercial and criminal laws will be exported in some instance, imported in others, with democratic representation being transported between towns, cities, counties, states, and nations making an ever changing, ever revolving, and ever evolving multi-national one world government system.
Commercial government theory is primarily based on competitive jurisdictions where the cities or states are excluded from earning revenue from the territories where they administer law. In most commercial government systems the expansion of political territory diminishes the available markets where profits can be legally captured. One world government system could be dissected into several competing regional (or continental) jurisdictions each excluded from competing in their own territory but still located within the same legal framework for regulation and enforcement. Each tier of government will offer alternative markets, different combinations of assets, and different systems of laws giving citizens of participating jurisdictions ample selection in determining their social and economic futures. This will set precedent for political affiliation to concentrate into larger more versatile systems. Commerce is facilitated and improved by uniformity in law and regulation. It will be in every city, state, and nation’s best interests to assemble with similarly orientated cities, states, and nations to form larger and more efficient markets. Organizing democracies into commercial governments not only makes a one world government possible, it makes it likely.
An incentivized system for territory relocation should vastly expand the areas of the world where democracy is practiced. There will never be an instance where citizens of a democratic nation are sold off to an autocratic state unless they themselves authorize the transaction. However, despots can be convinced to relinquish claim to populations on the borders or those in dissent or revolt. Despots often respond to bribery or equitable compensation and the relocated residents will have no opportunity to object. This creates one sided momentum for democracy to peaceably expand its representation throughout all corners of the world. None of the relocated residents should object to the transfer considering the fact they will immediately gain representation and partial ownership of the assuming jurisdiction’s permanent funds. The purchasing jurisdiction will of course immediately gain access to the resources and the tax revenues from commerce and labor within the territory. This will set the world on a trajectory toward one world government system and democracy for the vast majority of the world’s population.
The meaningfulness of political boundaries diminishes when 3rd party government service providers step in to administrate the duties of the municipality, county, state, or nation. This breakdown in the structure will lead to more willingness for residents to change their political allegiances. Territory transfers will be more frequent and the subsequent variety in secessions, assumptions, dissolutions, and mergers will realign residency into more equitable partnerships within all tiers of government. Ultimately jurisdictions will experience the same consolidation in market share that companies experience from mergers and acquisition within the various industries and grow in population, size, and wealth until only one or two competitive jurisdictions remain. Even if people don’t identify themselves as being part of the same nation if those apparently separate counties have interchangeable laws and share government service providers the difference is more nuanced than practical. For all intents and purposes they already belong to a single multi-national one government system.
