# Moderate Capitalism Idea [closed]

I'm trying to write a short story about a new post-capitalistic economic system. I have 3 ideas based on current capitalism:

1. Wealth Limit: To ensure that the middle class has most of the wealth possible a limit that establishes how much wealth in property and money you can have is set. Great projects are achieved through crowd-funding. This limit is set to make the middle class as big as possible with the most wealth as possible.
2. Moderate Wealth: 1% of the world's population owns the 99%. This wealth inequity is unacceptable. To prevent this from happening taxes are increased depending not on your income but how much wealth you own. It's the same with fines, you pay according to how wealthy you are. Your offspring can only inherit a part of your fortune if your are in that 1% of the population. All transactions are done electronically so there is no point in taking the money to a tax-haven. Your government knows how wealthy you are all the time. This is done to prevent lobbies from influencing the government and prevents the rich from controlling democracy.
3. Social Capitalism: It is believed that current capitalism encourages psychopathic behavior therefore "morality" is put first in certain sectors such us education, law, military, justice, media, health, prisons etc which can only be done by public services. Most technology is done with open source license therefore you get cars with clone components built by private industries. Patents are not allowed if they are related to a sensitive sector such us health. People who accomplish great achievements are properly rewarded by the people. Democracy is done directly by the people through the Internet.

I'm looking for opinions about these models, how sustainable they could be or what flaws they can have.

## closed as primarily opinion-based by AndreiROM, Mołot, dot_Sp0T, Azuaron, GreenJan 11 '17 at 20:26

Many good questions generate some degree of opinion based on expert experience, but answers to this question will tend to be almost entirely based on opinions, rather than facts, references, or specific expertise. If this question can be reworded to fit the rules in the help center, please edit the question.

• I think you have a fairly inaccurate idea of what capitalism is. Setting a wealth limit will only serve to demotivate people, and is a decisively communist approach. Your questions are also incredibly broad and opinion based, which make them a very poor fit for this site. – AndreiROM Jan 11 '17 at 16:36
• Thank you for your opinion. Can you expand in your "reasons"? It would be a valid answer to me. – user31264 Jan 11 '17 at 16:39
• @PedroGabriel It would be valid to me I don't know if it's valid for the forum. – user31264 Jan 11 '17 at 18:10
• As opinion based??? I thought that its main problem was being too wide. – Shadow1024 Jan 11 '17 at 20:41
• It's just a pitty that these questions are closed because they are opinion based. It's not a programming language question it's just a creative idea. – user31264 Jan 11 '17 at 20:47

# Regarding Wealth Limits

This is timely, since Jeremy Corbyn, leader of the Labour party in the UK, just suggested such a thing yesterday. You can read all about it in various news articles. Corbyn suggested capping income; capping wealth would be even more terrible an idea. Capping income dis-incentivizes work, capping wealth means that once you have earned up to your wealth limit, there is very little incentive to keep working. Why not retire at that point?

From a fiery lefty perspective, you are much better off with very high taxes. Thomas Piketty (a reputable economist, unlike Jeremy Corbyn) suggests that the 1% can take an 80% tax rate without dis-incentivizing work. I don't agree with him, but that certainly seems more reasonable and less economy-distorting than a hard income or wealth cap.

Conclusion: wealth limits are probably fatal to an economy.

# Regarding moderation of wealth

Saying that the 1% owns the 99% sounds inaccurate. The Atlantic quotes two different sources saying that the 1% in America owns 33% and 42%. Certainly still a lot, but not total.

The increased taxes are mentioned above as feasible. According to Wikipedia there are several countries where the general tax rate is over 50%, so using high taxes to reduce inequality is a reasonably well supported program. However, given that these high tax countries are the also the ones that can be generally described as capitalist (Belgium, Finland, Sweden, Canada, etc), no one really knows how much higher you can go with taxes. There is some analysis that high tax countries stagnated in the 1970s and have since liberalized their economies, reducing tax burdens, and have since performed better, with both the UK and Sweden being examples.

Offspring not inheriting much is referred to as estate taxes. These are already higher than they have been in the past, which is reducing the ability for Rockefellers and Vanderbilts and the like to pass on enormous fortunes. However, if I have a billion dollars, even a 99% tax still leaves my children with 10 million; a very sizable head start in life. A 100% inheritance tax would be effective at preventing money transfer between generations, but again would have significant impact on people's desire to work. If you already made 10 million, why keep working instead of retiring? You already have as much money as you can use for a lifetime and you won't be able to pass much if anything on to your family. Lastly, if you are implementing things like wealth limits or very high 80% + tax rates, the estate tax becomes somewhat redundant.

# Social capitalism

You will have to add some more evidence that capitalism encourages psychopathic behavior. That is not a generally supported statement.

Loosening patent laws is the one thing you suggest that seems to me the most wise. At best, patents are important in ensuring that the rewards for the effort involved in creating something innovative and new accrue to the developer. However, patents can also lead to restrictions on competition. A 25 year patent is a long time as fast as the modern economy moves; shortening them may be a good idea. Patents are themselves anti-capitalist in a strict sense; they are a means of restricting competition. They can be conceived of as a piece of government regulation.

Your statement, 'People who accomplish great achievements are properly rewarded by the people.' How?

As for 'Democracy is done directly by the people through the Internet,' how does the internet make democracy better? We already have media in place for expressing and aggregating popular votes. How does changing the media change the democratic system?

# Conclusion

Generally, what you are proposing is a much stricter version of European social democracy. The practical effect will be simple; people who can potentially make a lot of money will leave your jurisdiction searching for somewhere were they will be rewarded more. I argue that a much of the US's success is due to its inequality. The rich of Europe come to America to get even richer, bringing their wealth and ideas. Look at how many foreigners are bigwigs in Silicon Valley, or how much money European banks park in American assets.

So, by enacting this sort of government, you will simply drive wealth and talent away from your country.

• +1 As this is essentially how I would answer. As well, it could be expanded that the wealth cap is also a terrible indicator because there are people who make quite a bit of money but have a large amount of debt and therefore their net worth is quite a bit lower than reality. Also, completely irrelevant, but amusing is that many people become millionaires in retirement/slightly before if they have minimal debt just based on retirement nest egg and their house. – rangerike1363 Jan 11 '17 at 17:43
• There is a lot of people that work for free. Money is a important motivation, but is not the only one. – Lucas Jan 11 '17 at 19:15
• +1, anyway: instead of wealth limit, I'd give a higher chance to a progressive net wealth tax; services done any monopolist (including gov) tend to be provided in not specially price effective way, even Sweden started encouraging charter schools. If one goes this way, then would have to pay proper price, presumably some weird Public-Private Partnership may have be a better choice. – Shadow1024 Jan 11 '17 at 19:33
• @Lucas people "work" for free because someone else is earning or have earned their upkeep and they don't have to really work. Putting caps on income and inheritance would largely cut that possibility. – Mołot Jan 11 '17 at 19:38
• Your argument about capping wealth is similarly flawed. At the highest levels, wealth does not come from work but capital returns. And excessively concentrated wealth is fatal to an economy. So far from being fatal, capping weath should have no negative impact on productivity, and may be necessary for the maintenence of a healthy economy. – J Doe Jan 11 '17 at 19:51

Your (1) and (2) are essentially the same.

If you make a wealth cap, people getting to this cap...

1. Either won't work any more. This disables exactly the most productive people of the society.
2. Or, they will work, but not on to get more money, but to find a way to avoid this wealth cap.

The communists tried this. For example, in the eastern block, it was simply forbidden for a family to have more than 2 houses. This resulted that the construction industry got into such a low level, that most families had major problems to get their first.

Taken from another angle, your "post-capitalist" society sounds like a GREAT backdrop for an Ayn Rand Lite society, full of conflict.

While I agree that, on the surface, having a "1%" feels wrong... it's just a feeling, not reality.

In a capitalist society, as mentioned above, the only people who attain 1% status are those who, somehow, act as a force multiplier in the economy. Either by name recognition (Elon Musk makes any project better) or by shear business sense (Bill Gates rose to the top at the board table, not the keyboard) or by intuitively sensing the need for premium products for luddites (Steve Jobs sold people over-priced equipment with user friendly software). However it works, these people got where they are by being good at their job. If they AREN'T a force multiplier, then they'll quickly spend out their money, gain nothing from it, and find themselves at the bottom of the middle class, competing for "Senior Fry Technician" at the local greasy spoon.

Let's discuss what will actually happen if you impose wage caps; it turns out we've already done this experiment. Used to be, you went to work, and got a check. But during WWII, the government imposed wage caps in order to ensure nobody was "profiteering" from the war and ensure the maximum amount of money was being spent ON the war.

At least, that was the goal.

What actually happened was our modern "perk" economy. It started with health insurance; we can only pay you $50,000, but we can also give you a$20,000 health insurance plan! Stock options were popular, because it wasn't really "getting paid," it was "being invested in the company." More and more of the increasing wages were simply being spent by the company FOR the worker to avoid the cap. Company cars, business class; what you will find is that there is STILL a "1%," those people won't have huge paychecks or huge houses, but they'll still find perks somewhere.

Technology wages have remained flat for over a decade; in exchange, companies are giving out even more micro-management perks. Free sodas. Catered lunch. Covered parking. Because a box of soda is worth more in keeping an employee than in cost, but is also cheaper than giving a wage increase (and paying the increased income taxes, because employers have to pay half of the taxes).

We can also see this in the Soviet Union, and most "Communist" countries; everybody was technically "paid" the same and had the same access to necessities... but the ruling class still needed perks, because they worked so hard! So they had access to better markets with higher quality goods (bread was bread, so what if one loaf was higher quality?), they got cars and drivers (owned by the state, it wasn't their property, but they had control of the vehicles), datchas (even they needed to get out of the city occasionally, right?), and the government had really high quality buildings with higher quality machinery to keep it warm.

In other words, no economy works with "wealth caps." Those who are most productive will find some way to to reward themselves, and when people have no chance to gain a better reward they become apathetic. It would be interesting to see a story taking place in a Post-Capitalism America where it ISN'T a utopia, and characters are musing about how the New American Dream isn't working either.