Feb 7, 2016

A citizen-ownership democracy proposal for Goa, India, by the Goa Foundation

The Goa Foundation has, on 29th Jan 2016, sent a citizen dividend proposal to the Goa government, asking for the setting up of a permanent fund with 100% mining revenue and the distribution of citizen dividend from the permanent fund. This proposal fits the main ideals of a citizen ownership democracy.

Here are some details:

Goa (from wiki): "Goa is currently the Republic of India's smallest state by area post the 1974/75 UN treaty and presently has the fourth smallest population. Famously known as Rome of the East it was the capital of historical Portuguese eastern empire (1510 to 1910) followed by an Overseas province status of the Portuguese Republic (1910 to 1974/75)."

Goa (map from Wiki)
Goa Foundation: "The Goa Foundation is the most well known of Goa’s environmental action groups. Founded in 1986 by a group of Goan environmentalists each flighting his or her own individual environmental battles, the organisation today commands the respect of judiciary, government and the general public for persisting with its environment agenda for more than two decades."

The proposal: The link goes to the full proposal. The main ideas are extracted below.
"As far as mining is concerned, there are 3 assets being depleted: (a) the mineral itself, owned by the State in trust for the people and especially future generations; (b) the income associated with mining is an inherited opportunity which we deplete along with the minerals; and (c) the environment, health and other social aspects which can be severely damaged when mining takes place (usually considered under SD)."
"For the first asset, a Permanent Fund – as understood globally – is the appropriate instrument to achieve IE[ intergenerational equity]. To understand the concept, consider selling ancestral gold and purchasing agricultural land – this enables preservation of capital while retaining the potential to earn income. The basic requirements would include: (a) selling the gold for the full market value; (b) using all the proceeds to purchase agricultural land for not more than the market value; and (c) preserving the capabilities of the agricultural land so that the land retains its value. Only then can the crop be consumed." 
"By analogy, the Permanent Fund would be set up by the state as a trust on behalf of the people and especially future generations. This would flow from the original ownership of the minerals. It would be funded from the mineral receipts of the state. The Permanent Fund is an endowment fund, with the proviso that income upto inflation be reinvested (to ensure the true permanence or value of the principal for future generations). Ideally, income above inflation should be distributed directly to the people as a Citizens’ Dividend, originating from the right of ownership over the minerals and subsequently the Permanent Fund." (emphasis is mine)
How much money is involved? The following is an estimate of just one source of revenue, from the proposal.
"Our calculations from publicly available data show that for the eight year period 2004-05 till 2011-12, the State of Goa has received less than 5% of the value of its iron ore (after considering all associated expenses). This works out to a meagre Rs.2,387 crores when it ought to have earned Rs.53,833 crores. Further, even this trifle was treated as income, not as a capital receipt, leading to a loss. The amounts are in excess of Rs. 3.5 lakhs per man, woman and child. This is clearly not acceptable practice. We cannot cheat our children in this manner. Hence the need for a Permanent Fund in future."
That is Rs 350,000  (1 lakh is 100,000), which is more than US$5000. Relative to income in India, this is a lot of money.

A citizen dividend:
"Simply distribute the real income [from the permanent fund] to the owners as a Citizen’s Dividend. This is the only fair way to distribute income from the commons – equally to all.
The name: Goenchi Mati Permanent Fund
"We propose that the Supreme Court this permanent fund be extended to cover 100% of receipts from mining, and to cover all minerals, including manganese and bauxite. Consequently, it should also be renamed the Goenchi Mati Permanent Fund (GMPF)."
The proposal contains many very good ideas on the mechanisms for a permanent fund. It is a model worth considering for other states, nations or countries.

Of course, there is the all important question: what will be the outcome? Will Goa become a citizen-ownership democracy?

Feb 3, 2016

62 people own half the world

If you only had a quick look at the recent headlines about the richest 62 people on earth, you may have thought that these 62 people own half the world's wealth. One headline definitely gives such an impression: Super-rich: 62 people own as much as half the world (By aljazeera.com)

But, no. They don't own half the earth. They don't own 50% of the world's wealth. In fact, the percentage is very low. Make a guess before you continue reading.

Oxfam has a report on how it arrived at those numbers: methodology note. According to the details,

Total global wealth in 2015:              $250,145 billion
Wealth of the bottom 50% population:     $1,751 billion
Wealth of the richest 62 people:            $1,762 billion
Half the world's population is 3.6 billion people.

While most reports have focused on the super-rich 62, the main issue is really how poor the bottom half the world's population is.

The bottom half the world's population own 0.7% of the total global wealth. (1751/250145)
Yes, they don't even own 1% of the global wealth.

Half the world's population own, on average, $486 each. (1751/3.6)
Yes, their wealth is not enough for half an iphone 6S (with a list price at Amazon for $1199.99).

So, even if the wealth of the super-rich 62 are confiscated and distributed to the bottom half of the world's population, each of them will double his wealth to $975. But it is still not enough to own an iphone 6S at the list price. With the discounts, this will barely get 1.

Clearly, focusing on the super-rich 62 is not going to help the bottom half of the world's population much.

Feb 2, 2016

Don't pick my blackberries

Bristol City Council accused of being killjoys over plans to ban picking blackberries (Read more: http://www.westerndailypress.co.uk/ )

"Bristol City Council has suggested 34 new bylaws for 212 parks and green spaces around the city.
One new rule would ban people from removing "the whole or any part of any plant, shrub or tree" - effectively banning blackberry picking.
The bonkers rule, which is currently part of a public consultation, would also outlaw making daisy chains, picking apples or mushrooms or any other wild fruit."
Keep out, citizens. Keep out.

Don't pluck my mangoes: A story of national sharing

Available at Amazon Kindle
This short story of sharing is for everyone everywhere of any age. 
For the serious minded, the sharing of mangoes is also a sharing of the country’s wealth, in the form of a universal basic income or as a citizen dividend. 

Jan 31, 2016

The one and only reason needed for a citizen dividend

Malcolm Torry has written 101 reasons for a Citizen's Income: Arguments for giving everyone some money.

But there is really one solid indisputable reason for a citizen dividend: You own it. You own your country, and therefore your country's wealth is yours.

All other reasons are just supportive, but not necessary.

Why do shareholders of a company get dividends? Because they own it. Just one reason is good enough.

The inflation objection to a universal basic income

One common objection against a universal basic income is this: If everyone gets a basic income, inflation will happen and we will all be back to square one.

Another version focuses on rent: Landlords will raise rents by the basic income amount, and we will all be back to square one, except for the landlords.

Well, if you believe that, you will support everyone paying $1,000 more tax to the government. Deflation will happen and we will all be back to square one. But the government will be a lot richer.

What's really wrong with capitalism, socialism and communism?

Let us have a quick look at the definitions of capitalism, communism and socialism. What is glaringly missing from these systems?

What is capitalism?
According to Merriam Webster's definition of capitalism, it is an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.

What is communism?
It is a way of organizing a society in which the government owns the things that are used to make and transport products (such as land, oil, factories, ships, etc.) and there is no privately owned property.

What is socialism?

1: any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods
a : a system of society or group living in which there is no private property
b : a system or condition of society in which the means of production are owned and controlled by the state
3: a stage of society in Marxist theory transitional between capitalism and communism and distinguished by unequal distribution of goods and pay according to work done

What is glaringly missing?
These big ideas talk about who owns the production means, who make the decisions on what to produce, and who make the decision on how to distribute the goods.

What is missing? Nobody talks about who gets the profit.

With capitalism, the capitalists take the profit. With communism, the government takes the profit. With socialism, the government and capitalists take the profit. What about the common people?

The common people never get the profit. That's why capitalism, socialism and communism are all failed systems.

What is the solution?

Jan 28, 2016

Money for the poor has to come from the rich? Not so.

These are the simple reasons why a basic income for all could transform our society for the better (Jan 2016). While the writer, Caroline Lucas, is strongly in favor of a universal basic income, she thinks that a basic income must be redistributive.
"Crucially this is a policy designed to be redistributive – costing those with the most money more."
A universal basic income need not be redistributive, or as more colorfully described, robbing from the rich and hardworking to give to the poor and lazy.

If money for the poor is not coming from the rich, where is it coming from?

Almost all governments have been quietly confiscating their countries' wealth from their rightful owners, i.e., the citizens. Just by returning the confiscated wealth to every citizen, there will be quite a lot of money for everyone, poor or rich.

The idea of returning wealth to citizens is described in this great book:

Oil to Cash: Fighting the Resource Curse through Cash Transfers

"How can citizens truly benefit from national wealth?"

"Just give the money directly to citizens."

Jan 25, 2016

Give a man a fish, and you feed him for a day; show him how to catch fish, and he will show you the no-fishing signs.

Give a man a fish, and you feed him for a day; show him how to catch fish, and you feed him for a lifetime.

In this modern world, there is nowhere for the common folks to fish for food. Every pond, lake, and sea is owned by some rich person, organization, or government.

One big fear is that technology is making many jobs redundant without creating enough new jobs. For example, companies are experimenting with drone delivery. Imagine the number of delivery jobs that will be axed. Other companies are coming up with driverless cars. Soon, taxi drivers and Uber drivers will have to team up to protest against robotic drivers.

Jan 19, 2016

Dare to Dream: Governments Oozing with Money for their People

"Government investments in income generating assets is not only a good diversification strategy but it is a must."
 From: Time for actionKim Keating Published on January 16, 2016. The Telegram.

Prudent investment by the government is a topic often linked to oil resources. Some governments spend all the money from oil. A few smart ones save some of the oil money into an investment fund. The investment fund generates annual returns, which can be even bigger than the annual oil revenue. This has happened in Alaska. Other countries with big investment funds from oil money include Norway and Kuwait. UK, unfortunately, belongs to those who spend all their oil money.

But why stop at oil resources and oil revenue? Governments can divert money to a sovereign wealth fund regardless of where the money comes from. The sovereign wealth fund will eventually be able to generate huge returns. The Singapore government has achieved this. It has a lot of money from other resources that is placed in its sovereign wealth funds. The returns per capita are humongous!

Instead of poor governments stretching out their hands to beg, steal and rob from their citizens year in and year out, we should expect governments to actively invest money for good returns. In the long run, governments should have so much investment that they are oozing with money, with enough to support a great citizen dividend or a universal basic income.

Let us consider a simple analogy. A startup company needs money from shareholders. If the company is successful, eventually, the company should be oozing with money to give back to its shareholders. Governments and citizens must change our views. A government cannot remain as a startup company forever, every year demanding money from its citizens. Citizens must demand that their governments be like successful companies oozing with money for their citizens.

The simple and very effect strategy is for each government to start and commit to a few sovereign wealth funds. There are already many success stories.

Yes, it is good strategy, it is a must, it is a responsibility of every government to create income generating assets for their citizens.