Ownership rights of the poor over the instruments of production

I hope the title does not conjure an image of a poor farmer owning the changkol in his hand.

(From wiki)

In his book, Poverty and Hunger, Causes and Consequences, Dr. Ratan Das advocates that the way to eliminate poverty is to have ownership rights of the poor over the instruments of production.

In his own words:

"We must realize that hunger does not simply depend upon 'non-availability of food.' It depends upon the faulty social, political and economic systems and many alien factors pursued by the so called civilized world. These systems have to be wrecked at any cost to make the hungry to own and utilize the resources and infrastructures available in his country."

The very descriptive book is very much concerned with land for tillers, and the many political, social and economic systems that have created poverty.

It  focuses on the immediate surrounding of the poor. For farmers, land is the most important immediate surrounding.

Let us widen our focus. Let farmers own shares in Apple, in Google, and in Manhattan properties. These are very good instruments of production.

A citizen ownership democracy makes this possible. Not just for farmers or poor people, but for every citizen. You can see the list of shares and properties owned by every Alaskan resident. The Alaskans really own these. The dividends get distributed to every Alaskan every year.

People should not confused this with fake ownership, where the dividends end up in the government pockets.

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?

A contrast of two gardens.

Singapore. Garden by the Bay

India. Childless woman who mothered trees

One costs $1 billion to build. One is free.

One costs millions to maintain annually. One is free.

One is a decision from the very top political posts. One is a decision by an extraordinary couple.

Politician, businessman and citizen II

There is a name for the close tie between politicians and businessmen.

It is called "crony capitalism." It enables

"politicians and their friends to reap huge profits by gaining control of vast swaths of the country’s natural resources, often for nothing".

Scandal Bares Corruption Hampering India’s Growth - NYTimes.com

The separation of  business from politics is a very old problem. See The Separation of Business and State by Timothy Kuhner.

See this also: The Need for Separation of Business and State

"Apparently, when big business requests a “tax holiday”, it is not tax evasion but tax avoidance. We would all like a tax holiday to avoid paying taxes. Unfortunately, you and I do not have the lobbying power of multinational corporations behind us. That is, we do not have a whole political party behind us devoted to making us richer. "

Citizens need to watch over their common wealth, fight for their citizen ownership right and their rightful citizen ownership income.

Out of the family way: If India has to move forward, the voting public must wean itself off the Gandhi dynasty | Chetan Bhagat

Out of the family way: If India has to move forward, the voting public must wean itself off the Gandhi dynasty | Chetan Bhagat:

"We all know free cash in hand works for voters."

Not if the voters know that they deserve more.

For example, if the governing party transfers $100 from the government treasury to each voter, should the voter be happy?

If a voter thinks he deserve nothing, then $100 pre-election money is a plus.

If a voter knows that he deserves $9000 citizen-ownership income every year, then he should be very unhappy and should look for a party that can give him his rightful money every year.

Citizen Education: It’s time we realised India’s mineral wealth belongs to its people, not to the politicians | Chetan Bhagat

It’s time we realised India’s mineral wealth belongs to its people, not to the politicians | Chetan Bhagat:

   "The political parties are managers of the nation’s assets, not owners."

It is urgent that citizens have an good education that they are owners of their countries, not just in politician's slogans, but in cold hard cash.

The Alaska model of citizen-ownership democracy has been very well hidden from citizens around the world.

Few people ever heard of this. And even fewer ever dream of getting any income from their citizen wealth. But this is a dream worth dreaming. A citizen-ownership income can eradicate poverty.

In Singapore, a citizen-ownership income is expected to be more than $6000 a year for every citizen. This income will allow individuals to live with dignity.

For a household of 4 members, the expected citizen-ownership income is expected to be more than $26,000 a year. In comparison, there were 240,000 households (26% of total households) who earned less than $24,000 in 2000.

If I may add to the story by Chetan Bhagat, the managers (politicians) are controlling the "huge jewellery shop full of precious ornaments and family treasures", keeping any revenue or profit in the opaque accounts while the family members (citizens) are starving. 

Citizen-ownership Democracy. India?

With the new idea of a citizen-ownership democracy, citizens get a direct and equal share of the money that is raised when common properties of the country are sold. For example, when a country sells land to private enterprises, the money should be distributed equally and directly to all citizens.

This is the way for citizens to directly benefit from a democracy, instead of having just a vote that has little or no tangible benefit.

Indian politicians are already practicing some form of this wealth sharing. They promise voters goodies that are paid from the state fund. The goodies are small, e.g., $30 TV sets.

Tamil Nadu election: Will the best freebie win? By Nidhi Dutt, BBC News
"The practice of pledging gifts for votes in this southern state began in 2006."
"So successful did other major political parties perceive the strategy to be, that this time round they too built freebies into their campaign manifestos."

"S. Subramaniam Balaji, a Chennai-based lawyer who has taken his case against the DMK's TV-for-vote scheme to the Supreme Court of India, says that the superficial focus on gift-giving was disappointing."

In contrast, the citizen-ownership democracy idea can lead to real substantial sharing of the country's wealth. Citizens stand to receive thousands of dollar every year, instead of one TV set every election round.

Can an Indian political party take up this concept of a citizen-ownership democracy? Their voters have already shown support and acceptance of this idea. Will India be the first citizen-ownership democracy?