> legally structured businesses as institutions democratically run by those working in them

This already exists, they are called cooperatives, many of them actually work pretty great. Try to guess what happens when they grow and they need to hire employees...

> what would happen if we simply banned people from making money directly from their money in all forms?

No banks, no loans, no credit cards. No way to protect against inflation with financial instruments as basic as a target-date fund.

Oh, and 0% public debt, of course.

> Money is just a representation of property

It's not and you know it's not, you're just playing with words.

They continue to operate. Mondragon has 80,000 worker owners. And yes, it has a challenge in recent years where the worker owners have created a class of non-owner employee. But it got pretty big before that started happening, and there's no reason to believe it wouldn't continue to function just fine if that wasn't an option.

There are many other worker cooperatives functioning very well at scale with zero non-owner employees. My proposal is essentially that we make this the requirement. That any business formed must be formed as a democratically run worker cooperative. This is perfectly actionable. Governments define the legal structures under which businesses may form today, and continue to regulate those structures. Right now, those structure enable the investor ownership relationship, and most worker cooperatives have to use those structures and bend them to allow the worker ownership relationship. It's a relatively straight forward legal matter (with wide ranging consequences) to change that structure.

> No banks, no loans, no credit cards. No way to protect against inflation with financial instruments as basic as a target-date fund.

Like I said, this is a thought experiment. Not fleshed out. And it's not the same as the proposal I outlined above for a worker cooperative based democratic socialism. I don't think you actually read my post, I suspect you just skimmed it and then reacted to certain sentences.

So basically we are abolishing the ability for any business to hire employees? This would be terrible, especially for the poor. Owner and employee are different risk profiles, it's neither useful nor beneficial to impose by law that nobody can be an employee any longer, especially for those who can't afford the risk.

It's also very easy to route around that obstacle if it were made law: just fire everyone and hire them back as contractors, oh, no, sorry, democratically run worker cooperative employing one worker.

You are completely throwing away many layers of protections that are afforded to workers in a system of regulated employment relations.

> Like I said, this is a thought experiment.

It's a thought experiment predicated on paying an enormous social cost that nobody is willing to pay, to get to a point where nobody wants to be. If the first step of your plan directly implies getting rid of all credit, then I frankly don't think it's really a good plan.

The owner doesn't carry the risk - the business does. That's the whole point of a limited liability corporation. And there's no reason those liability protections couldn't be strengthened further.

Plus, this is seriously underestimating the risk a poor employee takes. Someone living pay to pay check who has no information about the state of the business and stands to lose everything if they get fired risks a lot more than a business owner who has all the information about the state of the business and can keep a comfortable cushion for themselves to fall back on should the business fail (and can choose the moment at which to end the business to be sure they don't eat into that cushion).

Who's taking more risk here? The employee, not the business owner.

> It's also very easy to route around that obstacle if it were made law: just fire everyone and hire them back as contractors, oh, no, sorry, democratically run worker cooperative employing one worker.

You could pretty easily tweak contract law to get rid of this workaround. Even so, this isn't an easy workaround. No business of reasonable size can afford to fire all of its employees. And if those employees are co-owners of the business no single employee has the power to fire all the others.

> You are completely throwing away many layers of protections that are afforded to workers in a system of regulated employment relations.

And replacing them with power. They don't need those protections when they are in control. They can devise their own rules.

> It's a thought experiment predicated on paying an enormous social cost that nobody is willing to pay, to get to a point where nobody wants to be. If the first step of your plan directly implies getting rid of all credit, then I frankly don't think it's really a good plan.

My proposal is a separate thing from the thought experiment. The thought experiment is an example of the sort of innovative thinking we should be engaging in to come up with new alternatives, but for the most part - aren't on a large scale.

My proposal is a fleshed out proposal that I could work. Sure there are pieces of it that still need to be further fleshed out - like exactly how the transition would work. But I you can I must hang out with different crowds if you don't think anybody wants to get to a place with less inequality and where the average person has a hell of a lot more control over their day to day life.

Someone living pay to paycheck can not afford to be an owner in the first place. The structure being LLC or whatever makes no difference: the vast majority of business enterprises just fail.

You are effectively forcing everyone to be a business owner even when they might have no will, interest or ability to be one, something that disproportionately damages those who would putatively be helped by this system.

> You could pretty easily tweak contract law to get rid of this workaround.

Yes you can. You can do that in my world, where regulated employment, you know, exists, and you can easily show how an operation like that is fraudolent.

> And replacing them with power. They don't need those protections when they are in control. They can devise their own rules.

How would they be in control? Magic? The invisible hand? How would a law mandating that everyone be an owner, assuming for the sake of argument something like that is possible and enforceable, make a minimum wage worker in control of his own destiny?

It doesn't work, it's a pipe dream, and it's ironically the same argument used by hyper libertarian right-wing types.

> if you don't think anybody wants to get to a place with less inequality

Pointless rethoric. Literally everyone wants that, like everyone wants an extra million in their bank account.

I'm disagreeing that what you're proposing will get us there.

Unless you mean it should be an entirely voluntary system? More likely you’re thinking like the Bolsheviks and you’ll cause 20 million people to stave with your ideas.

Remember Stalin was as evil as Hitler.

What I'm proposing is more akin to distributed democratic socialism. Our government is still democratically run. You still have independent banks (formed as credit unions) or crowdfunding to start businesses. The only difference is that once a business hires that first worker, then decisions start getting made democratically. And they continue from there. The state isn't running any of the businesses and there's no central planning arm.

To my knowledge, this has never been tried as a whole economic system. But worker cooperatives exist and are functioning just fine in the current system. Ever bought Equal Exchange chocolate? That's a worker cooperative. Heard of Mondragon? 80,000 member worker cooperative that's functioned successfully for decades across multiple verticals in Spain.

What I am proposing is that we do away with the traditional investor relationship and mandate that all businesses must be formed as democratic worker cooperatives funded either by regulated loans or some form of crowd funding.

In practice of course, none of the freedoms of decision making we typically ascribe to western democratic nations existed despite these labels. The reason, as always, is that significant coercion and force is required to get people to give up control of their property and wealth. This inevitably leads to not only authoritarianism, but also wealth being transferred to the state instead of the people.

There's no reason you couldn't write the laws of business structure in such a way that all businesses have to be run democratically by their workers. Essentially you do away with the partnership, LLC, and Corporation and replace it with the worker cooperative. What you get is an economy of democratically run worker cooperatives competing with each other in a free market economy. No central planning. No government control. And this is different from the worker councils you're talking about which are, essentially, an effort at democratic, distributed economic planning.

If you and your hippie friends wanna band together and start a commune somewhere and commit mass suicide (or something), I got no problem with that. Just don't force everyone else to join you by gun point (the logical endpoint of enforcing laws).

A better solution would be to increase taxes on income from interest and capital, and use that funding for education and social services.

The usery laws are just about preventing banks from exercising undo power over those worker cooperatives at the formation stage.

I feel like innovative companies such as SpaceX or Moderna would never happen under that economic model for example.

I know any number of people who would eagerly start a high risk innovation play as a worker cooperative, because the money reward isn't what they care about. They care about making change in society or seeing a technical advancement become wide spread.

For most of them, they just need the chance - a floor under their feet so they can't fall too far if they fail and enough funding to get going. And, given how much crowdfunding has succeeded in todays world of concentrated wealth - I believe crowdfunding could provide that in this system where wealth is much, much more distributed.

The other piece of if is, with worker cooperatives every single employee of the company is fully bought into that innovation play. And stands to see the rewards created by it. Not just the investors and company founders. If anything, it increases the effectiveness of these companies, because everyone involved in them is incentivized to give it their all. Everyone involved stands to see the rewards of success.

I do find it interesting that your social circle is willing to bet their entire net worth on a risky startup where the reward is a salary cut in the worker cooperative + some savings account level interest. The "funding" bit is the key. You waived over it with crowdfunding, but now it's like buying lottery tickets with low payout. Pay $20 for a 20% chance at $40 in 10 years! You'll make the world a better place!

Really what the parent is proposing is something like -

Here is a savings account. You can throw chunks of money in it at startups that have a high chance of failing. But if they succeed you'll only earn bank level interest since it's not capital investment. So you have a small chance at earning bank level interest.

Where is the incentive?

It's not "could", it's will. With 100% certainty. The only question is how many and hard they will be to control. We know this because it has happened before.

I think you're reading into other's worldviews too much. Most people likely agree it's systemic. Many would not be convinced by the proposed solutions, because they do not think they would improve the situation. Moreover, large numbers of people do not think the situation can be improved, that this is just the natural state of the world (for which they have thousands of years of evidence to point to).

> that this is just the natural state of the world (for which they have thousands of years of evidence to point to).

You write:

> And there was a wide range of economic systems prior to that.

That is my point. every single one of those 'wide range of economic systems' (including the ones directly intended to produce equality) produced inequality.

But lets work with your new point. Saying "all the economic systems we've tried produced inequality" with the implication being there's no point in attempting to devise new ones is rather like saying "all materials we've devised produced some amount of friction". Sure. But some produce a hell of a lot more than others. And it's still worth searching for new materials that produce less friction so that they can be used in applications where friction is a detriment.

Some economic systems produce a lot more inequality and environmental degredation than others. Our current system has produced a lot more than most. And a lot of the proposals on the table would almost certainly produce less than our current system does.

Environmental degradation is more a function of overpopulation and technology than the economic system. With free-market capitalism we at least have the potential to price in the environmental degredation externality in a fair and consistent way through taxes. That approach has been underutilized so far, but with most other economic systems it's not even an option.

For example, there's the form of Democratic Socialism I propose above: where we replace the current business structure with worker cooperatives funded by regulated loans or crowd sourcing that compete with each other in a free market. We know worker cooperatives work, because there are many successful worker cooperatives operating well in the current capitalist economy. There's no reason to believe they would stop functioning well in a free market economy where all businesses are worker run.

That's just one example. The next system project has collected a number of additional ones: https://thenextsystem.org/systems

And like I said, I have a whole bookshelf full of alternative proposals. Some of which don't make a whole lot of sense. Some of which are very plausible. And some of which are already working in micro, just waiting to be tried in macro.

> But lenders won't lend without a high expected ROI.

Exactly, that's what's stopping them. Worker cooperatives don't provide the return on investment that investor ownership grants. They don't allow those with capital (wealth) to demand a large portion of the returns from the business. That's what requires the new economy - removing the option for capital to demand ownership and control so that it has to make do with a reasonable, regulated return on its loans.

We don't use worker cooperatives in the same way we don't use corporations. There is no overarching entity that uses any of these things.

If worker cooperatives are so great, they should be outpacing corporations. Some do. For example, companies like Winco and Mondragon exceed productivity of their corporate counterparts. That's fine. More power to them. Their story should encourage others to start worker cooperatives.

My meaning was very plain. I said many people would be unconvinced that anything could be done to achieve equality. I then stated they could point to thousands of years of human life (which, as you correctly stated, contained many economic systems). If you put both points together, you'd see that I was saying essentially that 'no human system tried has achieved equality', so many people would believe that there are few changes we can make to ours to achieve this goal.

I'm going to expound on this idea more. Please consider everything I say before jumping to conclusions this time.

> Sure. But some produce a hell of a lot more than others. And it's still worth searching for new materials that produce less friction so that they can be used in applications where friction is a detriment.

Correct. But there's more than one knob. Some systems produce little inequality, but lots of destitution. Others produce lots of inequality but little destitution. By all objective metrics, ours produces little destitution, and while it produces inequality, it is a different form of inequality than many other systems. For example, marxism and communism in the forms tried produce more equality, but utter destitution for large swaths of the population (it's a race to the bottom). Our system of free markets, even in its heavily corrupt form, produces inequality, certainly, but little destitution, by all objective metrics. Moreover, of the inequality we create, it is a shifting inequality. Studies show that family fortunes in the United States do not form dynasties as they do in other economic systems (like monarchist mercantilism, for example). Most family wealth dissipates by the third or fourth generation.

If some inequality that ends up being redistributed is the price we pay for less destitution, then I don't see why equality ought to be prized.

> Some economic systems produce a lot more inequality and environmental degredation than others. Our current system has produced a lot more than most. And a lot of the proposals on the table would almost certainly produce less than our current system does.

Okay, and as I said, simply optimizing for 'equality' and 'environment degradation' would not lead to a good economic system. There are other goals you're completely ignoring. WE can create a system that's perfectly equal and great for the environment, but leaves everyone destitute.

For me, there's a hierarchy of needs here. First, destitution must end, then we can talk about equality. But ultimately, if the world is extremely unequal, but no one is destitute, then that economic system is good. And we're very close to that by continuing with current trends

Yes. If everyone is actually better off compared to the equal society, then the only problem is jealousy really. So why not attack that instead, people will never be equal anyway since nature is unfair, and some will always be much more beautiful, talented etc, even in a perfectly "equal" society. Capitalism just amplifies the human condition, raises everyone, and raises the best even more.

That being said... I don't begrudge them their wealth. I don't begrudge them their private jets. I have nothing to complain about. I have a home, a wonderful family, a lovely spiritual life, a fantastic community, etc. I have things that their money would never buy. Half the time I feel sorry for them.

It seems to me many of my fellow citizens are simply jealous of their material goods and want their private jets and all that nonsense for themselves. No thanks. We should discourage this kind of materialism.

This strikes me as an excellent way to put it, and is really at the core of why I look upon “alternative solutions” with a cynical eye.

Every proposal I’ve seen results in limiting overall wealth of our society. That just doesn’t pass the smell test for me.

To put it another way - it’s far easier for a wealthy society to achieve equality than it is for an equal system to achieve wealth.

Ironically, this seems to more closely mirror the writings of Marx than the goals of the self-described Marxists I’ve encountered.

I agree.

But there is something that needs to change in order for worker cooperatives become the dominant business form. So long as capital can demand ownership, worker cooperatives will remain a relative niche. What needs to change in markets is we need to remove the ability for capital to demand ownership. That's essentially the core of my proposal for a new system.

Replace the LLC and Stock Corporation with the worker cooperative. Remove the investor stock owner relationship from the economy. Legally mandate that all businesses be formed as worker owned cooperatives. And then regulate the amount of interest that banks and financiers can charge on their loans to limit their power over those worker cooperatives.

What you get is a free market economy where all businesses are democratically run by their workers and the relationship between capital and labor is flipped. It would vastly increase equality, with out increasing destitution. And would likely have some small decrease on environmental degradation.

In some ways it's a very gentle refactor of our existing economy. In other ways, it's far reaching and drastic (stock markets go away entirely and traditional banks become a primary mechanism of savings).

There's a reason all major religions historically prohibit usury (the charging of any interest, as well as enforce debt jubilees), while encouraging ownership.

Frankly, this sounds like a great idea, but it vastly understates the role of the markets (esp the stock market) in lifting others out of poverty.

Humans are not machines. We cannot always work. Stock ownership provides the ability for the disabled, the elderly, etc to earn income based off of work they'd already put in. It's like buying a stake in society. Without it, each person would be measured based off their economic output. I know you claim that's how the current system works, but imagine how much worse it would be if there were no other way to earn money other than by working.

> It would vastly increase equality, with out increasing destitution.

This is a claim stated without data.

Your meaning was not plain, you wrote a few very broad sentences and in your clarifications it seems you were talking about a single problem - equality. The original post was outlining many problems, inequality being one of them and the systems being proposed potentially address many problems.

But that's fine, such is the nature of dialog over text.

> Studies show that family fortunes in the United States do not form dynasties as they do in other economic systems (like monarchist mercantilism, for example). Most family wealth dissipates by the third or fourth generation

This is likely to be an outdated statistic at best. If you go back three or four genenerations, you will find yourself passing through a time when the US had very high inheritance taxes and a 90% top marginal tax rate. That period of time did likely prevent the formation of dynasties across it. However, those policies have since been repealed and current studies show very low social mobility and a significant increase in dynastic formation. [1, 2]

[1] https://www.theguardian.com/commentisfree/2021/mar/13/americ... [2] https://inequality.org/wp-content/uploads/2018/11/Billionair...

> Some systems produce little inequality, but lots of destitution. Others produce lots of inequality but little destitution.

If you're just measuring destitution and inequality, then you're getting a very narrow picture. You can't leave out things like environmental degradation from your calculation. The environmental degradation - in climate change - threatens to upend what gains there have been made in destitution and the current system is completely failing to respond appropriately to the threat. So the great likelihood is that if we stay with the same system on the same trendline, there's a cliff coming in our near future.

> For me, there's a hierarchy of needs here. First, destitution must end, then we can talk about equality. But ultimately, if the world is extremely unequal, but no one is destitute, then that economic system is good. And we're very close to that by continuing with current trends.

Saying "first destitution" must end before we consider any refactors of the current system makes very little sense. There are other options on the table than state socialism or returning to mercantalism. Systems that have the potential to increase equality, decrease environemntal degredation, and decrease destitution. All at the same time. Systems that haven't been tried in macro yet, but are working just fine in micro - for example the move to universal worker cooperatives funded by credit unions and crowd sourcing that I propose. And that's just one of many proposed possibilities. Those doing the work of proposing alternatives are absolutely including things like destitution in their calculations.

Throwing your hands up and saying "we can't do better than this" frankly runs counter to the very mindset that this website is supposed to represent. We can always do better.

How is it possible that you can dismiss my claims for being too long ago, and then cite claims on dynastic formation made today? Surely, in order to make the latter claim, you would need to wait equally long into the future as my claims were into the past? Would you look at my family, which has risen exponentially from poverty and claim we're forming a dynasty? How could you possible know it's a dynasty until I'm dead and my children inherit?

I don't believe the tax policy argument is satisfying. The studies show that the wealth dissipates due to squandering, not taxation. Even with a 90% income tax, these heirs still get millions and millions (likely billions in todays dollars), and yet still lose it all.

> The environmental degradation - in climate change - threatens to upend what gains there have been made in destitution and the current system is completely failing to respond appropriately to the threat. So the great likelihood is that if we stay with the same system on the same trendline, there's a cliff coming in our near future.

Even the worst models of climate change do not predict the catastrophic ends you are attempting to paint. You're just distracting from the issue at this point. In general, I find doomsday predictions unvaluable. Nevertheless, i'm not going to fall for this change in goalposts.

> Systems that haven't been tried in macro yet, but are working just fine in micro - for example the move to universal worker cooperatives funded by credit unions and crowd sourcing that I propose

So... a free market? There is nothing incompatible with the system we have and worker's cooperatives.

Although I will say credit unions have proven just as dangerous and capable of malfeasance as banks (Savings and Loans Crisis of the 80s, which everyone seems to forget for some reason).

> We can always do better.

Sure, we can improve some things in my hierarchy of needs by following down our current path, which, unlike your changes, is empirically shown to improve material conditions. This idea that because the current system hasn't made everyone's life better overnight, it must be replaced, is foolish. Some people have this constant drive to change things. Doing nothing is also a choice. And often a good one.

Yes. Yes they do. [1] That, and climate reality has so far been worse than our worst case models in many respects. [2]

[1] https://www.theguardian.com/environment/earth-insight/2014/m...

[2] https://www.haaretz.com/science-and-health/global-warming-is...

Anyway, we could keep going, but we've been at this all morning so it's probably best to let it lie. I feel comfortable I've made my point well enough, and I think you've made yours. I think we're unlikely to make further progress in a low bandwidth media.

I dunno, maybe if/when I write the book I dream of I'll be able to address more of your points in more detail and with more data and you'll find that more convincing than I can be reactively writing forum posts. Until then, I've appreciated the dialog.

Thanks for being respectful.