To: Frequent posters, lurkers, innocents on several mail lists, and Tom Walker. In a message dated 99-03-08 23:48:25 EST, on mail list <[EMAIL PROTECTED]>, (Tom Walker) writes: << A few comments on Wes Burt's model: I'm not sure I understand every element of the model, but what I do understand of it makes good sense. As to why a rational social investment in dependent children remains the "Teflon Topic", I would venture that Wes Burt's model offers both the greatest net benefit and the most equitable distribution of that benefit, and therein lies its "weakness", at least for the moment. As long as the need exists for _some_ kind of policy for investing in dependent children, sub-optimal policies can be promoted as "better than nothing". Sub-optimal policies, by failing to provide the greatest net benefit will continue to generate mandates for even more sub-optimal policies and, by failing to provide equitable distribution of benefit, will create pockets of surplus funding that can be used as campaign funds to press for more, similarly sub-optimal policies. Another way of saying this would be that it may be the carrying cost of a public policy that generates the most dedicated constituency -- a vested interest. Wes Burt wrote, >> Clearly, the flow of today's goods and services as shown by the upward arrow in Figure 7, represents an "interest free investment" by members of the workforce in the developing dependent members of the population. That "interest free investment" is a blessing to the developing members and a burden to the working members, and our only options are to keep the rate of investment adequate and to distribute the burden equitably over the productive taxpayers. - - snip - - . . . Why does the more modest proposal, to subsidize only the support of children, not have a corresponding international organization promoting the less expensive, but more certain approach? Lets hear from the frequent posters, lurkers, and innocents on several mail lists. regards, << Tom Walker http://www.vcn.bc.ca/timework/covenant.htm >> ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Thanks again, Tom, for pointing out the root cause of Peter H. Rossi's 1978 "Iron Law" of Social Programs (their net measurable effect is zero), and for pointing out the interests vested in our social disorders, which oppose every attempt to correct those social disorders. If you keep on explaining concisely what I have been trying desperately to say since 1969, the Devious Defenders of the Status Quo (The DDotSQ) may conclude that we are in cahoots, and figure they have been out numbered. That would be wonderful, but the DDotSQ have been hanging in there since long before King Rehoboam raised the taxes on the Israelites in B.C. 975 (I Kings 12), so we won't be that lucky. There has to be another way to go. You have pointed to an aspect of this Teflon Topic which has taken much more of my time than the technical content of the topic, which technical content would make 6th grade arithmetic more interesting to the kids if the subject were taught in the schools as a part of 6th grade arithmetic. The only arithmetic involved is that of subtracting the family's tax dollars plus the fixed dollar cost of dependents from the family's total income (earned, interest, usury, and dividends) to get the dollars of disposable income which the family can spend or save as they see fit, and then to note the break-even income for the given number of dependents at which the disposable income declines to zero and becomes negative at all lower incomes. In other words, more than half of an industrial nation's workforce may experience "increasing returns to scale," as their output increases. This negative region on every workers break-even chart is the motivating force which prevents the advanced industrial nations from moderating their production and consumption to comply with the physical limits of the earth's carrying capacity. My favorite economist, Henry Carter Adams, in 1887, took notice of the fact that productive assets with "increasing returns to scale" would not be properly regulated by a free market. Communism presumed to solve the problem by eliminating the free market, modern industry (Capitalism) solved the problem, but only for its corporations, by changing "increasing returns to scale" to constant or decreasing returns to scale, while keeping the General and Administrative (G&A) rate at a competitive 30% of net sales revenue. Too many reform efforts, it seems to me, erect a formidable obstacle to their own success by focusing their attention on an opposing (guilty) faction of the community. They focus on the bankers, the government employees, the members of Congress, the IRS, the international corporations, management, wealthy people, etc. Thomas Paine, for example, lost his battle for economic justice in England and France by making enemies of the religious leaders of his day by publishing his 1793 book, THE AGE OF REASON. He told the truth, but wasted his life. Persuading the Innocents is hard enough as a task. A serious reformer must look for the "no fault" solution which provides a win/win result for every faction concerned with the problem, or his/her efforts will fail under Rossi's law. While I have been so lucky for seventy-five years, and have never met a mean- spirited member of the English speaking elite, nor a stupid one, I can truly say that neither have I ever met one who would not terminate your employment on a minutes notice, or do what ever else it took to do you in, if he thought you were getting between him and the source of his income. After all, we did not establish the British Empire and the American Super Power by being "easy." With this thought in mind, we may all conclude that William Shakespeare used good judgment when he cast a Jew in the role of Shylock, in his 1596 play, The Merchant Of Venice. New England Yankees were not around to compete for the role of Shylock in Shakespeare's day and if he had cast a member of the English elite in that role, they would have hanged Shakespeare as surely as they tried to hang Thomas Paine, two centuries later. As you know, the issue of distributive justice was not raised by Shakespeare's Shylock nor invented by Pope Leo XIII when he proposed the "family wage" in his 1891 encyclical letter, RERUM NOVARUM. Anyone who is comfortable with our oldest, and most widely distributed history book, may find the financial structure of a just, stable, and prosperous social order, which achieved distributive justice in ancient times, in the three Mosaic tithes enumerated in the Pentateuch. That particular social order lasted about 500 years, reaching its apogee of wealth and power under King Solomon, and then abandoned the law under his son, King Rehoboam. But there is no need to torture our imagination with this ancient history when the three tithes may be studied directly in the pricing formula of modern corporations, where the G&A rate of 30% on all sales revenue funds the three centralized functions of the corporation. Just like the 30% tax rate on all personal income, according to Adam Smith's First Maxim of Taxation, funds the three centralized functions of a commonwealth. Since the productive assets of both the corporation and the commonwealth have finite life spans and a long period of development before the asset (member) becomes productive, the three centralized functions are common to both the corporation and the commonwealth, and consist of the development function (the first tithe), the executive selection and compensation function (the second tithe), and whatever else the corporation or commonwealth wants to do (the third tithe). So why, then, do we so consistently observe the first and second tithes in our corporations and so consistently resist the observation of them, beyond 50 to 70% of the required amount, in the commonwealth? The best explanation I have found is that the elite in the U.K. and the U.S. have no experience with a full implementation of the first tithe, which would assure the full development of each child, regardless of parental income, and assure a level economic playing field for complete freedom of community development. On the other hand, the elite in Canada, Australia, and New Zealand together with the elite in Japan, the elite in the western European nations, and the elite in Scandinavian nations all had established family subsidies in the order of 1/5th the average wage per dependent in their respective nations by 1946, and by 1970 had raised their respective GDP/capita close to, or above in the case of Japan and Switzerland, the GDP/capita of the United States. But the artfully cultivated "great inflation" of the 1970s and 1980s has reduced the effectiveness of these family subsidies just as completely as it has reduced the effectiveness of the income tax exemptions in the U.K. and the U.S. So here sits the whole world of advanced industrial nations, stewing in a juice of its own creation consisting of trade deficits, budget deficits, excess production, excessive debt service, inadequate purchasing power in the lower end of the workforce, a net lack of sound investment opportunities for the upper end of the workforce, and no way for the wealthy to spend their disposable income except by bidding up the current prices of previously produced wealth (Speculation). Each of the elements of this juice we are stewing in has its own vociferous constituency, and they will resist with their dying breath any plan of action that might diminish their income in the slightest degree. A way of illustrating this bind we are in was suggested by "the familiar logistic or ogive pattern of a growth process." shown as Figure 1-1, on page 7 of Kenneth E. Boulding's 1970 book, ECONOMICS AS A SCIENCE. Boulding's term, "ogive curve," describes the curved shape of the sides of a Gothic vault or Gothic arch. The more widely used term in engineering work is a sigmoid, having a double curve like the letter "S", or, curved like the letter "C" (uncial form of sigma). The sigmoid describes the minimum time, minimum acceleration, transition of a servo-mechanism between two positions of rest, or the transition of a vehicle between two locations, or the transition of a society from an underdeveloped (third world) state to an optimum rate of development, which, continued over time, would allow that society to determine its own future. To illustrate this mode of progress toward the future, the necessary sigmoid would have a horizontal axis of zero to 100% and beyond to show the various technical requirements that must be satisfied at 100% to reach the optimum rate of development at 100% on the vertical axis. The sigmoid, starting at 0,0, would accelerate slowly at first, then reaching a maximum vertical velocity and then decelerate to rest at 100%,100%, on the chart. The extended horizontal scale, beyond 100%, is to acknowledge the concept of "too much of a good thing," as when wealthy parents spoil their children and get less than optimum performance from their children. Some natural processes will have a marked decline after reaching their apogee, and that is the key question wherever the vested interests of the DDotSQ are concerned. Does their interest decline, or is it preserved, beyond their apogee? We may now draw a second sigmoid to show that the interest of some vested interests in a disorderly society may peak when the technical requirements for optimum development are only 50 to 70% complete. So the national elites of under developed countries will tend to support a universal public education system which will teach the workforce to read, write, and become more productive. But, lacking any experience of results beyond the 50% to 70% of requirements, the national elites will figure that universal college level education will only increase the number of competitors for their high income positions, and resist such proposals. And if such proposals are adopted by majority vote, like the 1942 G.I. Bill for American veterans, the elite will get rid of it as soon as possible to preserve the status quo. Other vested interests, small business, LetSystems, and do-good volunteer organizations, may also be assumed to reach their peak effectiveness when 50 to 70% of requirements for optimum development have been satisfied (the need is most urgent then), but then continue to perform at peak or higher as the society becomes more complex, diversified, and de-centralized as its public policy approaches 100% of requirements for the optimum rate of development. It has been my impression, from five years experience with the chattering classes on the internet, that nearly everyone with an IQ. above 100 believes that his interests will drop like a stone if public policy is allowed to satisfy more than the 50 to 70% of the requirements for optimum development. For every Derek Darves, Tom Walker, Tom J. Kennedy, John C. Turmel, Sabine Kurjo McNeill, and Ken Palmerton I have met on the internet, who have preserved an open mind on this topic, there have been hundreds of true believers in the ZERO-SUM SOCIETY and its ZERO-SUM SOLUTIONS, who regard with fear and loathing the very idea of moving beyond the 50 to 70% implementation of the technical requirements for the optimum rate of social development, and who thought the Teflon Topic was the Skunk at their lawn party, web site, or mail list.) Surely, by examining our individual interests, case by case, those who would truly loose income as their nation advanced to satisfy 100% of the requirement for optimum development, could be identified and adequately compensated (continue their current income for the rest of their life). This is an avenue of inquiry which list owners like Flemming Funch, Jay Hanson, Don Chisholm, John Pozzi, Bernard Lietaer, Paul Dillon, Richard Sclove, and Billy Grassie could easily include within the scope of their endeavors. It would compliment their endeavors, rather than compete with it for their time and effort. After all, there can only be one "optimum mode" of development which maximizes freedom and minimizes coercion, and we will all experience the evolving future together. Sincerely, WesBurt
