AltInst: Means of production.

One phrase has always stuck in my mind, "the people must have access
to the means of production". (Anyone know the original source? A
search on the 'net churns up 14 pages of hits. I suspect the Communist
Manifesto is the most popular source, but I'm know the anarchists
predate old Marx on this.)

And now we are here in the new South Africa and that hope is nowhere
near implemented...

Why? Private ownership. The means of production is privately owned,
and the vast majority of assets are owned by a tiny minority.

Sound familiar? This is certainly not uniquely South African.

Do we then go Marxist and say the answer is to place it in the hands
of the State? Nah! The time of the marxists vs the capitalists
bunfight is over and both have lost. (Ok, so you don't believe the
capitalists lost? Well, this post fights a different battle, so I
won't get into that flamewar. I just ask you to speak to more bods
from Africa or the old Eastern blok who have seen both and like
neither.)

What is needed is the following program :-

1) All assets must be owned by and accounted to real people, not legal
entities such as companies. Your income tax return must include a
complete listing of your assets and an estimate of the current
monetary value of those assets.

Ownership of any assets that do not appear on anyones tax form will
revert to the state. Such assets must be publically auctioned.

If the state believes an asset is undervalued on a form by more than
50% and can prove it by publically finding a buyer at twice the stated
value, the state can repossess that asset and sell it to that
buyer. The stated value goes to the owner, and the rest goes to the
state.

Conversely, your tax will be levied in proportion to your total
assets, (ie. gross over estimation of ones assets is also punished.)

It is OK to have partial ownership of an asset. eg. Assets accounted
to a company, but you list a certain percentage ownership of a
company.

2) The total assets of all citizens in the country is called the Gross
   National Assets (GNA). The Per Capita Assets (PCA) is the total
   assets of the country (GNA) divided by the number of people in the
   country. The PCA is simply the average assets of the people.

3) If any individual owns more than X times the PCA, all assets over
   and above X * PCA will revert to the state and be sold by public
   auction. X is an adjustable parameter allowing for pensions and a
   bit of ambition / greed. X could be as high as 50.
   
   Of course, nobody will allow the state to grab their assets and
   will "gift" family and friends with those assets to keep their
   personal wealth below X * PCA.

   The flip side being that those "gifts" are true gifts and those
   friends and family will then be legally entitled to dispose of
   those assets and the produce of those assets as they see
   fit. (ie. Any contract binding the use or disposal of those gifts
   would be taken as evidence that the asset was not accounted to the
   correct persons form, and the asset will be revert to the state.)

This would create an equitable and acceptable redistribution of
wealth, where the redistribution is performed with far less acrimony
than other schemes. (Wives of big execs will just _love_ this scheme.
(Who cares about the mays and maybes of alimony when you can get
ownership?))

In South Africa particularly there are assets held fallow by near
monopolies / cartels to artificially decrease availability and hence
increase prices. This scheme will break up such things better than any
red tape bound monopolies commission. The most infamous historically
being the De Beers diamond cartel.

The value of an asset is strongly correlated to the production
potential of the asset. Fallow assets = wasted production potential =
unemployment = poverty.

In South Africa tax is mostly derived from personal income
tax. Companies are taxed on their profits and some how, magically, our
companies always have so many arcane expenses that they hardly ever
make a profit... As ever, the net of state is a wondrous thing, it
catches all the little fish and lets the big ones slip through...

A tax based on assets rather than income will readjust that
balance. Indeed, instead of the inflexible X * PCA limit, estimate
what is the mean productivity of the assets and have a sliding scale
of assets tax that makes it, on average, unprofitable to have more
that X * PCA assets.

How to police the reporting of assets? Make all the information
publically available and grant a "finders fee" of 20% of whatever the
state gains.

You needn't list every desk and chair own by every company you have
shares in, merely the company and the percent share and the
value. Each company must list its assets in some sensible and public
fashion.

John Carter EMail: ece@dwaf-hri.pwv.gov.za
Telephone : 27-12-808-0374x194 Fax:- 27-12-808-0338
<http://www.geocities.com/SoHo/Cafe/5947> or <http://iwqs.pwv.gov.za>

There is ever only one enemy - And that is the military.
It matters not on which side they purport to be.

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Received on Tue Jun 23 19:57:21 1998