(1) Elected politicians currently accommodate their party’s (or lobbyist) interests, instead of the interests of the people they are purported to represent. Using Proportional Representation to help elect people supporting other than binary party viewpoints will assist in fixing the current corruption of representative democracy.
(2) “Where is the money to come from?” Representative government is not like a household. It can spend national money on a universal basic income, infrastructure, and other necessary projects, without borrowing money. Such government expenditure would assist demand and, thereby, the socio-economic fabric.
(3) “We need to set up a fund.” No, we don’t. We don’t need the Australian Government Future Fund, nor superannuation funds out of which retired people may be paid. We simply pay them their pensions, without building up funds which tend to lose vast sums at each recession, after the bursting of each bank-inflated land bubble. Nor is taxation a fund, a pot of money, from which our elected representatives may spend, despite current political mythology. Rather, we use taxation to withdraw money from the system, in order to maintain the currency’s purchasing power.
(4) Finally, and most importantly, we don’t need to tax wages and profits. These taxes on productivity carry enormous deadweight losses and ought to be abolished. However, we do need to tax away ‘ground’ rents (including mining and electromagnetic spectra rents), as advised by Adam Smith, if we’re to abolish monopolies. Capturing these economic rents instead of taxes will free up the economy and allow wages and profits to grow consistently, instead of granting super-profits to banks and other extractive rent seekers, at the expense of all others.
Although we do need these four surgeries to remedy the slough into which we’ve become entrapped, we seem to prefer applying band-aids to our ever-increasing number of socio-economic wounds.
At present, the western capitalist world divides into either a left/labour/social democratic stream, or the right/capital/libertarian stream, depending on the emphasis the followers of each place on the workings of the economic system.
What if there’s a more nuanced approach, blending the best ideas of both ‘labour’ and ‘capital’ adherents, by acknowledging the damaging role of the income that flows to land ‘ownership’?
The world’s heavily indebted rent-seeking economies indicate it may be time to revisit the ideas of classical economists, Adam Smith, David Ricardo, JS Mill and Henry George (amongst others). They understood the need for public capture of ground rent (which would include electromagnetic spectrum rents these days), for capitalism to work properly, where each of labour and capital would receive their earned reward.