Sustainability through Massive abundance.

Episode 34: Balancing Inequality

Should a city support or limit inequality? Answer: Both! Here’s why...

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Transcript

Is Edenicity socialist?
Intro [music]
What is inequality?
What's wrong with inequality?
Why would we want inequality?
How would Edenicity accommodate inequality?
How will Edenicity limit inequality?
Summary
Close [music]
Sources

Is Edenicity socialist?

Someone finally got around to asking me that loaded question of American political life.

My immediate answer is, it's about as socialist as an iPhone.

Like the iPhone, Edenicity is built to bring leading edge design to millions of people.

Like the iPhone, Edenicity combines lots of previously separate amenities into a single package that is much more than the sum of its parts.

In the iPhone's case, this would include many previously expensive services in the form of cameras, GPS, internet and thousands of apps that you can get for free, or drastically lower cost.

As for Edenicity, I don't think of the amenities it bundles as inherently socialist or capitalist. All are desirable, and all are integral to great design. Edenicity comes with free ultra fast transportation, education, health care and a universal basic income, pre-installed. Does that make it socialist?

Edenicity's government is actually accessible, inclusive, responsive and flexible. Does that make it socialist?

It's a mixed income development that repairs the persistent harms of racism to breathe new life into the workforce. Does that make it progressive?

It delivers healthier employees to the workplace 10 times quicker. Does that make it pro business?

It's also a highly profitable private sector initiative to deliver the most massively integrated lifestyle product of all time. Does that make it capitalist?

To me, the whole question of socialism seems curiously antiquated. Edenicity is designed to outperform all of the so called socialist countries in all of their key welfare metrics, while harnessing the power of private and public equity so it can change the world quickly.

But behind the question of socialism, there's a deeper question:

Does Edenicity support or discourage inequality?

Way back in Episode 5, I observed that one of the five functions of design is to resolve false dichotomies.

Is the choice between supporting or limiting inequality a false dichotomy? Is it possible or even advantageous to do both at the same time? And if it is, why and how could a city's design support and limit inequality?

Intro [music]

Cities designed like modern Edens, for economic and ecological abundance. I'm Kev Polk, your guide to Edenicity.

Welcome to Episode 34, where I'll discuss the Edenicity of inequality.

What is inequality?

Today I'll focus on two kinds of inequality: social and financial.

Social inequality exists when some people have more status and social mobility than others.

Financial inequality exists whenever some people have a lot more money than others.

What’s wrong with inequality?

Well, when social inequality is based on prejudice, it's a bad thing. I'm talking about when gender, religion, class, caste or race prevent access to jobs, equal compensation, or social, educational or business opportunities.

This makes everyone poorer because it arbitrarily wastes the unique talents and perspectives of vast swaths of the population.

For example, as an award winning software interface designer, I've noticed that Facebook has extremely poor design from the standpoint of user experience. To me its clunky interface and lack of data integrity practically screams "forget you!" Just what you'd expect from the combative bro culture that invaded Silicon Valley in the post 2000 tech boom.

Facebook recognized it had a problem way back in 2014. As reported in Business Insider in 2019. It has since increased hiring of black women 24 fold and black men tenfold. But it would still like to double those numbers and double the number of women on staff to reach its goal of 50%.

If it actually achieves those goals on the software side, I'm here to tell you its interface will improve a lot. Who knows? Maybe it will figure out how to dismantle its clumsy partisan echo chambers, and provide ways for people to benefit from forming more diverse friendships. If it ever does that, Facebook will be richer, and so will everyone who uses it.

Social inequality can even be a matter of life and death. When I toured the Bloomington Indiana Fire Department as part of the city's Citizen Academy, I met a huge, muscular, greying Irish firefighter originally from New York City. He spoke about how a diverse fire crew saves more lives. He pointed out that you needed small firefighters to get into tight spaces, and that children under intense stress are much more likely to cooperate with a female firefighter.

What about financial inequality? As I reported in Episode 25, the richest eight people in the world own as much as the poorest half of humanity put together. This is a bad thing. Money is a medium of exchange. And as I illustrated at the start of Episode 25, money does more good for more people when more people have it.

Financial inequality also fosters bad behavior, even in otherwise good people. I present the evidence in Episode 8 in the perils of wealth chapter. This shows up as lack of empathy, entitlement and an unconscious selfishness.

These traits are really bad for the environment. For example, in his 2008 presidential campaign, John McCain, a politician renowned for his fairness and decency, didn't know the answer to the question: "how many houses do you and your wife own?"

Accumulating houses and possessions that sit unused most of the time poses a clear and present danger to the whole purpose of Edenicity, which is to reduce our consumption of resources and energy by at least the 95% required to end the mass extinction.

Now, just to get into the specifics, Edenicity achieves this while providing a higher quality of life by limiting the number of square meters of living space per person. It's actually quite livable: similar to my current townhouse. And by shifting diets to a lower trophic level, in other words, eating more plants and less animals. It also vastly increases efficiency through shared infrastructure, such as transportation, housing and food. And finally, Edenicity achieves its goals through ecologically sound arrangement of that infrastructure, so we don't waste space, time and energy.

For details, just visit the show notes and download a copy of the free reference design.

Right now, there's thousands of people rich enough to buy a whole finished Edenicity village and displace 6000 people, but that would defeat the whole purpose of Edenicity.

Why would we want inequality?

Well earned inequality motivates high performance. Social inequality can be earned, of course. The superstars in sports, music, entrepreneurship, academics and other fields achieved their high social status in part because of unique talents, but mainly because of hard work.

Michael Jordan was so crushed when he didn't make his high school varsity basketball team that he just poured everything he had into his game from then on, until he became the most influential basketball player in the world.

Earned inequality is about status, and it powerfully motivates achievement. The same holds true for earned financial inequality.

As mentioned in episode 8, entrepreneurs are motivated by their dreams, but to achieve those dreams, they need to build effective teams. How do you attract the talent? Well, excitement and empowerment plays a big role of course, but so do money and equity, as in giving your team a certain percentage of the company.

Look at it this way: launching any new venture is high risk, as I illustrated in Episode 25. The more innovative it is, the more the risk of failure. People generally won't take that risk, at least for other people's dreams, without the prospect of high rewards.

We have so many modern conveniences such as smartphones because Apple and other tech companies make lots of their key employees rich.

And finally, for Edenicity, there's an immediate benefit to inequality. Its ultra luxury apartments and brownstones could fetch extremely high profit margins. And these more than offset the slightly reduced margins from reparations that I discussed in Episode 27 and help convince banks to finance the development.

How would Edenicity accommodate inequality?

Well, first of all, it would do this through a predictable, business-friendly legal structure including strong contract enforcement and bankruptcy laws. All pretty standard for modern industrialized society. This is essential to establish the value of agreements and equity so that people actually get paid for their investment and innovation.

Next, as you might expect, comes housing. Apartments with views in town and in the city center would clearly sell for a premium. Higher quality materials and amenities would also add value. For example, if the average toilet in Edenicity has a bidet, in a luxury apartment, it would have a heated lighted bidet with dryer. Luxury apartment buildings might have high end gyms and heated indoor pools that store excess solar power from transparent window panels. And they might also have exotic gardens.

Now larger living spaces would come at a premium. More about that in a moment.

What about transportation? I mean, how would a free public loop transit system accommodate inequality? Well a small portion of the loop andHyperloop rides could be set aside for scheduled travel by auction. The extreme high end might even offer a private loop-to-elevator-to-door service, at a considerable premium, of course, and for those who prefer to bike well, gold plated Brompton, anyone?

Now, inequality might give people access to rare or unusual locations and views, people and venues, chartered travel through Zone 5 and the oceans (by sail and electric boat of course), and chartered air travel departing the industrial zones.

And let me take this opportunity to point out that electric powered airliners will be possible within 10 years. Batteries with the minimum required 400 watt hour per kilogram should be available well before 2025.

In the realm of food and dining, the marginally larger spaces occupied by the wealthy would provide more rooftop garden area, and hence more opportunities to grow exotic food. Edenicity's town and city centers are also a natural for high end restaurants.

What about shopping and fashion? Here's where the free market really shines in Edenicity. According to a 2016 study by the Urban Land Institute, bicyclists shopped more and bought more than car drivers. True, they spent less per visit, but they visited shops far more often. With its incredibly convenient Loop, Hyperloop and bicycle infrastructure, Edenicity will be a paradise for in-person retail, including the very high end.

And finally, let's talk about private events. Edenicity has lots of public spaces from the block to the village to the town to the city center. Many of these venues could be available to private parties by reservation a small fraction of the time. I've actually been to private events at pool and party areas and high rise condos that one of the residents rented out. It was great. Market mechanisms, such as auctions chartered by the political circles that manage these spaces can ration these private events efficiently. But again, with Edenicity's massive Commons, lots of these opportunities will be available.

How will Edenicity limit inequality?

General George Patton said it best: "All glory is fleeting."

Yet All my life, I've watched rich person after rich person argue for ways to make their wealth permanent, so they can pass it on to their kids for free. For example, I watched an interview with the late Charles Krauthammer, who argued for endless copyright protection so writers like him could leave their heirs a legacy as durable as any castle.

He neglected to mention that castles are subject to property taxes, and are forfeit if you can't pay them.

Edenicity would use taxes to balance inequality.

I know shocking, right? Every now and then someone trots out the myth that income taxes are a recent invention by modern greedy governments. Ridiculous. Taxes on personal productivity have been integral to civilization for at least 5,000 years. The Bible and numerous archaeological records confirm that the pharaohs of ancient Egypt took a fifth of crops grown for state purposes.

No crops? No problem. You could also pay on the convenient forced labor plan!

By comparison, modern taxes are fairly tame.

Now I'm no expert in public finance, but in my mathematical models, I was able to maintain the commons and pay all the public workers without an income tax. This may turn out to be bonkers for reasons I have yet to learn. But I did it all with a flat wealth tax, that is a recurring tax on assets, not income.

In my model, taxes are a flat half percent of wealth per month. In reality, taxes would be progressive, meaning that they would increase with the value of some assets.

Never mind fairness or economic necessity: a progressive tax on property and assets is absolutely essential from an environmental standpoint. Here's how it would work:

In housing, taxes would increase exponentially with floorspace per person. Notice that this provides a strong incentive for rich folks to hire live-in staff, because that reduces the floor space per person. Just remember, you'll need to treat them well and pay them well because they can always fall back on that universal basic income and say, "forget you!"

Energy and water costs would also increase exponentially with quantity used. And although transportation is free to every citizen, private, scheduled or extra services could be made available at a premium.

Commodities such as clothing and jewelry would be subject to a flat tax by value. Now when you think about it from an environmental perspective, this makes sense because the floor area that they occupy is already taxed exponentially. But if you have to warehouse additional possessions, then those would be taxed at an exponential rate with the floorspace of your warehouse.

And don't worry, this works just like any other property tax: if you can't pay it, then you're not really rich enough to own it, and you can't really expect society to subsidize that. But hey, no problem, your property goes to auction. And there's lots of places you can move and afford with that universal basic income.

Now, obviously, vigilance and enforcement would be required to maintain the system. Tax investigators would make assessments based on imputed value of offshore assets, if there's good evidence that they exist, and there may even be a role for a central bank. This would drastically simplify taxation. Basically, you'd get a statement and a limited opportunity to dispute the payments already made.

Now edenicities would exist within nations that have their own tax systems, but I feel it would be appropriate for them to negotiate reduced or city-scale lump-sum federal taxes, because they would be self sufficient in terms of transportation, education and health. This is like the reduced overheads that academic departments sometimes negotiate with universities when they're able to bring in a lot of grant money.

Now, one good thing about the wealth tax is that it would allow us to get rid of the inheritance tax. You might call it semi generational wealth. Say you inherit $10 million, for example. On the Edenicity plan, it would be worth $1 million in 19 years, $100,000 in 38 years, and $10,000 in 57 years. Glory is fleeting.

Now of course, clever rich people can still get richer through investments, but when they do, everybody else does too in this system via increased tax revenues. This funds a higher quality Commons (medicine, public works) and higher universal basic income.

This is especially important as more and more work gets automated. Without a wealth tax, fewer and fewer people would own more of the capital assets that produce everything of value, leaving everyone else with fewer choices and chances to contribute to society.

Now, on the other hand, are these taxes fair to all those "job creators" out there?

Consider this: the commons provide short free commutes. The lifestyle cuts sick days by 50-80%. So you have a much more productive workforce. The city attracts other businesses. These will be your suppliers and customers, accountants, lawyers, bankers and investors. And it provides the courts and police that enforce contract law and protect you from extortion and other crimes. It also provides the large public venues that you use to rally everyone involved in your business, and the quality schools and lifestyle that brought them to your door. And most importantly, a universal basic income safety net for you and your employees, so everyone can seize opportunities as they appear and take those entrepreneurial risks.

Edenicity's very design minimizes stress and social strife. And all these benefits are rolled up in a simple, fair cost of doing business. Even Microsoft founder Bill Gates, who was once the richest person on earth and is now the second richest, wrote in his 2019 New Year's blog about how capital should be taxed at least as much as labor already is. In his words, "a vibrant economic system depends on setting expectations for who pays how much."

Summary

So is Edenicity socialist?

Well, like I said, Edenicity is about as socialist as an iPhone.

Like Apple, it's equity driven. Like the Apple Store, it's open to all while setting clear economic expectations. Like the iPhone itself, it combines phenomenal amenities, to empower, engage and delight its residents.

But unlike the iPhone, the whole point of its design is to end the mass extinction and heal the earth, so we can all have a long and prosperous future.

I don't know if that makes it socialist, but it's hella competitive with the status quo!

Close [music]

If you enjoyed Episode 34, please use the share link provided in your podcast player to let people know about it. And be sure to join me next time when I'll discuss how to end pollution.

I'm Kev Polk and this has been Edenicity

Sources

Edenicity 34: Balancing Inequality

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