Chapter 16 : Reducing the Polarization of Our Society.

If you don't get taxes and transfer payments right in a country, it could eventually lead to the polarization of society. If you don't fix the public education system and mass media, this can lead to a society open to manipulation, leading to polarization. A polarized society is one that, by definition, is ripping itself apart. It's not so bad here in Australia. We have a true democracy (kind of), so a person who grew up in a housing commission home can become Prime Minister of Australia. I think that matters. That's not as much the case in republics like the USA. 

But then, if you listen to Gary Stevenson, who is a British economist, that doesn't matter. According to him, because of compounding wealth, the rich will gain more and more of the available productive assets in the economy at a faster and faster rate. He says asset price inflation of everything worth investing in is showing us this in real time. The rich can outbid normal people on more and more assets, eventually cannibalizing the middle class. He says this is very hard to stop because the rich own the mass media, they lobby the politicians, and they have heavily weighted influence over what you learn at school and even at university. So you can't fight against something you don't understand. And even if you did understand, you haven't got the resources to compete against the rich. Nor would your natural allies understand the significance of what you are saying. 

In Australia, we do have some things on our side. Gerrymandering is illegal, and compulsory voting is good. You can fool some of the people some of the time. But you can't fool all of the people as easily. And I believe insider trading by Government parliamentarians is illegal in Australia.  I also think compulsory superannuation helps because normal people are forced to save 12% of their income and invest it. So throughout their working lives, normal people are actively competing for the available assets worth investing in. 

In the future, even Australia will have challenges with polarization. So here are a few ideas to throw into the melting pot of ideas known as the Internet. I like the idea proposed by the American group "Represent Us". They suggest all voters be given a tax deductable $75 coupon to donate to their preferred candidate. This dilutes the effect of "big money" skewing election results obscenely with their lobbyists. 

On the matter of taxes, when someone earns income, that income should eventually be wound back to the point where there is no income tax at all. Those people are bringing value to society. Let people work as hard as they like and keep all that money for now. You should definitely not put tariffs on to replace income tax. That's so stupid, only Trump would think it's a good idea. 

All assets over $500 should be taxed monthly based on their market value. Over a 10 or 20-year period, this tax increases from almost nothing to an amount sufficient to run the country effectively. An asset is defined by how it is used, not how it is bought. For instance, you can't buy 100 parts for $499, assemble them, and suggest it is a tax-free asset. All assets over $500 in value should be registered with a bank of the owner's choosing. Each asset has a unique identifying number created when the item was manufactured or imported. An item can't be sold as new or second-hand without that number being attached. The bank is responsible for paying the tax on the asset, not the owner of the asset. The bank being taxed extends a line of credit to the owner of the asset. No assets are exempt, whether personal or business. The massive tax code that exists should just be thrown out. If you want subsidies for your workplace, negotiate for them before these tax laws ramp up and start to bite. All subsidies have a review date within a 5-year period. You need to make sure they are fair and still fit for purpose. If the industry rep doesn't present a case to the Government, then the subsidy lapses. 

This wealth tax is used to pay for the services the Government sees fit to offer to the society. The excess is paid as a transfer payment to all taxpayers in the form of a universal basic income. So whatever you collect from the asset taxes is just paid in equal amounts into the bank accounts of all citizens and permanent residents in Australia less the Government costs of running the country. As mentioned above, the tax on assets and the amount paid in the UBI are gradually increased from almost nothing to a livable basic income over a 20-year period. This will allow people to adapt to the new regime. It will also allow the Government to fine-tune faults in the system, whilst the system has little financial impact. It's important to get the restructuring right first. As this new tax regime increases to its full extent, income tax should be reduced gradually to zero over the same 20-year period. 

These taxes and transfer payments should occur monthly, in an effort to smooth out the financial impacts on the economy. Since all transactions would occur electronically, physical limitations probably would not be a factor. Keep your tax havens in the Cayman Islands or wherever you hide your money. If we tax your physical assets enough to keep society working smoothly, I don't think it matters. You may be rich, but those assets you own, which make you happy, also make less fortunate people in our society happy as well through the taxes the asset values generate. 

The maximum level of the UBI would be set by a group consisting of the elected Government of the day and Social Welfare Groups, putting forward their arguments to an independent commission at a public hearing annually. So the UBI and asset taxes are adjusted annually. Don't bother cranking up the printing presses to make it rain money where you socialize the loses and privatize the profits. If the assets go up in value due to Government intervention, the system will just self-correct. Asset inflation automatically leads to higher taxes on the rich. Taxes and the UBI will catch up at the next annual reset.  

At present, that doesn't happen. When Governments print heaps of money, those with the most assets benefit through asset price inflation. This can lead to polarization of society. Rich people can borrow against those inflated assets to afford an even more luxurious lifestyle or control even more capital in our society. 

Within 20 years or so, I believe robots combined with general artificial intelligence will be able to replace most of the existing workforce. When our children are our age, they will not be able to bargain in the marketplace with their labour for an income to support a reasonable lifestyle. The owners of capital will encompass much of what we now know as labor. This will lead to a polarization of society as well. It needs to be addressed now, not when the effects are already upon us. By that time, it could be too late. The desperation of many in society will require a quick fix. This is such a massive change that it requires a slow, considered transition. 

I worry that paying people a livable income is not enough. A holistic approach is needed for our society. In Sweden, new immigrants were paid a pension, left largely to their own devices, and expected to proactively assimilate into society. This did not happen. Ghettoes formed, organized crime flourished, and gang violence occurred. All new immigrants were stigmatized to the point where new immigrants with promise found it harder to get into Sweden. 

People who receive a UBI in Australia who think they don't have to be productive members of society could become a breeding group for future unrest. The public education system needs to be changed from "find a job" to "find a life". Children need to be taught that what they eat becomes who they are physically. They also need to be taught that what they think all day, every day, is who they are mentally. So they need to pay more attention to what they think and be taught how to think in a way that helps them. It's a life skill just as is eating correctly. You can worry about Shakespeare later. 

We all know what I mean. Those young boys and girls are put into a competitive environment in a school system that was designed more than a century ago. If you score high marks compared to others in your class, you are considered worthy. If not, you are unworthy. So we are teaching our kids that they are either winners or losers. Teaching kids to think that way is criminal. It sets up a scarcity mentality in the child. Something they already get from their parents at home, possibly. Scarcity means fear, fear leads to irrational behavior, and poor thought processes. Kids are often susceptible to poor, even dangerous, thinking habits. Let's not add to their problems with an outdated learning environment. 

So what I am saying is the way our education system is designed is not fit for purpose. If we want our kids to be mentally and physically better off when they leave the public education system, then everything needs to be reworked. And with the level of technology that exists today, that is entirely possible. Learning facts can be achieved by a basic computer program or a sophisticated AI-generated program. Children can develop at their own speed. Progress is the key, not competition. And reward the child when each learning module is completed. 

Socialization skills such as team sports, drama, debating, and event and project organizing can still be part of the curriculum. Group activities are still good. Children need to be taught how to properly socialize. To be wary of the leader and organizer of the group becoming a little dictator. If you see groups forming, ask that the leadership of the group be rotated each day. Tell the students to prepare entertaining things for the group to do the next day when they know they will be leading the group that day. There must be a million and one ways to improve young people's social skills and factual knowledge without labelling them a winner or a loser. Practice role playing acceptable yet difficult issues found in the domestic environment as well as in commercial and political environments. Even role play group interactions at school between students and students and teachers and students.

If we get this right, we may see an overall reduction in the level of violence throughout our society. That's violence towards others and ourselves, and our loved ones. Birth rates across the world are plummeting. Perhaps teaching kids how to be successfully married by studying those life skills would help. Most young people would, in my opinion, enthusiastically participate in such courses. 

I am not talking about sex education. Though let's not ignore it. I am talking about researching why marriages fail and teaching our kids how to avoid that problem. How to bring up kids from the state's point of view, not just the parents' and grandparents' point of view. And the state needs to have research to back up its viewpoint because it will be challenged. I would also like to give grants to young people who pass a family education program given as a wedding gift by the Government. The idea of giving out "baby bonuses" is stupid. 

If birth rates keep falling, then research needs to be done to find out why. The state needs to look at how this can be addressed. The most important relationship in our society is that between husband and wife. They can be same sex marriages as well. But for the benefit of our society, these people need to be understood and guided carefully. We have taken this most important relationship for granted and left it fend for itself.

You might find this idea stupid, but even teaching kids to have a place where they always put things and then actually doing so can help in a relationship. Before you buy things, discuss with your partner whether you need it, can you afford it, where it will go, and what gets thrown out to make room for it. Role-playing these scenes in classrooms before they become a high-stakes issue in a marriage is important. I suspect that if you want to know what's in a person's head, look at their bedroom. If it is a mess, then chances are more likely, they find it difficult to motivate themselves. 

Imagine you've been through such an education system. At some future date, an issue comes up in your marriage. If you can recall from your classroom days how the entire class said exactly what you are doing in this marriage now is totally unreasonable, then you may be more willing to give in. It might even reduce domestic violence issues. In 2022-23, 34 women were killed by their partners in Australia. 

The most important relationship upon which all of society is built is the family unit. Too often, the only supporting structure for that group of people is some old man in the form of a priest, or a monk, or a rabbi, or a muffty. All of them were programmed to believe and promote some medieval mumbo jumbo. Or worse still, the family is atheist, so they are left to their own failing devices until the damage is done. If a successful state is to evolve, this family unit structure needs TLC.