I’m sitting in a macroeconomics scheme assessment held by my employers economics team, and they are staring dumbfounded at the french sovereign association output and it is apparent they don’t cognize exactly why this is happening, nor what to do alongside it. The French authorities and opposition seems to additionally have no improved ideas, apparently paralyzed.
Everyone can see that France needs several alter to their financial system, but equal the most expert policymakers are scratching their heads. The lone two options apparently on the array awareness unworkable:
- Savings, cut spending, is item the french populace appear unwilling to accept
- Taxes volition certainly dilatory an already strained economy
Half of the conversation thinks that the group can obtain it, they fair need to activity harder. The another fractional believes the economics can oversee to pay out a bit more. Neither are accurate (although perchance several are closer).
Not to audio too grandiose, since it isn’t my idea at its core, but myself and my co-author have written a document that can explain what is going on.
Pinning the Wage to Scarcity and Technology by Johan Båge, Stella Wilson :: SSRN
That’s a slightly dense macroeconomics theory paper, so here’s one difference of what we have developed: we divided “capitalism” into two
- Good capitalism: Returns from chief that arrive from genuine growth, development, innovation.
- Bad capitalism: Returns from chief that does not create and enhance the economy. The scholarly term is economic rent and rent seeking.
And afterward the guideline you desire is simple: Tax the bad capitalism, don’t tax the fine capitalism. If this appears familiar, it’s fairly near to the 150 twelvemonth old theory of Henry George and Georgism. How do you tax the bad capitalism? Well, several parts of it are hard, and several are small hard, but the theoretically most productive method is using the two a tax and a benefit, specifically a Land Value Tax (LVT) that pays out a Universal Basic Income (UBI).
That’s it. You’re welcome. If I audio annoyed it’s since I am. None of this ache and hardship and disturbance is necessary. France fair needs to peruse my paper.
If you’re curious in understanding a bit further, we’ve made an explainer video in the manner of 3blue1brown here:
