Bumping Against Planetary Boundaries. Derived from globe.svg by Ninjatacoshell
AEOI and FATCA are symptoms of the failed version of capitalism that underlies global political turmoil and the crisis stage our planetary home has already met. Politicians worldwide are desperate to provide enough for their voters to keep themselves in office, but they are failing. Their failure causes disappointment, anger, war, devastation and flight. Populists with worse ideas are attempting to cash in on the chaos. They will be even less successful.
The Failure of Conventional Capitalism
We think we know that capitalism is all about growth. If we could make enough stuff, everyone would be better off. Shallow thinking. Although we all know that the Earth is finite and that we’re not leaving, we act as though Earth’s resources are infinite. The capitalism that we embrace as our secular religion takes that as a given. But the collapse of Venezuela, Somalia, Syria, Western Sahara, the encroaching of sands onto Chinese agricultural lands and the disappearing summer sea ice of the Arctic tell another story.
AEOI and FATCA Measure Desperation
If things were proceeding normally, the OECD governments would not be desperate for revenue. After all, they suck in monumental amounts of revenue every year, that should be enough. Sad to say they then disgorge it wastefully. To top that off, they pilfer it from the pockets of those who need it most and pass it to those who need it least. So they get remarkably little bang for the buck and so do we. This topsy-turvy allocation may align with a fairy-tale version of capitalism but it dispenses with capitalism’s promise.
That’s not news to you, I’m sure. If governments spend revenue unwisely, their first response is to seek more revenue, not to spend wisely. Having emptied the pocketbooks of 95% of their citizens and not wanting to bother the rest, they look farther afield. AEOI and FATCA are the tools they use to suss out additional revenue sources. You look like a likely candidate.
Unforced Change Not in the Cards
Liberals, Socialists, Conservatives and NeoLiberals all suffer from the same illusion that the problem of current debt is solved through future growth. They have to believe it. If they don’t, their whole system collapses. The trouble is that even children can now see that the emperor has no clothes. Politicians cannot see the fallacy because they must not see the it. If they do, they will have no choice but to do what’s necessary to make things better. What could be more unwise than that?
Wealth Concentrates as the World Deteriorates
The structure of today’s capitalism all but guarantees that not only rent-seeking (seeking unearned income) is rife but also ensures through self-reinforcing rental mechanisms greater and greater wealth will accumulate faster and faster. It is accumulating so fast now that this may be the year that one person owns as much wealth as 99% of humanity. At the same time, human population continues to climb and global warming continues to increase with no halt in sight.
Unstopped, global warming will kill us all. Unstopped, population growth will kill us all. And unstopped, wealth concentration will kill us all.
One thing we know with absolute certainty, in a finite system, exponential growth will not continue indefinitely. That’s where we are today. Believe what you want, reality doesn’t care.
I need to make a slight aside here so that you can understand where you are in the grand scale of things. If you have more than US$10,000 in wealth then you have more than 71% of the people on Earth. If you have US$100,000, you have more than 92% of the people on Earth and if you have US$1,000,000 you have more than 99.4% of the people on Earth. And if you are the richest person, you have as much as everyone else put together. Ahhhh the schadenfreude and envy that you must feeling and feeling guilty about, right now, for you are so far above the bottom but the top is out of reach.
There is no way to graph your wealth in relationship to Bill Gates or Warren Buffet. If you have only a few million in wealth, your dot on the computer screen will vanish into nothingness. You’ll cease to exist. Every time he swings his golf club a multi-billionaire accumulates more wealth by the mere fact of his existence than you will in a lifetime of work. Perhaps you think that’s okay. I don’t.
Traditional Capitalism Encourages Shoddyness
Somewhere along the way progressing out of my lower middle-class life I learned that a little extra money spent on clothing bought clothing that was an order of magnitude better in terms of durability and wearability. One could easily spend twice as much on a piece of clothing and get ten times the wear out of it. As it turned out that was true of many things. (Not cars, unfortunately. or smartphones.) Those who patronise Walmart ensure that they’ll need to keep patronising Walmart because the quality is so poor that they have to keep shopping there for replacements. Savings in the world of shoddy are hard to come by. A few more dollars spent at Land’s End, Duluth or L.L. Bean can mean a decade’s difference in the life of a skirt or shirt. Longer-lived clothes are one more way to add to your bank account.
This isn’t meant as an anti-Walmart tirade, it is to point out that mere numbers do not tell the story of economic progress. Take Las Vegas as an example.
Las Vegas – Home of the Ephemeral
Las Vegas Boulevard is a strip of disposable multi-billion dollar dream castles and fantasies. The Neon Museum in Las Vegas is the final resting place for the signs of once world-famous casinos that are no more. It houses the last echo of casinos that were wondrous, shoddy creations in their day; creations that deteriorated and outlived their use-by dates and were imploded to make way for equally shoddy successors.
How much more money would have had to have been built into the design and construction of each of these buildings to extend their lives for one or two hundred years? Ten to fifteen percent. That’s all. But of course the pay back would have started a little later and taken a little longer, and that was all that mattered. It should be obvious that this sort of thinking is a direct contradiction to universal principles and patterns of systemic health and development.
What Can be Done
Regenerative Capitalism offers a way out. But it calls for a radical shift in perspective. Growth is out. Improvement is in.
Here I adapt page 8 and 9 of Regenerative Capitalism
These are the eight characteristics of a healthy human system:
- A Healthy System is Innovative, Adaptive, Responsive. The most innovative, adaptive and responsive systems are the ones most likely to prosper in a world of change. In Darwinian terms, they are the most “fit”.
- It Empowers Participation. In an interdependent system, fitness comes all parts contributing and taking from the system so that the whole benefits as well as the parts.
- A Healthy Human System Honors Community and Place. Each human occupies a unique place in the system and came to that place through a unique history. A healthy system will honour each person’s place and history.
- It Fosters Edge Effect Abundance. We are a collection of small systems and maximum creativity occurs where different systems touch, not at the center where things are uniform. Working collaboratively across the edges enhances each system.
- It has Robust Circulatory Flow. Economic health is dependent on the robust circulation of money, information and resources. Sequestering these in the hands of a few leads to economic death.
- A Healthy System Seeks Balance. The Regenerative Economy seeks to balance efficiency and resilience; collaboration and competition; diversity and coherence; and small, medium, and large organizations and needs.
- It is In a Proper Relationship. Humanity is an integral part of an interconnected web of life in which there is no real separation between “us” and “it.” The scale of the human economy matters in relation to the biosphere in which it is embedded.
- It Views Wealth Holistically. True wealth is not merely money in the bank. It must be defined and managed in terms of the well-being of the whole, achieved through the harmonization of multiple kinds of wealth or capital. These include social, cultural, living, and experiential capital. The human system must also be defined by a broadly shared prosperity across all of these varied forms of capital.
Where to Start?
AEOI and FATCA are, as I mentioned, tools that demonstrate the desperation of governments to increase their revenue streams. Resistance is futile. They will have their way sooner or later and you must become comfortable with that fact. There are two things you can do, and both are important:
First, you can avail of legal options that will reduce or eliminate the taxes that you now pay through careful tax planning. I personally detest the idea that we have a system that enables this form of legal cheating, but that’s the system we live in.Contact us for some ideas.
Second, Read Regenerative Capitalism.
Third, Get locally involved, no matter where you are. If you are reading this, you are the kind of person that can make things happen in your community or communities adhering to the principles above. Do it.