Toward a philosophy of socio-economics

"Society" is an abstraction that includes all value and capital within its borders, not because society "owns" all this but simply because all of it comprises society in the abstract as well as in the concrete. When a forest of trees is cut down and converted into lumber, that is potential capital becoming actual capital, of/by society itself; society itself in the abstract sense increases and comes slightly more to life as a result, but it is not "society" that performs the actions of converting the trees into lumber, rather people do that. People are also a part of the abstract social substance, that which comprises society but is not "owned by" society, and therefore it could be said that social capital is self-transforming or that when people convert trees into lumber the self-transformation of society qua its own capital is taking place whereby actual capital (people) is converting potential capital (trees, resources etc.) into more actual capital. Society is the silent benefactor of all this, but remember that society does not "own" it and is instead constituted by/of it.

Taxes are a consequence of the fact that some people in society work in tasks that produce no visible or tangible increase of actual capital, no immediate or soon to be increase of material value, yet we deem their work important and real anyway. What are some examples of this kind of work? Politicians writing laws is one kind, which is administrative; researchers or expert thinkers in various disciplines is another kind, which comprises a knowledge economy (also includes here would be teachers); courts and police who enact laws is another kind, which is an extension of administrative and could be called enforcement; there are many other examples but they all generally fall either under the category of administrative or knowledge economy. The reason these jobs require "taxes" is that the jobs produce no immediate material capital or value which could be traded to produce a profit, namely to produce something by which the individual person himself can live off of, a small excess. Profit is an excess that is partially or totally redirected to fund the needs of the individual person, as income to be spent on wants and needs. But some work does not produce profit like this, for example the politician crafting a law, or the researcher studying his field of interest, or the judge handing down legal rulings or the police confining people in jails based on those rulings. We all do many actions every day which do not produce tangible process of converting potential capital into real capital, or which do not exchange capital for other capital and in the process generate a small excess, a profit. "Work" is defined as this latter activity of either converting the potential capital (a resource, for example) into an actual capital or trading around potential or actual capitals in order to generate a small excess, whereas any other of our activities which doesn't do one of these things isn't considered work. In this same way the activities of politicians, researchers, judges and police is also not work, technically speaking, but we deem it important nonetheless and therefore a system of taxation exists to create a new excess on which the people performing those jobs can live, namely they are paid an income from the excess-pool that forms as a result of taxation.

Note that this taxation is the same mechanism as how the small excess of profit is produced, however the mechanism is used differently in either case: in the small excess of profit you have an excess generated directly as a consequence of the transaction or work itself, and the excess stays in that locality and is bound to it in the form of prices and regulates the transactions over time via this pricing, namely the profit makes sense ontologically speaking with respect to that from which and out or which the profit came, whereas taxes are almost the exact opposite as they do not come from a natural aspect of the locality itself regulated as pricing, and the excess does not remain local, therefore taxes do not make sense ontologically speaking and with respect to how the small excess of profit makes sense ontologically speaking.

All increase of value in an economic sense is always going to be one of three kinds: either a tangible resource is converted from potential to actual capital (trees to lumber), or an existing capital is traded around from one locality in which it is in abundance to another in which it is in less abundance (or from one region where it is less needed or desired to another where it is more needed or desired), or the processes of resource extraction-conversion (industry, manufacturing) and of capital trading and exchange (infrastructure) are increasingly refined and made more efficient. Out of this whole economy of production and trade and excess in exchange always seeking a more efficient excess, comes the possibility that new kinds of capital can appear simple because the total excess as "economy" produces enough profits payable as incomes to a large enough number of people that these new forms of capital can appear as products which are made to be sold but which produce no tangible or material, economic value and yet people want and need them anyway-- for example, books and music. We want and need food and clothing and shelter, for without these our bodies would die; we also want and need entertainment and edification such as books and music provide, for without these such "non-material capital" (even though these capital make use of materials in their existence and use, a physical book for example, they are not a material capital because the excess which they are and represent is not part of or reducible to that physical material) our minds would also die.

A society must increase in its material capital by doing all three of those things mentioned above, and it must also increase in its immaterial capital (ideas, affects, etc.) in order to be considered a healthy and rational-sane society. Different possible configurations exist, including systems with more or less taxes, or with maximum taxes (socialism) or minimum to no taxes (anarcho-capitalism). In the case of either too much or too little taxation (socialism or anarcho-capitalism)  there seems to be an irrationality produced as the inefficiency of either economy or of administration and knowledge economies, respectively.

What of "ownership" then? We say something is owned when we have control over how it is used or traded around, and when we have the ability and supposed "right" to consume it. Society cannot own its own capital (including its people) because that would imply control and right-to, whereas society itself is not individual in this manner due to society being instead an emergent expression of all of this capital which constitutes it. Society is a result and one that only retroactively organizes that capital out of which it is constituted. Yet as already stated there are many processes in society that do not yield immediate or even any measurable, material capital value as excess qua new value able to be used or traded, and indeed it is both the material and immaterial capital which together defines a society. Primarily we can look to the economies of knowledge, themselves immaterial capital processes regardless of how the consequences of that knowledge are able to be retroactively applied back into tangible material gains, in order to see the upper end of social definition and being, and again this sort of immaterial capital only becomes possible once flows of excess have been diverted to sustain it (either flows of profit or flows of taxes).

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Now connecting this into what Parodites was elaborating about the geographical model of economy and its contraction in the US:

The contraction forced immediate increases in efficiencies, in particular by decreasing logistical requirements and decreasing the number of people needed to sustain a given process or model of economic activity, namely the US replicated the European economic model in such a way that greatly and by default represented a huge increase in efficiency, one of the three ways in which profit (truly new value) is produced. This meant that the other two ways for producing profit (resource harvesting and trade) got the benefit of this; the abstraction which is society as such grew more definitive, concrete, real and powerful as the result of the contraction, similar to how a stellar body has exponentially stronger gravity as its same quantity of mass is contracted into a smaller volume. This model as contraction was attempted to be replicated in Europe as the EU, but largely failed because of the significant differences from one EU member state to another, namely for a lack of cultural homogeneity but more primarily because of how the discrete economic entities in question (individual European nations) became indebted to one another in ways that the US states never did. Debt sustains a false capital displacement qua profitability, false because not based around a geographic relocation but rather on distorting one's future gains in order to artificially project those in the present as excess of profit. The cost of debt is not only interest but also the opportunity cost of such displacements carried over time. The temporal contraction natural to economic production (namely that relocation is geographic in nature and occurs over space) is warped by debt and becomes ontologically "loosened" in order to create a new spatial contraction, but again that spatial contraction is a false one.

As ownership (control, legal right-to) of capital becomes more centered on massive corporations and less on individuals and small corporations, a similar "false contraction" is occurring whereby spatially the distance is contracted within capital (from one end of production to the other) by virtue of the fact that capital becomes self-referential and reflexive unto itself as massive capital accumulations start to control more and more capital accumulations elsewhere, essentially we have capital falling into itself in an ontological sense, like a black hole. This does represent a spatial contraction, but again a false one and false for a different mechanism than that of debt; capitalism has developed into this new system of producing capital-falling-into-itself or what we call "bubbles" in the various sectors of the economy, which is also another form of warping and slackening the natural temporal contraction of capital economic processes and thus causing society itself to become less concrete, less real, less able to emerge naturally as the result of all of the capital within its spaces. The natural temporal collapse that capital economic processes represent is what allows for geographic spatial distributions, namely one of the three sources of profits, and this geographic distribution can only be shrunk so far in a natural sense, namely without distorting the time contraction/present moment 1:1 mapping of the onto-epistemic onto the economic. America was naturally able to contract the spaces without distorting time, but wasn't satisfied with this and eventually had to seek artificial contractions. Remember that contracting a given quantity of mass into a smaller volume only works to achieve exponential increase of being so long as the basic underlying structures of that matter/mass remain operative. Once spatial contractions start to distort the structures that sustain economic capital processes then such contraction becomes counterproductive and irrational.

For the same reason that a society at large cannot "own" that capital out of which it forms, so too as corporations become increasingly large and societal-level it becomes irrational and inefficient for them to own that capital out of which they too are constituted. Economic capital process is only possible when created value (excess) is able to be distributed locally, at first in more or less the same domain in which that excess appeared, for this is the same ontological principle by which a society or an individual forms as well; imagine if an individual person were unable to gain the benefit of the food he ate, or the actions he takes, etc., likewise a society emerges as the sum net effect of countless local processes and small excesses that freely pool and move around to produce truly unpredictable consequences. Top down economic control and regulation destroys the very locality out of which society forms at all. This error is replicated to one degree or another at the level of massive corporations, which act like microcosms of society at large and begin to pull apart the fabrics of that larger society in which they exist, drawing away the power or sum excess emergent effects to produce the larger social body in its ontological certainty, namely these corporations are cancers within the body of a society. It might make sense therefore that such corporations become truly international, so as to prevent them from riddling a given social body with cancers. Perhaps we need new economic rules that dictate if a corporation becomes sufficiently large it must be reclassified as international, which is to say non-national and a kind of independent status entity. Then such corporations could set themselves up as mediating points between different societies, and indeed this already seems to be happening. Are not Google, Facebook, Walmart, Monsanto already performing this task? Yet because these companies are still tied to their host society they continue to distort the formative local excesses out of which those societies are constituted. These companies should not have free access to society's capital, rather they should be required to purchase this capital as if they were dealing with another entirely separate and independent entity. The practical way this would occur in reality would be that once a corporation becomes this large its status is reclassified as non-national and it must now purchase access to the given capital of any society in which it does business, purchase by means of paying a large added tax or fee. This would regulate these massive corporations from being cancerous while also creating natural incentive for other companies, even though they aspire to grow large themselves, to remain essentially locally embedded and to only breach that locality when it would be beneficial for them to do so (when their net gain of doing so would exceed the cost of those new taxes and fees for access to a society's natural capital), and therefore given those taxes/fees as reclassification into non-national status would also bring net benefit to a society in which such massive corporations are operating.

I came up with a convenient name for these huge companies that would be reclassified as non-national: Non-national Business Entities or "NBEs". Basically the largest financial firms in the world, or companies like Walmart or McDonalds, for example, they would get reclassified. Since their money is basically international anyway why not make it official? These companies earn the right to be free from being tied to any nation-state. They finally get an independent charter.

But the price is they now must purchase access into the markets, labor and resources of those nation-states in which they do business; we set a modest target of for example 3% or so tax, like a tariff, that they pay annually. Each nation-state negotiates its own fee with these companies, those smaller nation-states that have less significant economies have less leverage and might only be able to get a fee of 0.1% annually, but the fee is still required. The NBE is free to choose to withdraw from any nation-state or wishes to, in which case new national-scale companies would step in to fill the void.

Another obvious rule: it would be illegal for an NBE to give money or any donations to politicians or any political causes. Only those companies truly tied into a national level society and people would be able to contribute to and influence politics, since politics should be local. The nation or society itself is now thought of more properly as a locality, one made up of smaller localities in emergent fashion.

The owners of an NBE would have the option to either lose their citizenship status or allow their company to break up into smaller competing companies to avoid NBE status. We make a special new visa for owners of NBEs. The NBE and its owners are now free from income tax requirements, but must still pay any sales taxes and fees associated with their business endeavors. So free from income taxes they can now afford to negotiate those fees with each nation-state.

What would this arrangement do? It would remove a lot of capital from nation-states, namely all the assets and cash these NBEs hold. But realistically that capital of theirs isn't part of the capital of the society generally anyway, since these corporations are so huge they keep money offshore in convoluted and secret arrangements. And the NBE will still need to invest much of its money in markets and financial instruments, which is fine since the NBE and its owners would be treated like any other foreign investor.

Criteria for when a large company is to be reclassified:

1) the company's income tax payments reach a threshold minimum level relative to its gross revenue, or

2) the company's assets and cash are meaningfully tied up in 25% or more of the world's leading economic nation-states, or

3) the company can be considered a monopoly in any given nation-state.


The numbers can be refined with practice as the system is worked out over time. Basically you want the free market to appear in the intersection of each company's drive to be as big as possible, the company's tax structure and its incentive to avoid paying income taxes, the power of the nation-state as self-determining ontic entity versus this equal power or desire for it by large corporations and their owners, and the cost of doing business. Make it all about negotiating deals, as Trump likes to do; NBEs get some added legal requirements but also some added breaks and special treatment, they don't owe any nation income taxes but must pay meaningful fees to have access to national resources, labor and markets, and each nation-state gets to negotiate its own fees and legal rules with every NBE.

Using Walmart as an example: Walmart has significant revenue from oversees business, they pay some income taxes to the US but also hold many more billions in tax havens. If they pay 6 billion in taxes but have revenue of 500 billion, that puts their income tax at just over 1%. Now look at this: Walmart makes 130 billion in profits from a revenue of 500 billion, and pays 6 billion in taxes; that's about 1% taxes, 25% profit and 74% operating cost. Compare that to myself: I pay about 25% to taxes (and an additional 7% or so to state taxes), with most of the rest going to "operational costs" such as bills and food. Why not reverse this a bit?

Walmart is reclassified, now it owes no national income taxes at all because it isn't considered a national company, and its owners are similarly divested of citizenship and given special "work visas" so they can still live here is they want. They keep all their profits; now, we set a fee for their access to US capital and resources, markets and labor, let's say 10%. That means Walmart must now pay the US 50 billion dollars a year in fees for operating within the US. Considering Walmart makes 350 billion in gross revenue in just the US alone it's worth it to them to do this. Now the US gets an additional 44 billion dollars that it didn't get before. That is basically the entire annual budget for a medium sized state in the US. Profits for Walmart drop from 135 billion to 85 billion, which again is definitely worth it for Walmart since they made 350 billion in revenue in the US alone (and another 150 billion from oversees revenue) and in terms of profit Walmart makes about 80 billion in profit from the US a year. Now they are paying 1/6 of their US revenue back into the US, and since their profits from US revenue alone were around 80 billion they are paying slightly over half of all those profits to the US. Again, they could choose to stop doing business in the US but that would now cost them 300 billion in revenue a year, or 30 billion in profits a year. And even if their owners are petulant retards and decide to leave, good, fuck them then, think of the huge new market potential that opens up as all that former demand is now just sitting there waiting for new companies to spring up and take advantage of.

Under my idea Walmart gives 16% of its US revenue, or 62% of its US profits, back into the US.
Under the current model, Walmart gives 1% of its US revenue, or 7.5% of its US profits, back into the US.

One way to fix the problem of too many national deals draining NBEs of all their profits:

Each nation-state has a rank order priority in deal making with an NBE. Any nation-state deal only applies to "available revenue and profit" for an NBE, with unavailable amounts being any fees already being paid to higher-tier deals. So if US is the #1 deal maker with Walmart and say India is #2, then the US deal of 10% means that the 50 billion fee Walmart pays the US is subtracted from their total revenue and profit available for consideration by the deal India makes with Walmart. So if India negotiates a 3% deal, this means 3% of 450 billion rather than of 500 billion, and 3% of 80 billion in profits rather than of 130 billion in profits.

Another way would be to tie the fee into only that portion of an NBEs revenue and profit that it makes in the given nation-state with whom it has a deal.

So the lower ranked countries would only get like 1% of perhaps 1 billion or so, around 10 million dollars a year, but that's probably more than they're getting paid in taxes right now by Walmart, since Walmart is a US company it probably pays no income taxes to other countries.

Yeah it's not a perfect idea, but I think it's on the right track. When Walmart makes 130 billion in profit and pays only 6 billion in income tax, or 4.6% on profits and only 1% on revenues,, and I pay 25% on my own revenues and basically I have no profit at all, something is wrong.