Retiring entrenched wealth


Part of what has been personally interesting regarding MaidSafe and other promising disruptive communications technologies is the possibility of stripping away the deafening commercial noise. The point of that noise has long been more power for those who already have so much they can’t reasonably be expected to use additional power and resource constructively. In short that noise has an opportunity cost that breaks society apart because it channels ever more resource and power to people who already have their hands full or can’t meaningfully use it and this comes at the expense of everyone else. A key to addressing pressing challenges is technology and policy that can strip away this noise.

During WWII Roosevelt told the wealthy in the US that a wealth ceiling was to be implemented and they would not be allowed to earn more than 50x what a GI who went to Europe to die for them did. They begged for a 98% tax rate instead and the US ended up with a 92% top rate across 30 of its most glorious years. When that 92% progressive tax rate was removed prosperity started to decline. Under that system the wealthy kept control of most of the money that came their way through logical loop holes that ensured that they didn’t abuse people with the power of that money. They went to jail not so much for greed in tax evasion but because not using the loop holes and not paying the tax was proof of abuse of power. This was simple weed pulling that recognizes that overly concentrated wealth is an externality, an over growth problem of sorts, a cancer.

As Thomas Picketty has suggested we would seem challenged to manage a global tax on capital. But a global tax on capital might be aiming too low. Instead we might go with Roosevelt’s initial suggestion but in the modern and more accountable form of an arbitrary (we have to start some where) limit on total wealth (vice income) for both individuals and corporations. We’d say to private citizens if you have more than a billion dollars (in constant real dollars) state divesting through donation or lose it quickly through taxes and check it at the boarder if you try capital flight. And to corporations: if you have more than 50 Billion (in constant real dollars) start spinning off or converting to complete employee ownership and get rid of your interlocking boards or face charter revocation. We’d of course scrap useless WTO type treaties that got in the way and nullify any treaty that wasn’t totally transparent on its face and its its process. Lowest common denominator quality of life conspiracies like the WTO treaty would reap prosecution. We’d work to close down Wall St. and replace it with open source at the quickest rate that would still support keeping the peace- hypothetically (arbitrarily) a 12 year ramp up of capital gains taxes on all Wall St products where waiting until year 12 would result in forfeiture.

A firm so retired would not be interested in mergers or becoming too big to fail. They’d be infrastructure with very long horizons producing products at cost. It couldn’t matter less that smaller firms would compete with larger one almost devoid of the profit motive producing at cost. It just doesn’t matter- as that again would prioritizing the interests of people already far beyond the reach of real need or want.

Someone so retired (hypothetical billionaire) is still qualified and welcome to participate in the overall wealth creation of society on the merits of their voice and effort and even through the use of their remaining private capital but with regard to the growth of the capital under their or name or proxy it would limited by the ceiling and no trust or other subverting technique would be allowed. This recognizes equal opportunity justified by intrinsic equality. This recognizes everyone’s need to be heard and not be drown out. It might overcome some of the counter productive gravitation of wealth and end the glorification of addiction, replacing it with context. It could end the competitive hollowing out of casino games like Wall St. because the score keeping mechanism would be broken.

Conflicts involving ‘capitalism,’ and ‘free markets’ have largely been distractions that keep us from addressing unproductive and oppressive excessively concentrated accumulations of private wealth. This ceiling can help end the bickering over contribution and merit and allow us to address real challenges and even change the basis for economy. Entrenched wealth is like constipation or like oil molecules so clumped together they gum up an engine.


Geez, you certainly put a lot of original thought into your posts. I’ve read a lot of different economics stuff over the last few years, but still not brainy enough to either distil it, nor formulate my own perspective from it…so well done.

One guy I read Martin Armstrong has a pretty unique take on current economic events…his writings on history are fascinating and is of the opinion that we are set to make the same mistakes over and over if we don’t look at the past as cyclic.

For those unfamiliar with Martin’s take (American) on things, here’s a few snippets:

“It is the taxation that creates the corruption and therein we will see the rise of the strongest to influence power regardless of the system”

“It is the rising cost of government that is out of control and NO LEVEL of tax increase can reverse this trend”

“The problem with socialism is the assumption that they know better and that the people do not deserve to retain their own earnings”

“When the economy turns down, targeting the rich is the favourite past-time of the left while the right will move against foreigners regardless of the race, creed, or language”

“You cannot eliminate human behaviour by law no matter what”

“Everything is geared to move toward the confiscation of wealth not reforming the system”

His cycle theory, based on pi is fascinating and alternates between Public (government) and Private waves…2015.75 is predicted to be the next inflection point down in this cycle.




Scary. I am glad maidsafe will move power both beyond current tyrants, as well as those who wish to apply equally tyrannical systems to ‘fix’ them.


@traktion. There is the old theory that law is the whim of the soveriegn. And a newer one that its just culture. In the middle is a technique where we try to get at some sense of impartiality and fairness by laying down dictates or local limits on th soveriegn ahead of time. This is the idea of a society of law and not men and the rule of law. And be it law or code, both are golems that attempt to bind/free future people from the burden of administration. But you know rule by money is likely worse than rule by despot as there is at least the very rare benevolent despot. Whereas rule by money will predictably lead to things like accepting involuntary organ harvesting as unavoidable. During Bush we had many people arguing that ERs should be closed because they were not profitable- and what should we just give every one a car?

Thank you Chris. Another source to check out.


Codified behaviour which has been arrived at through incentives is probably a desirable outcome. The same behaviour which has been arrived at through force is not.

Unequal wealth distribution does not concern me; it is the abuse of the power which it enables which I fear.


@traktion: “Unequal wealth distribution does not concern me; it is the abuse of the power which it enables which I fear.”

The two seem inseperable.

I like the idea you can “nudge” this to improvements, but the problem with that is that the current flowing in the opposite direction is overwhelming, and hurtling towards catastrophic collapse.

So I’m with @Warren & Thomas Picketty at this point.

Also intrigued to hear @ned14 share his economic ideas in this context :slight_smile:


Inseparable only if wealth easily buys power. Clearly, this happens currently, as money can buy votes, legislation changes, legal monopolies, etc.

However, this is much harder with a decentralised power system. Sure, people can seek to re-centralise power again, but this is much harder to achieve than subversion of existing power structures.

Maidsafe is decentralised by design. This helps to pave the way for other decentralised systems, all of which spread power.

Wealth will always buy influence, but whether such actions will be tolerated by a more distributed society remains to be seen. I suspect much of the state sanctioned rent seeking activities will no longer be tolerated, including intellectual property, land monopolisation, legal tender laws, etc.


Good points. I certainly support those ideas, and the view that smaller units (of community) improve governance and accountability, which is helped by decentralisation. Technology is a small, enabling, part of this.

Smaller, means closer connections, increased chances of emphatic understanding and compassionate responses. For this to shift requires much more human to human engagement, as well as democratising technology.

What can facilitate this is a vital and perplexing question!



Under a steward model where we want to allow those who prove they can take societies resources forward, we do want them to have enough of an expanded voice to make use of the societies investment in resources under their steward. In 78 or 79 or so a couple of professors from Canada did a paper that (according to a recent article series) convinced the business world that profit was the end all and be all. At that point the culture apparently shifted to money chasing its tail or money for the sake of money or society for the sake of business. Part of the series showed a text of Johnson & Johnson’s passionate mission statement from the early part of last century. By the looks of the statement, assuming it was representative of other firms of the era, it was even then a completely different take on a reason for being.


Seeing as I have some time as I await RUDP soak tests … some quick factual corrections and notes.

Empirical studies say corruption is entirely linked to design. Good tax design = good outcomes. The US, lacking a professional civil service, has woeful average tax design. European countries - and many Asian ones - have professional civil services and correspondingly good tax design.

The US is the only Western government whose cost as a share of GDP has risen in the past twenty years. European countries have in particular reduced their cost down to an average of about 42% GDP.

Empirical evidence shows people are quite useless at wisely spending their earnings. Taking away 60% of their earnings and giving 20% of it back in a tied form (e.g. as welfare, remember European countries give more welfare to you the richer you are) produces the best outcomes and opportunities of known methods. China and other Asian countries plus South American countries are copying the European model here because of the evidence.

Well, that’s democracy for you, scapegoating someone.

Agreed. But you can ameliorate it. If you do like most European countries and enforce biannual free health checks of citizens, a surprising number will amend their behaviours. Some countries like Sweden will fine you if you repeatedly engage in a destructive behaviour after multiple warnings e.g. getting fatter and fatter and you’re already obese, if you have refused the free fat boot camps the government runs. As the state pays for healthcare, this makes sense, you’re being socially irresponsible if you let yourself go.

I find this laughable as the US doesn’t have a wealth tax exacted on total worldwide assets. Try paying 5% of your total assets annually - including your residence - and then we’ll see what confiscation of wealth looks like.

That said, yes the US system sucks. The founding fathers made a terrible mistake in the design of checks and balances, the untrammeled unrestricted powers taken for granted by European governments where only the monarch could override has proven much more durable, resilient and flexible. For example, today the UK government is passing a law where they can record everyone’s communications without a warrant - they just went ahead and enacted it, and there will be no appeal, no recourse, no striking down of segments. It’s law, until the next government changes it.



It isn’t anyone else’s business how wisely someone spends their money. One man’s wise is another man’s waste of time.

By all means advise people on such matters. Taking their money and spending it for them isn’t the solution. Everyone deserves a choice.


@ned14 good to hear the voice of someone who has a different view than most on here. It’s important to keep these conversations balanced instead of “slippery-sloping” every conversation to it’s most extreme point.

True, but people who pool their money can do more as a group. I think you’d be surprised at the amount of people that want to pay taxes. There’s a common in many communities (without insurance, or even in places where insurance is available but too expensive) to pool a percentage of their money in case someone gets injured. And if a certain amount of time goes by and nothing bad happens, they’ll use part of that money for other things like a party or vacations.

In a society where folks are doing whatever they want, it’s probably fair to presume that a large portion of those people would pool their money together. The people not doing will see the benefits of the people who are doing it, more will join, the whole community puts money in one pot, they hire someone to manage it, and the cycle begins again! I’d rather figure out how to balance this then just destroy, start over, destroy, start over, destroy, start over. Learn from the past, as they say.

Society is a balancing act between anarchy and totalitarianism. As technology, social behavior, and our understanding of the world around us evolves, we readjusting the fulcrum to keep society balanced.


Oh, I agree that pooling resources is a great idea! I think cooperatives and mutuals are a great example of this model too.

What I disagree with - the only thing I disagree with - is forced subscription/membership. We can do much better than coercing people into agreement.


To paraphrase, try a %5 percent tax on total global personal assets per year. !!! It does give context.

And forced subscription/membership is enclosure. Paradox that transparency allows privacy or useful enclosure and secrecy/spying/censureship/conflict of interest destroy it.


Study after study shows that a majority either are incapable or don’t care about wise choices - for example, over 60% of those who take out a mortgage can’t compound interest, they don’t have the math skills. You can try teaching them, but a majority really genuinely do not care. They want the house, and don’t really care how or the long term consequences.

A huge amount of empirical evidence has shown the best outcomes and the best opportunities come out of taking away most of people’s income and returning it to them in the form of what Milton Friedman would call vouchers - and this is why all European countries do exactly this, as do most South American countries and Asian countries - because the empirical evidence is unequivocal. Vouchers for healthcare, pension investment, transport, education, minimum income guarantees, housing and so on. These aren’t actually vouchers in most countries, they are usually highly subsidised or free public services (which are often run by private interests oddly enough). For example, in Sweden everyone gets a mandatory private pension fund account with mandatory minimum payments into it, and whose investments are by default managed for you by the government. You can opt to take control of investment instead (after I believe a short exam to show you’re competent), but you are barred from excessively risky investments as rated by the government. After all, if you lose your pension fund it is the state who will have to look after you.



Is it fair to say that Amazon as it is manifest is essentially devoid of the profit motive and simply produces at cost with increasing efficiency and market dominance while the market accepts the profit void in exchange for a control mechanism?


@ned14 > “No immigration visas are required.” I like that. This is the criticism of some libertarian socialists in the US where its said they believe there is a false conscience because people have had the wool pulled over their eyes where really there isn’t any wool. They want there Mercedes period. Still, generations of Americans have had a deep commercial indoctrination and an education that teaches mainly obedience to authority or the abuse of power. A different socialization might help. There is a new crowd that’s been sniping people on Xbox 360s since they were infants. They might have a different approach.

The vouchers approach could be used on a larger scale to help limit the abuse of money by elites too. I think it is, that’s the point of progressive taxation but with them its called a loop hole instead of a voucher.

@TradeWithDaveIs it fair to say that Amazon as it is manifest is essentially devoid of the profit motive and simply produces at cost with increasing efficiency and market dominance while the market accepts the profit void in exchange for a control mechanism?

To me that’s what a competitive firm should do. When Jobs said screw Wall St. Wall St posted huge numbers, in part because screw Wall St. was sign of a design and quality orientation. Its seems different with Amazon. Right now the Wall St. types who favor social uselessness for firms and cash-in all-the- market-will-bear theft type models are complaining about Amazon calling it a public charity organization or give away program. But if you look at its website its becoming cluttered and cluttered with sponsor BS. A sign that it will go cash in a and start to be a huge net negative for society. I’ve noticed that its entrance into video hasn’t lead to a reduction in movie rental prices. Its seems most movies can’t be rented by streaming now but must be ‘purchased’ at a much higher price. Its becoming collusive.

Walmart used to listen to its customers. A customer would whisper to Walmart and 10000 patrician-ed silver spooners would quake in the shoes. They complained about this aspect, they wanted Walmart to raise its prices and stop listening so it could become supply side useless. That’ has happened.


The logical thing for a firm to do is to become monopolistic such that it drives its competitors out of business until such time as it controls the landscape… literally. In an extreme example of Amazon it would “control the air space… control the ground.” As a precursor to this level of control a firm would want to control the public discourse say by purchasing the Washington Post and BusinessInsider. Then the company controls the price of movies and thereby controls/influences Hollywood, Charlie Rose (via Sumner Redstone) and influences education and culture to its advantage.

It seems logical “that’s what a competitive firm should do?” Is it logocal that a consumer would purchase from Amazon until such time as the consumer either loses their job because their employer was driven out by Amazon or the employee becomes an employee of Amazon. At some point Amazon either takes over or implodes under it’s own weight but not before redefining how a legal monopoly forms the retail landscape.

Most models reach a point of diminishing returns as society becomes enlightened as to the genuine impact of the firms policy. I believe we are seeing that in the case of Wal-mart whether you are talking about return on capital in the case of domestic new store performance or the fact that the working poor make up much of its own workforce. Wal-mart US, from all appearances is beginning to eat its own tail. No one ever thought W T Grant could fail. The difference today is that a recursion is established by policy makers at the SIFI level and when it comes to employment and the distribution of EBT/snap, Wal-mart is systemically important. Just visit the store at midnight on the day that cards are funded. Would Wal-mart be bailed out by taxpayers? Is it already receiving a form of a bailout for being a facilitator. I was in the cut fruit section and there was a sign that says “you can now use welfare to pay for cut fruit purchases.”


That reminds me of what has happened with US media. If one worked for General Dynamics and then found that the only media access one was allowed was the company news letter… that would be equivalent to the relation possibly a majority in the US have with the echo chamber mainstream media.


What tab is society picking up? I will gladly give up the services you list, just as soon as I can stop paying for it.

The “if you don’t like it, you can leave” argument is a poor one. I could assert that you could go and live in North Korea and I doubt you would relish the chance to live in that statist paradise either.

If a local thug came around your house each month and demanded a percentage of your earnings, would I suggest you should just move house? Of course not, even if 51% of the housing estate supported it.

It isn’t your place to decide what is good or bad for another. If people are failing to take advice, then those giving it must improve their arguments. Just stealing stuff from people, because you think they are too stupid to make decisions for themselves is hardly civilised.