Change how we work or vote, change the world | Solving society's problems III
A better, different way
Keywords: comparing countries, gdp, solving problems, entrepeneurs, worker cooperatives, removing profit incentive, new voting-expertise model, balancing pros and cons of a few experts vs. the crowd
A country nowadays is generally classified with GDP data, even though that doesn’t say much and there are a lot of better indicators to classify and measure the economy, but that will be a post for another time.
That means the country is pigeonholed to be only dependent on it’s economy, which means, it’s businesses, corporations, employees and employers. However since a large part of our lives, we are working, a country does well to optimize how we work, in order for us to contribute better to society. Also as a compromise, I think countries could use transitional indicators, if not already in use, with the first four terms most likely already in use:
GDP per capita PPP (Purchase Power Parity);
Gross output (per capita would be nice, but this metric is relatively new);
gross financial wealth: mean wealth minus debt and mean net financial assets per capita (median measures here would be nice instead of mean because of skewed data by outliers).
Definition of economic energy efficiency or economic rate of return on its consumption of energy: how many economic units of GDP are produced by the consumption of units of energy.
With more emphasis on material productivity and economic energy efficiency, because those ones are the least represented classically.
To explain my argument I will need two other metrics: most billionaires per million, VC funding per capita.
Countries with most startup investment
So I’m trying to see trends in countries to determine how the country should help us with how people work.
Looking at the general transitional indicators you can see some of those trends (Wikipedia). The top countries are either: financial hubs: Switzerland or Hong Kong; or they are commodity leaders (Oil, minerals): Norway, Qatar, US, Australia; or just a small country in general, either by total inhabitants or high population density: Iceland, Luxembourg, Singapore or Hong Kong. In general the countries are in Europe, with exceptions like: Singapore, Israel, Hong Kong, US, Canada, Australia, New Zealand. Overall they are developed countries, having a lot of time to build their economy and profit from colonialism or imperialism.
If we exclude well established developed economies, exclude financial hubs and focus on either small countries and/or on just reaching development status, then we are left with Singapore, Israel, Taiwan and maybe South Korea. Three countries from four, which were called Asian Tigers, because of their upcoming economies in Asia, copying broadly the economic model of Japan, before their lost decade and China, that copied Japan as well. Hong Kong would be included as well, if we include financial hubs. Though these countries are severely lacking in ranking high in median income and/or in median wealth. Which probably means their social policies or opportunities to create income/wealth are not as well developed. Countries should work on those issues as well of course, but I wanted to focus on the type of or the way we work, that would influence our economy and society.
The following youtube video was created a few months after my blog post, you can check the date and also the original (unknown) readers can vouch for me, I edited to include it and it shows a similar analysis like I did. Though mainly focusing on the wealth or financial prosperity of a country or of their citizens, instead of considering how it was achieved.
Now if we look at most billionaires per million and cross reference that with VC funding per capita and we re-include the developed countries, but still exclude financial hub and commodity leaders. Furthermore if we expand to top 20-30 countries in those transitional indicators. We see 3 winners: Singapore, Israel and Sweden.
What do these 3 countries have in common? As the VC funding per capita would suggest: a lot of skilled and well educated entrepeneurs. These countries do it the most efficiently. Of course a country like the US has a lot of funding or a lot more entrepeneurs, but it’s per capita numbers, that’s what’s important. Also I don’t have a rigorous statistical method to prove my point and economics, generally classified as a social science is not an exact science, but all the more reason that human potential should be optimized.
These three countries and a lot of developed countries also show up in the top 10 of Index of Economic Freedom, except for Israel, that falls barely outside the top 30 with at 34, proving my point, that people contribute to economic prosperity even though the country may not be as economically free to achieve such prosperity.
For Sweden even though they generally have high taxes among all the countries along with a lot of other Scandinavian countries, it matters how and what you tax. They tax income high, so income equality is low, but have almost no tax on wealth, like property and inheritance, so wealth inequality is relatively higher (even though that could lead to other problems, see my blog post: From living to spending or saving | Solving society's problems II). So high taxes won’t stifle innovation and therefore GDP in your country as long as you stimulate entrepeneurship.
List of sovereign states by tax revenue to GDP ratio
List of countries by tax rates
Part of stimulating entrepeneurship is having a good education and also a lot of these developed countries are in the top 20-30 of the Education Index, although it seems not as highly correlated. Singapore only at 8, Sweden at 11 and Israel at 20. Maybe a better educational indicator would show something else.
So how about a metric that tries to capture innovation. All the usual suspects are here with Singapore at 3, except it is suprising that Sweden is at 20 and Israel at 38. Showing that a country or society as a whole contributes a lot to innovation.
International Innovation index
Let’s take another look at innovation. We see a similar distribution. However, Sweden and Singapore are in the top 5 and Isreal at 14, a bit higher than above. So it depends on how you measure innovation.
Most innovative countries in 2023, Global Innovation Index (GII)
Furthermore I consider economics as a complex adaptive system that has emergent properties, that the government, organizations and businesses can affect. In simpler terms, society as a group is more than the sum of it’s parts and gives rise to several new phenomena on a broader level or scope. This is the field of complexity economics.
Economic Complexity Index (ECI)
The three countries show up at least in one of the three rankings and there’s only two companies showing up in the top 10 of all three rankings, Germany and Sweden. Showing that Economics is a “complex” topic indeed.
All the non transitional indicators, Index of Economic Freedom, International Innovation Index, Global Innovation Index and Economic Complexity Index show that not only entrepeneurs affect the economy. Though again I think that individual human potential isn’t fully optimized yet and we shouldn’t only look at a macro, meso or group level. People and thus entrepeneurs should be able to have more of an opportunity to build an economy, society or country.
There are several ways to increase the wealth of your economy, like you saw, be a financial hub, commodity power house, trade hub or something else, but you don’t want to be dependent on those, you don’t want your country to be susceptible to “Dutch disease”, so we again return to the solution of human potential.
Entrepeneurs (try to) solve problems and at the same time make your country prosper, in GDP if you will. So the government or your country should facilitate and stimulate entrepeneurship as much as possible and also another worker model that I will discuss next.
Maybe entrepeneurship is not for you, but you still like to participate in the decision making of a company. Then a worker cooperative would be a good model of a company, where such people can work. Like in my post about housing, worker cooperatives are similar to cooperative housing.
From living to spending or saving | Solving society's problems II
Just like how you want a country to be democratically run and not in authoritarian way, in this company you can vote for CEO’s, vote for a board of directors and/or vote for policies. An added benefit would be, that the capitalistic incentive would be greatly reduced or non-existant, because a group of workers would not selfishly hold the profit motive in high regard and would try to benefit the community and society in a more just way. If the capitalistic incentive would be reduced, then automatically extractivism, imperialism and climate destruction would be reduced, along with some other positive secondary effects that I haven’t thought of.
In sports, board-, videogames or other games not everyone wants to be or can be highly competitive. Not everyone can be a star athlete. Some like cooperative (team) games or some just like activities with no competitive element at all. But that is what capitalism does. It makes you compete in a market to gain as much marketshare as possible and to (try to) get the most profit. In today’s society you already have non profit organizations, the part of society with (almost) no competitive element, so why not more worker cooperatives?
The government should stimulate or decree by law to have each organisational work model have a minimum share at a certain initial target x% to eventually an equal share of 20% of the total workforce, this holds for the models: non profits, worker cooperatives, traditional employee and employer model, for 20% I got another idea of a model see the link to my post in the paragraph below and the remaining 20% is a mix of models. This mix would be that 50% belongs to the workers, including the board and CEO, and 50% belongs to shareholders. Though another distribution can be preferable when you want to create more wealth and trust for your country by creating a sovereign wealth fund, see my post: Fiscal policies and wealth ownership to prosper society | Solving society's problems VI.
There are several models how to govern groups of people, in companies, organizations and countries. I came up with an idea while thinking how to balance expertise of people and decentralization or devolvement of power, the merit and (semi-) direct aspect came naturally along the way, see this post for more information: Better voting methods, better politics, better society | Solving society's problems VIII.
So 20% of the companies should be according to this model called dianomocracy. I think this is the best model, but after reaching the quota we set for each model in society, we can let society decide which equilibrium of percentages is the best.
In conclusion let people have more participation or control to decide what’s best for the country and this in turn could boost innovation, productivity and GDP. This can be accomplished by fostering an entrepeneurial climate, stimulating worker cooperatives and implementing the new voting-expertise model, named dianomocracy.