EOnation: Toward a General Theory of Socioeconomic Democracy (SeD)

[WesBurt@aol.com]

To:  World Bank, The Quality of Growth E-Seminar, at
        qog@lists.worldbank.org

To:  The Treaty of Noordwijk aan Zee at URL  
       www.treatyofnoordwijkaanzee.com 
    
To:  Citizen's Income (CI) Discussion site at URL
      http://citiinco01.uuhost.uk.uu.net/discussion/index.shtml, 

To:   Friends on several mail lists.

To: Robley E. George, Director
      Center for the Study of Democratic Societies
      <A HREF="http://www.centersds.com/";>http://www.centersds.com/</A>
~~~~~~~~~~~~~~~

Dear Robley,

In your 10-26-2000 note, Re: SeD (Socioeconomic Democracy), 
you wrote, among other things:

>>
--while I haven't had the opportunity to enjoy more than just a few 
of your posts, I did see somewhere that you started -- or at least 
upped -- you activity back in good ol' '69.   That was a very 
significant year for me also, as I was given the essential ideas of 
SeD that year.
<<

When you have a moment to spare I would be delighted to hear 
more about the 1969 event that prompted your thirty-one year's, 
and counting, of serious research on Socioeconomic Democracy.
(SeD).  My own interest in SeD was prompted in 1953 when the 
General Electric Company proposed an Automatic Dispatching 
System for Interconnected power systems.  The new product 
computed and executed the same optimum production schedules 
which power system engineers had previously computed and 
executed manually, using "loading slide rules" and empirical 
system data collected to a central location.  This fine example of 
decentralized computing control of our most capital intensive and 
geographically dispersed industry has never been mentioned in 
the General Electric's public relations programs, nor by Ronald 
Reagan in his jobs as GE public relations spokesman and 
US President.

I was fascinated, at that time, by the marked contrast between 
the classical economic (free market) calculation used by the 
sovereign power companies to trade electric power with other 
members of the interconnected system, and, the neoclassical 
(laissez-faire) calculation (now called globalization) used by 
sovereign nations to trade goods and services with other 
members of the global economic system.  That Automatic 
Dispatching System was an "easy sell" because every potential 
customer knew exactly what he wanted the new product to do, 
and could recognize an adequate design of the product when it 
was presented.  But it took sixteen more years of hard knocks, 
as an employee of five different US defense contractors, together 
with Fortune Magazine's October 1966 issue containing a 166 
year profile of the US Consumer Price Index (Figure 10) before 
the contrast between a classical solution and neoclassical solution 
of the social problem became clear in my mind.  Briefly stated, 
the neoclassical solution enforces a net 5% of GDP deficiency 
of purchasing power on the workforce in each nation.  That 
deficiency locates the nation's Phillip's Curve at 4-10% 
unemployment and 2-3% per year inflation.  The classical solution 
allows each nation to reach a dynamic equilibrium at full 
employment and zero inflation.

In 1969 I thought a few letters to industry and government would 
raise a public debate on the subject and the US congress would 
put the country on the path to GeD, as practiced by the American 
private sector since John D. Rockefeller was a boy, and as 
practiced by Japan and most of Western Europe since the late 
1940s.  And here we are, thirty-one years later, two old engineers 
swapping e-mails in the vain hope of finding some common 
ground in a subject that has not been taught by English speaking 
schools and colleges since the Bank of England was authorized 
to create money by the "stroke of a pen" in 1794.  I look forward 
to hearing more about the 1969 event that brought SeD to life.

My sincere thanks, again, for the copies of your 1972 book, 
COMMON SENSE II (on the further design of government in 
general), and the as yet unpublished SOCIOECONOMIC 
DEMOCRACY (an advanced socioeconomic system).  Each 
book was an enjoyable read.  The RAMPARTS Magazine style 
which enlivened COMMON SENSE II seems to have abated 
somewhat in the latest book, but the comprehensive treatment 
of the subject, the professional documentation of references, 
and the literary quality of your writing more than compensated 
for a moderate style which is appropriate to the importance 
of the subject.

By proposing solutions for both ends of Herrnstein and Murray's 
1994 BELL CURVE you have treated socioeconomic democracy 
as a whole self-regulating system which comprehends and 
subsumes so many popular topics of discussion on the Internet, 
such as LETSystems, alternative currencies with negative interest, 
interest-free green banks to replace the existing global banking 
system, new kinds of people to replace the people who got us to 
our present condition, bloody revolution to replace the greedy 
bastards in the thirteenth tribe, etc., etc., etc.  And yet, although 
I admire and envy the scholarly credentials which enabled you 
to write these two valuable books, I believe that both books are 
well within the limits of political correctness as defined by the 
Anglo-American establishment and other Devious Defenders of 
the Status Quo (DDotSQ).  In spite of your comprehensive 
treatment of the subject, there is yet something missing.  Something 
so simple, profound, and true that every Joe Sixpack can get his 
hands and mind around it, and constitute a substantial majority of 
American voters who would force either Bush or Gore, together 
with the next Congress, to implement an optimum SeD as soon as 
one or the other is declared our next President.

If this simple, profound, and true "some thing" did not arouse such 
determined opposition from the DDotSQ, the required public 
debate to establish an optimum SeD would have taken place in 
Thomas Paine's time at the founding of the Republic, or in concert 
with the founding of the American Economic Association (AEA 
1985), or after World War II when Japan, Germany, and other 
Western European nations adopted children's allowances to 
stabilize their labor markets and enable the post war reconstruction 
of their societies.  I am not certain, but the sullen silence on the 
two web sites addressed above and the fact that Basic Income 
European Network (BIEN) is now advocating BI for adults only 
makes me think that Europe is still enjoying the SeD they adopted 
after World War II, and all this chatter about Basic Income and 
monetary reform is aimed at keeping the American taxpayer in 
his hundred year old mushroom condition, in the dark and 
covered with bullshit.

While waiting to hear from you about that 1969 event, here is 
an excerpt from a previous exchange of e-mails, with Craig 
Hubley at URL http://hubley.com/green/span.htm, in which I 
failed again to convey the meaning of that "missing something."

>>>>> Begin excerpt of exchange with Craig Hubley <<<<< 
Subj:   The Original, and Continuing, Fallacy of the Commons
Date:   06/29/2000 4:29:14 PM Eastern Daylight Time

Clearly, Craig Hubley has put the monkey on my back with his 
question: 

>>
I realize that our models differ to some degree, but what is it that 
you think is missing in mine?
<<

What is missing from your model, Craig, is a conceptual framework, 
shared by a majority of serious reformers, which is capable of 
defining the "present condition" of a society and robustly showing 
how and why the society evolved to its "present condition," rather 
than to one of the other 200 conditions suffered, or enjoyed, by 
the 200 nation states documented in the World Bank's 1996 
ATLAS.  By "present condition" I mean a continuously evolving 
state of human well-being which may range between an upper 
limit imposed by the carrying capacity of the ground occupied 
by the society, and a lower limit imposed by a Thirteenth Tribe 
(the law givers) that regards the people as a commons to be 
exploited.  

Prior to the founding of the United States, the perennial "present 
condition" of human society seems to have been what we now call 
the third world condition with a few people comfortable and many 
people living at the margin of subsistence.  So the shared 
conceptual framework need only explain the wide range of human
 development over the last 200 years, between a Switzerland with 
a GNP per capita of $37,180/year and an Uganda with a GNP per 
capita of $200/year.  Anything one might find in the Bible, in 
support of this conceptual framework, should be regarded as 
welcome, but not critical for proving the technical validity of the 
framework.  You may recall that the authors of the Federalist 
Papers Hamilton, Madison, and Jay traveled at the same speed 
and communicated over the same distances as Abraham, Jacob, 
and Moses of the Old Testament.  

As you said on June 22, Craig: "The goal is to change the values 
of the existing world financial order." I would add, in such a way 
that the first world nations will be able to moderate their 
competitive intensity and the third world nations will be able to 
increase the well-being of their citizens.  Such a reform must 
begin with the United States because we are, for a few more 
decades at least, the largest and most productive economy on 
the globe.  If we can persuade the US to stabilize its economy 
to produce only what is demanded with a minimum input of 
natural and human resources, the other nations will follow the 
US example and the global economy will become as deep and 
quiet as a millpond.

The ten figure graphical model at URL 
http://www.freespeech.org/darves/bert.html 
provides such a conceptual framework which captures the 
"present condition" of the US economy and carries the condition 
back in time to explain how we became the way we are.  Your 
model, Craig, amounts to a great leap forward, with no regard to 
how we arrived at our present condition, and no regard to how 
we might move to a better condition using the same earth, the 
same people, and the same money system that got us to our 
"present condition."  

Figures 10, and 1 through 6, constitute the macro part of the 
whole conceptual framework which has earned my living 
since it was reduced to practice for the electric power industry 
47 years ago.  Figure 10 shows the 200 year history of the 
US and marks "The Great Transformation," as Karl Polanyi 
called it in his 1944 book of that title, of the US from an 
agrarian society to an industrial society as the frontier closed.  
Figure 1, supplemented by UN data for years 1949 and 1961, 
shows the relative decline of the US economy from 170% of 
Swiss GNP per capita in 1949 down to 70% of Swiss GNP 
per capita in 1994, along with the relative performance of 
Japan and the other European nations.  Figure 2-3 shows the 
1957 to 1994 growth of the US M1 money supply, M3 debt 
instruments, and the Dow Jones Industrial Average.  Since 
1994, M1 has declined by about 5% while the other items 
have continued their steady growth.  Figure 6, (4 and 5 
are redundant) captures the structure of Wassily Leontief's 
1966 Input/Output tables to show why, among other things, 
the US invested only 16% of GNP in its capital plant while the 
European nations and Japan were investing 25% of GNP in 
their capital plants.  

Figures 7-9 constitute the micro-model which maps, as a scatter 
diagram, the individual contribution of the entire US population, 
by age (0 to 100 years) in Figure 7, by earned income ($/year) 
in Figure 8, and by unit cost of individual contribution ($/unit of 
value contributed) in Figure 9.  The micro-model applies at two 
places on the macro-model Figures 4, 5, or 6, once to replenish 
the capital plant at 90 degrees on Figure 6 and again to 
replenish the human capital at 270 degrees on Figure 6.  As 
you might expect, the owners of the capital plant do it right at 
90 degrees, most of the time. But the human assets in the US 
at 270 degrees have been regarded as a commons since the 
1890s and get the "Fallacy of the Commons" treatment 
(withholding of investment in other people's children) in the 
amount of about 5% of GDP.  

Now Craig, here in the global (development framework) model at 
http://www.freespeech.org/darves/bert.html
is a small body, of elementary technical principles, which was 
known to the elite when the Bank of England was established and 
it still has not trickled down to the US taxpayer.  From my seventy-
six years of experience, six on the Internet, it seems that every 
mail list, web site, NGO, corporation, and government agency 
has several determined defenders of the status quo (DDotSQ) 
lurking on the payroll who are as wealthy, as healthy, as 
Intelligent, and as powerful as Craig Hubley.  
That puts you, Craig, between a rock and a hard place.  If you 
can refute the global model, then there will be no need to shoot 
the messenger.  If the model stands, all of the above mentioned 
DDotSQs, and yourself, should adopt the model as your own, 
because it subsumes the "next system," the WB's CDF, and it is 
nice to be on the winning side.

As I said in my second note at URL 
http://www.geocities.com/Athens/Academy/3142/IR/items//19990119
WesBurtSustainableFuture.html
>>
Our human condition is much like that of the laboratory rats. There 
is no direct connection from the experimenter to the individual rat, 
nor from our public policy to the individual citizen. The experiment 
imposes less space and less food. Our public policy has imposed 
for the last hundred years, and more, 4-10% unemployment and 
a 2-3%/year decline in the value of our money. But the single 
imposition on either the rat colony or the nation produces a 
different response in each rat, and a different response in each 
citizen, so it is a mind stretching intellectual effort for the rat or 
the citizen to reason from his own experience back to the root 
cause of his experience. 

People can see the cause of the rat's experience because they 
are outside the system. They cannot see the cause of their own, 
until they find a conceptual framework, and make the intellectual 
effort, that lets them view the whole system from a vantage point 
outside of the system. This is what drawings, charts, and visual-
aids help people to do, that is, to stand outside the system under 
discussion and look at the whole system in operation. Notice that 
the system operates, regardless of whether or not we look at it, 
understand it, neglect it, or change it to our heart's desire.

>>>>> End excerpt of exchange with Craig Hubley <<<<< 

Again Robley, I may be mistaken, but my training and seventy-
six years of experience has taught me that our primary task is 
not to supply missing technical information, which is ubiquitous 
but withheld from the public in every advanced society.  But 
rather, to persuade the "powers that be" that their concerns 
would be better secured under an optimum SeD than they are 
under the evolving status quo.

Kind regards and best wishes for the holidays to you Robley 
and yours; and to Dr. Anthony F. Gilberti, Peter Burgess, 
John Pozzi, Mike Rowbotham, Kevin Donnelly, Chris Ridings, 
Craig Hubley, Bernard Lietaer, Jeffery J. Smith, 
J. Walter Plinge, Richard Douthwaite, Stephen DeMeulenaere, 
Stephen Zarlenga, John Courtneidge, Aart Roukens de Lange, 
Harry Pollard, William B. Ryan, William Krehm, 
and John C. Turmel.  Serious reformers all.

Wes Burt