9:  The Journey Part One (Basic Information)

How will such a progression work?

To explain this, I will need a visual aid. 

The back cover of this book contains an illustration marked ‘the Road Map of Possible Societies.’ 

 

I have described this road map before, but here is a quick recap.  There are two things that can vary about a society: 
                 1.  The way people interact with the land and other physical structures of the world around them; and,
       2.  The way people interact with the other people around them.
          The horizontal axis represents different ways people can interact with each other; societies toward the left are built on a hierarchy, with certain people having authority over others.  You may say that societies toward the left have more government than those toward the right, but this doesn’t tell the entire picture, as there are authoritarian bodies other than governments (organized religions, for example, and institutionalized authoritarian structures including marriages).  Systems at the far left are authoritarian, with authoritarian bodies in control of all the important decisions in the lives of the people; societies at the far right have no authoritarian bodies at all.
          The vertical axis represents different ways people can choose to interact with the world around them.  Societies at the extreme bottom interact with the land by owning it.  They accept that humans or human entities (countries, for example) own absolutely all rights to everything in the physical world, from the surface of the planet to the stars in the sky.  You could call these 100% ownability societies.  Societies at the extreme top interact with the world as if the humans are caretakers to properties that aren’t ownable in any way.  You might call these societies 0% ownability societies.  Intermediate societies accept that the people of the Earth are the dominant species and therefore the only species with any ability to control the treatment of the planet around us.  They can agree among themselves to respect private property rights in some cases when this benefits the human race, and to allow people to buy and sell, and by implication own certain rights to use certain parts of the planet as private property.  Societies toward the bottom allow and accept greater ownability and societies toward the top allow and accept lesser ownability.  Although there are many ways to create these intermediate societies, one option leads to consistent results that can be compared and contrasted: leasehold ownership systems can be made in any of them, with different leasehold ownership systems created by selling leasehold rights in an auction market and then setting the price/leasehold ratios indicated by the left scale of the chart.  Thus, a price to leasehold payment ratio of 5:1 (a socratic leasehold ownership system) causes 16⅔% ownability, a system where 16⅔% of the free cash flow is available to purchase with the rest unowned and unownable. 
          Each point on the Road Map of Possible Societies represents a combination of the two variables, one particular ‘way of interacting with the planet’ and one particular ‘way for people to interact with each other.’

 

We were born into societies on the extreme bottom line (sovereignty-based societies, or societies with 100% ownability).  All options on this line are sovereignty-based societies; they vary with regard to the degree of authoritarianism or, to simplify a little, the degree of government control. 

All societies that exist as of 2020 are very close to the middle of the range.  There are practical reasons for this: sovereignty-based societies have very powerful forces that push toward war.  Societies (states, countries, or groups of states/countries) that are too extreme in one way or the other aren’t able to compete in war.  Too much authoritarianism prevents innovation and progress (people must have the freedom to do things that lead to innovation) and make countries in this category unable to compete effectively against those with more advanced weapons.  Societies too far to the right (very small governments and little authoritarianism) aren’t going to be able to be organized around war and will devote more to social programs and services, with less emphasis on keeping the military complex well-equipped and ready for battle.  (Societies toward the right can work if we move farther up the chart, to areas where war risks are less severe, but they can’t compete in sovereignty-based societies.  The book ‘Possible Societies’ on PossibleSocieties.com goes over the details.) 

There are some differences between the different countries, sovereign states, unions of states, and countries in the world today, with some farther to the right of center and some farther to the left, but the differences aren’t very great.  The numbers on the bottom scale represent the percentage of the total amount of value/wealth created that is under the control of governments.  Most governments report these figures and the United States Central Intelligence Agency (CIA) goes over these figures to make them consistent and reports them on its website.  If you want to know what percentage of total value created (called the ‘Gross Domestic Product’ or GDP by the CIA) is under the control of the government in any particular country, you can find this by searching in the CIA Factsheet for ‘percentage of GDP controlled by government.’

Because differences between current societies are very small, I simplify the analysis here by representing ‘current societies’ by a single point, the point at the exact center of the bottom line marked ‘2020 Societies.’

If we want to change societies, we can’t choose where we start.  We start where our ancestors put us, which is at the point in the center of the bottom line of the Road Map of Possible Societies.

If we want to move to a society anywhere on the chart, we will need to go ‘through’ other societies to get there.  For example, say that we want to move to a socratic society that has the same basic level of government involvement that exists in the world today.  This would be represented by a point at the center of the line marked ‘Socratic Societies on This Line.'  To get there, we must go along a line that is marked ‘Journey Line A.’ 

We are starting with a system where 100% of the rights to the wealth of the world are ownable and nothing is left unowned, unownable, and under the control and direction of the human race.  The center scale of the Road Map of Possible Societies shows the percentage of the wealth of the world that is unownable and allocated by the direction of the people of society.  Note that at the bottom line it is at 0%.  If you go up a tiny bit off this line, you move to a system where some very tiny percentage of the wealth of the world is unowned and unownable. 

If we create a system like the one described earlier in this chapter, where an NGO like the Community of Humankind gains control of certain parts of the world and sells socratic leasehold rights to private owners, the human race will gain some automatic and risk-free income from the land.  At first, there will be only one property in the system, so we will have only a tiny income from the land.  To put this another way, a very tiny part of the yearly wealth the planet produces will be considered unowned and unownable and will flow to the human race through automatic mechanisms. 

This will pull us off the extreme bottom line.  It is true that, at first, the wealth that is unowned and ownable and directed by the human race will be very, very small, perhaps only a tiny fraction of 1%.  But any positive number is more than 0%.  As time passes, more and more properties get into the system and the properties that are in the system get improved so that they are more bountiful and then sold for higher prices, causing the wealth that goes to the human race to increase.  As more wealth falls into this category, we will move upward along the line marked ‘Journey Line A.’  Each movement will take us to a society that is slightly different than the one we had before. 

 

The Journey:  Part Two (Changes in Latitude)

As we go upward along this line, we will move to societies with different flows of value and different incentives.  The scales on the extreme right side of the Road Map of Possible Societies indicate the strength of two important kinds of incentives: incentives to destroy value and incentives to create value.

Some societies work in ways that send money/wealth to people who do things that harm the planet or human race.  These societies destroy what we may call ‘value,’ which can be broadly defined to include anything that humans want or need.  A clean environment is ‘value.’  A safe living situation, where people are free from the threat of war is ‘value.’  Some societies work in ways that send wealth to people who destroy value.  This creates financial incentives to destroy value.  This book calls incentives that encourage people to do things that destroy value ‘destructive incentives.’ 

Different societies work in ways that lead to incentives of different strengths.  Some societies have very powerful destructive incentives; they send a lot of wealth to people who do things that reduce the amount of ‘value’ on Earth.  Some societies send small amounts of money/wealth to destroyers; they have weaker destructive incentives.  Other societies don’t send any money/wealth to destroyers; they don’t have destructive incentives at all. 

The scale on the inside right of the Road Map of Possible Societies indicates the strength of destructive incentives.  Note that sovereignty-based societies (those all the way at the bottom) have the strongest possible destructive incentives: they literally make all of the wealth the world produces and contains available to people who do things that harm the human race and planet.  Anyone who can convince people that they are a ‘country’ and that she is the leader of that country can start war and start conquering land.  Once she is the conqueror, she can take anything the land produces and contains and use it for anything she wants.  If the part of the world she conquers contains oil, she can pump it and sell it.

 

Normally, the conqueror isn’t going to build the pumps personally; the conqueror will form a partnership with a corporation and the corporation will pump the oil and send a share of the revenue to the conqueror.  This is what happened with Dick Cheney and his partner Halliburton: Cheney arranged for his government to conquer the Iraq oil fields, which are the second richest in the world, generating about $200,000,000 per day in revenue.  Cheney, as one of the majority shareholders in Halliburton, gets a share of this money. 

 

The system at the extreme bottom of the chart represents systems where all of the wealth of the world is available to go to destroyers; it has the strongest possible destructive incentives, 100% in the chart.

Move up and you go to systems where some of the wealth the world contains and produces is under the direct control of the human race, leaving less to go to destroyers.  Less is available for destroyers, so the destructive incentives are weaker.  (The mechanisms that cause the wealth to go to destroyers aren’t really as simple and obvious as this explanation implies; the book ‘Possible Societies’ explains them in detail.  Here, I am just trying to give you a general idea.)  If we start our ‘journey through societies’ at the point marked ‘2020 societies here’ and then move up, we move through a range with progressively weaker destructive incentives. 

Incentives are behavioral motivations.  You could think of them as invisible hands pushing people to act a certain way.  These invisible hands work by basically pushing people toward a river of money.  The bigger the river of money, the stronger the incentives.  (You may be able to see why Cheney and his minion George Bush were willing to risk a global war that might destroy the planet to get Iraq’s oil: $200,000,000 per day is a lot of money.)  As we move up through the chart, we move to societies with weaker destructive incentives: the invisible hands are still there, they just aren’t pushing as hard.

Of course, at first, the destructive incentives will still be extremely strong, and we won’t expect a huge reduction in the amount of destructive behaviors.  But incentives have a very well understood and very consistent impact on behavior: give people less money to destroy and, although many people will continue to destroy, some people who would have chosen to destroy if more money had been involved, will decide that it isn’t worth it and choose not to.  Rates of destruction will fall.  Perhaps they will only fall by tiny amounts, but they will fall.

The outer scale represents the strength of different kinds of incentives: some societies work in ways that allow people to get money/wealth if they do things that lead to invention, innovation, technological advancements, mechanization, and increases in the amount of wealth that the land can produce in sustainable ways.  Some societies work in ways that allow people to get money/wealth if they do things that lead to more value existing in the world.  Again, we can interpret the term ‘value’ in a very broad sense.  The world has more value if there is no polio or smallpox available to kill our children.  The world has more value if people are free from the threat of war and the risk of destruction. 

Constructive incentives are the opposite of destructive incentives.  One encourages people to create value (again, broadly defined) and the other encourages people to destroy value.  

If you start at the point marked ‘2020 societies’ and go upward on the line marked ‘Journey Line A,’ eventually your journey will intersect with the line marked ‘Minimally Sustainable Societies Here.’

Part Three:  Minimally Sustainable Societies

There are certain conditions that must be met to have a sustainable society.  (I find it strange that many people advocate sustainability without even trying to define the term.  How can we move toward a sustainable society without knowing what this term means?)

It is possible to create more value than is destroyed indefinitely.  We can have better and better housing, better and better food, better and faster public transportation, cleaner air, increased health, all without limit.  There is no point where life becomes too good and we all destroy ourselves.

However, it is not possible to do the opposite forever.  If a society destroys more value than it creates, eventually some key item of value, say the atmosphere, the ozone layer, the state of health of the people, or something won’t be sufficient to support us, and we will perish.  It is not possible to continue to destroy more value than is being created forever. 

Any society that destroys more value than is created is unsustainable.  If we know this, we understand the absolute minimum conditions needed for sustainability: the amount of value that is created over time must be equal to or greater than the amount of value destroyed.  

If you start at the societies at the extreme bottom of the chart, then move upward, you move to societies that are different in two ways.  First, destructive incentives are weaker as you go up, for the reason discussed above.  Second, the constructive incentives—the incentives to create value—get stronger. 

This happens for several reasons that mainly have to do with taxes and regulation.  Sovereignty-based societies have no common income that can be used by the people to meet their common needs.  These societies work in ways that create governments that need enormous amounts of income.  War is a constant risk; it can come at any time and, when it comes, governments need every single bit of wealth (money in systems that use money) they can get for the war.  Even during times when there is no war, they can’t stop spending, as they must be prepared for war.  This is a fantastic expense and governments must get the wealth to cover these costs somehow. Generally, they get this wealth through taxes. 

These societies also totally disenfranchise the majority class of society, the working class.  The working class gets no share of the bounty at all; in fact, they get nothing, and starve to death, unless they can get jobs.  Technology is causing jobs in production (creation of value) to disappear.  Governments must find ways to create jobs.  Most of the job creation programs in effect today focus on paying destructive industries subsidies so that they can compete with non-destructive industries and keep the non-destructive industries (which don’t create jobs) from taking over.  These subsidies on destruction started out small but must get bigger and bigger over time to keep people working.  As I write this in 2020, these programs are truly massive: globally, subsidies on destruction exceed a trillion United States dollars a year and the only thing that the global governments spend more on is military activities. 

Governments spend such fantastic amounts in these two areas that they need massive taxes just to function.  As a result, the tax burden is often about 50%. 

 

Note: the really important number for people who want to improve is called the ‘marginal tax rate.’  This is the tax rate on additional income that is generated as a result of changes to a taxpayer’s situation, including improvements that lead to more creation of value.  Marginal tax rates are actually far higher than average tax rates.  One reason for this is ‘bracket creep.’  If you do something that drives up your income, you pay a higher tax on the increase than you would pay otherwise, because you will be in a higher tax bracket.  Often, marginal tax rates are more than 90%, meaning that the government gets 90 cents out of each additional dollar people generate in income. 
          Obviously, the more of marginal income you can keep, the stronger your incentives to make improvements that drive up income ‘at the margin.’ 

 

Socratic leasehold ownership systems work in ways that cause wealth to flow into public coffers automatically and without risk.  The money that goes to the public does not come from anything anyone has done to earn: it is always a part of the free cash flow and free cash is, by definition, free.  It is always unearned. 

If the public has revenue that comes from unearned income, there is no need to take money that people have done anything to earn.  In the socratic society discussed earlier (for Pastland), people could keep everything that came from improvements that drive up cash flows on properties; there was no need for taxes and, since taxing people for doing things that create more value and make life better don’t make sense (you don’t punish people for doing things you want them to do) there was no reason to have them. 

If we start at the point marked ‘2020 societies here’ and go upward, we move closer to a situation where people aren’t penalized for improving the world.  As the Community of Humankind gains the ability to regulate international disputes, international tensions will fall and governments will find it isn’t necessary to spend as much as before on weapons, allowing them to reduce taxes.  As the Community of Humankind takes over services that the people want, again, governments will be able to reduce taxes.  People who improve anything will be able to keep more of the increases in revenue from the improvement.  Constructive incentives will grow in strength. 

Incentives mater.  They affect people’s behavior.  Not everyone will react every time the incentives change; in fact, most people won’t.  But the incentives will make a difference.  We can expect the behaviors related to the ‘creation of value’ to increase and the behaviors related to the destruction of value to decrease.  We can expect the amount of value created over time to increase and the amount of value destroyed to decrease. 

At some point, we will reach the line marked ‘minimally sustainable societies on this line.’ 

Minimally sustainable societies are NOT non-destructive societies.  Destruction is still a part of these societies.  They still have destructive incentives and, if destructive incentives exist, people will destroy value.  But these societies work in ways that lead to far weaker destructive incentives than exist in the sovereignty-based societies we started with at the beginning of the trip.

Sovereignty-based societies also have incentives that lead to the creation of value and modification of the Earth so that it produces more things of value over time.  Incentives matter: they impact behavior.  Because of these incentives, we would expect far more value to be created in sovereignty-based societies than in societies without constructive incentives, like natural law societies.  Minimally sustainable societies work in ways that lead to even stronger constructive incentives than exist in sovereignty-based societies.   Again, incentives matter.  They affect behavior.  We would expect greater efforts to create value, to modify the planet so it produces more value and wealth over time, in minimally sustainable societies than in sovereignty-based societies. 

Minimally sustainable societies are those that have strong enough incentives to create value and weak enough incentives to destroy value that the total amount of value of all kinds (including the value of having clean air, stable weather, and safe living conditions) does not decline.  This is the minimum condition needed to have a sustainable society.

It is not the only condition.  Obviously, if value is being created by turning wood into fancy sailing yachts but is also being destroyed by destroying the air and water the people depend on, the system will not be sustainable.  In sovereignty-based societies, the human race has no revenue and no way to impact such variables.  (The governments of countries can affect them, but governments of countries don’t have incentives to improve global variables like atmospheric carbon dioxide levels or war risks.  We, the people of the world, care about such things and once we have control of wealth, we can create structures to deal with them.) 

However, it is a minimum condition: the destruction of value must be less than or equal to the creation of value to have a society that is even potentiallysustainable. 

Part Four:  How Far Do We Have to Go?

I put the level of minimal sustainability at about 97% on the chart.  This number refers to the percentage of the bounty (free cash flow) of the world that is buyable and ownable by private individuals and does NOT go to the human race.  To put this another way, the human race would get 3% of the bounty of the world.  To make this happen, about 3% of the cash flow-generating properties on Earth would have to be controlled by socratic leasehold ownership. 

For comparison, a socratic society like the one described earlier for Pastland would be an 16⅓% ownability society; this means that 83⅔% of the bounty of the world would flow to the human race, more than 40 times the amount that goes to us in the minimally sustainable societies. 

This is an approximation of course; it is basically a guess about the minimum amount of wealth that the human race would have to have in order to have enough control over important variables in our world to reach minimum sustainability. 

How much money would we, the people of the world, get each year under this condition?  The best figures I could find for global value creation come from the World Bank and the International Monetary Fund, that provide estimates of these figures.  The most recent figure on the analysis page for the World Bank (taken from https://data.worldbank.org/indicator/NY.GDP.MKTP.CD) show that the global production of value is about $80 trillion a year.  How much of this is bounty depends on many different factors and would be pretty much impossible to work out, but we don’t need an exact figure for this analysis, just a very rough number.  A figure of half would be very conservative; in other words, it is almost certain that more than half of all production is bounty.  We live on an extremely bountiful world and it gets more and more bountiful each day as machines replace workers, allowing wealth to be created and collected with no effort.  (A system where machines produced everything would have zero labor costs.  Many economists argue that labor is the only true cost of production: if things are produced without labor costs of any kind, with zero-cost energy systems like solar power running the machines, everything that is produced is bounty.)  So we have a number to work with, let’s say that the total bounty of the world (the total global free cash flow of all land, corporations, infrastructures, and anything else that is ownable and generates free cash flows) is about $40 trillion.  If we get 3% of this, we end up with $1.2 trillion ($1,200,000,000,000) per year.  Remember how socratic leasehold ownership works: leasehold owners must put up a price that is five times the leasehold payment.  Because they know they will lose this entire price if the leasehold payment is even a second late, they have powerful incentives to make this payment and the income of the Community of Humankind will be automatic.  In the event they miss the payment, all rights to the property will revert to the Community of Humankind, which may then sell the leasehold rights again for five times the amount of the missed payment.  This system works in ways that lead to an automatic and risk-free income for the human race.

This income does not come from taxes.  It is a flow of wealth that comes from the productive properties of the world anyway.  We, the members of the human race, have set up a system that allows private individuals to control parts of the world without consent as long as they follow the rules that we have created to protect the planet and human race, and share the flows of wealth that come from the land with the human race.

When we start out in our journey toward a healthy society, we get none of this wealth.  As we progress, we get more and more.  At a certain point, we will get 3% of this free wealth.  (For this to be true, about 4% of the cash flow-generating properties on Earth would have to be controlled with socratic leasehold ownership.)  

Obviously, 3% is not much; it is nothing like the 83⅔% that we would get in a socratic society.  But we live on an incredibly bountiful world.  When we get up to this percentage, we, the members of the human race collectively, control wealth that works out to be about $800 per person per year.  This may be easier to picture if we think of it as a ‘per family’ figure and multiply it by 4, to get $3,200 per year per family on Earth.

Again, this isn’t much.  But it is enough to make a real difference.  The human race has certain common problems that the governments of the countries of the world aren’t doing anything to solve.  (In fact, the governments of the world are responsible for the most serious of these problems; they create them intentionally.)  Once we get to minimally sustainable societies, we reach the point where we have enough power and wealth to set up global structures to deal with the most serious of these problems.

The governments of the world will have far less pressure on them to encourage destruction and make war.  They will see that the creation of jobs, while still necessary over the short run, won’t be necessary over the long run.  Even at this tiny percentage of the bounty, we will have enough money to provide some basic incomes for the people of the world. 

 

A ‘basic income’ is a cash distribution from the common fund of the human race that is divided among the people of the world.  This is one of the election options, as discussed earlier in the analysis of ‘Public Administration in a Socratic.’  We can vote money into this fund and it will immediately be divided among all people who have registered to receive this money through electronic transfer. 

 

We will all be able to see that there will come a time when the human race will have enough income, from our share of the bounty of the planet, to provide basic incomes that can meet the basic needs of the people.  After this time comes, the people will gain nothing by having their governments take money from them and use this money to subsidize destruction or create military tensions to create jobs.

When the human race gets to this level (again, about 3% of the bounty of the world flowing to us) we will have more power than the great majority of the world’s governments.  This will put us into a position to start to do some of the things that Dunant had in mind for the organization he created that have a real impact on international relations.  We can create a true World Court, not the token organization that makes only non-binding decisions that we have now, but a body with tools that it can use to compel the governments of the world to accept its rulings, and to create agreements that will push the governments of the world to work together to ensure the compliance of governments that have lost cases at the World Court and are required to give up land or control over people that they have gained through activities the court rules are unacceptable. 

We will have the ability to create binding limitations on carbon emissions and have the governments of the world sign accords agreeing to enforcement mechanisms that the human race has funded.  (In sovereignty-based societies, governments can agree to anything, even somethings they have no intentions of doing, because there are no enforcement mechanisms in place. They can simply make up some excuse and ‘pull out’ of the accords, or simply modify them, or report compliance when it isn’t happening, and there isn’t anything anyone can do about this.) 

Once we get to this point, we, the members of the human race, will have tools that we can use to get governments to back off on their attempts to prevent sustainable processes like solar from taking over.  Currently, the great majority of the governments in the world have complex policies designed to protect jobs in destructive industries that can only work if the switch to sustainable processes doesn’t take place.  When we get to a level of about 3%, we will have enough power through our control over wealth to educate the public about these policies so that they don’t support them and replace government officials who do things that harm the human race in the countries of the world.  Again, 3% is not much.  But there is already pressure in this area: more and more people are realizing that their governments are tricking them to prevent the world from moving to sustainable systems. 

All the above changes will work together.  It won’t eliminate destruction, but we don’t have to eliminate destruction to get meet the minimum conditions needed for sustainability. We merely have to reduce the amount of destruction enough, and increase the rate of progress and growth enough, to get the progress we are making to be enough to offset the destruction that is still taking place.

How far do we have to go? 

This particular estimate, to a system where 3% of the bounty of the world flows to us, is just a guess.  But I think it is, if anything, conservative (in other words, we may easily get to sustainability with far less of the world’s wealth flowing to the Community of Humankind.)   Technology is already growing at an extremely rapid rate, creating many tools that we can use to pull the human race together and deal with common problems, even without us having any structural organization at all.  The internet is making it harder for governments to convince their people that the ones born on the opposite side of imaginary lines are evil monsters who deserve only death and misery.  We can get both sides of the story; we can see that the ones our governments want us to kill have children, feelings, and that they care about the same things that we care about.  When we see a mother searching for her children in a war zone, it is hard to really think of her and her children as enemy monsters to be destroyed. 

Solar costs have plummeted and now are so low that the old argument against solar—that it is too expensive to consider—aren’t even remotely believable.  (The book, ‘Anatomy of Destruction’ shows that solar costs fell below the costs of the most common destructive systems as long ago as 1978, when solar technology was still primitive.  Solar costs now are less than 5% of what they were in 1978 and the costs of destruction have only gone up.  As a result, even the analysis that is designed by the gas and oil industry—like the BP energy survey, which would show that destruction is cheaper if there were any way to twist facts to make it appear to be true—shows that solar is the cheapest energy system available.)   Governments have only been able to prevent a switch to sustainable energy systems with extremely aggressive action, restrictions on use of solar (like PURPA, which makes it illegal to sell solar energy in the United States; this is discussed in the book ‘Anatomy of Destruction’), massive taxes on solar, and massive subsidies on destruction.  Even without any organized and concerted effort on the part of the human race, governments are having a very hard time preventing sustainable systems from taking over.  I think that this particular estimate of the power the human race would have to have to counter the efforts of countries, with 3% of the bounty of the world flowing to the human race each year, is very conservative; we could probably do it with a lot less.

How far are we from the line marked ‘minimally sustainable societies here?’  We don’t have nearly enough information to determine this.  However, once we begin on the journey and get started with the system, sending some (rather than none) of the bounty of the world to the human race, we will be able to map the progress and make a better estimate.  Again, I think that the 3% figure is conservative.  Chances are we will be able to meet the minimum conditions for sustainability long before that.

How long will it take to get there?  Obviously, if we don’t know where ‘there’ is, we can’t really estimate the time it will take to get there.  But we have evidence to show that NGOs that do things that the people really want done can grow extremely rapidly.  I think it is reasonable to estimate that, if we started today, we could meet the minimum conditions for sustainability in less than 30 years. 

A Look Around

Sometimes, when you are on a trip, you may see something that wasn’t on your agenda and stop to take a look.  You may find a wonderful beach, a fantastic waterfall, a great museum, or a walking street (like La Florida in Buenos Aires, Las Ramblas in Barcelona, or Nan Jing Da Ja in Shanghai); sometimes, you may find something along the way that is so nice you decide you want to stay there, rather than go on to your original destination.

Once we get to minimally sustainable societies, we can look around.  Do we want to continue down the path to the socratic?  Perhaps.  Perhaps we may want to pause a little, remain where we are so we can consolidate our gains.  The socratic is a very nice society, of course, but we are starting from a terrible mess with many hardships.  Rather than focusing on ‘getting there at any cost’ we may want to focus on expanding the quality of life for the people of the planet, dealing with the population so that problems related to population stress don’t get any worse, or take some other steps to make our eventual progress easier but will slow us down and push the ultimate goal farther into the future.

 

Population: 

The definitive work about population was Thomas Malthus’ 1798 book ‘On Population.’  This book was and still is highly controversial but it really the only book I could find that takes an objective look at this issue.

The book points out that the population of the working class will grow exponentially if there is enough food to support higher populations.  (More food means lower food prices; if a working class family can support more members, more will be born and grow to maturity, leading to very rapid population growth.)   More recent analysts call this effect a ‘population explosion.’  This explosion only takes place in the working class and is very pronounced in the most impoverished areas: greater poverty means more rapid population growth. 

Since he wrote this book, his basic theories have been confirmed and you can easily look at the data and see the result: populations with greater prosperity tend to have smaller families with the most prosperous half of the global population either entirely stable or actually falling.  The most impoverished demographics have very rapid population growth, with some—the most impoverished part of the human population—doubling every generation.  If you look at a list of the countries with the highest population growth rate in the world today (you can find this at https://www.cia.gov/library/publications/the-world-factbook/rankorder/2002rank.html) and cross-reference it with a list of the poorest countries in the world (available at https://www.cia.gov/library/publications/the-world-factbook/fields/221.html) you will see that it is basically the same list.  All of the 25 countries with the highest grow rates are in Africa; all have total gross domestic product per person of less than $2,500 per person.

Why does this happen?  Analysts point to two reasons.  The first is a lack of birth control.  Extremely poor people can’t afford it.  We all want to have sex and, without birth control, sex leads to pregnancy.  Once the woman is pregnant, she has no choice: there will be a baby (if she can’t afford condoms, she certainly can’t afford abortions).  Mothers don’t let their babies starve to death if they can help it so they will do anything they can to keep the baby alive.  If there is enough food, and any way for the mother to get it, the population will grow and can easily double each generation.

The other reason this happens is social security.  Very poor countries don’t have it.  People get sick and will get old.  Without any family to care for them, they will die.  Very poor families need to be large to be secure.

 

Most countries in the world today have enough prosperity to keep populations stable.  (At least this is true for natural increase; immigration from poor countries is also driving up the population of wealthier countries.)  But the population in extremely poor areas is exploding.  It is growing at a fantastic rate that is putting pressure on resources all around the world.

Once we get to the point where we meet the minimum conditions necessary for sustainability in general, we may want to divert some attention to the population problem so we can reduce the pressure on resources caused by the need to feed an ever-growing number of extremely poor people.  This is actually a pretty simple fix, but it will require allocating a lot of wealth to two areas that may not seem like a very high priority at the current time:

1.  Reliable, affordable, safe birth control for everyone who wants it.

2.  Global social security programs that are designed specifically to reduce the stresses that induce the very poor to have large families. 

The problem of an exploding extremely impoverished population will make it extremely difficult to limit the power and authority of the governments of countries.  As time passes, there will be more and more pressure on them to isolate their countries to prevent a massive inflow of people with no skills, no education, no wealth, no incomes, and no experience with the realties of life in the countries they flee to.  We can already see the impacts of this: isolationist policies have been increasing in popularity for decades.  These policies have widespread popular support among the wealthier nations of the world and it is very hard to enact policies that tie the human race together when so many people will do just about anything they can to make sure that the people from other countries can’t even walk on the land they claim as theirs. 

What can we do about this?  It seems obvious: the first step is to create a global birth control system that makes the highest quality pregnancy prevention methods available today available to even the poorest of women, around the world.  The second step is to devote funding—a lot of it—to the development of better birth control methods so that, after these systems become available, the only babies born will be those that people want and plan for.

The third step is to study and examine the pressures that lead to the clear relationship we observe between poverty and population growth.  If it turns out that the problem is a lack of social security, we need to extend the same social security systems that are available to people in more prosperous countries to the rest of the world.  Obviously, this is going to be expensive over the short run.  But any success is going to bring massive dividends.  The population explosion among the poor will go away and, when this happens, poverty becomes a solvable problem.  At some point, we won’t have to worry about the population of impoverished people exploding anymore, because there won’t be any more poverty. 

Once we get to minimally sustainable societies, we have a little bit of time to reflect.  We can look around us.  We can stop worrying about how we are going to avoid extinction because extinction isn’t going to be a threat anymore.  We can begin to examine ways to create the best society that humans can have, and then make it happen.

Life In Minimally Sustainable Societies

Superficially, minimally sustainable society are extremely similar to sovereignty-based societies.  People still have jobs, they still get up early and drink coffee, commute to work, listen to the news, and shop at supermarkets.  They still pay for things either with cash or plastic, and most of the income of most people still comes from their jobs, their business income, or from returns on wealth.  The great bulk of the properties on Earth will still be owned and controlled through freeholds, with no real difference in the way this system works.  (The minimally sustainable societies only need about 3% of the properties to be controlled by leasehold ownership.) 

Girls will still try to make themselves attractive for boys, boys will still try to get girls to go to bed with them, the social games people at all levels play will be the same as they were in the sovereignty-based societies that used to exist.  The financial structures don’t need to be significantly different than those in place in our 2020 societies, prices won’t be much different, the options people have for making money and spending it won’t be much different.  Superficially, minimally sustainable societies are very similar to sovereignty-based societies.  But they are entirely different structurally.  They have flows of value that bring the human race together into a true Community of Humankind.  The entities we call ‘governments of countries,’ although still very important, will no longer be omnipotent.  They will no longer be able to dictate global policy to the people of the world and force us all to accept whatever they tell us.

The differences aren’t enough to completely solve the problems that threaten us.  But they are great enough that people with at least reasonably good eyesight will be able to see that our situation is not hopeless.  We will have a venue, authority, and power.  We will have control over variables that we can use, if we want, to increase the amount of authority and power that belongs to the human race.  We will see that our destiny really does belong to us and we can make the world work in a safe, sane, and healthy manner.  If we want to do this.

Beyond Sustainability

It is hard to make any decisions of any real importance if you are being forced to pay a game of Russian Roulette and may blow off your own head at any moment.  

Humans can clearly organize the realities of our existence many different ways. Which is best?  This is actually a very complicated topic.  I have tried to provide a starting place in this analysis in the book ‘Possible Societies,’ available on the PossibleSocieties.com website.  But this is just a starting point.  To really understand our options, we will need to take a lot of time.  We will have to create new sciences and do research in them.  I think that we will find when we approach this topic scientifically, it opens our horizons in wonderful ways.  We will find that we are capable of having societies that bring us prosperity, peace, and a safe, clean world where we can ask important questions that will help us find a better future.

I needed to present an example of a healthy society for the points of this book, so you could see that a healthy society is possible.  It is within the capabilities of the wonderful and terrible beings around us that we call ‘humans.’  The socratic is just an example.  It is one of the places that we might go when heading toward a better existence. 

Are socratic societies the best societies humans can form? 

Probably not.  You can’t expect to get everything right the first time.  But it doesn’t have to be the best society to make the point I am trying to make: we can survive as a race.  If we start where we are now, and then head in the general direction of the socratic, eventually we will get to minimally sustainable societies.  Once we are there, we are out of the woods.  We can take our time and find the best place to go from there. 

It’s hard to make a long-term decision about your future while you are in the middle of a forced game of Russian Roulette and your head could become mush in the next second. 

 

In the movie the ‘Deerslayer,’ enemies force captured prisoners of war to play Russian Roulette against each other and then place bets on the outcome.  Obviously, it is very stressful to have to play this game.  Imagine one of the soldiers being forced to play this game gets a call from his wife who wants him to decide among several houses she has selected for the family to buy and raise their children, after he gets out of the military.  I don’t think he is going to make the best possible decision until he is sure he is actually going to survive.  

 

Once we get to minimally sustainable societies, we will be in a position to look at the next step.  We may see that we can get to a better system if we simply keep heading in the same direction.  We may want to go somewhere else.  But either way, we will have taken our destiny out of the hands of the primitive and barbaric people who created the extremely destructive and dangerous societies that we had been in before and put our destiny into our own hands. 

8:  The Community of Humankind

We start with an NGO.  I will call this NGO the ‘Community of Humankind’ in this example.  This may be a new NGO, created specifically to tie the human race together and give us authority, or it may start with an existing NGO that already has a large organization and infrastructure and is willing to accept a model that will increase its scope and power. 

It might even be the original NGO that Dunant created, the Red Cross.  This organization has changed its orientation over the long period it has existed.  As science advances, it becomes able to explain many things that, earlier, could only be explained with references to magic and spirit beings.  People educated in science tend to look for and accept scientific explanations for the things they see.  People with these education often think of the religious books that claim these same events happened by magic (as a result of the powers of a spirit being who can’t be seen or otherwise detected) as silly remnants of our superstitious past. 

If we discard religion, we can see evidence that the human race is actually in charge of its own destiny.  We are where we are now because of decisions other people have made in the past.  If we want to change the basic structural realities of the societies we live in, we have the ability to do this and we have the right to do it.  I think that people are more enlightened now and it is even possible that the organization that Dunant created and was then kicked out of may want to move back to the original plan. 

 

The Red Cross is actually trying hard to shed the religious reputation that is implied by its name and symbol.  It is not a Christian organization anymore, or even a religious organization: it is a global NGO, devoted to advancing the interests of the human race. 

 

Whether we start with an existing NGO or create a new one, the approach is basically the same: we want an organization that is intentionally designed to empower the human race and give us control over things that, currently, we can’t control.

What gives the human race power?  The simple answer is ‘money.’  But money, as a one-time gift, doesn’t really meet our needs.  The human race is forever.  The money is only going to be available to spend once.  If we want to empower the entire human race, including the members of the human race that have not yet been born, we need to set up a system that will allow the human race to have some share of the wealth the world produces over time. 

This is clearly possible.  We live on an incredibly bountiful world.  It produces fantastic flows of free cash over time.  This cash represents the right to share in the enormous wealth that flows from the planet.  We can set up a system where some of this wealth flows into a fund that belongs to the human race. 

The Community of Humankind will do this mainly by accepting endowments and bequests of real estate and corporate assets, then selling leaseholds on these properties.  The properties will remain private and the leaseholders will own real rights to them.  But some portion of the free wealth that the land produces will flow into a fund that belongs to the human race. 

This system is likely to appeal to people for many reasons.  One of the main reasons, I believe, is people’s personal attachments and concern for the particular part of the world they have experience with.  Say that you were raised on a cattle ranch.  You know every inch of the farm and what it can do.  You are getting old and know that there will come a time when you won’t be there to work the ranch or even protect it.  Many people look at real estate as nothing but a bit of land that sits on top of oil, coal, iron, or other resources.  They want to get control of the land so they can destroy it.  Say that you don’t want this to happen to your farm.  Say you want your farm to continue to be a farm, to raise animals and allow at least some of the people of the world to live in commune with nature. 

How can you make sure this happens?

In our 21^st century world, there really isn’t any way to do it, at least not any way that anyone is going to have confidence is going to continue working after they are gone.  Trusts can be busted.  Giving the land to the government isn’t a sure thing: the government can simply sell the land to a corporation that will start raping it right away.  There are some NGOs devoted to conservatorship, but they really don’t have the ability to protect land that they own: they may be able to hire rangers to protect large parcels of land that are contiguous, but won’t be able to protect a ranch that is the middle of an area of private ranches.  (Donate it to them and they are likely to sell it and use the money to buy land that is close to their existing land and that they can protect.) 

The Community of Humankind (capital letters mean this refers to the NGO) will create a leasehold and sell the leasehold with socratic leasehold ownership.  The buyer of this leasehold will pay a price that is always five times the yearly leasehold payment.  

As a result of market forces, this price must be quite high. 

 

We actually know what the price will be: it will be a multiple of 4.16 ⅔ times the price, assuming interest rates are 4%.  Why?  Bidders will drive up the price until the yearly cost of ownership (the total payments made to all parties) is equal to the free cash flow.  (Why: greed.  People want free money.  If people can buy into a cash flow-generating property for a total cost per year that is less than the free cash flow, everyone will want it: everyone wants free cash.  They will keep bidding up the price, which is the only thing they can bid on, until the cost of ownership is equal to the free cash flow.  They won’t go higher than this because people won’t take money out of their own pockets to own a property.)
          There are two costs of ownership, the leasehold payment and the interest on the price.  (Borrowers pay this to others; cash buyers must ‘pay’ this cost by giving up interest they currently get on the money they invest.)  The leasehold payment is always 20% of the price and if the interest rate is 4% the interest cost is 4% of the price, so the total costs of ownership are 24% times the price.  They bid up the price until the costs of ownership are equal to the free cash flow, so they bid up the price until 24% of this number (the price) is equal to the free cash flow.  If the free cash flow is x, they want a number ‘y’ such that y *24% =x.  To solve for y, divide both sides by 24% to get y = x * 1/24%.  This fraction is 1/24%=4.16⅔ so the price will be 4.16⅔ of the free cash flow. 
          The math in some cases is complex, but the basic motivations that lead to the required numbers are easy to understand: people are greedy.  As long as this is the case, we can understand the forces that lead to prices in any leasehold ownership system we might design.  (The prices can also be understood in freehold ownership systems: they are the result of the same processes.  But because freehold ownership systems are extremely unstable, the formulas must adjust for this and are far more complicated in freehold systems than leasehold systems.)  The book ‘Possible Societies,’ available for free from PossibleSocieties.com, explains the math and underlying principles in detail, for those who are interested.

 

The people who want to buy leaseholds will have to pay a lot of money for them.  They know they can get this money back later, if they want, by selling the leaseholds to someone else, so they think of the price as almost like a refundable deposit.  To get their deposit back, they have to take care of the property and follow the rules in the leasehold agreement.

The Community of Humankind will set up leasehold agreements with rules that require the leasehold owner to take care of the property and keep it safe from harm.  Because they have a large amount of money invested and stand to lose all of this money if they don’t follow the rules, they have very strong incentives to follow the rules.  (If they don’t, the Community of Humankind doesn’t lose; it can cancel the leasehold agreement without recourse, keeping the full price paid.  It can then use this money to restore the land to its former condition and sell another leasehold on it, all without loss to the Community of Humankind.)  

I know a lot of people who had close relationships with a certain part of the world.  A friend of mine had inherited a forest in New York.  He wanted to protect it forever.  We talked about ways to do this and concluded that he could keep it protected while he was alive, but not after he was gone.

Forestry experts had told him that the best way to keep the forest healthy is to remove excess growth.  Cut some of the trees each year and remove underbrush that may catch fire and destroy the forest.  He had a logging company come in and do the necessary work.  This not only protected the land, it provided a steady income for him: the logging company sold the logs, paid itself for the work it did, and gave him the rest of the money.

If a system like the Community of Humankind existed, he could make sure the land is protected forever by donating the leasehold rights to the farm to the Community of Humankind.  The Community of Humankind could sell the leasehold with the provision that the forest must remain a forest and be operated as a productive forest, with strict rules prohibiting any potentially destructive use.  The buyer/owner of the leasehold would have money on the line.  The forest would produce an income.  The leasehold owner would share this income with the human race, giving us our leasehold payment, and keeping the rest.  The leasehold owner would take on all risk and make sure the interests of the human race were protected.

If the leasehold owner could find other ways to generate revenue from the land that didn’t violate the rules protecting it, she could keep all this additional revenue.  For example, a lot of people in New York live in cities and would really like to get away to a nice cabin in the woods once in a while.  If the rules that the Community of Humankind set up to protect the land didn’t prohibit this use, the leasehold owner could build some cabins and rent them out.  She could keep any additional cash flows the land generated from the rental income.  Then, at some point, she may want to get out of the forestry business.  She may then sell the leasehold on the forest.  Others will be able to pay significantly more for it than she paid, because the land now produces a much higher free cash flow.  When the leasehold sells, everyone benefits: the seller gets a higher price and the human race will begin getting a higher leasehold payment (the leasehold payment will reset to 20% of the higher price).   

People who control a part of the world and want it protected can donate the leasehold rights to the land to the Community of Humankind.  The Community of Humankind can then sell the leasehold rights and give the money to whoever the donor wants to have the money.  (It could be to her heirs, perhaps, to the Community of Humankind, perhaps, or perhaps even to herself; she doesn’t have to wait until she dies to donate.)  

There will be three benefits to disposing of property in this way:

 

1.  The property will be protected through a secure mechanism which is undiminished through time.  A person with real estate to protect won’t have to worry about someone eventually finding a way to destroy the property.  The protection will continue indefinitely.  A person with a corporation that is designed to and intended to do things that make the world better can donate it and be sure that a leasehold will be sold that prohibits any activities that will turn the corporation to activities that harm the world or people on it.  The buyers of the leaseholds will put up money as a guarantee that they will follow these rules.  They don’t want to lose this money so they will have to follow the rules the donor creates.  This system will align the interests of all future owners with the interests of the donor.  There is no way to create this alignment in our world today; it will be easy for people who have built corporations or formed close personal relationships to real estate and want these things protected to do this by taking advantage of this system. 

2.  Donors will know that the property will soon begin to bring real benefits to the human race in ways that can be measured and easily understood.  These benefits will never end; the donors will be doing something that they know can’t be turned against the interests of the human race, because the human race directly controls everything that happens. 

3.  Donors will be able to turn their properties into cash very quickly in this system.  The Community of Humankind will be the guardian of the leasehold ownership system.  This system will work much better if there is an electronic global market that is as large and liquid as possible to make sure that people who buy leaseholds will be able to sell them quickly and for the highest price the market will bear, and people who want to improve the world can easily find a leasehold property available for sale that matches their skill sets.

This is actually fairly easy to do because leaseholds have certain important advantages over freeholds that make it much safer and easier to buy them than to buy freeholds.  (The reasons for this are rather complex so I won’t explain them here, but you can find an explanation in Possible Societies, available on PossibleSocieties.com website.  The main reason is that leaseholds have a ‘correct value’ is that there is a fixed relationship between the free cash flow and the market value of each leasehold; because people know that this is true, they know they aren’t going to lose money through the dramatic price swings that are part of freehold systems.) 

If there is a massive global market for leaseholds, with special structures included to make sure this market is liquid (something that people know how to make happen), leasehold properties can be sold very quickly.  This will be very appealing to many people who have property and want to turn it into cash quickly and without trouble: merely donate the leasehold rights to the Community of Humankind and instruct that the money from the sale (the price of the leasehold) go to them.  People who donate by bequest will know that their heirs will get checks within days, rather than the many years that are common for bequests in freehold systems.

 

The Community of Humankind will have both short-term and long-term goals.  Over the short-term, it will provide services that the people want but that the governments of the world don’t want, or at least don’t want enough to actually fund them.

This is the great appeal of NGOs in general.  Most of the people of the world realize that governments aren’t really working to make the world a better place.  Governments not only aren’t putting out any serious efforts to solve the key problems of the world, they actually intentionally create the most serious problems of the world today.

The Community of Humankind will create a fund in banks throughout the world.  People will make their leasehold payments into this fund.  This money will come in without any need for the Community of Humankind to collect anything or even send out notices: the leasehold owners have paid a price for the leasehold that is five times the yearly leasehold payment.  If the leasehold payment is not in the account of the Community of Humankind when due, it is late, and the leasehold owner has violated the terms of the leasehold agreement.  The agreement then automatically cancels and all rights to the property revert back to the Community of Humankind.  The Community of Humankind can then sell it and get five times the amount we would have gotten if the leasehold payment had been made.  The price actually functions like a rental deposit.  Since this ‘deposit’ is five times the amount of the yearly ‘rent,’ we have total security and our money will come in automatically.

Once the money is in the account, it can only come out of the account through an election process.  Each registered voter will get votes that represent a certain amount of money each.  For the sake of example, say that each vote is worth $1.  Say that $2 million comes into the fund on a given day.  This generates 2 million votes that are distributed among all registered voters.  Voters may cast their votes for any fund that has been approved through voter referendums.

You can cast your vote to give the money to governmental organizations or non-governmental organizations.  If you think that the governments of the world do a good job and nothing else is needed, you can cast all your votes to a ‘national and local government fund.’  This fund will divide any money put into it among the governments of the world, to use as the governments of the world want. 

However, if you think that the governments of the world aren’t doing some of the things you want to be done, you don’t have to give them this money.  You can send the money to one of the NGOs that are dedicated to providing specific services and solving specific problems. 

In most cases, the Community of Humankind won’t have to form new NGOs to do the things the people want done.  NGOs already exist to do most of the things the people of the world want done.  Doctors Without Borders, for example, provides medical care all around the world.  Habitat for Humanity builds affordable homes.  The Red Cross provides disaster relief.  If you think that governmental bodies aren’t doing a good job, and that non-governmental organizations can do better, you may decide not to cast any votes at all to the ‘national and local government fund.’   You can give all of your share of the bounty of the properties that are in the system to NGOs.  If an NGO already exists that does the things you want done, you can simply cast a vote for it.  Say you cast a vote for Doctors Without Borders.  This vote will initiate an electronic funds transfer from the account of the Community of Humankind into the account of Doctors Without Borders.

Say that there is something that you want to happen to the world that governments are not doing, and that no NGO currently does.  You can form your own NGO.  You can use the same funding systems that are currently in use to form NGOs.  Once it gets into operation, you can sponsor a referendum to add it to the ballot.  If it gets enough signatures, it goes onto the ballot and anyone on Earth can cast votes for it.  Each vote cast transfers $1 from the general fund of the Community of Humankind to the NGO you created. 

 

Practical Matters

Global NGOs already exist.  We don’t have to reinvent the wheel to have them.  We know that people like the work NGOs are doing.  We know this because they are supporting the NGOs; they wouldn’t support them if they didn’t like the work they are doing. 

People who run NGOs know that they can get funding through their traditional sources of funding and through the Community of Humankind.  They will know that there are 7 billion people who are all potential donors.  They will know that the more they can please their donor base, the more money they will get.  The people who run the NGOs will naturally want to broaden the appeal of their organization as much as they can, to attract the attention of more people. 

The Community of Humankind won’t be a service-providing organization itself.  It will be a conduit that will funnel money to other service-providing organizations.  The people will control which services are provided.  If the people like the services governments provide, they can vote to send money belonging to the human race to governments.  If the people think that the governments do a very good job deciding what programs to fund, they can give the money to a fund that allows people in the government to do anything they want with it. 

If the people of the world think that governments are not particularly good at providing services, they can give the money to NGOs.  The money that goes into the Community of Humankind is under the direct control of the human race.  The people of the world decide what happens to it.  If we don’t want either the governments of the world or NGOs to get any of it, we can simply divide the money among ourselves: we can cast votes for a ‘basic income fund’ that will be divided equally among the people of the world.

Governments will still exist.  Countries will still exist.  But there will be a new entity, the Community of Humankind, that will also have power.  If the people of the world think that the Community of Humankind is doing good work and making the world better, they can increase the organization’s power and wealth as they see fit, by donating their time, skills, talents, property, money, or any other resources they control to the cause.

 

Long-Term Goals

Over the short run, the Community of Humankind will be designed to help the human race meet needs it is not currently able to meet.  Over the long run, the Community of Humankind will be working to change the foundational structures of the societies of the world. 

People are self-interested.  If a group of people that make up a minority of the human race controls wealth, they will want to find ways to use that wealth to advance the interests of that particular group.  For example, no country includes a majority of the people, so all countries are minorities.  They control wealth and they use this wealth to advance the interests of their particular minority.  Over history, the people who control the wealth of countries have found that they can advance the interests of their group by using the wealth to form armies and then using the armies to conquer land in other countries, causing the wealth of this part of the world to flow to the conquering country.  They act in the interests of the group, which usually are entirely different than the interests of the human race.

In this case, the group with control over wealth is the human race itself.  If the human race acts in its own interests—something we expect every group to do—we use this money for things that benefit the members of our group.  We will use it for things that make the world better for our constituency, the human race. 

The flow of income-generating assets into the system is a one-way flow.  Properties can get into the system very easily: any time anyone donates a piece of real estate or a share of stock, it becomes a part of the system and its bounty is used for things that benefit the human race.  It can’t ever get out of the system unless the majority of the members of the human race want it out of the system: they need to vote to buy back the leasehold of this property and then sell or give away a freehold on the property.  This kind of transition clearly harms the human race so, if the people of the world act in our best interests, this is very unlikely to ever happen.  If it doesn’t happen, the flow of properties into the system will be a one-way flow. 

The income of the human race will increase through three mechanisms.  The first will be improvements.  People may buy existing leaseholds, improve the underlying properties so they generate higher free cash flows, and then sell leaseholds on the improved properties for more than they paid.  (All this was discussed in great detail in previous chapters.)   They will do this out of greed: they want to make money and they can make money buying leaseholds on properties that are in need of improvements, improving them, and selling for higher prices.

They may be doing this only for their own benefit.  But they can’t make money themselves without also benefiting all other members of the human race.  When they sell the leasehold for a higher price, the leasehold payment will automatically adjust upward to be 20% of the higher price.  The income of the human race will go up.

In this system, the interests of individuals align with the interests of the human race.  In any system that has this alignment, we all benefit if people are greedy, selfish, and interested in profit: the more money they make, the more they advance the interests of the human race.  Since it is highly unlikely that people will ever stop being interested in their own personal welfare, we don’t have to worry about our welfare: they will make sure that the power and control of wealth of the human race will constantly increase.

The second method of increase is donations.  The people of the world will see that the Community of Humankind is doing things they want done.  People can give to the organization in many ways.  They can donate their time, their skills, and their talents.  They can also donate property and money.  All these donations either increase the revenues of the Community of Humankind or reduce the operational costs, allowing more of the endowments to be used for purposes that benefit the human race. 

The third mechanism is purchases.  The human race can use part of its income to pay people to look for and purchase freeholds on cash flow-generating properties around the world. 

Over time, we would expect the power and wealth of the Community of Humankind to grow.  As this happens, the power and wealth of the human race will grow.

Eventually, the Community of Humankind may have enough wealth to start to relieve the countries of the world of some of their financial responsibilities.  Consider healthcare: most national healthcare systems are not particularly efficient and don’t run very well.  Governments have a lot of other priorities.  They often need large sums of money for emergencies like war or the subsidies on destruction that create jobs.  They can often get this money by raiding funds that were designed to provide health care.  (Virtually all of the money that was allocated to Medicare and Medicaid in the United States has been ‘borrowed’ by the United States government to use for other programs; the money is gone and the funds are empty, so the government can’t provide the intended services.)  

Why should this be something governments do?  Can’t non-governmental organization do it?  If NGOs do it, they will have incentives that governments don’t have.  They will have incentives to provide universal care, without any need for restrictions or qualifications, in the most cost-effective manner possible.  Perhaps, with the Community of Humankind providing these services, the governments of the world will be able to cut back and eventually leave this particular service to non-governmental providers.  This will allow them to reduce the tax burden on their people and, if the people in the government are responsible, they will cut taxes to reflect their lower costs. 

Perhaps, over time, more and more services can be taken on by the Community of Humankind leaving less and less for governments to do.  Remember, the Community of Humankind is run by direct elections and can’t send money to anything that the people don’t want.  We therefore know that the people want the services the Community of Humankind provides.  We don’t know whether the people want the services the governments provide. 

Do we really need governments?  Do we want them?  The people of the world may decide that they do want governments, but they don’t want the particular governments that have formed over their history.  They want different governments, governments that are under the direct control of the people.

The people may create a fund to create a global government.  They may decide that they want a body with the authority to rule, control, or otherwise ‘govern’ the people, as there are certain things that need to be done that can’t be done without this power.  They may then create a fund to fund this government.  People who want more money to go to the global government they created can vote for it.  People who want more to go to the national and local governments that already exist can vote to give money to them.  People who don’t like governments at all may choose to give only to NGOs or to the ‘basic income fund.’ 

If the global government that gets created doesn’t do a good job, the people don’t have to overthrow it.  They simply stop voting to fund it and it will disappear.  If they decide they made mistakes in forming this government, and gave it powers they don’t want it to have, they can stop funding this particular government and begin to fund one that works the way they want it to work. 

The people who run national and local governments will eventually start to realize that they can attract additional funding, without putting any additional tax burden on their people, by having their particular national or local government work with the global government or NGOs in a way that allows them to provide services better and cheaper than before.  They can become local arms of the global government, playing the same role as the local chapters of the Red Cross play in providing disaster relief.  Local and national governments that do a very good job at this will be able to attract enough funding from the Community of Humankind to eliminate taxes.  After this time comes, the local and national governments will be in the same category as the global government: nothing but a tool that the human race uses to help it accomplish its common goals.

7:  Treatment

Throughout this book, I have tried to stack evidence on top of evidence to make a very simple point: 

Survival for our race is possible. 

Most of this book presents arguments to back up this claim.

I believe that the technical steps that we need to take to prevent extinction really aren’t particularly complicated.  If we know where we are now and how the society we inherited works, and we know how a sane, sound, and healthy society works, we can design a plan to get from here to there pretty easily.  The plan itself isn’t the hard part of this kind of transition.  The required steps really aren’t onerous or traumatic. 

As I worked out the principles of this book over the years, I have tried to discuss its message with many people.  Almost without exception their response has been the same: they have tried to argue with the premise.  They claim that it is not possible to stop the forces now at work.  We are on a path to extinction, we have been on this path for a long time, and there isn’t anything we can do to change this.  Anyone who even thinks about what must be done to change it is the very definition of a fool: nothing could be more foolish than to think about trying something that everyone knows is impossible.  If you believe a better world is possible, you are a ‘utopian dreamer.’  Nothing could be more foolish than to dream about something that can never be.  Anyone who claims there is hope for our race is to be ridiculed.   

It seems to me that we are like the engine in the children’s story, ‘The Little Engine that Could,’ only in reverse.  We are ‘The Little Engine That Couldn’t.’  Logic and reason tell us we can do it.  But there is something about the way we were raised or the way our minds work that somehow makes us believe we can’t.  If someone tells us we can do it, our response is to first to laugh at them (they must be joking, right?) and, if this fails, to try to help them to see reality by pointing out the errors in their arguments. 

What of the people who try to actually do something?  What of Pythagoras, Socrates, and Sir Thomas More?  How do we treat them?  Do we embrace them: they are working toward a better world, something that makes them better than the rest of us?  Or do we fear them?  They are saying things that can destroy our world view and the way we look at reality.  We want to believe that our depression and lack of action is justified.  Those who act are foolish.  We, who do nothing, are the ones who are reasonable: those who try to do the impossible are causing problems, diverting attention from important things that need to be done today (don’t we need to win the current war or put people to work to prevent a recession?).  People like Pythagoras, Socrates, and More are dangerous.  They can harm morale.  For the good of society, they need to be removed from society: all three were put to death, with the claim that this was needed to protect society from their heretical and seditious ideas.     

The cartoon family the Flintstones had a car that would go if they put their feet through the floor and run and would stop if they dug in their heels through the same hole in the floor.  We are like a race of people on a giant train, which easily could make it up the hill ahead, but is full of people holding their feet through holes on the floor, rubbing them raw in an attempt to slow us down, all chanting ‘I think I can’t, I think I can’t, I think I can’t, I know I cant!’  There is something about our psyche, or perhaps the way we were raised, that makes us want to believe we can’t make it.  As long as the people of the world think this way, they have a vested interest in extinction: it will vindicate them.  It will prove that they were right all along, that they did the right things, felt the right things, and if there is an afterlife they can tell the souls there, ‘See, I told you so.’  Logic and reason are enemies to these people because logic doesn’t support their contention.  Logic holds that we, the members of the human race, are the dominant species on this planet.  Logic tells us that we are capable of organizing ourselves in non-destructive ways. 

I think part of the reason that people want to believe everything is hopeless is personal guilt.  As long as people can keep believing there is nothing anyone could do, they won’t feel guilty about ignoring the topic.  What if they find that solutions really are possible at some point, that there is something they could have done if they had simply allowed their minds to think about it, but their inaction led us further down the path we could have avoided?  How must people feel?  It must be much more satisfying to simply fight anyone who says that we might possibly make it.  As long as they can convince themselves that everything is hopeless and our only reason for existence is to fight for our countries and pray for afterlife redemption, they don’t have to feel ashamed of their lives.  

Others have seen this.  George Orwell claimed that we are trained to resist any attempt to apply logic and reason to certain areas of our existence: basically, anything that involves thinking about changes that might alter the existing order is off limits.  He claimed that we were trained to believe that we don’t even have the right to think about these things and, if we violate this training and let our minds go where they aren’t supposed to go, we are committing a kind of crime against humanity.  He called this kind of thinking ‘thoughtcrime.’  He writes that we are taught mental techniques to help protect us from the dangers of thoughtcrime.  One of these techniques is called ‘crimestop.’  He describes it this way:

 

Crimestop means the faculty of stopping short, as though by instinct, at the threshold of any dangerous thought.  It includes the power of not grasping analogies, of failing to perceive logical errors, of misunderstanding the simplest arguments if they are inimical to Ingsoc [Orwell’s term for the philosophy behind the societies around us] and of being bored or repelled by any train of thought which is capable of leading in a heretical direction.  Crimestop, in short, means protective stupidity.  But stupidity is not enough.  On the contrary, orthodoxy in the full sense demands a control over one’s own mental processes as complete as that of a contortionist over his body. 

 

I can read the frustration in his mind as he wrote these words.  Clearly, he has tried to get people to look at the world logically.  Clearly, he saw that we could understand things if we looked at the world logically that we couldn’t understand otherwise.  But the people he talked to went to elaborate lengths to avoid thinking this way.  Then, when he tried to press them, to get them to see things that were pretty obvious to him, they appeared to be trying to misunderstand even the simplest arguments.  When he clarified, creating arguments so simple that no reasonable person could misunderstand, they changed their tactics, claiming that such analysis made them bored and even repelled them: we aren’t supposed to think about such things.  They turned off their minds to make it impossible for them to think about societies logically.  Orwell appeared to be describing something he had experienced. 

In this book, I have tried to make the point that the problems that threaten us are structural problems.  We can’t solve them with superficial efforts.  We need to understand the way human societies work and the way they can work.  Some foundations can support sound societies, others can’t.  We happened to have been born into societies in the latter category.  These societies have a disease which is clearly fatal. 

This disease involves a belief.  The people who created these societies started with the premise that humans are capable of owning anything at all.  We can own the stars, we can own the planets, we can own animals, and we can own mountains, rivers, lakes, forests, and even nature itself.  We can own anything at all if we form into groups, call our groups the right names (nations for example), sew up flags, compose anthems, and draw up documents like constitutions and declarations of independence.  People born into natural law societies believe that nature is above humans and that humans depend on nature entirely for our existence.  They believe that the dependence of humans on nature is a self-evident law of nature, one that all thinking people should understand.  People in sovereignty-based societies somehow believe that we can trick nature into being ownable, provided we go about it the right way, create enough icons, songs, documents, and monuments, and raise our children to believe the same things we believe. 

Is it really Mental?

The actual practical steps needed to create a sane society aren’t really difficult to understand; we will go over them shortly.  The hard part is getting to the right mental state.  To see this is true, consider this thought experiment: 

Imagine that a group of aliens have a mind ray that can selectively erase memories in entire populations.  They set it to erase all memories related to political education on Earth.  People can remember everything else, they just can’t remember anything related to their country or the idea of countries. 

You can still speak; your vocabulary is the same.  You can add and do math just as well as before.  If you knew how to drive before, you can still drive; if you could program a computer or play a piano, you can program and play.  Anything you knew from before you still know except if it has to do with countries.  You don’t know anything about countries; the word is meaningless to you.  If someone were to ask you, ‘Does this land belong to your country?’ your response would be, ‘what is a country?’ 

Do countries have rights to own and prevent others from benefiting from mountains, rivers, lakes, and other parts of the world?  This question would make no sense. 

All of the people will look around them and see that they live on a wonderful world, full of bountiful farms, automated factories, and well-built homes.  Who has the right to use these facilities?  If we believed in countries, we would believe the documents countries have issued that grant rights to certain people, making them individual or corporate owners.  But if we don’t believe in countries, we really have no idea who has the rights to these wonderful things.

If we have no idea, we have to come up with something.  What makes sense?  We are intelligent.  Why not figure something out that makes sense?  What are the different ways that humans can interact with the land around us?  (In other words, what ways that humans interact with the world apart from forming countries and letting countries make the rules?)  We can find something that works and put it into place.

It is true that some people will try their best to come up with excuses to try to convince others that they have special rights.  They are living in a home.  Does that give them special rights?  In Inca cities, it did not: the homes weren’t owned by the people who lived in them.  They were built as common resources and then divided by lot once every 10 years.  If you have been living in a home for 10 years, the Inca people would say that it is time that you give someone else a chance. 

We might decide to think of the existing stock of housing and other buildings as similar to the existing stock of forests and mountains; no one owns them, they are common resources, available for the benefit of all.  What is the best way to let people benefit from these things?  Perhaps, we may decide to set up an auction system and lease them out. 

Who will get the lease payments?  Since no one owns the land and buildings being rented out, no one owns this money.  We could put it into a common fund and then have general elections to determine what happens to this money.  Without countries, we would have no particular reason for excluding people born in various other parts of the world from the elections.  Everyone could participate.  Later, we may decide that we want people to have incentives to improve the properties they are leasing, so we could make the leases marketable, turning them into leaseholds.  

The above example was designed to make a point:

If no one had any political indoctrination at all, it wouldn’t be hard at all to move to a sound society.  In fact, a little intelligent analysis, and we would move there almost automatically. 

Treatment Plan, Phase One

Phase One of the treatment plan involves creating an organization that grants the human race authority over some aspects of global society, shifting some of the authority to make decisions from the entities called ‘governments of countries’ to the human race. 

We can do this by going back to Henri Dunant’s plan, as originally envisioned, and starting again.  Dunant ultimately failed in his attempt to transfer power and authority to the human race.  But if we understand the exact reasons he failed and take steps to avoid the same pitfalls, we can increase our chances of success a great deal.  Let’s start by considering what we can learn from Dunant’s efforts, his successes and his failures. 

Dunant succeeded in creating a new kind of human body that basically goes above the heads of governments and puts certain decisions into the hands of bodies called ‘non-governmental organizations’ or NGOs.  There are currently thousands of NGOs around the world, most of which are working to provide services to the people of the world that governments aren’t providing or don’t provide in consistent ways.  Many of these NGOs are enormous organizations with global reach.  The largest are the ones that Dunant created.  It is true that these organizations aren’t playing the role that Dunant envisioned for them, but they definitely do things to benefit the human race that the governments of the world aren’t willing or able to do. 

The fact that they exist at all tells us something very important: it tells us that the people of the world really do care about the conditions on Earth and really do want to help make it better.  They have to give to their governments by paying taxes.  We can’t really judge by their willingness to give to government-sponsored causes what they care about.  But anything they give to NGOs (non-governmental organizations) is given voluntarily.  We can tell by the level of support that people voluntarily give the NGOs that Dunant created, and the other NGOs that were created later on the same model, that people don’t just sit back and passively talk about these things.  They are willing to back up their concern with their time (volunteering to help), talent, skills, property, money, and anything else they have. 

The non-governmental organizations that Dunant started, including the World Court, the World Library (a part of the work of the organization now called UNESCO), the ‘Society For The Complete And Final Abolition Of The Traffic In Negroes And The Slave Trade’ (which provided the foundation of anti-slavery societies around the world which are still active today), the Red Cross, and the Geneva Convention, get support from all around the world. 

The societies that Dunant started didn’t end up bringing about the changes he was trying to bring about when he formed them.  As we saw earlier, both patriotic and religious forces came into play to prevent these organizations from altering the structural realities of the world, as they were originally intended to do.  But Dunant’s efforts helped set up a new approach to dealing with human problems. 

The pre-Dunant efforts were based on the premise that the governments of countries were the only real tools that humans could use to solve problems.  Dunant realized that governments of countries really couldn’t do anything about the most serious problems of the world, because these problems were global, not specific to any country.  In fact, the most serious problem of all, war, was the planned and intentional result of the activities of the governments of countries. It is rather silly to expect these bodies to be useful in solving these problems because the only reason that these problems exist is that governments undertook long-term plans and appropriated massive amounts of wealth to intentionally cause these problems.  They not only plan the military activities themselves, but they also use all of the tools at their disposal to create the mindset needed to allow the governments to continue to do these horrible things.  To expect governments to help eliminate these problems would be like expecting wolves, grizzly bears, and cougars to take the lead in efforts to protect lambs from predators. 

Dunant realized that we can go over the heads of the governments of the world.  The people of the world really are interested in taking steps to prevent wars and destruction.  He wanted to create an organization that was not associated with any government, but which was intended to give the people of the world tools that they could use to meet their collective needs.

The organizations he created weren’t able go to nearly as far as Dunant intended for them to go.  But even with their limited effect, they have done truly incredible things.  When disasters come, representatives of the International Red Cross contact the local governments to get permission to help.  If the governments allow them to enter (and this often doesn’t happen), the Red Cross moves in a very well organized and well-planned manner to deal with the hardship.  It is very rare that government bodies can even come close to matching the resources and capabilities the Red Cross has to deal with disasters. 

 

The worst disasters in history, by far, have been intentionally caused: governments build bombs and other weapons to intentionally kill and destroy.  Normally, the governments of countries don’t want the Red Cross helping the victims of these disasters: the governments created the disasters intentionally and knew before they created them that they would cause misery and hardship. 

 

Dunant helped us understand a new way to deal with human problems: rather than begging our governments to stop spending so much effort on wars and stop supporting destruction of the world, we can give to organizations that are designed to and intended to advance the condition of the human race and planet Earth, without regard to which country is involved. 

The organizations he created didn’t go nearly as far as he intended, but they still do things that the people of the world clearly want done.  The success of the organizations Dunant created has made it clear to others that they need to transcend the boundaries of countries if they want to have any real impact on the problems facing the human race. 

Dunant showed us that, if we set up these organizations and allow people around the world to help run them and support them as they see fit, people will come, help, and support them.  We can see this: people want a better world.  They are willing to sacrifice their time, effort, property, talent, and skills, to try to make the world better.  If we build an NGO that is intentionally designed to solve the problems that threaten us, and which works in ways that move the human race toward better conditions at every step of the way, people will come together and make it work. 

The basic idea behind the NGO I propose is not new.  I am basically proposing the same organization that Dunant originally wanted, with a few additions and modifications that incorporate tools and structure that weren’t a part of Dunant’s plan. 

You may recall from the discussions above that Dunant was trying to do something that the other administrators of the organizations he set up thought was against the principles of their religions.  He was trying to do things to limit the ability of governments to conduct war with an aim to eventually end war.  For example, he wanted an organization that would use lobbying, grassroots pressure, and other tools of influence to get the governments of the world to agree to binding accords that would require them to submit any disputes they had with governments of other countries to an organization called the World Court. 

The World Court would have certain tools it could use to make sure that the governments in the accord complied with its rulings.  If the tools of the court weren’t strong enough to make this happen, the other governments that were part of the agreement would have already agreed to support the World Court to ensure compliance. 

The NGO called the ‘Geneva Convention’ would also work to limit the scope of war, should it break out in spite of the efforts of the World Court.  It would work to organize agreements to NOT use certain weapons, to treat civilians in a civilized manner and protect them from the impacts of war, to resettle displaced persons in a humane manner, to provide humane treatment for prisoners, to notify families of prisoners of the status of the prisoners, to allow prisoners to get care packages and letters from their families, and to abstain entirely from certain unconscionable acts like the use of prisoners for medical experiments and acts of torture.   

Although some of Dunant’s ideas were implemented in a very limited way, his grand plan never became reality because of opposition from key officials at the organizations Dunant created.  He started the organization with a small group of very rich and powerful people who had the money and connections necessary to create the required legal structures.  The members of this small group of people were religious.  They shared a common religion, the ‘Calvinist’ branch of the Reformed Protestant branch of the Abrahamic religion called ‘Christianity.’  All Abrahamic religions are based on the principles of the First Book of Moses (called ‘Genesis’ in the Christian version).  This doctrine holds that a spirit being who lives in the sky named ‘God’ had created the planet and then created humans.  This being then let humans live without countries for 1,634 years but was not satisfied with the results, so he killed everyone except for the members of a family headed by Noah with a great flood and started fresh. 

This time, he set up a different system: the spirit being divided the land into countries with well-defined borders.  God then chose specific descendents of the surviving family to be the owners of individual countries, with the ownership passed down to descendents of the original owner.  (You can find these discussions in ‘Genesis,’ starting with Chapter Ten.)  Shortly after God divided the world this way, the countries started using war to try to take additional land.  God makes appearances in the religious books from time to time and clearly accepts that the countries that are able to gain dominion over each area (the ones that win the war and drive out or subjugate the other residents of the land) are the legitimate owners of the land they conquer, with the same rights to it as they would have had if the land had been a part of the original land grant. 

The religion claims that God has the power to do anything and nothing can exist without God wanting it to exist.  Since God created the conditions that lead to war, allowed wars to take place, and accepted the results of the wars as changing the country that owns the land, this all must be a part of God’s plan for the human race. 

Dunant wanted to tie the human race together into a world community which would limit the effect of war and, hopefully, eventually eliminate it.  In fact, if Dunant’s efforts succeeded, the countries would no longer be the true owners of land: the countries would be subject to the rulings of the World Court, which would be under the control of the human race, so any rights that countries had would be subject to the consent and approval of the people of the planet Earth.  If Dunant’s efforts succeeded, countries would no longer have the rights that God gave them (and therefore clearly wanted them to have); they also wouldn’t have access to the tools that they needed to protect these God-given rights.  Dunant was trying to interfere in God’s plan for the human race. 

Religious people thought they had some rights.  Their holy books had two parts, the ‘Old Testament’ and the ‘New Testament.’  The second book is about a benevolent son of God that seeks to mitigate the misery caused by the principle character in the first book.  After a war has come through an area, they have the right to come in and alleviate the misery, treat the wounded, and help rebuild the structures that have been destroyed.  But they didn’t believe they had any real right to alter the structural realities of society.  It was built around countries with God-given rights.  The countries must continue to exist and keep these rights.  This foundation leads naturally to war.  The spirit being who is claimed to have created countries clearly wants war to happen and humans have no right to interfere or get rid of this.

The other key officials in the NGO Dunant created believed that humans did not have the authority to do the things Dunant wanted his NGO to do.  They fought Dunant and eventually had him removed from any position of authority in the NGO he created.  (As discussed earlier, they had to take all of his money before they could do this; they did this with a series of legal battles that they could easily afford—they were rich—but that Dunant could not afford.  After he was broke, they found it easy to remove him.)  

After Dunant was removed from the first NGOs he created, he created others, this time starting with allies with more open minds and fewer ties to organized religion. 

But here he faced a different problem: the governments of the world would simply not do certain things.  The key element of the societies of the world is the idea of sovereignty for countries.  The countries claim to be sovereign entities, able to deal with all matters inside their borders without any interference from outside entities.  You could say that sovereignty is their prime directive, their ultimate law, something that could never be violated. 

NGOs like the World Court could issue rulings about what they think is right and they would happily assign someone to listen.  But they wouldn’t agree to be bound by the rulings.  To agree to this, they would have to give up their sovereignty.  Nothing was more important to them than sovereignty.  They wouldn’t give it up, period. 

From Dunant’s failures, we can learn that there are certain obstacles that will be in our way.  We need to understand this and find ways around or over these obstacles.  These obstacles are formidable.  But if we understand the tools discussed earlier in this book, we can use them to help us get to a system that transfers control over wealth, and therefore transfers power, to the human race.  The more wealth the human race has the more power it has.  Eventually, the human race will have enough power to make it the leading authority on Earth.  We can be in charge of our destiny, with direct control of the most important variables through biding elections. 

6:  Alexander

In the next 17 years, Alexander did the seemingly impossible.  He united more than 500 million people in a new kind of society that stretched over more than 2 million square miles, included hundreds of ethnic groups with dozens of different languages and cultural backgrounds.  He built more highways than had ever been built before in history, including most of the highways that are still the main arteries today in the lands that were a part of his new society.  He built the largest and most complete libraries that had ever existed, he founded universities, he introduced new kinds of capital markets, he created banking and credit systems, and he built more than 20 master-planned cities from scratch. 

The changes he made led to massive increases in production, creating great prosperity that brought opportunities to all members of society.  In the new system he created, cast and class distinctions weren’t nearly as important as in the old society.  People could start with nothing; by taking advantage of the information in the open libraries and the funding opportunities that came from his new financial systems, they could make something for themselves. 

The changes that Alexander made were unprecedented; the world had never seen anything like it and if we put it into realistic perspective, we would have to say that nothing even similar has taken place in the more than 2,300 years since.  Alexander did more to advance the human condition than anyone ever had done and, today, he is one of the few men who are remembered as truly great.

And he did this all in less than 17 years. 

How did he do it? 

It is very unfortunate that the book burnings that started shortly after Alexander was assassinated were as successful as they were.  The libraries that Alexander built throughout the lands were some of the finest and most complete that have ever existed.  They almost certainly contained complete descriptions on exactly how Alexander accomplished what he accomplished.  After Alexander was out of the way, people brought the old system back and did their best to destroy any evidence that anything better had ever existed. 

Unfortunately, the book burnings were incredibly effective.  Almost all of the details were lost.  All we have left are a few scattered records that weren’t destroyed because they weren’t considered important enough, and the remains of the durable structures he built and devised that the Romans and later conquerors continued to use (and continue to use to this day) because of the great benefits that they brought to them.

We do know this: Alexander didn’t just make a few modifications in the details of the society around him.  Working with Aristotle, he analyzed the societies that were in place at that time (the same type that Socrates had claimed could never be healthy or workable societies, which are the same type that we have today). He examined their structural elements and worked out changes that would cause these structures to operate differently.

He didn’t just create a slightly modified version of the politica societies that were in place, he actually built an entirely different system.

Alexander clearly did not believe the principle that the wealth inside of the lines that make up a given country are supposed to only benefit the people of that country.  If Alexander thought a shipping port should be in a certain place, and the particular political unit that controlled that part of the world didn’t produce enough surpluses to afford the port but the land of another political unit did, Alexander didn’t see anything wrong with violating inherent principles of independence and sovereignty for the political units by using the wealth where it was most needed. Alexander was also flexible with the principle of ownership of land.  Many people thought of the idea of ownership as a religious or philosophical principle: if you own, you own everything; if you don’t own, you don’t own anything.  Alexander could see that it is possible to allow people to buy and own certain rights to use the world without owning that part of the world itself.  He realized he could grant rights to people who would own those rights, but not own the land itself. 

Alexander did things no one else had ever done before and achieved things that no one after him has been able to match.  It is hard to understand how he was able to do these things if we think of him as simply trying various combinations of minor alterations to the details in the then-existing societies and hoping for the best.  If we think of him as building on the work of Pythagoras, Socrates, Plato, and Aristotle to work out logical and reasonable principles that put societies on an entirely different foundation, the things he did do make sense. 

 

Military Advantages That Come From Granting Rights to People

For more than 2,000 years, military analysts have tried to figure out how Alexander could possibly have gained control of the massive amounts of land he came to control in such a short time. In less than 17 years, he gained control over 2 million square miles, which is about the area of the lower 48 United States.  This land had 500 million inhabitants, significantly more than the current population of the lower 48 United States. 

Before Alexander came along, this land was divided into hundreds of kingdoms.  The kings had all built walls, hedgerows, and other barriers and heavy fortifications to protect their land.  They kept highly trained armies equipped with the best weaponry the kings could afford to protect their land.  These fortifications had held for centuries. 

What kind of military genius could overcome all of these defenses, taking more land in a single month than had been conquered by all military commanders combined in centuries before Alexander came along? 

To see how difficult this task is, consider one tiny part of the land that became a part of Alexander’s community of nations: the 250,000 square miles that is currently called the ‘country of ‘Afghanistan.’

As I write this, the United States has been fighting to gain control the administrative apparatus of Afghanistan for 20 years, longer than the entire 17 years Alexander was in power.  But this giant superpower with all its advantages and technology and enough nuclear bombs to destroy the world thousands of times over is no closer to forcing the people of Afghanistan to accept its rule in 2020 than it was in 2001 when the war began. 

If you try to use force to make people conform to your wishes, they resist in many ways.  They may pretend to be your friends and pretend to be complying but if you turn your back on them, they will do anything they can to make sure you don’t get what you want. 

The people of Afghanistan today hate the United States invaders just as much as they hated the next most recent invaders of Afghanistan, the Russians.  Neither of these superpowers has had any success at bringing this land under its dominion. 

Alexander annexed Afghanistan in passing.  This annexation took so little time and effort that historians didn’t even bother to record the events; they weren’t interesting, there were no battles and there was no resistance.

How could this be?

I submit to you that Alexander didn’t try to do the things the United States is trying to do, and the Soviet Union tried to do.  He wasn’t trying to force the Afghan people to accept control by his military.  He didn’t ‘conquer’ Afghanistan at all. 

He gave people an opportunity. He understood how to put together societal structures that benefited the people.  People who wanted to join could do so; he would help them build the necessary institutions and get them started.  He let them know that many people had joined the system so far and if they joined themselves, they would be joining a community of humankind, not a ‘country’ that would try to advance its interests at the expense of other countries.  The empire he was forming was vast, productive and prosperous; if they joined, this prosperity would begin to flow to them immediately.  The wealth of the empire would be used to build roads, schools, parks, libraries, banking systems, and other facilities that pull them out of poverty and want and into the modern world. 

Alexander did incredible things, things no one else had ever done or has ever done since.  He came closer to changing the realities of human existence, and putting us on a path to sustainable, peaceful, non-destructive societies, than anyone else either before or after him. 

Shortly after his 33^rd birthday, Alexander began to show signs that are associated with arsenic poisoning.  Alexander trusted people around him because he believed they loved him and most of them did love him. He got invitations to dinner all the time and went out frequently.  He was very fond of wine and often got so drunk he had to be helped back home.  He didn’t take precautions against poison. He was 33 years old, in his prime, an age when men believe death is so far in the future that they don’t even have to think about it. 

Arsenic has cumulative effects. A few drops will hardly affect you; the same amount added tomorrow will make you a little sick; another dose will confine you to the toilet for a few hours; a few more drops and you can’t leave your bed.  Eventually, the body stops functioning.  Alexander’s aids kept detailed records of the last two weeks of Alexander’s life.  We can’t really account for the symptoms with any known disease, but they match arsenic poisoning perfectly. 

Alexander clearly had a plan. But we know from his communications with Aristotle that he hadn’t really explained all of the details of this plan with the people around him.  (In letters, Aristotle admonishes Alexander for discussing certain principles of society in public.)   He had not appointed or trained a successor.  When he died, there was no one to take over. 

We can get some idea of what he hoped would happen from his last will and testament:

 

People of the Near East are to be encouraged to marry with those of Europe and those of Europe to do likewise; in so doing, a new culture would be embraced by all.

 

He wanted a world community that included all members of the human race.  Their rights wouldn’t have anything to do with which ‘nation’ their mothers were in when they were born, their race, their language, or their culture. Humans would all have human rights.

The system he started to set up would have made all humans a part of community of humankind.  The flows of value that had been going to the kings and governments of the world, and used mainly for war, would go instead to the people of the world, to help them have better lives. 

After Alexander was out of the way, the old power systems came back very quickly.  Immense flows of wealth were available.  Alexander had used these flows of wealth to build roads, libraries, universities, to build port facilities for shipping and trade, and to fund banking systems to finance capital improvements.  People who controlled military units, or had the means to raise them, realized that they could take control of the land that produced the wealth, call it their ‘country,’ and then rule the country for their own benefit. 

The wealth that had gone to universities and libraries could be used to pay for castles and harems.  To prevent the system from rising again, the scholars were purged, the books burned, and any who supported the now-dead Alexander could be put to death.  The old system could be wiped from the face of the Earth and from the memories of survivors, in the same way that Cortez was to wipe out all of the books and libraries of the Aztec people. 

We can learn a lot from Alexander, from his successes, his failures, and the aftermath of his period of history. From his successes we can learn that if we can set up a system so that the interests of the individuals in society align with the interests of society as a whole, we can have truly fantastic progress.  A system can grow very rapidly. Considering the technology that existed 2300 years ago, and the progress that he made in a very short time, we might imagine that if someone had the background, training, and leadership skills that he had, combined with the communication technology and other very powerful tools that we have now to bring people together, the world could be united in an extremely short period of time, perhaps as short as a few decades.

His failures tell us that the vested interests in the system now in place have great power.  We need to be aware that even a great movement toward a better world can be crushed.  Certain people who run the sovereignty-based societies of the world today know how to prevent the kinds of changes that would harm their power base.   These people need the world divided: as long as we are fighting each other in petty and ridiculous disputes that don’t change anything fundamentally about the world, and as long as we believe these wars are the most important reality of existence, we aren’t going to take the time to understand anything really important about our world.  We aren’t going to come to understand the big picture. The structures that enrich the tiny minority at the expense of the great majority can remain in place. 

In his book ‘1984,’ Orwell discusses the idea of mind control at great length.  He claims that our minds can only really be controlled if we let them be controlled.  We must consciously split our minds and think of certain things logically, while refusing to think of other things logically.  He calls this splitting of the mind ‘doublethink.’  He claims that doublethink is a primary tool that the people in power use to prevent us from having hope, so that we will never make progress:

 

Doublethink means the power of holding two contradictory beliefs in one’s mind simultaneously, and accepting both of them.  To tell deliberate lies while genuinely believing in them, to forget any fact that has become inconvenient, and then, when it becomes necessary again, to draw it back from oblivion for just so long as it is needed, to deny the existence of objective reality and all the while to take account of the reality which one denies — all this is indispensably necessary.  Even in using the word doublethink it is necessary to exercise doublethink.  For by using the word one admits that one is tampering with reality; by a fresh act of doublethink one erases this knowledge; and so on indefinitely, with the lie always one leap ahead of the truth.  Ultimately it is by means of doublethink that the Party has been able — and may, for all we know, continue to be able for thousands of years — to arrest the course of history.

 

Alexander failed to change the world. But this wasn’t because his plan was bad.  He needed to show the people that a better world was possible before they would truly believe it. The people had been raised and educated to live in fear and hate: their countries were the source of all good things and the enemies were the ultimate in evil, trying to destroy all good things everywhere.  After people realized that this was nonsense, and the training had been designed to turn them into tools of a defective system, they could safely be given power and control over enormous flows of wealth that came from the planet; they would use this power and wealth to advance the interests of the human race, rather than to try to split themselves into teams and fight for the rights of the teams. 

From the aftermath, we can learn the true danger, the one thing the people in charge know can alter society: knowledge.  After Alexander had been taken out of the picture, and the structures that removed power from the entities called ‘countries’ had been disassembled with power redistributed, the people in charge began burning books.  Alexander had proved that a better system was possible.  If people accepted a better society was possible, they would spend their time and effort to try to recreate the structures that had made the world better, not trying to find better ways to give their ‘countries’ advantages in wars, or otherwise trying to change details that had no effect over any large scale structures of societies.   

After Alexander was gone, the libraries were put to the flames.  The schools were closed, the scholars persecuted and sent to places they could do no harm, because no one would hear them.  The people who had been displaced and removed from power by Alexander’s system knew that knowledge was their enemy, reason and logic were their enemies. If the people knew that a better society was possible, they would try to create it; Alexander had proven that a better society was possible.  They had hard evidence it could be done.  This evidence must be destroyed.

The historians then played a neat trick on future generations.  How could they make it appear that Alexander had not done anything extraordinary? They couldn’t hide the evidence: the roads, aqueducts, ports, and other structures he created were still there. But they could create a general picture that Alexander was ‘just another conqueror.’  They could portray him as a soldier who just happened to be a little better at soldiering than others.  They could play down the importance of the structural changes he made to the areas that joined his system.  They could play down his relationship with the heretics of the past, including Socrates and Pythagorean, who claimed and taught that humans really could do better. If they worked hard enough, they could cause Alexander to simply fade into the background of history, perhaps giving him a page or two and having these pages claim nonsense that he was primarily a military man with no social conscience.  They could make it appear that he hadn’t really done anything structurally at all: he simply figured out the system well enough to manipulate it to his advantage. 

In his book ‘1984,’ Orwell talked about the idea of ‘disappearing’ people who caused problems for the power structure.  He uses the term ‘disappearing’ as a verb, something that the ‘Ministry of Truth’ (which hides and distorts the truth) does to wipe all traces of dangerous people from the books and, through the ‘Ministry of Love’ (involved with torture and mind control), from the minds of the people.  Alexander the Great is probably the most dangerous of all historical figures to those in power because he gives us hope.  He shows it is possible for humans to organize themselves differently and, if we do, we can have a much better world.  The historians couldn’t totally ‘disappear’ Alexander.  His impact had been too great.  But they could render him fuzzy and semi-transparent and prevent future generations from seeing him clearly enough to understand that he really does give us hope. 

Alexander never finished the system he was building.  He had priorities.  He had to do certain things first. First you bring prosperity to the people.  Once people are lifted out of poverty and given the tools they need to make something of their lives, the society as a whole moves forward. Then, the people need to be educated: they need to know the things that Socrates and Aristotle understood about how human societies work.  They need to know that people who try to divide them from each other, by splitting off land and people and calling each combination a separate ‘sovereign and independent country,’ and training them that they owe their allegiance to the country they live in—not the human race or planet Earth—are only trying to trick them. You can’t really tell them that they have been tricked and hope to get them on your side.  People don’t like to think of themselves as dupes: tell them that they have been tricked and they only get angry at you. You need to bring them to a condition where they can realize this for themselves.  They can see that the people who claim that they know why the divisions are for the best and try to make them fight for the divisions are, to use Socrates’ term, ‘pretenders to wisdom.’  You can show them that these people don’t know what they are talking about by letting them live in and experience a better society firsthand.  They will see that it has nothing in common with the war-driven systems that the ‘pretenders’ claim is the best. 

Then, after you have created this state of mind in the people, it is safe to give them tools that allow them to control their collective destiny.  They will realize that the ways of the past are primitive.  They will not use their control over wealth to divide themselves into clans called ‘sovereign states’ or ‘sovereign countries’ or anything similar and build weapons to use in battles against others with these beliefs.  They will realize that the old ways were silly, the people who taught them that they were the right ways really were ‘pretenders to wisdom’ and had themselves been duped to believe nonsense.  After you have created the required mindset, you can transfer power to the people.

Unfortunately, Alexander didn’t have time.  I was a 33-year-old man once. If you had told me I had to prepare for the time when I wouldn’t be there, I would have laughed.  This time was far in the future.  Unfortunately, it wasn’t far in the future for Alexander. He didn’t prepare. 

His successes show us that there really are great advantages to organizing society in a logical way. They show that prosperity really does increase when wealth is used to unite people, rather than to tear them apart. It shows that opportunity empowers people and that people who were normally stupefied by poverty can become highly productive and create real wealth. 

His successes tell us that a movement towards a sound society can gain momentum over time: success leads to more success.  Over time, people will realize that things can be done that they had believed could not be done.  They will get on board to changes that they otherwise would have opposed.

His failures tell us that the vested interests in the system now in place have great power.  We need to be aware that even a great movement toward a better world can be crushed.  Certain people who run the sovereignty-based societies of the world today know how to prevent the kinds of changes that would harm their power base.

 

Two Approaches to Converting to a Healthy Society

We have a lot to learn from the past.  Two approaches have been taken to alter society; each has their advantages and disadvantages. 

The first is the approach that Henri Dunant took involves leaving governments and countries out of the equation entirely.  Start with an NGO.  Have the NGO do things that bring real benefits to the human race.  The people will support it because they will want it to do more. (We know this happens; the Red Cross grew into one of the largest organizations of any kind in the world.)

I am personally drawn to the idea of starting with a non-governmental organization and working for change through avenues that have nothing to do with governments.  Perhaps a part of my attraction comes from prejudice: I have a general mistrust of governments that derives from my experiences growing up.  Governments don’t know what the people want; only the people know what the people want.  

Since non-governmental organizations work outside of the nationalistic system, and take advantage of structures that governments have to protect in order to function, governments won’t be able to prevent its growth even knowing in advance that it will eventually put the human race in charge of variables that the governments of nations now control.  

 

Why NGOs take advantage of structures that governments MUST protect:  Corporations are essential to make the tools of war.  These tools are simply too complex, and the machines required to make them are too expensive for individuals to fund.  All nations in the world today accept corporations as legal entities with rights that are protected in courts.  The governments have to protect the rights of corporations because, if they don’t, the corporations wouldn’t be able to operate efficiently enough to provide tools of war.  As long as governments fear war, they will have to protect corporations, even corporations designed specifically to make the world a better place.

 

But Dunant’s approach has disadvantages.  The first is that it takes time.  Even with an enlightened populace, it may take more than a human lifetime before this approach creates enough power and wealth for the human race to give us the ability to prevent wars and destruction. 

We may not have the time. 

The second problem involves information.  Before this approach will work, a large percentage of the people of the world have to know and accept on a conscious level that the society type that they inherited from past generations can’t meet the needs of the human race, that a sane, sound, and healthy society is possible, and that certain steps will take us to that society. 

At first glance, the required steps seem to have nothing to do with the problems of war and destruction.  They are based on the idea that war and destruction are symptoms of a disease, not the disease itself.  They deal with the underlying forces only, not the symptoms.

For thousands of years, governments have been successful in making people think that the entities called ‘countries’ are real things and that we have some sort of moral obligation to fight, kill, and even give our lives if this can help advance the interests of the country of our birth.  Socrates described the methods used during his time to create this mindset in great detail (in the ‘Πολιτεία,’ available in full on the PossibleSocieties.com website).  If you read this book, you will recognize that the schools of today use the exact same tools to instill this state of mind that schools used in the time of Socrates, more than 2,400 years ago.  These tools were effective 2,400 years ago.  They are still effective.  It may be that people thus trained simply aren’t able to open their minds enough to think about society objectively.

This is my greatest fear.  Brave people like Pythagoras, Socrates, Sir Thomas More, and George Orwell, have told us that the people who run the systems we live are tricking us and controlling our minds for thousands of years.  Yet the deception continues and seems to work as well as it ever did.  I hope that the scientific revolution that is taking place, together with the availability of correct information on the internet, will help change this.  But it may not.

The real problem with Dunant’s approach is that it relies on enlightenment to work with enough speed to have any hope of helping us get out of our mess.  I hope that the new tools that are now available are contributing to enlightenment.  But there doesn’t appear to be any way to tell for sure.

The second approach, the approach that Alexander took, has different sets of advantages and disadvantages.  He gained control of a nation and then set up a system that was not nationalistic.  Set up a system that takes advantage of incentives to encourage progress and growth, as Alexander did, and use the wealth generated for projects that lead to even greater wealth creation. 

Rather than expanding by conquering and subjugating people, it can expand by welcoming people outside of the starting nation to abandon their own nationalism and join the system.  Make it clear that there is no ‘base system’ that will use wealth the newcomers provide to improve the lives of the people in the base system.  Make it clear to any who may want to join that, if they do join, they will be working for the betterment of the human race as a whole, not just the collection of people who originally created the system. 

This system also has advantages and disadvantages.  The first advantage is speed.  Alexander showed how fast such a change can spread.  If it could spread as rapidly as it did 2,300 years ago, during a time with no telephones, jets, or even cars, we might expect it to spread even more rapidly in our own time. 

The second advantage involves education.  It isn’t necessary to make everyone aware that foundational changes are needed and are taking place.  The ordinary people will see only that the conditions of their own lives are improving. They will see that backing change increases their incomes and makes their lives better. 

They don’t have to know there is a grand plan; they only have to act in their own interests. 

That is something we all know how to do.

The disadvantages of this system involve the fundamental problems of granting power to any group with any tools at all.  The group that asks for power so that they can work to put the human race in charge may be lying from the first.  Politicians will say anything they have to say to get into power.  Once in power, they can then act as if they never said anything and do whatever they want.  We all can dig up as many examples of this as we want. 

This system depends on one enlightened person to take charge.  This gives it an important weakness: eliminate that individual, and the movement can be killed rather easily.

But we don’t have to do one or the other.  The different approaches taken in the past aren’t necessarily exclusive. If we are smart, if we use logic and reason, if we put together the best of what we can learn from the past with the best of what is available now, we can have a real hope of success. 

 

 

5:  Socrates

 

I am not the first to claim that the problems with the societies that we have now are structural problems, integrally related to the foundation that these societies rest on.  Many others have seen this relationship.

About 2,450 years ago, the great thinker and mathematician Pythagoras spread the same basic message.  His ideas offended many people who believed in the established order and wanted others to believe in it too.  Pythagoras was asked to stop saying such things several times. 

He didn’t stop.  People began to threaten him. He was trying to undermine the existing order.  They believed in the existing order.  They wouldn’t allow him to do this.  He decided to take his message underground.  He created an organization called the ‘Pythagoreans,’ what historians record as a ‘secret society.’  Pythagoras had a keen logical mind.  He had worked out several mathematical principles that helped people understand important aspects of our existence, including the famous ‘Pythagorean theorem’ that we all learned in school. 

Pythagoras actually had a very wide impact on human thinking.  His theorem about right triangles was only one of hundreds of theorems that he worked out; these theorems form the foundation for mathematics as we understand it today.  Pythagoras is also responsible for western music, as it is played today.  He created something called the ‘circle of fifths’ that forms the foundation for the chromatic scale (the 13-note scale that is the foundation for all music in the western world today; to play this, you play all keys on the piano keyboard).  He showed that there is a simpler scale inside of this 13-note scale, which has only 8 notes.  (This is called the ‘harmonic scale; to play it, you play only the white keys on the piano.)  He explained the mathematical relationships between the things we call chords (the chord C, on any instrument, includes the notes C, E, and G; these notes sound good together because of mathematical relationships that Pythagoras explained). 

Pythagoras made contributions to many fields.  But he devoted his later life to his analysis of human societies. Pythagoras believed that the basic structures of human societies could be made to make sense in the same way that music and mathematics made sense. 

We know very little about Pythagoras and have nothing directly from him.  We know that he traveled a great deal and was devoted to both teaching and learning; he is claimed to have gotten his great wisdom from various different places where he lived, including Egypt, Persia, Greece, Italy, Crete, Palestine, and Macedonia.  We don’t know for sure when the Pythagorean secret society came to exist, but we do know that it eventually became very large, it included many people who were very important to history, and it survived a great many very dedicated attempts to destroy it. 

In 495 BC, Pythagoras was giving a lecture in Croton, a town in southern Italy. His enemies heard about this and must have decided it would be a good time to destroy the movement.  Led by the politician Ceylon of Croton, they blocked all of the exits of the building where Pythagoras was giving his lecture and set the building on fire, killing everyone inside.

This didn’t destroy the movement.  It still had chapters in many places in Europe, Africa, and Asia that met on a regular basis.  Again, because these meetings were illegal and didn’t provide a paper trail that might have allowed the authorities to treat other members of the group as they had treated Pythagoras, we don’t really know much about them; we just know that this society existed and had many followers in the places where Pythagoras had lived. 

The most important and influential Pythagorean in history was Alexander the Great.  Roughly two centuries after Pythagoras was killed, Alexander made the most significant attempt in history to create rational societies, by putting Pythagorean principles into effect.

We can learn a lot from Alexander’s attempt.  We can see that certain rather simple changes to society can have an enormous impact.  We can see that many of the tools that Alexander created (almost certainly with the aid of his tutor, Aristotle), are capable of working to create a healthy society. We can see that his attempt almost worked, and we can use this information to see what we can do to build on his successes.

His failures also tell us a great many important things.  If we know what attempts people made to do something we want to do, and we know why they failed, we can know what we have to worry about.  To really understand what Alexander the Great did and how we can learn from it, we need to go back to before he was born and examine the development of the ideas that he tried to put into place.  Alexander got his ideas about society through a chain of brilliant scholars that starts at Pythagoras.  Socrates’ grandfather, Timaeus, was a noted Pythagorean and raised Socrates to think about human societies logically, something the Pythagorean society taught. Like Pythagoras, Socrates’ ideas offended many; Socrates was eventually put to death for heresy (disputing that the gods created the structures of societies) and sedition (teaching ideas potentially harmful to the state to young people).  One of Socrates’ students, Plato, didn’t want Socrates’ ideas to die and wrote a series of books explaining Socrates’ ideas (the Πολιτεία, the Timaeus, and the Critias, discussed below).  Plato opened a very famous school, the Academy, that attracted scholars from all over the world to study Socrates’ ideas; the most famous of these scholars was Aristotle, who became the personal tutor to Alexander the Great. 

To understand the ideas that eventually made their way to Alexander, we need to look at the only place where they are really written down: the series of three books that Plato wrote about Socrates’ ideas for society.

The books are:

1. The Πολιτεία [The Politica Society]

2.  Timaeus [The perspective of Timaeus, Socrates’ grandfather and a follower of Pythagoras]

3. The Critias 

I want to go over these books a little here because the book you are reading, ‘Preventing Extinction,’ follows the same basic line of analysis as Socrates followed in these books.

The first book, ‘Πολιτεία’ (Politica Society) is an attempt determine if the type of society that dominated Europe at the time, a society that divided the world into independent political units (countries) could meet the needs of the human race.  The book clearly shows that it cannot.  In the book, Socrates first explains why this kind of society can’t meet the needs of the human race. Then, several of his students try to argue that it can work well, and its foundations are sound, it just needs certain minor modifications to work well.  Socrates shows clearly that this is not the case.  The problems in the πολιτεία (politica society, a society that divides the world into individual political units like sovereign states or sovereign countries) are structural.  No superficial changes can make any difference. 

Why?

The book shows that any society built on this foundation will necessarily have war. The benefits of war are essentially infinite in this society and they will push with ever increasing force until war ultimately breaks out.  It is not possible to prevent this.  (The book uses the Greek term αναπόφευκτος, which means ‘inevitable;’ war, it says, is inevitable.) 

War creates certain needs that force societies to operate in very dangerous ways. The leaders and decisions-makers in these societies must organize their societies around the needs of war, not the needs of the people. As a result, there is never any real attempt made, in politica societies, to even try to meet the needs of the people.  The governments kind of pretend to be trying to meet the needs of the people, but anything that improves their country’s ability to make war will become reality, even if it does great harm to the people and anything that harms the war effort will stop, even if it brings great benefits to the people of the country. 

In the final analysis, war is nothing but organized, planned, and intentional mass murder and destruction.  This is an ‘inevitable’ part of any politica society; it is a side effect of the operation of the most foundational forces in these societies.  We can’t start with a society that must be built around organized mass murder and build a sound, safe, peaceful society.  The book concludes that a politica society cannot ever be sound, safe, or healthy.  It can’t meet the needs of the human race.  (The exact word used in the book is δικαιοσύνη, pronounced ‘dikosey,’ which is often translated as ‘justice’ or ‘righteousness’ or ‘piety’ or ‘morality’ but actually has a far broader meaning.  It basically means ‘the ability to meet the needs of the human race.’ This is something that the politica society can never have, the book shows.) 

 

The last few pages of the book claim that there is a way to make this happen, but it requires creating a religion that tricks people into believing that reality isn’t really real.  Rulers can create a religion that tells people that this world is not the real world, just a test world where our souls are tested for placement in the real world.  The book proposes that the foundation of this religion be this: first, the idea of multiple gods, the foundation of the Greek religion, has to be abandoned and they must convert to a system based on monotheism.  The god must be portrayed in a certain very specific way; this portrayal is described in great detail in Πολιτεία.  The god must have a son that is killed; the son’s soul then goes to the place of afterlife placement, witnesses it, and then comes back to the original body that comes back to life.  The resurrected son of god tells people about the afterlife judgment so the can prepare and, if they live only for the afterlife, not this one, they will be saved and go to a wonderful afterlife world with all comforts and luxuries. 
          This book was written about 400 BC, some 722 years before Constantine abolished the polytheistic Roman religion and replaced it with a religion that was built around the exact same premises as described in Πολιτεία.  Perhaps Constantine was trying to create a sound society the only way possible (at least in the opinion of Socrates and Plato) in a world divided into countries. If this was the case, he failed: the system he created degraded into the system that now dominates the world. 

 

The next book in the series is the ‘Critias.’  This book presents transcripts of conversations between Critias, Timaeus (Socrates’ grandfather) and Socrates that discuss how to build a society that can meet the needs of the people. 

The book opens with a discussion about a continent that the speakers claim exists on the other side of the Atlantic Ocean.  They call this continent ‘Atlantis.’  The book claims that the continent was low and easily flooded; it ultimately washed away entirely, leaving nothing but an archipelago of islands, where the inhabitants of Atlantis fled after their continent sank.  The book starts out by describing the society on one of the islands in this archipelago that is 375 miles by 275 miles (3,000 Stadia by 2,000 Stadia), the same size as the island of Haiti, the place where Columbus landed and the island he made his home.  Here, Critias describes the people who lived on this island:

 

They possessed true and in every way great spirits, uniting gentleness with wisdom in the various chances of life, and in their intercourse with one another. They despised everything but virtue, caring little for their present state of life, and thinking lightly of the possession of gold and other property, which seemed only a burden to them; neither were they intoxicated by luxury; nor did wealth deprive them of their self-control; but they were sober, and saw clearly that all these goods are increased by virtue and friendship with one another, whereas by too great regard and respect for them, they are lost and friendship with them.

 

Unfortunately, the details of the societies on this island were lost: many book burnings took place word and almost all of the ‘Critias’ was lost. 

Here is what we do have: this book introduces the societies of the people who lived on the other side of the Atlantic in glowing terms, in the passage above and similar passages.  Then, it goes into a passage that seems to be trying to lay open arguments that show that, although this society had great advantages, it wasn’t perfect and had some very serious flaws.  The surviving part of the book then ends, very suddenly, in the middle of a sentence. My copy ends with: ‘The rest of the Dialogue of Critias has been lost.’

We can get some idea of what the lost part of the book probably says by looking at the third book in the series.  The third book is ‘Timaeus;’ it describes various conversations between Socrates and his grandfather (a noted Pythagorean).  This book starts by accepting that the readers already understand the way a sound and healthy society works.  This makes it seem pretty likely that this is exactly what the ‘Critias’ explains. 

But what might this society look like?

It can’t be a politica society.  The first book in the series showed that this society can’t be the foundation for a sound system.  It can’t be exactly the same as the societies of the people who lived on the islands on the other side of the Atlantic: the book clearly is getting ready to explain flaws in these societies.  If this is the case, why start with a description of both of these unsound societies?  Why bother to describe the society on the western islands at all?  Clearly, people have to understand both of these societies to understand the sound and healthy society explained in the ‘Critias.’  If this is the case, it seems very reasonable to assume that the sound and healthy society mixes together the features of the two starting societies.  We can tell by analysis of the changes that Alexander the Great was later to make—clearly inspired by the ideas of Socrates, Plato, and Aristotle—that the society he was trying to create had many of the features described above for the socratic.  (We will examine the similarities shortly.) 

The third book doesn’t go into great detail about this society (something that most historians call an ‘ideal society,’ and which I simply say is a ‘sound and healthy society’).  The ‘Critias’ clearly does describe it but we don’t have these descriptions. 

The third book is about the idea of societal change.  What must we do if we don’t like the society we inherited and want something else?  Timaeus had ideas in this regard.  The book goes over these ideas. 

Plato and The Academy

How did all this get to Alexander?

To understand this, we have to know a little bit about another person in the chain, Plato.

At his trial, Socrates talks about one of the charges against him, the charge of sedition or ‘corrupting youth.’  Socrates believed that the type of society he lived in was structurally unsound and could not meet the needs of the human race.  He met people who thought otherwise: they thought the idea behind the country-based society was sound, that the particular country where they were born was superior to other countries, and that by advancing the interests of the country, they were making the world better.  Socrates talked to a lot of people who believed this and came to believe that these people could not defend their position logically.  It was based on beliefs, prejudices, implanted patriotism (the book ‘Politica’ goes into great detail about the idea of implanting patriotism).  These people claimed to be wise and the people who followed them thought they were wise, but Socrates called them ‘pretenders to wisdom.’  If he could get these people into a discussion, he could ask them a few simple questions about how and why these societies were sound; in trying to answer, they would show that they were fools and the people around them would realize that they did not really know what they were talking about.

At his trial, he discusses the reason he was being charged with sedition (‘corrupting youth with dangerous ideas’):  

 

Young men of the richer classes, who have not much to do, come about me of their own accord; they like to hear the pretenders examined, and they often imitate me, and proceed to examine others; there are plenty of persons, as they quickly discover, who think that they know something, but really know little or nothing.  Those who are examined by them instead of being angry with themselves are angry with me: This confounded Socrates, they say; this villainous misleader of youth!

If somebody asks them: Why, what evil does he practice or teach?

They do not know, and cannot tell; but in order that they may not appear to be at a loss, they repeat the ready-made charges which are used against all philosophers about teaching things up in the clouds and under the earth, and having no gods, and making the worse appear the better cause; for they do not like to confess that their pretence of knowledge has been detected—which is the truth.  As they are numerous and ambitious and energetic, and are drawn up in battle array and have persuasive tongues, they have filled your ears with their loud and inveterate accusations. 

And this is the reason why my three accusers, Meletus and Anytus and Lycon, have set upon me; Meletus, who has a quarrel with me on behalf of the poets; Anytus, on behalf of the craftsmen and politicians; Lycon, on behalf of the rhetoricians.  As I said at the beginning, I cannot expect to get rid of such a mass of calumny all in a moment.  And this, O men of Athens, is the truth and the whole truth; I have concealed nothing, I have dissembled nothing.  And yet, I know that my plainness of speech makes them hate me, and what is their hatred but a proof that I am speaking the truth? This has led to the charges against me.  

 

Socrates said he just asked questions.  The questions made the people who claimed to be experts look like fools.  Young men liked to hear this and, after they saw it, they imitated Socrates, asking the same questions to others claimed to be experts, who were also revealed to be ‘pretenders to wisdom.’  He is not to blame for this; he wasn’t trying to corrupt anyone and never sought out followers or made any attempt to influence them.  He just wanted to understand how societies worked. 

Plato was one of these ‘young men of the richer classes.’  He came from one of the richest and most well-connected families of Athens.  In the year 388 BC, Plato inherited a property that had once been owned by the one of the most important people in Athenian history, Hipparchos. Hipparchos had developed this property as a kind of private retreat.  It had an enormous gymnasium, several heated pools for soaking and swimming, luxurious accommodations, and about 3.5 acres of park-like land with olive groves, surrounded by a 30ft high wall with guard towers at regular intervals.

(Why did he feel he need this security?  Hipparchos is also known as the ‘tyrant of Athens.’  He had a lot of enemies and wanted to be able to feel safe himself and entertain his guests in a safe space.)   

Hipparchos named this resort after an Athenian military hero of the ancient past; he called it Ἀκαδημία, which would be pronounced ‘Academia’ or ‘Academy’ in English.  Originally, this had nothing to do with learning; it was simply the name of a military hero.

Plato inherited this property 11 years after Socrates had been executed.  In this 11-year period, Plato had written the three books described above.  He continued to believe that Socrates was right: the societies built on political divisions (politica or πολιτεία societies) couldn’t meet the needs of the human race.  If we want sound and healthy societies, we need something else.  Of course, this line of inquiry was not considered acceptable and couldn’t be discussed in public.  However, the Pythagorean secret society continued to expand.  A very large number of people believed that we needed to use logic and reason on societies.  Plato wanted a place where these people could come together and discuss this issue, and consider the contribution that Socrates had made, without having to worry about the authorities. 

The walls stayed up.  There was one entrance; people could only get in if they were known to have the right state of mind.  Although we don’t know much about the details, because secret societies obviously don’t want to make their practices public, it is thought that the society that came to be called the ‘Masons Templar’ used the same general practices to identify their members as the Pythagoreans.  (In the recent excavation of the Academy, researchers found that the Academy buildings used the same symbol as the Pythagorean, which happens to be the same as the Masons Templar, the mathematician’s compass.) 

 

Aristotle

The Academy was originally designed and built as a luxury retreat for the richest and most powerful people of southern Europe.  It was a very pleasant place to spend time.  I can imagine people getting through the gates of the Academy and away from the hustle and bustle of the city, into the shady groves, going to the baths for a soak, sitting beside the pool drinking wine and talking. 

The Pythagorean society had chapters in many cities.  Aristotle was born in Stagira, a small city in the nation of Macedonia, about 350 miles northeast of Athens.  Aristotle heard about the Academy at an early age, presumably from other Pythagoreans.  He moved to Athens in 367 BC to study there.  He remained at the Academy, living on the grounds for another 20 years, studying under the direct tutelage of Plato. 

He came to the Academy when he was 17 years old.  Plato was 60 years old at the time.  I can imagine the eager teenager questioning the wise Plato about the ideas of Pythagoras, the lectures that Socrates had given, the idea of a sound society—as discussed in the Critias, which Plato had written—and the tools that practical people might be able to use to create a system capable of meeting the needs of the human race.

Plato passed away at the age of 80 in the year 347 BC.  Plato was rich and had a lot of political connections.  As long as he was alive, people felt safe at the Academy.  After his death, many people believed it was no longer safe to remain and left the property.  One of the residents was from Turkey.  His name was Xenocrates and he and Aristotle were close friends.  Xenocrates and Aristotle left for Turkey shortly after Plato died.  Xenocrates was friends with a Turkish sultan named Hermias.  Aristotle became friends with Hermias and, shortly after they met, Hermias made dramatic changes in his administration, making some of the changes that Alexander was later to make in the areas under his control.  (This seems to back the conclusion that the ideas behind the changes that Alexander made came from Aristotle.) 

His changes led to an extremely rapid and immense increase in prosperity in the parts of Turkey under Hermias’ control.  Aristotle got diverted: he fell in love with Hermias’ daughter, Pythias. They married and spent their honeymoon on the Greek island of Lesbos.  They liked it there so much they decided to stay and raise their family there. 

According to many accounts, Aristotle was one of the most brilliant men who ever lived. When I read his books today, I am in awe of his mental skills.  He was a prolific author and wrote a very large number of books on an incredible variety of topics.  No matter what topic he dealt with, he started with an analysis of objective evidence that could be verified scientifically. 

He worked out what must be happening in botany, biology, physics, chemistry, or many other fields, based on logic that most historians credit Plato for developing and that Aristotle is famous for using.  By the time Aristotle moved to Lesbos, he was already famous all around the Mediterranean for his mental talents. 

In 343 BC, King Phillip of Macedonia was looking for a tutor for his son Alexander. He interviewed several scholars who were eager for the position.  But his first choice Aristotle.  He sent people to Lesbos to try to convince Aristotle to take the position. Aristotle’s terms were very strict, and we can tell by Phillip’s acceptance of these terms how badly he wanted Aristotle to teach his son. 

Aristotle would only agree to teach Alexander if Phillip first totally eliminated slavery in his kingdom.  Phillip would have to buy back all slaves from their owners and free them.  If the freed slaves had owned property before capture, Phillip would have to restore it to them; if it had been destroyed, Phillip would have to rebuild it.  I can’t think of a more persuasive argument for the incredible intelligence of Aristotle than the fact that Phillip wanted him so badly he was willing to accept all of these terms. 

Aristotle arrived at Naoussa, the location of the school, in 340 BC.  He was Alexander’s personal tutor for the next four years.  Aristotle was 41 and Alexander was 13.

Four years later Phillip was assassinated, and Alexander became the king of Macedonia. Alexander was 17 years old, the same age that Aristotle had been when he had arrived at the Academy 28 years earlier.

 

 

19:  What Is A Goverment And Do Socratic Societies Need Them?

DICTIONARY.COM DEFINES GOVERNMENT AS:

 

The political direction and control exercised over the actions of the members, citizens, or inhabitants of communities, societies, and states.

 

The Merriam-Webster Dictionary defines it as:

 

The act or process of governing; specifically: authoritative direction or control.

 

All the definitions of government I could find focus on the idea of controlling the people.  I could not find any definition of government that said or implied that governments had anything to do with providing common services for the people, making life better for the human race or trying to solve any problems.

Some possible societies are structured in ways that prevent them from operating unless they have bodies that meet the dictionary definition of governments.  They have to have administrative systems with the ability to control the people.

Sovereignty-based societies (hundred percent ownability societies), for example, absolutely can’t function without bodies with the ability to use ‘authoritative direction or control’ on the people.  Groups of people in these societies claim that they own a part of the world.  After they make this claim, the entire rest of the human race is excluded from all rights to the part of the planet they have created.  No country or other sovereign entity today includes more than a small minority of the human race, so these systems basically have a small minority of the human race excluding the great bulk of the human race from anything produced or contained by a part of the planet.

This kind of system can’t exist by consent of people of the world because the majority of the people have no reason to consent to renounce all rights to certain beautiful and productive parts of the world when they get nothing in return. They will not simply agree to give up rights to be nice.  The people who want to keep them away have to use force against them.

The people who don’t accept the claims may decide to counter force with force.  The people who make the claims must have the ability to use superior force.  They must have the ability to take revenue somehow from the people inside their area of jurisdiction (perhaps as taxes),and use this revenue to pay people to build truly horrific tools of murder and destruction.

They must do these things, or this particular kind of societies (sovereignty-based societies) can’t exist.  If people want these societies to exist, they must have the means to meet the dictionary definition of ‘government’ listed at the beginning of the chapter.  They must be able to control people: they must be able to take wealth away from them (to tax), and to organize their societies to make the tools of control available.

Sovereignty-based societies (hundred percent ownability societies) need very extensive structures to force the majority of the people to accept the rules designed to give the minority special rights to the world.

Administration in a Mature socratic leasehold ownership Society

In the Pastland example, it is pretty easy to make decisions because there are only a small number of people.  We can make all decisions in binding public elections in which everyone has a vote and every vote counts the same.

How might a larger socratic system work?

Let’s move ahead a little in our description of Pastland to see if we can get some idea.

Say that a long time has passed, and the population has grown to 100 million people. Over the centuries, many people have made requests to allow certain parts of the world to be private property. We have approved many of these requests that we, the members of the human race, thought were in the best interests of the human race.

We had no reason to approve any requests for freehold ownability of any part of the world.  We, the people of the world, do not gain from freehold ownability and it locks us into something that we can’t change (freehold ownership is forever).

We allowed people to buy and own rights to use land in exchange for yearly payments set by market forces.

 

Market forces determine leasehold payments because markets determine prices of leaseholds and the leasehold payment is a fixed and known percentage of the market price; by determining the price, markets determine the leasehold payment.

 

We wanted to make sure that the people who agreed to make these payments always made them, so we required them to essentially post a deposit that was five times the required leasehold payment by paying the ‘price’ of the leasehold. (This is like a deposit because it is returnable; if you buy a leasehold, keep it in good condition and make your payments on time, you can get back the price/deposit by selling the leasehold to someone else.)

Over the centuries, we have sold many millions of leaseholds on real estate all around the world.  Every single leasehold brings us, the members of the human race, an income.  This income depends entirely on the bounty of the land involved; the more bountiful the land, the more money people are willing to pay as leasehold payments to own rights to it, and the more money the human race gets.  We live on a bountiful world, so we get a truly enormous income from the land.

Over the centuries, we have authorized many corporations.  The first few years these corporations existed, the cash flows they produced were not free cash flows; they were earned cash flows. But later buyers of corporations were buying truly bountiful properties.  They were willing to share this bounty with the human race by making leasehold payments.  Again, the amount we got depended on the free cash flows the corporations produced.

You could say that there are massive rivers of wealth pouring forth from the land and corporations of the planet Earth.  We have allowed private individuals to direct the course of these flows of wealth in exchange for a portion of the free money.  But the great bulk of the free wealth/money flows from the land and corporations into a bank account that is owned by ‘the human race’.

It is not owned by ‘the government of the human race.’  It is not owned by any government at all.  We may or may not decide to form governments.  If we do, the only way governments can get any of this money is for the voters to agree to give it to them.  If we don’t form governments and/or don’t agree to fund governments, there won’t be any governments with any rights to wealth anywhere on the planet.

Common Services

When Frances first set up the bank account of the human race, she wanted to make sure that no government would ever have any control over this money.

No person can ever withdraw money from this account.

The money in the account can only be transferred to other accounts, and these transfer requests can only be made by the members of the human race, acting together, in general elections.

Here is how Frances set it up:

A computer keeps track of payments made into the account over the year.  All people who had registered to vote would receive a certain number of votes based on ‘their share’ of this money.  For a simple example, say that there are 100 million voters and a total of $1 trillion is paid into the account in a given year.  Each voter will get 10,000 votes, each of which is worth $1.

You are in Pastland and so am I.

We each get 10,000 votes in our voter account, with each vote representing $1. We cannot withdraw money from the account for ourselves.  But we can transfer money from this account into one of five different ‘general funds.’

 

These funds are:

1. The Government Discretionary Fund

2. The Infrastructure Fund

3. The Children’s Fund

4. The General Services Fund

5. The basic income fund

 

You are a voter.  You log on to your voter page and it says you have $10,000 to allocate.

The Government Discretionary Fund

If you want a government to rule your system and want the people in the government to have the authority to allocate money any way they want, you can simply transfer all $10,000 of your share of the bounty of the world to The Government Discretionary Fund.  After you do this, you are through.  The government (which comes to power through some separate process that has been decided on by the people) has discretion over this money.  It can do anything with the money it gets for anything that the governments of sovereign countries in sovereignty-based societies (hundred percent ownability societies) can do.

If you give all of your money to The Government Discretionary Fund and all other voters make the exact same decision, all public money goes to the entity called a ‘government.’

Since the government will have all the money, it will obviously have all the power. It will be able to govern or control the people.  If the rulers in the government want to use government money to set up programs that benefit themselves, their families, and their political supporters, they can do this.  If they want to load planes with billions of dollars in $100 bills (as the Bush-Cheney administration did in 2011), and then fly off the planes to destinations that are unknown only for the money to disappear, they can do this.  (For information about this missing money Google ‘Bush Cheney planes with $100 bills.’)

If people protest government activities, the governments can use some of the money the people granted them to build camps to hold the protesters.  If too many protest to be put into camps, they can use the money to haul planeloads of people out over the ocean, drug them, and throw them into the water (as the Argentine government did between 1973 and 1983; Google ‘Argentine Dirty War’ for more information).

If you don’t want a powerful government, you can simply not give The Government Discretionary Fund any money.  If you don’t give them any, and no one else does, there won’t even be a government.

You, and your fellow voters, decide if a ‘discretionary government’ will even exist. If you do want it to exist, you and your fellow voters decide exactly how much power the government will have each year it exists.

 

The Infrastructure Fund

If you don’t want a government, but do want infrastructure, you can allocate money to the ‘infrastructure fund.’  After the general election, the computer will show how much money is in the infrastructure fund.  There will then be a secondary election where you can, if you want, allocate this money to individual projects that you favor.  If you don’t want to bother with this secondary election, you can vote to put this money under the control of an elected official called ‘the administrator of The Infrastructure Fund.’

People who want to run The Infrastructure Fund will campaign on their ideas for the best way to spend infrastructure money.  Some will want to prioritize highways and road systems.  Some will prioritize solar power plants, power infrastructure, and automated and mechanized recycling facilities that are designed to totally eliminate ‘trash’ by separating all raw discarded materials into their raw materials, which are then sold back to producers.  Others will believe that infrastructure money should be used to design and lay out master-planned communities, designed from scratch to meet the needs of the people who will live in them, with leaseholds to the land sold to developers who will actually build the infrastructure.

You don’t have to allocate any money to ‘The Infrastructure Fund’ if you don’t want to do this.  If you do, you don’t have to give the elected administrator of the fund any of your share of the bounty of the Earth.  If you don’t like the ideas of the current administrator of the fund, you can bypass her and fund the specific projects you want.  If you want solar and the administrator wants highways, you can take whatever money you initially voted into the infrastructure fund and allocate it directly to the solar projects you prefer.

Where will the money go?

This depends on the desires of the voters.

We might expect that people running for office of administrator of this fund to do a lot of research into the desires and needs of the people.  They know that if the people think they can trust them, the people will give them control of large amounts of money.  If the people don’t think they can trust the elected officials, they can totally eliminate their power by totally eliminating their funding.

Over time, we would expect the people who want the job of administrator to get better and better at reading the needs and desires of the people.  The better they get, the more people will simply allocate the money to the fund and then stop voting further, putting their money under the control of the administrator.

 

The Children’s Fund

There will be a voting age.  Let’s say it is 18 years old.  Only people voting age and over can vote.  A certain percentage of the population will not be represented, as they will be below voting age.  Let’s say that 15% of the people are below voting age.

When this system was first set up, the people had forums and elections to set up what was basically their constitution.  In this case, they decided on certain foundational rules about what would happen to the unearned wealth that was paid into the account that held the leasehold payments.

They decided that this money represented the bounty of all privately controlled land. It was the part of wealth of private land that they had decided would be unowned and unownable.  No one owned this wealth.  They decided that the human race would determine what happened to the unowned wealth in elections.  Since children would not be represented in these elections, a fund must be created that would be used only for projects that specifically benefit children.

The voters would decide what projects and services fall into this category.  After the general election, they could go allocate the money to specific projects and services.  Some may want healthcare; some food and support, some may want better schools, some may want more parks, playgrounds, beaches, and information sources for children.  Some people may realize that adults will be getting cash payments over time (from the basic income fund,’ discussed below) and may want children to begin receiving cash allowances to help them learn responsibility with money and give them something to lose if they should violate rules or act irresponsibly.

Like ‘The Infrastructure Fund,’ The Children’s Fund will have an elected administrator.  People running for this office will campaign on their abilities to figure out the needs of young people and meet these needs.  We would expect candidates to work very hard to try to figure out programs that would be effective and beneficial: if they could do this, they know that the voters will trust them with the money allocated to ‘The Children’s Fund,’ and not bypass them and allocate money to specific programs.  We would expect people to get better and better at this job and, in time, most voters would only vote in the primary elections, deciding how much money should benefit children.

 

The General Services Fund

Our current governments do a lot of things that some people think the public should pay for.

For example, some people think that society is better if certain basic healthcare services are provided by public agencies.  They think that if you break an arm, you shouldn’t have to spend a year’s pay to get basic care; you should be able to go to a public clinic, get treatment, and pay either a nominal fee or nothing.  They think that society is better off if a public agency works to prevent the spread of communicable diseases like influenza and HIV.

Many people believe that there should be a public program to collect garbage, to have police and courts to enforce whatever rules the people have, and to provide various other services that don’t really fall into any of the other categories.

Different people want different things.  Some of the projects that the governments of the world fund today seem silly to some observers.  For example, in 2018, The National Science Foundation funded a study on how stressful it can be to debate politics with friends and family.  A lot of people, including the authors of the report, thought this was a silly expense as the report concluded (and this is an exact quote), ‘One could argue that the most stressful thing about politics is the waste and bloat of government spending, especially researching topics such as this.’

Like the other funds, The General Services Fund will have an administrator.  The people may bypass the administrator and fund specific projects if they want.

We might expect people who run for this office will have done a great deal of research into what the people want and will make sure that the money goes exactly where the people want it to go; if they do this, the people will trust them and allow them to make the decisions over what happens to money in this fund. If not, the people will simply take way all their power by taking away their funding.

 

The Basic Income Fund

Some people believe that each individual knows what she wants better than anyone else. They believe that roads should not be paid for with public funds; private, profit-motivated companies should have the right to build roads and charge individuals for their use.  Those who want to use roads can pay for them by the mile or through an annual subscription to the road company’s products.

Some people believe in the smallest possible public sector.  They believe that individuals all know what they want, and bureaucrats are horrible at figuring out what people need.  They will fund only services they see as absolutely essential to the operation of society, like police and courts, and provide only the minimum needed for the operation of these services.

We live on a bountiful world.  It produces enormous amounts of wealth over time.  Certain people want to have the right to control various parts of  the world and corporations.  In the socratic system, they are given the opportunity to do this, but they have to agree to share and actually share the free money with the human race, in exchange for the benefits we give them.   When they buy socratic leasehold rights, they make an agreement to share.  As long as they keep this agreement, we will allow them to have documents that verify that they have our permission to control the property, and give them access to courts to litigate disputes.

The amount they agree to share with us will flow into a fund that is under the direct control of the human race.  We decide what happens to this money.  We can do anything we want with it.

If we want, we can use it to provide common services or fund projects that benefit us all. If we can’t find enough services or projects that we think are worthwhile, we can simply divide the money among our members in cash.

Say that you are looking at the ballot and find $2,000 worth of services that you think are worth funding, so you cast 2,000 votes in the election, for services that are in the first four categories listed above.  This leaves $8,000.  If you simply stop spending at this point and leave the election, the computers will zero out your account for this election cycle by allocating this $8,000 to the basic income fund.

Money in this fund will be divided evenly among all (responsible) members of society. The term ‘responsible members’ will be defined as ‘people who haven’t been convicted of criminal acts punishable by fines or found liable for reparations or civil penalties by courts.’ People who are liable for fines, reparations, or civil penalties will have their incomes reduced by the required amounts and will get only the balance.

 

What is a Public Administration?

In different societies, the term ‘public administration’ can mean different things. Sovereignty-based societies (hundred percent ownability societies) absolutely need a very specific kind of public administration.  They can’t function without an administrative organization with the authority to use force against any who violate its rules.  The main reason for this involves the need for taxes: sovereignty-based societies accept that everything is owned and belongs to some person or group. Nothing is left unowned and available to meet the needs of the people.  The only way that these societies can have anything for public projects is to take it away from the people as taxes.  Not everyone will pay voluntarily and willingly; some will have to feel that the taxing authority will take action against them before they will pay.  The taxing authority must have the ability to actually act: a hollow threat isn’t going to convince anyone to pay.  If there is a limit to the force—a point beyond which the taxing authority may not go—the tax evaders will simply go to that point, so the taxing authority must have no limits. It must be able to use any method necessary, up to and including arresting tax evaders, and using any level of force necessary to subdue them, including deadly force.

If an administration has the authority to use any level of force against human beings, it can use this authority to crush dissent.  Quite often, people who cause problems for the people in power are claimed to be in violation of some law (if all else fails, they can always be labeled tax evaders: no real evidence is needed for this crime, only a suspicion, and it is possible to be suspicious of anyone).  The government can then make attempts to arrest them. If they submit to arrest, it seems quite common for these dissidents to suffer accidents like falling down several fights of stairs while in custody, and these accidents seem to be fatal a large percentage of the time.   (Mysterious diseases that kill the accused very quickly also appear to be common.) Often, the people who have made enemies of the state know that they will be arrested and they resist, which makes the solution easy: they can be killed ‘fleeing the police’ or ‘resisting arrest.’

An administration with the ability to take these kinds of measures becomes more than an administration, it becomes the kind of body we call a ‘government.’  A government governs people; it controls people, it enforces the will of the leaders against the people.

Having elections over relatively unimportant matters, like the identities of the specific individuals (who have always been vetted in advanced in ways that make sure that both candidates are acceptable to the political establishment) doesn’t change this.  If the people can’t vote on foundational issues, the systems aren’t really under the control of the people.  For example, the United States is often held up as a model for democracy.  But the Constitution of the United States has never been put to a vote by the people.  Would the people approve?  Consider that the constructive incentives start out by dividing the populace into four categories.  The first of these categories is ‘free persons.’  The other three are non-free persons.

 

What were the ‘non-free persons?’
          The first category, according to Article 1, Section 1, is ‘persons bound to service for a period of time.’  This refers to mostly white people who were purchased from debtor’s prisons in England and Holland by corporations.  The corporations got them released by paying off their debts in exchange for a servitude agreement that ranged from 5 years to 30 years.  The laws of England and Holland prohibited using these people as slaves inside the country (both countries prohibited slavery within their borders) but they allowed the buyers to remove the slaves to anywhere outside and use them there.  Most light-skinned people who came to America as workers came as slaves.
          These slaves were financial assets of corporations. The corporations wanted to maximize the returns on their assets, so they worked these people very hard.  In fact, since they knew they would not have these people for the rest of their lives, the corporations really didn’t care how long their lives lasted and records show that these indentured servants were treated far worse than property slaves (blacks, who could be owned for life). The corporations would maximize their returns on investments if the ‘indentured servants’ had been worked so hard that they died in their last year of service. 
          The second category of ‘non-free persons’ listed in the Constitution were ‘Indians not taxed.’  Of course, there was no such thing as an ‘Indian not taxed,’ because the colonies had excise taxes that were included in the prices of all goods sold, including the goods sold to people called ‘Indians,’ but the ‘not taxed’ part is just a bit of rhetoric: this category of non-free persons refers to all people with American native heritage: it defined a race of people.  (This became very clear after the ‘Indian Removal Act’ was passed in 1837: all ‘Indians’ were removed, even those who had tried their best to conform to the standards of the invading societies, in ways that even included paying taxes.)  The Constitution doesn’t discuss their treatment much except to say that they are to be ‘excluded’ when counting persons.  Courts interpreted this to mean that they were not persons, under the law, and had no human rights.  They couldn’t testify in court, couldn’t bring charges, and didn’t have the basic rights of habeas corpus that the Constitution granted to ‘persons.’ They could be and often were shot or lynched without repercussions: the penalties for harming dogs were more serious than the penalties for harming ‘Indians.’ 
          What is the third category of ‘non-free persons?’ The framers of the Constitution clearly knew that kidnapping people from their homes and transporting them across the ocean to enslave them wouldn’t be seen as a noble or even conscionable act by future generations, so they didn’t describe this category except to say ‘all other persons.’
          In other words, the fourth category consisted of all persons who were NOT free, NOT Indians, and NOT white.  The Constitution says that these people should be counted as 3/5^th of a person.  What category of person is not free, not an Indian, and not white? This appears to only refer to black slaves. 
          Jefferson pointed out that it was rather strange that people would refer to the United States as a ‘free country’ considering that about 80% of the population, as of his presidency, was not white.

 

What if the Constitution had been put up for a vote?  How do you think the 80% of the people who the Constitution classified as ‘non-free’ would have voted?

What if the people of a ‘democratic country’ like America decided they didn’t like the idea of being a part of a ‘country’ and wanted to be a part of the human race, working with other people all around the world to make life better for us all?

Would they have the right to make this happen by a simple vote?  Or would they find that the basic structures of their societies were made not to be changed?  They may be able to vote on certain things, like which of two people (both of whom have been carefully vetted in advance and both of whom have promised and continue to promise to respect the foundational laws) get into certain offices.  But they won’t be able to vote on anything important.

By practical necessity, the group that administers people in sovereignty-based societies must have the ability to govern the people: it must have the ability to control them and force them to follow any rules the government makes, without ever having to ask what the people want.

In these systems, governments are not optional.  They are mandatory.  They must have governments.  We were all born in and raised in sovereignty-based societies.  We may not really understand why they do the things they do, but we have been in them from birth and seen the way they operate for our entire lives. We are so used to having all public affairs administered by governments that it is hard for most of us to even imagine a society with any other kind of public administration.

But history tells us that other societies have existed.  Some of these other societies operated differently and neither had nor needed a body with the authority to govern or control the people.  They did not need or have bodies with the authority to create policies that the majority don’t want and put them into place.  Natural law societies, by their very nature, are ‘majority rule’ societies.  No one owns the land, so no one owns the food and other wealth it produces.

The people must have some sort of meeting and election to determine what happens to this wealth.  If the wealth goes where the majority says it goes, there is no effective way for any minority to control the group, to govern them, or to force them to do what they want the group to do.  If a minority tries to use force to get the majority to accept certain rules the majority doesn’t want, the majority can simply exclude the rule Nazis from food distribution.  They will either reform and accept the will of the majority or starve to death.

We know that societies with different administrative systems are possible because they have existed.

Socratic leasehold ownership systems are hybrid systems, with some elements of natural law societies and some elements of societies that accept sovereign ownability. Like natural law societies, socratic systems are inherently democratic, because the people control the wealth.

The ones who control the wealth control society.

In socratic leasehold ownership systems we, the people of the human race, control the wealth so we, the people, determine what happens in society.

What do ‘we the people of the human race’ want?

This question can’t be answered because the human race has never been in a position to figure it out.  What if we want peace, a harmonious and sustainable relationship with the planet we live on, and a high level of personal and social responsibility? What if we want our planet and machines made by people to produce more and more wealth for the benefit of the human race, until we have our physical needs met and can concentrate on solving great mysteries and figuring out the meaning of life?  If we want this, we can have it.

 

The Example Society

Humans are very capable beings.  We are the only beings on Earth with the power of intellect: we can decide what to think about and organize our thoughts intentionally.  We can, if we want, think about different ways to organize the key realities of our existence.  We can think about the type of society that was in place when we were born and figure out how it works.  We can figure out what other societies have existed in the past and work out the way they operated.  We can use this information to build a scientific understanding of human societies and figure out other societies that are possible—that could exist if we wanted them to exist—and figure out how all of the possible societies operate.

The last four chapters went over an example society, from within the range of possible societies.

I have four important reasons for discussing the example society.

The first is to show you that it is possible to build societies on something other than guesses or beliefs about the intentions of invisible spirit beings.  Humans have the power of intellect.

So far, we don’t seem confident enough in this ability to use it to analyze the nature of existence, the reasons that we might be here, the different ways we can interact with the world and each other, and the different kinds of societies that we can have.

We have used our intellects mainly to help us respond to the incentives that our destructive societies create.  These societies push us to make war.  We use our intellect to build ever-better tools of murder and destruction.  We can build fighter-bombers that can fly faster than the speed of sound and send a cruise missile that flies even faster at treetop levels to deliver a nuclear warhead capable of destroying a city down into a vent hole the size of a chimney.  We have used our intellect to build warships that are floating cities, complete with their own airports, and to build submarines that can stay submerged for months on end, each of which is equipped with enough bombs to destroy the planet many times over.

We have not used our intellects to understand the different modes of existence the human race can have, and the way our world would work if we chose other options.

The first goal of the ‘example society discussions’ is to provide evidence that this kind of analysis is worthwhile.  It is time for us to use our great intellects for something other than finding new and better ways to kill each other.

The second goal is to show you that non-destructive societies don’t have to be primitive.  We don’t have to go back to living in grass huts and planting crops with sticks in order to have healthy, sound, and sustainable societies.

It is true that natural law societies are inherently non-destructive and sustainable. But they are not the only kinds of societies that fall into this category.  If we understand that there is a reason for the sustainability of natural law societies and find the features of natural law societies that are responsible, we can incorporate these features into societies that have very advanced features.

On some level, we should all realize that it is possible to live in peace with each other and in harmony with the world around us.  People once did this.  But the people who did this had societies that did not have many of the structures and tools that we have come to take so much for granted that we would not want to live without them.  The second goal of the discussions of the example society is to show you that we don’t have to give up electricity, steel, comfortable heated buildings, cars, televisions, and other luxuries that have come to be necessities, to have a healthy society.

The third goal leads into the discussions of the next chapter.

Let’s say that I have convinced some people that it is possible for humans to organize their existence in non-destructive ways.  Many people will say that this information is totally useless, because any society organized in non-destructive ways will be so different from the societies that we were born into that we would never be able to convert to that society.

I wanted to give an example to show you that this is simply not true.

The example society is, at least superficially, very similar to the societies that we have now.  It has all of the things we need and are used to, including money, banks and lending institutions, private property, corporations, jobs, materials needed for roads, bridges, buildings, and utilities capable of meeting the needs of billions of people.

I want you to realize that it is totally realistic to accept that we would not have to go through a traumatic change in our modes of existence in order to move from the highly destructive and dangerous societies that were in place when we were born to sound, logical, sustainable, and peaceful societies.

If you were somehow transported to a world with a socratic leasehold ownership system, at the same level of technological advancement as the current Earth, you would be able to adjust easily.  The other system would have restaurants, apartments available to rent, paying jobs, and other structures you are used to.  The details of this society would be so similar to the societies we have now that you would hardly notice any difference, at least when dealing with things that are important in our day to day lives.  But the foundational structures, including the idea of sovereign countries (which wouldn’t exist) or administrative bodies with the authority to ‘govern’ the people, or the flows of wealth from the land would be entirely different.

If we are considering converting to a different type of society, we will find this much easier to do if we choose to convert to a society that is as similar to the society that we start with as possible.  A socratic leasehold ownership system is, at least superficially, very, very similar to the sovereignty-based societies (hundred percent ownability societies) that we were born into.

The third reason to go over the example society in such detail is to show you that we don’t have to change everything about the societies that we have now to have sane, logical, sustainable, peaceful, and otherwise healthy societies.  If the problems are in the foundation, we only have to fix the foundation; we can leave the details as they are.

The fourth reason for the example society is to help you understand the discussions that follow shortly and explain how to convert from sovereignty-based societies (hundred percent ownability societies) to socratic leasehold ownership systems, if we should choose to do this.

 

 

 

 

 

18:  Who Benefits from Socratic Ownership?

 

For the first 15 years, Fred and his shareholder partners got everything. There were no taxes; they didn’t have to pay withholding for their workers, sales taxes, excise taxes, income taxes, or corporate taxes.  They got it all.  After 15 years, the company is a mature company.

If you are looking for an investment, you have options.  Let’s consider two different options:

1.  The first is the leasehold rights to the Pastland Steel Company.

2.  The second is a leasehold on a new farm called the ‘New Pastland Farm.’ This is a new rice farm that is basically the same as the original Pastland Farm, but it hasn’t yet been improved or altered in any way.

Both investments generate free cash flows of $2.4 million a year.  No matter which leasehold you buy, you will be buying the right to lease a property that generates $2.4 million a year in free money.

The Pastland Steel Company is being offered for $8 million.  If you buy, your leasehold payment on this property, at 20% of the price, will be $1.6 million leaving you $800,000 each year, a 10% return on your invested capital.

The new Pastland Farm is being offered for $10 million.  Your leasehold payment on this, at 20% of the price, will be $2 million leaving you $400,000, a 4% return.

Which is the better investment?

That depends a lot on your personality.  Some people are willing to take a little more risk in exchange for more reward.  Other people are not.

If you aren’t willing to take on the greater risk, you will be better off with the farm.  If you are willing to take on less risk, you are better off with the steel company.

People with money to invest will have choices.

Basically, they will have the same choices they have in the world today.  In the end, the same basic market forces will determine the returns investors get as determine them in our hundred percent ownability societies. People will look at the amount they get after all payments.  They will consider the risk of the investment.  They will pay up to the price that gives them the return they need for the risk of the investment.

Necessities

There are certain things that are currently (in our 21^st century world) produced in enormous quantities that make our lives much better than they would be without these things.  I want to go over three of these things: steel, cement, and silicon wafers (which can be used to produce electricity in photoelectric panels, to direct electrons in computers, phones and other electronic devices, and to direct or create light in light emitting diodes, television screens, video cameras, and other devices).

These things have become so ubiquities in our world that we have a hard time imagining what life would be like without them.  These three things are literally made of the same things the planet we live on is made of.  We can have as much of all of them we want without ever risking running out of the needed raw materials or even running low.  All can be produced in any quantity we want without doing any damage to the environment.

If we have these things, together with the inherent incentives of the socratic system, we can create a paradise.

We can have high rise steel, glass, and concrete skyscrapers that allow us all to live in what poets of the past represented as heaven, high in the clouds with all manner of luxuries and comforts at our disposal.  We can have transport systems that move us anywhere we want to go rapidly, cheaply, and comfortably.  We can have just about any manufactured good we want basically for the asking.

Let’s go over these three ‘necessities’ and see that they will all be made in the socratic leasehold ownership system, the people who run the companies that make them will get the same percentage returns on investments that they get in our world today, and we, the people of the human race, will wind up the main beneficiaries, getting the great bulk of the free wealth that flows from the companies that make these things.

Hydraulic Cement

‘Hydraulic Cement’ is a natural material made from limestone.  Limestone is a rock made of calcium, which happens to be an extremely abundant material (the fifth most abundant material on the surface of the Earth).

Calcium dissolves in water so, over time, water removes calcium from rocks that contain this mineral.  The water carries the calcium wherever the water flows.  When the water stands for a time, the calcium precipitates out (goes to the bottom).  As a result of this process, vast parts of the world that used to have standing water on them have layers of limestone that are hundreds or even thousands of feet thick.

It is very easy to get this limestone. Just dig it up.  We will never run low on limestone: it is one of the most abundant and easiest-to-find materials on Earth.

Limestone has been used to make cement for a very long time.  It is pretty easy to make into cement: grind it to powder and mix it with water. When it dries, it is as hard as limestone.  While this is pretty hard, it isn’t super hard: you can still easily carve your initials into limestone. It has another, more serious problem: it dissolves in water.  This is clearly no good for a bridge or high rise building: you don’t want your bridge or building to dissolve when it starts raining.

In the early days of the Roman Empire, chemists found ways to process limestone to create a cement that doesn’t have these problems.  The limestone has to be heated in a very hot furnace for about 28 hours.  After this, it ‘sinters’ or disintegrates into a very fine powder.  This powder can then be mixed with volcanic ash (also a very fine powder) and the result is something called ‘hydraulic cement.’  It can be mixed with water and left to harden.  It will get much, much harder than the lime-based cement and, most importantly, it will be totally waterproof when it is finished.  This product is the same as the cement you get if you go to Home Depot today and buy a bag that says, ‘Portland Cement.’

 

Why Portland?
          The Romans had thousands of cement plants and built millions of structures with hydraulic cement.  In the year 322 AD by the calendar he created, Emperor Constantine decided that the society he lived in was a horrible system and couldn’t meet the needs of the human race.  Under the influence of some of Plato’s writings (described in Forensic History) he decided that the best way to solve these problems was to create a religion-based society (a theocracy). He closed all schools, ordered all books collected and destroyed, and forbade the teaching of everything but religion.  He had a collection of scholars assembled in Rome and had them write a new book, called ‘the Bible,’ that would be the only book anyone would be allowed to read from then on. Everyone in the empire was required to convert to Christianity: those who refused were executed. 
          As part of this change, all corporations and other businesses were shut down.  This included the steel mills and cement plants that were then in operation.  No hydraulic cement was made for over a thousand years.  The technology was lost. 
          In 1824 a British chemist, Joseph Aspdin, rediscovered the process.  The ‘sintered’ limestone powder that was key to the process was a dull gray color.  It made rocks that were dull gray and reminded him of the stones quarried on the nearby island of Portland.  He named the product ‘Portland Cement’ and patented it under this name.  Builders all around the world still call it ‘Portland Cement.’  It is one of the most useful building materials known.

 

Roads made of this product last thousands of years.  This isn’t speculation; you can find such roads just about anywhere Romans lived, all more than a thousand years old, that are still in use today.

Pipes and aqueducts made of hydraulic cement can carry water and will not dissolve; again, you can find many aqueducts, irrigation ditches, and even pipes that the Romans made that are still being used thousands of years after they were made.

Cement is very useful.  If you mix it with sand, you get mortar cement that you can use to attach just about anything made of rock to anything else made of rock.  You can pour a cement/sand mixture into molds to get cement blocks; you can stack the blocks to make buildings more than a hundred feet tall.  If you mix cement with gravel, you get a product called ‘concrete.’  It is extremely strong.  You can pour this into a mold of any shape, and it will harden into a rock in that shape that is as strong as granite.

Do you need a dam that is a thousand feet high, a half mile wide, and 100 yards thick?  Just make a mold and pour it full of concrete; the dam will be as strong as if a single natural rock of granite had formed there when the Earth formed.  Do you need a bench, a table, or a floor for a garage?  Make a mold, pour it full of concrete, and when the concrete is hard in about a week, you will have the thing you need.

If properly assembled, you can make concrete structures of immense size.  Nearly all skyscrapers are made of concrete reinforced by steel; all of the tallest buildings in the world are made this way, all dams and nearly all bridges take advantage of large amounts of concrete.

Although the raw materials needed for hydraulic cement are incredibly cheap and abundant, these materials have to be processed a certain way to turn them into the finished product.  The processing plants are enormous and cost millions of dollars to build.

Modern cement plants work like this:

They start with limestone that is crushed into a fine powder (this is called ‘quicklime’ or ‘natural lime’). They put this material into a massive rotating kiln.  The lime has to be heated to an extremely high temperature and rotated constantly for 28 hours.  After this time, the lime ‘sinters,’ which means it disintegrates into a fine powder.  This product is called ‘hydrated lime’ and is the raw material for cement.  The processing of the lime changes its crystalline structure; now, if it is mixed with a little water, it becomes a semi-solid plastic that forms into a super hard and dense product that is as hard and waterproof as granite.

The hydrated lime is then mixed with a few common and cheap fillers.  It is sold in 40 kilo bags (90 pounds in the US) everywhere building materials are sold.

If you want to make hydraulic cement, you need a very large and very expensive machine, the super-hot rotating kiln.  Cement plants are big and expensive, but they produce very high cash flows.  Generally speaking, if the free cash flows from a cement plant were applied entirely to the cost of building the plant, it would take ten years to pay them back.  This means that if you started with enough money to build a cement plant and then used it to build that plant, then operated the plant, it would take a full ten years for you to just break even and recover the amount you spent building the plant.

Because it costs so much to make cement plants and it takes so long before they will begin to make a profit, most single investors aren’t going to put their money into these plants.  It is just too risky.  A lot can happen to the economy in 10 years.  If it falls apart, and the price of cement falls (and this happens whenever the housing market collapses), you could be out everything.

However, inside of corporations, it definitely makes sense to build cement plants.  You can get together with a large number of other people and build the plant.  You can issue shares and use the money to build the plant.  If you want your money back, you can sell the shares.  (As the plant is built, the shares generally rise in value: it is closer to the time when the plant will pay dividends.) When the plant exists, it will begin making a lot of money.  After this happens, you don’t have to wait another 10 years, or even another 10 days, to get back your investment: once the plant is operating, everyone will see it as a cash flow-generating property.  They will be willing to pay a lot of money for it.  If you want, you can sell your stock for many times what you initially invested, even if the plant has only been operating for a few days.

If we want hydraulic/Portland cement here in Pastland, we can have it.  But we will need a corporation to produce it.

The Pastland Hydraulic Cement Company

One of the people in our group in Pastland, a man named ‘Ned,’ managed a cement plant back in the 21^st century.  He knows how all the parts operate, and he has drawn up blueprints to build one here in Pastland. Back in the future, Ned made a lot of money taking ordinary limestone, which he could get basically for the cost of hauling it, turning it into very useful hydraulic cement-based products.

We have a lot of building going on here in Pastland.  A lot of people would love to have this product.  Ned has talked to builders who have told him they would gladly pay very high prices if he could supply them with hydraulic cement.

 

As of 2024, the world produces about 4 billion tons of cement a year.  This works out to about 1,500 pounds per year for every human being on the planet.  If we want to match the 2020 per-capita production levels here in Pastland, we would have to produce 1.5 million pounds, or 750 tons per year.

 

Several investors are willing to back the project.  But they aren’t wiling to invest in Ned personally: if something should happen to him, and he was the only one involved, the project would collapse, and they would lose all their money.  They need a corporation to run the project.

They petition the administration of the human race for the right to form a company they intend to call the ‘Pastland Hydraulic Cement Company.’  This petition is granted under the condition that, after 15 years, the company will revert to control with leasehold ownership.

Ned builds the plant and starts making cement.  The plant makes 3,150,000 pounds a year, which the company sells for $1 a pound. The costs run $200,000 a year (5¢ per pound).  He also must pay interest and principle on the loan he took out to build the plant, which adds another $550,000 to his expenses.  After he pays all this, he has $2.4 million a year left over.

This is the cash flow of the Pastland Hydraulic Cement Company.

It is not a free cash flow; it is earned.  Without Ned’s work, this plant would not exist, and the cash flow would not exist. For the next 10 years, Ned collects everything; there is no tax.  He has done something that brings great benefits to everyone on Earth and his income from this company is his reward.  But after 15 years he retires.

He hires an investment analyst to sell the leasehold rights.  The analyst splits the company into 100,000 shares and sells each share for $80, generating $8 million for Ned.  He pays no taxes on this income; there are no taxes in this system.

Buyers of the shares pay $80 per share to become the owner of a share and $16 a year (20% of the $80 price) as a leasehold payment to remain the owner.  The company generates $24 per share in free cash flow and pays this money out to shareholders.  If you buy a share of the company, you will get $24 a year from the company and turn over $16 of this to the human race as your leasehold payment; this will leave you with $8 a share, a 10% return on your invested capital.

You win.  Ned wins.  The human race wins. Everyone wins.

The Pastland Solar Energy and Computer Company

The third really critical product that we will want and need, but can’t have without corporations, is the starting material needed to make computer chips, photoelectric generating panels, super-efficient lighting devices, cameras, smart phones, television sets, computers, and thousands of other products that most people use so much and have grown so dependent on that it is hard for them to imagine life without them. These devices all use the same starting material, something called ‘silicon wafers.’

If you have silicon wafers, you can make solar panels very easily.  If you check on YouTube, you will find a great many videos showing people doing this; you can buy the wafers on Ebay and build as many solar panels as you want.

The silicon wafers are made of silicon dioxide, the most abundant material on the surface of the Earth. (About 87% of the crust of the Earth is silicon dioxide; it is also called ‘rock’ and ‘sand’ and ‘gravel.’) We obviously have as much of this as we want, and the raw materials are so abundant that they are free for the hauling.

However, you need a very expensive machine called a ‘crystallizing furnace’ to make the sand into a silicon wafer.

Crystallizing furnace starts with sand that is heated to melting, becoming liquid glass. A tiny seed of crystallized silicon is suspended from a wire in the mixture and it is kept very, very still for many days.  Atom by atom, the silicon adds to this crystal.  After about 30 days, the seed has grown into a ball of crystalline silicon the size of a grapefruit.  It is then removed from the machine and sliced very thin with a diamond blade, then polished.  The result is a ‘silicon wafer.’ You can find a complete description of the process, and an explanation of how and why these devices are able to turn ordinary sunlight into electricity, in Anatomy of Destruction, available on Amazon.com.

Here in Pastland, we have a lot of building going on.  People need electricity for their homes, offices, shops, and apartments.  Solar can provide unlimited energy at very low cost. Barry wants to build a crystallizing furnace to make silicon wafers.  Once we have the wafers, we can use them to make solar panels.  People may also use them to make LED lighting devices, and various other electronic devices; they all start with the same product: silicon wafers.

Again, his problem is money.  He doesn’t have the money and can’t borrow it on his personal credit.  He asks Frances if she can do the same thing she did for the others and create a corporation for him.  He wants to call it ‘The Pastland Solar Energy and Silicon Wafer Company.’ He wants to buy the leasehold rights to this company.

We have a vote.  We decide we want this company.  Frances does all the paperwork (of course, she charges Barry for her time).  Everything is the same as the other corporations.  The company will start as a freehold company; it will covert to a leasehold corporation in 15 years.  Barry gets his investment and builds the machine.  He starts making wafers and finished solar panels.

He produces 315,000 solar panels a year and sells them for $10 for each, so it generates revenues of $3.15 million a year.  The main input needed to make the solar photoelectric coating is silicon dioxide, another name for ‘sand.’ It is literally the cheapest raw material on Earth. Barry pays various costs, including the cost of the sand, the payments to the investors who put up the money to build the machine, and the salaries of the directors, the president (Barry) and other officers.  These costs total $750,000 a year.

After paying these costs, the corporation has $2.4 million a year left over.

This is the free cash flow of the company.

After he gets the company going, Barry loses interest in it.

He wants to retire.

He contacts an investment analyst to sell his shares.  The analyst says that the freehold on the corporation will last for 10 years, after which it converts to a leasehold.  After the conversion, the company will be worth $8 million.  Right now, however, it generates a return of $2.4 million and, at the current market yield for corporations of 10% (the yield generated by the steel company and cement company), the Solar company would be worth a lot more than this.  There are some rather complicated formulas needed to calculate this.  (See sidebar for more info.)

 

The correct formula is ‘present value of a cash flow with a residual value.’  You can calculate it on a spreadsheet with the formula PV (10%, 10, 2,400,000, 8,000,000, 0).  The term PV stands for ‘present value,’ the 10 is the number of years until it reverts to its residual value, the 2,400,000 is the cash flow per year until then, the 8,000,000 is the residual value.

 

But if a buyer pays $17,831,307, she will get a 10% yield on the investment perpetually.  (If you want to find out why this is the right figure, you can find the information in books on financial analysis and stock pricing.)

The human race won’t get anything from this company for the next 10 years; after that, we will share in the free cash flow for the rest of time.

Other Corporations

Almost everything made in our 21st century world today comes from corporations.  People don’t form corporations for frivolous reasons; we know this because corporations have to pay taxes and other costs that non-corporate entities don’t have to pay.  People wouldn’t form corporations unless they felt they needed to do so.

In Pastland, we can take advantage of corporations to make the things that corporations make.  We don’t have to reinvent the wheel; the wheel has already been invented and we can simply adapt it for our uses.

One important difference in the socratic leasehold ownership involves the rules of corporations.  In sovereignty-based societies, the world is divided into individual sovereign entities called ‘countries.’  Each country has its own rules.  If the rules of incorporation in one country don’t suit a group that wants to form a company, they can go to another country. The leaders of the countries want the tax revenues that the corporations bring and both the working class and the leaders in governments want the jobs.  The corporations can basically shop for countries, offering to locate themselves in whatever country offers them the greatest benefits.

As a result of this competition, corporations in our world today have been able to get rights to do truly horrible things.  They can rape the land of any and all resources it contains, they can exterminate entire species of animals, they can expose workers to conditions that they know will kill the workers, they can create toxins that will never break down into anything safe, they can exploit children and the helpless, all with the permission of the government of the country the company is incorporated in.

This competition works because there are a lot of countries and the countries don’t have to listen to or even care about the desires of the human race.  The people forming countries can talk to the leaders and tell them that they will bring jobs; of course, they will.  What do the countries have to give up to get the companies to locate there? Well, in sovereignty-based societies, all countries need jobs very, very badly.  They will give up a lot to have them.  Does the company keep people employed by raping the world?  Does it keep people employed by transferring toxic waste from other countries and burying it in drums that will rust out in a few decades?  The countries have to compete for the jobs and, if their country won’t allow it, some other country will.

What if corporations want to do things that are so horrible that they can’t get any country to let them do these things through open negotiations?  Sovereignty-based societies grant the entities called ‘governments’ incredible authority.  The governments can do many things without the people even knowing about these things. People in government are just like people everywhere: they are greedy.  A few extra million in the pockets of the right political officials and, in some countries, corporations can do anything they want.

In sovereignty-based societies, there is no effective way for the people of the world to keep corporations from harming them.  Even within ‘their own countries’ the people generally can’t do much more than choose which of two leaders will be in charge.  They don’t determine which corporations will exist or what powers they will have.  The people of individual countries have no control at all over what happens in the great bulk of the world.

Our group in Pastland could have divided the world into countries if we wanted.  But we decided that this would lead to violence, destruction and other problems.  We decided to not divide the world into countries and to consider it a crime for people to organize to use murder and violence to get the majority to accept that a certain group of people has special rights to a part of the world.  We, the majority, easily have the ability to prevent a minority of our members from using force to make us accept they are a ‘country.’

We have this ability because we live on a bountiful world; enormous amounts of wealth flow from the world over time and we have figured out how to cause the great bulk of this bounty to flow to us, the members of the human race.  The majority is in charge because we decide what happens to this wealth in elections; if the majority of the people of the world don’t want countries, we can make sure there are no countries.

Since we are in charge in general, we are in charge of corporations.  If we don’t want corporations, we can simply not create them. They can’t exist without legal rights enforceable by some sort of court system.  If we don’t grant these rights, they won’t exist.  If we do decide we want corporations, we can create the rules. Leasehold ownership system gives the landlords the rights to make rules.  The people who own leaseholds will have money invested; they will always have five times the leasehold payment invested as a price.  We can set the rules.  They follow the rules, or they lose their rights and all the money they had invested.  We, the people, will control what happens to corporations.

Why Corporations?

Corporations can give us wonderful things that we wouldn’t have without them.  They can turn the ordinary materials our planet is made of into wonderful things that can make life comfortable and luxurious for us.

Consider this:

The most abundant material on our planet is silicon dioxide; 87% of the part of the Earth where we live, the ‘crust,’ is made of this material.  Corporations can turn this material into photoelectric panels that can make all our electricity, into CCD devices that can record video and audio, into LCD screens for televisions and smart phones, into LED lights, and into thousands of other products.  This happens to be the main component of glass and is the ‘filler’ that is bound together with cement to turn it into concrete, the main material in skyscrapers. We can have all of these things we want.

The second most abundant material on Earth is aluminum, making up 8.7% of the crust of the planet.  Amazing; this happens to be the most versatile and useful metal known.  Corporations can remove it from the rocks and sand that contain it with simple electricity, which can come from solar panels.  We can have all the aluminum we want.

Next comes iron that we can use to make steel.  Next after that comes calcium, the main component in cement.  Everything we need to have rail systems for bullet trains is right here; all we need are the factories and we already know what it takes to get people to build the factories.  We need to let them organize into corporations that have the right to build these facilities and profit by building them.

Everything we need for jets and cars and boats is right here; everything we need for luxury high rise skyscrapers is right here.

If we have socratic leasehold ownership of corporations, the great bulk of the free wealth that mature companies produce will flow from the companies to the human race.  We can use this wealth to pay for things that we, the people of the world, want.  If we want paradise, we can have it.

The Big Picture

In his book 1984, George Orwell writes:

 

From the moment when the machine first made its appearance it was clear to all thinking people that the need for human drudgery, and therefore to a great extent for human inequality, had disappeared.  If the machine were used deliberately for that end, hunger, overwork, dirt, illiteracy, and disease could be eliminated within a few generations.

 

Why hasn’t this happened?  Why is it that greater production of wealth is associated with ever more people living in poverty?

The problem doesn’t have to do with inability to create wealth.  We can create immense amounts of wealth.  A few centuries ago, thousands of people working fulltime were required to produce a little bit of usable steel; now, automated mills can churn out thousands of tons a day.  They basically use nothing but dirt and electricity; if the electricity comes in the form of solar energy, they only use dirt and sunlight.  Automated factories can turn the steel and other materials into electric cars.  Less and less labour is needed for production.  Machines do more and more.  The machines can work 24 hours without taking a break, at speeds that no humans can come close to matching, with a reliability and consistency no humans can match.

The reason that the product of the machine does not get to the people is that the wealth doesn’t get to the great majority of the people.  The majority of the people of the world are not owners or part-owners of cash flow-generating properties and have no rights to share in the wealth these properties produce.

The product of the machine is sold for money.

In our world today, virtually all of the machines belong to corporations.  The corporations get the money from the sale of the things the machines make. The corporations use a tiny part of this money to pay for the materials taken from the world to make the products—the sand (silicon dioxide), iron, aluminum ore, and other raw materials)—and the rest of the money is free cash flow.

Who gets this free cash?

The owners of the corporations.

In our 21^st century world, the people of the world didn’t form corporations or make the rules for the way corporations would be owned.  Rich people, working with powerful people and governments, formed corporations.  The people who wanted corporations wanted to own them the same way they owned cash flow-generating land. They wanted all of the free cash flows of the corporations to flow to the people who ‘owned’ the corporations.

The human race had nothing to say about this.  We were not asked.

Here in Pastland, we, the members of the human race, can decide what we want.  Do we want corporations?  If we do, we can decide the way the corporations will be controlled.  Do we want people to own absolute rights to corporations?  If so, they will get all of the free money and we, the members of the human race, will not get any of the free money.

But we can decide to set up a system for ownership of corporations that is basically the same as the system we set up for ownership of land.  We can decide to allow people to build and own corporations provided they agree to follow certain rules that we set and, after a certain length of time, to share the free wealth the land produces with the members of the human race.

The Replicator

The television show ‘Star Trek,’ is about a group of star travelers in the future.  On this show the people have a machine that can make basically anything.  You tell the computer what you want.  The computer has voice recognition matched to the preferences of everyone who might use the device.  Ask for ‘tea, Earl Grey, hot’ and it will know the exact temperature you mean when you say ‘hot,’ the exact variety and type of Earl Grey tea you want, and the size and shape of the cup you prefer. The replicator has all of the materials ready in a central repository.  It uses a fictional teleportation device (a ‘transporter’) to move the devices to the dispenser and gives you what you want.  It can give you anything.  Say you want a 2020 Galaxy S9 phone.  You can say ‘2020 Galaxy S9 phone, ready to use on 2020 Earth.’ The computer knows what color you like and all your preferences.  It has any data you might want on your phone on a central server; it downloads everything and has it ready for you.  The finished phone materializes in a matter of seconds in front of you and you can walk to the machine and pick it up.

In our 21^st century world, we don’t have a single machine that will do this, but a collection of corporations does the same basic thing.  Say you want a new Galaxy S9 phone.  You say ‘Alexa,’ I need a Galaxy S9, set up like my old phone on the Verizon network, delivered here as soon as possible.  The computer recognizes your voice.  It repeats something like ‘we can deliver a fully programmed Galaxy S9 to your address in 3 hours for $400; do you authorize this charge?’  If you say ‘yes’ the computer sends to the nearest vendor that can fill the order.  The tech plugs the phone into a server that downloads all your information from the cloud and programs it into the phone.  The tech puts the phone back into the box and gives it to the courier, who brings it to your door.

The computer will then recognize that the distribution center needs one more Galaxy S9 to bring its inventory to normal levels.  It will send a message that will be bounced off of several satellites and end up at Samsung’s headquarters in Japan.  The computer will check its total inventory globally of S9 phones: if it has excess phones in any of its centers, it will send one phone to the distribution center. If there is no excess, it will send a message to the factory in Shenzhen, China that makes the phones.

This factory is totally automated. It makes a lot of different phones, not just the S9.  It is signaled to make an additional S9.  The machines whir to life, all the components are transported by belt to the assembly machine and, in a few minutes, a new S9 rolls off the line, is packaged and labeled, with the shipping costs calculated and paid, and a shipping label attached; it goes to the loading dock waiting for the carrier pickup.

All of the parts are made by other machines.  None of the work manufacturing the phone components or the phone itself are done by hand by human beings: humans are simply not capable of this work.  The etching on the wafers, including the wafers for the screen, the processors, the radio transmitter, the multiple television cameras, and the many censors, are only a few atoms thick; each of the printed wires is smaller than a wavelength of light and therefore impossible for anyone to even see with a light-based device (like a human eye).  The screen crowds 4,233,600 individual lighting units, or pixels, each of which is capable of more than 3 million colors, into an area about the size of a human hand.  No person could individually place these lights as needed for the phone.  It has to be made by a machine.

The raw materials are mostly sand—silicon dioxide—and aluminum.  These things are the first and second most abundant things on earth.  They are everywhere in this vast planet. Somewhere, an automated loader starts with these items.  It cleans and sorts the sand granules; it feeds the right ones into the crystallizing furnace, it operates the furnace to turn out a batch of silicon wafers, it then passes the wafers on to another machine.  The machine stamps them to get them to the right size and shape; it inspects the wafers to make sure they don’t have defects, it etches in the networks of wires, and then it attaches any needed hardware to attach it in the phone and passes it down to the next machine.

Each of these machines is incredibly expensive; they cost, in some cases, billions of dollars.  But they turn something that is as common as dirt—it is dirt—into devices that are worth incredible amounts of money.  Once built, these machines can stamp out thousands of phones per day, with the total cost of each additional phone produced equal to only a few pennies—the cost of the sand and aluminum that goes into them. The phones can then be sold for hundreds of dollars (thousands if they are brand new and have features people are willing to pay for).

All of the machines involved with this process are incredibly complex and fantastically expensive.  No single individual would ever be able to afford to build these machines.  In many cases, these machines cost so much that they have to operate for many years before they have even made enough to recover the construction costs.  No one would invest in these machines without some way to create some sort of legal entity that will exist and continue to operate no matter what happens to the individuals involved.  But with thousands of corporations, all working together, the process is seamless.

More and more, the things we make are being made by this process.  Humans are being cut out of the production system.  Humans are unreliable.  We tire easily, we need to stop to take breaks from time to time, and human labor is fantastically expensive relative to the cost of operating the machines. Machines can do the work very cheaply and many machine owners compete against each other to sell their products by offering lower prices than the competition.  The cost of products falls and falls and now, many things can be bought for a price that isn’t much more than the cost of the inputs (which often means ‘the cost of a pile of sand), and the costs of the labor for very few tasks that still have to be done by humans.

This system is almost like the replicator system on the TV show. The machines do everything.  These machines are designed, financed, built, and operated by corporations.  It is really impossible to imagine a single individual, no matter how rich, putting billions of dollars into a machine that may or may not work and, if it does, may take decades to generate enough cash flows to pay for itself.  To have these machines, we need a system that allows projects to proceed over a long period of time, with investment systems that allow people who invest at early stages to get their money back, plus a nice return, even before the machines are able to be turned on and tested.  We need a structure like the corporate structure that dominates the world in the 21^st century.

On 21^st century Earth, we already have the technology we need to have consumer goods that are so abundant and cheap that ordinary people can have things that allow them to live in luxury.  These things can be produced at incredibly low prices.  The problem is that the society we have is based on principles that make it impossible to get these items to the people who need and want them.

The type of society we have now, the sovereignty-based society, is based on the premise that the everything is ownable and ownership is an absolute concept.  The owners of the land get and deserve everything that comes from ‘their’ land.  The owners of corporations get and deserve everything that comes from ‘their’ corporations.  People who don’t own anything don’t get and don’t deserve anything at all unless they get jobs and work for the owners.

We have seen that there are certain forces associated with sovereignty-based societies that cause wealth to get more and more concentrated over time: the rich get richer and can use their returns on wealth to buy more stock or land or other cash flow-generating properties.  Machines replace workers, the unemployed compete to get the few jobs left by offering to work for less and wages tend to fall over time.  As jobs disappear, the disparity between the classes grows. Now, in many areas, the 1% richest people get more  income each year than entire other 99%.

The system that we have now allows people to get goods if and only if they have money.  The great majority of the people are in the working class; they only get money if they work.  The machines are taking away their jobs, making it harder and harder for them to get enough to eat.  If we extend the mechanization trend out to the future we can see how dangerous this type of society really is: imagine that everything we need and want is made by machines that have already been built, are built to standards where they rarely ever break down, and can be repaired by robots that also already exist.  The machines can make everything we need and want.

But how are the 99% of the people who weren’t born rich to buy these things?  Once the machines have been perfected, there are no jobs.  Where does the working class get its income?

It may be easy to say this: just tax the corporations.

If we had a socratic society, or some other society that is NOT based on countries, this might be possible. But in a society that divides the world into countries, it isn’t.  There is a simple reason for this: corporations are simple legal entities. They can move from country to country as easily as signing a few electronic documents.  If one country taxes them too high, they can simply move their machines to another country with lower taxes.  We can see the result today: the corporations move their machines and their headquarters to places that give them tax breaks.  The leaders want to keep the corporations, so they offer tax breaks to keep them in place. The other countries that want the corporations to move there offer still lower tax rates to get them to move.  As long as the world is divided into the entities that we were raised to call ‘countries,’ and as long as these countries have sovereignty, we can’t come close to making up the loss of income for the working class with taxes.  In fact, tax rates for corporations are currently in a kind of free fall.

The basic idea behind sovereignty-based societies is flawed.  It starts with the premise that whoever can come to an area and claim it, using the same incantations and ceremonies that Columbus used to claim land for Spain, becomes the owner of that part of the world, with everything that part of the world produces and contains belonging to the owner.  This is a primitive system.  It may have worked for us before.  In fact, we can say it definitely brought us many advantages we otherwise wouldn’t have had.  (A large percentage of the technologies that we have now were created to make weapons so that countries could fight each other.  Without the intense pressure of war, many of these things, including everything from steel to the internet, would probably not exist.)  But we are at a point now where we can take stock of our general situation.

There are other ways to structure our societies.  Imagine, for a moment, that you had been born into a different society.  The machines are still there and still make the same things.  The machines are owned by the same corporations that own them now.  But the people who made key decisions in this other society realized they were doing a favour to the people who wanted corporations. The people in this other society had decided they wanted people to buy and own rights to use land, but not buy and own the land itself.  They set up a socratic leasehold ownership system to own land.  When people wanted corporations, they set up a socratic leasehold ownership system for corporations too.

The machines make the same things. They sell them for the same prices. Prices are the same.  Cash flows are the same.  But in this other society, the owners only own rights to keep a portion of the free money, plus any extra money they can generate themselves from improvements.  The great majority of the unearned part of the free cash flow, including the flows that were already in place when the current owners of the corporations bought their stock, flows through the owners to the human race.  You, as a member of the human race, get a share of this free money.  These corporations generate truly massive free cash flows, so you get massive amounts of money from them.  The more free cash flows the corporations generate, the more you and everyone else get as incomes.

The people who own the corporations still can make money if they can improve the machines.  Their leasehold payments are fixed (20% of the price they paid for their stock, payable each year) and will not change as long as they own. If they can improve the machines and make them produce more, they can keep the extra.  (If a person owns only a share of the company, she will only keep a share of the money, of course.  That is why most people today who have plans to make significant improvements in corporations buy the entire corporation.  They want the whole thing; they will do the same thing in the socratic system.)  They have the same powerful incentives to improve in this system as they do in the sovereignty-based system.  (In fact, the improvement incentives are stronger in the socratic because it doesn’t have taxes.)  If there is a way to improve the machines so they produce more free cash flows, the leasehold owners will improve.

Eventually, the leasehold owners who made the improvements will sell their shares.  Because the shares produce higher prices, they will sell for more money.  When they sell, the leasehold payment will reset to be 20% of the higher value.  The human race will get more.

Our income comes in automatically and without any effort or risk: the owners of the leasehold shares always have five times more money invested in the price than they pay us each year. We don’t need taxes and we don’t want them.  We get the lion’s share of the unearned wealth the land produces over time.  We don’t need to take anything anyone has done anything to earn.

In this system, mechanization is good. Machines produce things far more efficiently and cheaper than humans.  The machines will produce the items, the corporations will sell them and pay the costs, leaving the free cash flow.  The more free cash flows from the corporations, the more the human race gets. Each job that disappears means lower production costs and more free cash to divide among the people of the earth.

The corporations take free or very cheap items and turn them into very valuable things.  (This is the same thing the Pastland Farm did; it took air, water, and a few seeds, and turned them into millions of pounds of food. The food then sold for its market value and the money generated, minus the cost of labor and supplies, was the free cash flow.)  We, the people of the planet Earth all share in this bounty.

As long as we have a socratic system, life will be good.  As time passes, and the people who want to form corporations are able to build better and better networks of machines to turn the raw materials the world is made of into goods like smart phones, electric sports cars, high rise skyscrapers, appliances, and other things that make life better for humans, life will get better and better.  The leasehold owners will get all increases for the time they own; there will be no taxes either on their incomes or capital gains.  The harder they work to improve their corporations, the more money they will make.  Eventually the people who made the improvements will be out of the picture. We will all be living in a more bountiful world.  We all share the bounty.  Life just gets better and better.

Corporations Summary

All the atoms that are in all of the homes, phones, television sets, cars, skyscrapers, bridges, photoelectric solar tiles, and jets, all existed 3.4 million years ago, when the first proto-humans evolved on this planet.  All the iron, silicon, aluminum, calcium; everything was here.  These atoms were just arranged differently than they are now.

The molecules and atoms that make up the products that make our life better are incredibly common.  Look at outcropping of rocks, anywhere on Earth. The white streaks are aluminum oxides that make up 8.7% of the crust of our world; the reddish-orange streaks are iron oxide, which makes up 5.9% of the crust of the world.

We have no shortage of materials. But these materials are not useful in the form that nature made them.  Iron oxide (‘iron ore’) is also known as ‘rust.’  We can’t use rust for much of anything.  But if we have a large network of machines that cost staggering amounts of money to build, the oxygen can be removed from the iron oxide to create pure iron; we can then add carbon to the iron to turn it into steel that is strong enough to support bridges that span miles.

If the machines don’t exist, we have only rust.  But if the machines do exist, we can have all the steel we want.

As a practical matter, mortal humans aren’t going to build these machines as individuals.  The machines cost far too much; they are too risky, and the projects take too long to pay back the investment and start generating profits.  People can make money undertaking these projects, but they need a ‘shell’ organization to run the projects, keep them operating, carry them through to completion, and then operate them long enough to repay the costs and generate profits for the investors.  We need the kind of organization we call ‘corporations.’

If we want them, we don’t have to reinvent the wheel.  We don’t have to start from scratch and figure out how to build these organizations. We can simply adapt organizations that already exist for our purposes.

 

 

17:  Socratic Ownership of Corporations

 

 

ome people here in Pastland have ideas for projects that can bring immense benefits to the human race, but which are so large the people will need some sort of long-term organized structure to make them work.

For example, we have only a small amount of electricity.  Now that people are building mansions, we need more.  One of our people knows how to make a machine called a ‘crystallizing furnace,’ which turns ordinary sand (silicon dioxide) into crystalline silicon that can be easily turned into photoelectric generating solar panels. The furnace is large and expensive and will require many years to build.  Investors might be wiling to fund it, but they are worried that if they invest in a project that only one person knows how to do, and this one person dies or gets bored, they can lose their money.  They will invest if the person forms an organization with stated, written goals and several layers of management that are able to make sure that all personnel could be replaced and the project completed, regardless of what happened.

They may agree to invest if the person who wants to build the furnace writes up a plan that can be followed even if he should die; he then hires officers who will hire and supervise workers to carry out the plan.  (He can be one of these officers, perhaps the main one, as long as there is a plan in place to replace him if something happens to him.)  He will then have to make sure that the officers could be replaced if something happens to them.  He can do this by creating a ‘board of directors’ to stand over the entire project and deal with any problems.  If he does this, the investors are willing to put up the money. They must have the authority to fire and replace the directors if they aren’t doing the jobs, and the directors must have the authority to fire the officers if the directors think the officers aren’t doing their jobs.

 

Steve Jobs created Apple Computer in 1977s and organized it as a corporation.  To attract money, he sold stock and gave the stockholders the authority to hire directors, who then had the authority to fire the officers.  In 1985, the directors decided Jobs himself was not helping the company and fired him. It can happen.  They can fire anyone.

 

This kind of organization is called a ‘corporation.’  Many people here in Pastland want to do things that will take a long time to finish. Investors won’t provide the money unless they know the project will continue regardless of what happens to the individuals.  This is what the structure that we call a ‘corporation’ does in our 21st century world. If we want such projects to take place, we don’t have to reinvent this structure.  It already exists and we already understand it.  We can just adapt it for our needs and make sure that corporations benefit us, the members of the human race, by only selling rights to corporations when we benefit from this, and selling them in ways that bring maximum benefits to us, the members of the human race.

 

Two things that are Almost the same: Real Estate and ‘Mature Corporations’

Frances says that corporations, once created and operated to stability, are almost identical to farms in certain important respects.  Farms may be ‘bountiful.’ They can produce rivers of free value that can be represented by rivers of free cash, or free cash flows.  So can corporations.

In fact, corporations have far greater potential to generate rivers of free money (free cash flows) than land because corporations can produce an infinite variety of things that bring benefits to the human race.

Consider that one corporation—a very mature and seasoned corporation—by itself, generated more than $93 billion ($93,000,000,000) in free cash flows in 2020 alone.  You can see that there is truly great potential to benefit from the operation of corporations.

 

Apple makes devices out of silicon.  Silicon dioxide is the most abundant material available to us: more than 87% of the Earth’s surface is made of silicon dioxide (also called ‘sand’ and ‘rocks’).  Apple takes this silicon dioxide, processes it to remove the oxygen, then processes the silicon into wafers and chips that form the working components of phones, computers, and other electronic devices.
          It buys the starting material, sand, for a few pennies per ton.  It sells the finished wafers and chips for thousands of dollars per pound.  The difference between the amount of money it gets for its products (their value, as expressed by people’s willingness to pay) and the amount it pays for the sand, is its free cash flow.  Since the items it makes are extremely valuable and the items it uses to make them are extremely cheap, it generates fantastic free cash flows.

 

If socratic leasehold ownership was common in our world, we might use this system for mature corporations (corporations that already exist, are already generating cash flows, and are basically the same, for the buyers of these assets, as any other cash flow-generating asset).

For example, people who want to form corporations can do so under the same basic terms as in our 21st century world. (The exception of taxes; our 21st century societies absolutely need taxes and corporations pay a lot; in the socratic society, taxes are unnecessary and, to encourage corporate progress, corporations and corporate owners can be guaranteed freedom from taxes.) After a certain amount of time, say 15 years, the corporate charter for the ‘freehold’ corporation expires and converts to a new corporate charter that only allows people to buy and own leasehold rights to the company.

Let’s consider the above corporation, Apple.  Apple converts ordinary sand into electronic devices of incredible capabilities.  Obviously, the company doesn’t have to pay much of anything for its inputs and gets incredible sums of money for the outputs.  The difference between the cost of all inputs (including management, organizational costs, and administrative costs) is the free cash flow of the company.  The company generates a truly fantastic, mind boggling, free cash flow.

People buying into Apple in 2020 are not going to have to figure out how to turn the sand into the chips, arrange the chips into computers (including iPhones, which are actually very powerful computers) and then figure out how to design the input devices (the touch screen, for example, the gyroscopes that detect movement, the GPS receiver that tells the phone where it is, the cameras that determine what is around the phone), and figure out how to build the software that puts all this together.  The people who formed this company and put it together in the 1970s and 1980s already figured all these things out.  They put together a massive cash flow-generating machine.

People buying into the company now are simply buying a cash flow, in the same way that people buying in to Texas rice farms are simply buying cash flows.

Another example may make this clearer. In 1874, Andrew Carnegie heard of a company that was making steel using a new method to make steel.  The Thompson Steel Works used a process called ‘The Bessemer Process’ to add the carbon to the iron.  Old steel mills did this by a very expensive, labor-intensive method, literally pounding carbon into the iron with hammers.  The new process was thousands of times faster and much, much cheaper.  Carnegie bought the mill and the patent on the process.  He expanded the process and the Thompson Steel Works began making truly fantastic free cash flows.  He expanded to build more mills that used the new system.  By 1901 he was one of the richest people on the planet.  That year, he sold his collection of mills, (called the Carnegie Steel Corporation) to become the foundation of a global network of steel mills, using the same process.  He got $480 million for the company, adding a great deal to his incredible wealth.

The mill that Carnegie first bought in 1874, and most of the other mills he built to test and perfect his new process, are still in operation to this day.  They still generate incredible free cash flows, with the company that holds them, US Steel (formerly the Carnegie Steel Corporation), generating about $1 billion a year in free cash flows.

None of the people involved with building the process are alive anymore.  None of the people involved with building the mills are alive today. It is clearly not possible for the people responsible for the cash flows to get this money: dead people have no use for money.  Some other people must get this free money.

Who gets it?

In freehold systems, the right to get all free cash flows is offered for sale.  The free money goes to whoever is willing to pay the most for it. If you want a share of these free cash flows, you can call any broker and say you want to buy a share in the US Steel corporation.  You are buying the right to get a share of any free money the company produces.

You aren’t getting the free additional money because you are doing anything to benefit the human race.  You are getting free money because you live in a system that is designed so that the free wealth or bounty of this bountiful world flows to a tiny, tiny percentage of the population.  Only rich people have enough money to spend their money buying free cash flows (buying cash flow-generating assets like farms and corporations).

Many estimate that only about 1% of the world’s people are in this category. These people start out rich and get richer.

Corporations

Corporations are legal entities with legal rights that are protected by courts. They would not be able to raise money or do business if they did not have these rights, and they therefore wouldn’t be able to exist without these rights.

The system in Pastland has no countries.  We consciously decided not to form them.  We decided that the people of the planet Earth would make key decisions involving what happened on our world.  We are in charge.  If we want corporations, we can have them. If we want to make rules that involve ownership of corporations, we can make these rules.  If the people who are thinking about forming the corporations don’t like our rules, they will choose not to form corporations.  That is their only option; they can’t simply go to another country (as people forming corporations in the 21st century can do) and bribe the government officials (or lobby them, in places where bribery is called lobbying) to allow them to make their own rules.

In Pastland, we can decide to allow corporations to exist or decide to not let them exist.  I want to show you that we, the people of the planet Earth, gain truly incredible benefits if we allow corporations to exist and make a rule that specifies that control over the corporations will convert to socratic leasehold ownership after a length of time.

We will gain two benefits from this.  The first involves the creation of products that simply can’t be created and wouldn’t otherwise exist if not for corporations.  This includes high-quality and inexpensive steel, and all the things that simply couldn’t exist without high-quality inexpensive steel, from skyscrapers to bridges, to cars.  It includes electricity and everything that runs off of electricity, from cell phones to refrigerators to television sets.  It includes the machines that harvest our food in a fraction of the time humans would take, leading to high-quality diets, and medical devices that save millions of lives a year.  Our world would simply not be able to support anything near the 8 billion people it supports without corporations and, whatever number of people it could support would not have anything close to the standard of living that we take for granted in our world today.

Let’s consider how and why people might form corporations in Pastland, and how we might set up a system so that every person on Earth benefits every day in two critical ways from the existence of corporations.

Leasehold Ownership Of Corporations In Pastland

People are building a lot of homes in Pastland.  These people want certain tools and building materials that could be made much more cheaply in enormous plants and factories.

Many people would like to build these factories, but they can’t afford to build them with their own money. They need to share the risks and costs in an organized way that will allow the people who invest to make money over a long period of time, allowing them to recover their investment and make a profit.  They need some organization that will allow them to do this.

The organization that they use must be accepted by the people around them and have the ability to make contracts and deals that are enforceable in courts.  Our group in Pastland hasn’t yet built any structures like this so they can’t do these things.  As a result, they can’t build many things they want to build.

One thing that people would really, really like to have is nails.  It is possible to make nails in small workshops, the kind that ordinary people can afford to build, but this requires immense amounts of labor and is incredibly destructive.  If we don’t have corporations (or any similar organizations) people will be able to make nails, but they won’t make very many of them and those they make will be incredibly expensive.

Nails In Societies Without Corporations

You could make a few nails a month in your backyard if you had a few dozen people to help you.  Here is how you would do it:

First, you need to make several thousand pounds of charcoal.  You will need charcoal because regular wood and regular coal don’t burn hot enough to ‘smelt’ iron out of rocks.  Charcoal is basically pure carbon fuel and burns far hotter than wood, natural gas, natural coal, or anything else that is available to make fires.  It is the only natural fuel that burns hot enough to smelt iron.

To make the charcoal, you need to cut immense amounts of wood and build it into a huge pile, with a kind of room in the middle and an opening that allows you to get into this room.  You cover the pile with several inches of dirt with a chimney opening in the middle and then build a fire in the middle of the interior ‘room.’ You need to keep the mound very hot for several days, but make sure it stays cool enough to keep the carbon itself from igniting.  This requires a great deal of skill and talent. If you can do it right, the heat will burn off everything in the wood except the carbon, leaving pure carbon fuel: charcoal.

You now need to build the smelter furnace.  You can build it out of clay. You need to build a massive bellows to blow air through the furnace to provide the maximum in oxygen for the carbon fuel to burn; the charcoal can get hot enough to smelt carbon, but it requires an enormous flow of air to provide the oxygen for the burning to make this happen.  You light the charcoal inside the furnace and have a team of people who switch off at operating the bellows; it is so hard that each person will only have enough strength to operate the bellows for about 5 minutes at the time before needing to be relieved.

You will need a line of people bringing in more fuel and stuffing it into the furnace.  You will also need a small pile of iron-containing rocks (iron ore) in the middle of the furnace.  (It is easy to find rocks that contain iron; they have a reddish-orange tinge.  About 5% of the part of the earth we can get to is composed of iron; it is everywhere.)  After a few hours of pouring fuel into the furnace and pumping the furnace full of air, the rocks with iron will start to glow red. (You can find many videos on YouTube showing this process.)  After a few more hours, the rocks will glow yellow and then white.  After they have been white hot for 2 hours, the iron in them will start to liquefy.

This iron had been iron oxide (rust). The heat of the fire causes the oxygen to fly away and combine with the carbon in the fuel to form carbon dioxide. This leaves metallic iron in a liquid form.  The metallic iron is very heavy and drips down through the fire to the sand and dirt below.

You need to keep the rocks white hot for about 4-6 hours to get all the iron out of them.  If you have about 20 pounds of iron ore, you will end up with about 5 pounds of finished iron.

The bottom of the furnace should have sand that is shaped so it can catch the iron into a pool.  Most people who smelted iron in workshops set this up so that there was a large pool in the middle to catch the iron and then little channels into smaller pools for the overflow.  The iron hardened into this shape and people thought it looked like a mother pig feeding her piglets, so they named the product of this process ‘pig iron.’

Once you have ‘pig iron,’ you have finished the first step needed to make a steel nail.

You can go on to the second step:

You need to create another charcoal fire and feed it with a bellows to make it extremely hot.  You hold the pig iron with tongs and heat it in the coal until it is white hot again.  While it is hot, you hammer it into the shape of a nail.

This is an iron nail, not a steel nail.  Iron nails can be used for many things, but they are not nearly as strong as the steel nails that we use today.  To make a steel nail, you need to ‘work’ the iron nail continuously for several weeks.  You heat it over and over again in a charcoal fire and hammer it into a flat sheet; then you fold the flat metal into itself.  (The difference between steel and iron is carbon.  ‘Steel’ is iron with between 1% and 4% carbon content; more carbon means harder steel.  The carbon comes from carbon in the charcoal.  It needs to be literally hammered into the nail.)  Do this for about six weeks and you will have a steel nail.  Then start again with another nail.

Obviously, when people made steel this way, steel was far too valuable to be used for things as simple as nails. Even iron nails, which are far weaker than steel nails, cost more than most people made in a week of labor.  Since steel was so expensive, most people didn’t waste it by using it to make nails.  They used their steel for more important things, generally knives and swords. Only the very rich could afford steel swords; often, military officers spent more than a year’s pay on a sword.

It is possible to make many tons of steel nails per day, but you can’t do this by hand.  You need a truly massive and very expensive steel mill for this.  Before about the mid-1800s, when corporate-friendly countries began creating extremely liberal laws to protect the rights of corporations (often giving them ‘human rights’ and defining them as ‘persons’ under the law), the corporate structures that existed on Earth didn’t provide enough protection for investors to allow them to justify making large steel mills.

Before this time, steel was only made in small shops and only tiny amounts were made.  After the new laws were in place and the investors had the protection they needed for their corporations, people began to build massive steel mills that took advantage of processes that worked entirely differently but required enormous facilities to use.

Corporate Nails

Andrew Carnegie was the first to apply a new process called the ‘Bessemer Process’ for steel.  He formed a corporation called the Thompson Steel Works to build his first mill and raised $100,000 to build the mill. (This was an enormous amount of money at the time, equivalent to $2 million in 2020 money.)  This mill generated $40,000 a year in free cash flow, or 40% of the total capital cost, on average, over the next 20 years.  Of course, his company built more and more mills, under different corporate names. In 1892 Carnegie consolidated these mills under one name, the Carnegie Steel company.  The company was the first company on Earth that made steel that was priced low enough to make steel nails.

You could do the same thing Carnegie did and build a mill here in Pastland.  You might be able to build for the same price he built for in 1872, or $2 million in Pastland dollars (2020 United States dollars).

Chances are that no real-world individuals would be rich enough to build one of these plants with their own money and also be willing to devote the time and energy and take all of the risk.  But a group of people working together might see this as a really great opportunity.

They could each put up a few dollars, buying shares in the company.  They could hire people to run the construction process.  As the plant was being built, they would see that the market value of their shares going up over time: even though the company is not operating and making profits, its assets are worth more because everyone will see it is closer to generating what are sure to be massive profits.  Because people know this, they will be willing to pay more for the stock and the stock price will go up all through construction.

Once the mill gets into operation, it will start generating cash flows.  For the first people to build the corporations that organized the construction of the steel mills, these cash flows are not free cash flows. They are earned cash flows. The builders worked very hard to make these cash flows.  The cash that flows from their corporations and mills is not free as long as they are still involved with the corporations.

At some time in the future, the people who built the corporation will be out of the picture.  Others will buy and own the shares of the corporation. These people bought into properties that already produced cash flows before they became involved.  If they buy with freehold ownership, they are essentially buying 100% of the free money.

If the people in Pastland want, we can decide to issue corporate charters that provide total rights to all cash flows generated to the owners/builders for only a certain fixed amount of time, say 15 years.  After that, the original charter will expire and a new charter will be issued that changes the method of control to socratic leasehold ownership.

If we do this, we, the people, will have a flow of wealth coming to us from each and every corporation on the planet. In fact, just as was the case for the Pastland Farm, the great majority of the free wealth from the corporations will flow to us.

The socratic leasehold owners of the corporations will want their corporations to operate efficiently and smoothly so that they will be able to afford to make their leasehold payments and keep all extra money after their leasehold payments.  They will have incentives to improve the corporations whenever they can so that they produce even higher free cash flows. Eventually, the improvers of the corporations will be out of the picture and will sell their shares. People who want to buy mature corporations will be buying properties that are like mature farms in many ways.  They generate cash flows that the current owners of the companies didn’t do anything to generate.  We can set up a system so that these people will have the right to buy and own rights to the corporation, but to do so, they will have to follow rules created by the human race to protect the human race and planet Earth, and share the flows of free wealth with the members of the human race, in the same way that people who buy and own rights to farms and other wealth-producing properties have to follow rules and share the wealth.

The Pastland Steel Corporation

One of the people in our group, a man named ‘Fred,’ used to be in the steel business back in the future.  Fred built and operated small steel mills. Although the mills his company built were small by the standards of 21^st century Earth, they were still quite large and expensive plants, requiring very large investments.

Fred knows how to build a steel mill. He has the blueprints, and he has found where to get the necessary materials.  Fred’s problem is money.  He can’t raise the money needed for a mill on his personal credit. Several investors have told him that they are willing to make the investment if Fred sets up a kind of business enterprise that has a separate existence from himself, and which has a set of rules that will allow it to continue to operate even if Fred himself should lose interest in the project or otherwise become unavailable to run things.

Fred knows that he can set up a business that will make and sell steel and generate very high cash flows.  But this business will have to have legal rights and protections and, to get these rights, Fred must get the permission of the administrators of our world.  So far, we haven’t formed a government (we haven’t needed one).  He will have to call a meeting and try to convince the people to allow him to form this kind of business, a ‘corporation.’

The investors have told Fred that he absolutely must form a corporation, or they simply won’t invest, period.

Fred decides to talk to Frances about his problem.  Frances says that she can set up a system that will show the landlords of the Earth (the members of the human race) that everyone can benefit from corporations in very real and understandable ways.

The steel mill will do basically the same thing as the Pastland Farm: it will turn free or almost-free materials that already exist into things of real value to the human race.  (The farm turns seeds, water, sunshine, and air into rice; the mill turns dirt and sunshine into steel.) The mill will produce an enormous free cash flow and, using the socratic leasehold ownership system that we used for other properties, every single member of the human race will benefit from the existence of the mill in very understandable ways (everyone understands what it means to get money).  Everyone’s life will be better if steel tools are available in stores. We will all get more cash, and have more to buy with this money, if we have the mill than otherwise.

Fred gets together with his investors and builds the mill.  Let’s say that, after a few years, the Pastland Steel Corporation is making 3,150,000 pounds of steel a year.  It sells this steel for $1 a pound so it generates $3.15 million in revenue.  The company has almost no costs.  It pays about $200,000 for electricity, and another $250,000 for various other costs, including the costs of the officers and directors of the company.  It repays the loan to build the plant at a rate of $300,000 a year, so its total costs are $750,000 a year.

After all these costs are paid, there is $2.4 million left over. 

This is the free cash flow of the corporation.  This money goes to the shareholders.  Fred is the majority shareholder so most of this money goes to him.  Over the next few years, Fred buys out the other shareholders.  (People who form corporations often do this: they need help to realize their idea but once the system they envisioned is in place, they have enough income from their share of the revenue to buy out their partners.)   After 15 years, all of the shares of the company convert to leasehold ownership.  Fred decides, at this time, that he will get out of the business and retire.  He will sell leasehold rights to the entire company.

He has an appraiser evaluate his leasehold title.  The appraiser says that other leaseholds have sold for properties that generate the same free cash flow $10 million.  (The Pastland Farm generated this free cash flow and sold for $10 million.) But these other properties have lower risks than the steel industry.

Because of the higher risk, investors will need a higher return.  The appraiser says that the leasehold rights to the Pastland Steel Company should sell for about $8 million.  Here is why:

At this price, the leasehold payment will be $1.6 million.  The leasehold owners will collect the $2.4 million a year in free cash, give $1.6 million of this money to their landlords (the members of the human race), and be left with $800,000 for themselves.  They invest $8 million and get $800,000 a year as returns, so they get 10% a year.

This is a much higher return than the investors in the Pastland Farm got; they only got 4%.  But farms are less risky.  The leasehold owners of the steel company are making higher returns to compensate them for taking the higher risk.

The appraiser says that, back in the 21^st century, investors were willing to invest in companies with the risk profile of steel companies if they could get 10% returns.  The risks are about the same here in Pastland, so they should be willing to accept the same yields.  If they do, they will pay $8 million for the leasehold rights to the steel company.

16:  The Pastland Township

Several people would like to build homes on the land.  There is a 640-acre parcel of land (one mile by one mile) fronting a lake.  One of our people, a former city planner from Shanghai named Chan, has drawn up a plan showing how this would look if it were developed into a master-planned community.

His rendition includes a map that shows where all of the roads and sidewalks would go, the sizes of the lots, the locations of parks, schools, and other public areas, and the locations that would be zoned for stores, workshops, offices, and other business facilities.

The map shows a total of 100 building lots for single family homes, laid out in a suburban style.  It shows another 100 sites for stores, another 100 for office buildings, and has several other parcels that are designated on the map as sites for apartments and condominiums.  Chan was a city planner back in the future and understands everything finished cities need.  He has put them all on the plan, including maps for the sewer system, the water system, electric system, underground tunnels connecting important areas, parks, and other facilities that we would like to have if only we had land to build on.

Chan says that we can have this town if we want.  We can set up a system where private individuals may buy and own rights to the individual lots; they will develop them.  We can build the common facilities out of the income we get from the owners of the property.

Kathy raises her hand and asks about a building lot she particularly likes, adjacent to the lake.  She asks how much money we might ask for that lot, if we were willing to sell it.

Frances says that, if we want to benefit from the land forever, we are better off not to sell freehold rights to the land.  We can sell leasehold rights to the building lot, just like we sold leasehold rights to the Pastland Farm. We can use the same system: we can offer it for sale with a leasehold payment that is exactly 20% of the price paid for the leasehold, just as we did with the leasehold on the Pastland Farm. (The original price was $10 million with a leasehold payment of $2 million, exactly 20% of the leasehold price; each sale thereafter resets the leasehold payment to 20% of the sale price.)

How much should we ask?

She says there is no reason for us to even think about this.  We can let people submit bids.  At our monthly general meeting, we can discuss the bids on the various parcels and decide if we like any of them.  If we get a bid on a property that we like, we can accept it.  If not, we can leave things as they are.

Frances says that we aren’t really taking any chances by doing this.  We are only allowing people to submit offers.  If we decide not to accept offers, nothing has changed.  We are like the pretty girl at the dance who came to the dance after having decided she isn’t going to dance with anyone, no matter what they say to her.  The boys can come up to her and try to change her mind.  She may stick to her resolution and not dance with anyone. She isn’t hurt by being there, even if she turns down all the guys.  Perhaps a guy will change her mind and she will dance.

If we don’t accept bids, we are like the pretty girl who sits at home and feels sorry for herself, because she doesn’t feel like dancing, rather than going out and letting the boys try to convince her to change her mind.  If we do accept bids, we aren’t bound to anything until the majority of the members of the human race have been swayed and we have decided we are better off to allow a second leasehold than to refuse the offers.

Even then, we aren’t really bound to anything.  We will get a price and an offer of a yearly leasehold payment.  We can still put the price money into escrow.  Each year, we will get money from the buyer/owner of the leasehold we have agreed to allow.  If we ever decide we made a mistake, we can buy back the leasehold. If the property has not been improved yet, we can buy it back with the money in the buyback fund.  If the property has been improved, we can use this money supplemented by whatever amount is necessary to pay the higher market value of the property, with this excess paid back from the increases in the flows of value the land generates for a few years.

We can’t really lose from this.

In 21^st century Hawaii, people buy leaseholds on vacant lots, build homes on the lots, and then sell leaseholds on the improved properties all the time.  People make money doing this.  People will be able to make money doing it in Pastland as well.

Frances wants us to do this. Again, she points out that we will never be locked into anything.  We can set it up as a ‘trial’ system, just like we set up the leasehold for the Pastland Farm.  We can hold the price in reserve, offering a buyback option for buyers of leaseholds on lots.  If we ever decide we don’t want the land to be private, we can wait until the leaseholds are offered for sale (and this must happen eventually; either people will sell while alive or they will die and their estates will sell the leaseholds to distribute the proceeds to heirs) and buy them back.

After some discussion, we decide that we will let people submit bids on lots they like.  Each bid will include both a price and leasehold payment.  The leasehold payment must always be 20% of the price.  (That is what defines this particular kind of leasehold ownership.) For example, if you bid $1,000 for a lot, you must also bid $200 as a yearly leasehold payment.  You will pay both, just as Kathy did for the Pastland Farm: you pay the 1,000 to become the owner of the property rights and then another $200 a year to remain the owner of the property rights over time.

Every three months from here on, we will hold a meeting where we will go over the bids.  We can consider what we will be giving up to accept a bid and what we will get in return: we give up the right to use this land as common property; we get a lump sum up front, and a yearly payment, and the benefits of growth and improvements.

If we think all of the offers we get are too low, we can reject all of them.  If we like some of the bids, however, we can accept them.

The buyers will pay the price at closing, just as what happened with Kathy and the Pastland Farm; each year they will make leasehold payments to the human race that are exactly 20% of the price they paid for the leaseholds they own.

Why might we want to agree to this?

This is one tiny development on a tiny part of the world that most of us never use for anything.  Since most of us don’t use this land for anything, most of us don’t benefit from its existence in any way.  If we sell leaseholds on a part of the Earth that people aren’t using anyway, from then on until the end of time, wealth will flow to the human race from this land.  The buyers/owners of these leaseholds will have incentives to improve the land and then sell the improved leaseholds, leading to higher and higher incomes for the human race from then into the future, for the rest of the time that the leasehold is private.

If we ever change our minds and want to take this land back to ‘unowned and unownable’ status, we can wait until the leaseholds are offered for sale and buy them back.  We can benefit from this land as long as we want without taking any risk.

Improvements

In most cases, the land won’t be worth much to the buyers of the leasehold rights until they have made the improvements.  They will still have to make their leasehold payments, however.  They will want the land to begin generating revenue (if they intend to sell or rent it out) or value (if they intend to build something to use personally) as soon as possible, so they will begin work as soon as they can.

Many of these people will build homes, offices, shops, or other facilities that they intend to sell later.

They naturally want to sell for the highest prices they can get.  We will be happy every time a leasehold owner sells a leasehold for more money than she paid for it: it means that we will get more money from then on from this property.  We always get a yearly leasehold payment that is 20% of the price the current owner paid for the property.

We will start accepting bids and more and more of the land in this 360-acre parcel will be private.  The people will only be buying the rights to develop the land in accordance with the master plan.  If a lot is zoned for offices, the buyer can only use it for offices; if a lot is zoned for a resort hotel, it must be used as a resort hotel. We get the same benefits by allowing partial ownability rights for this land as we got by allowing partial ownability rights for the Pastland Farm.

The investors make money managing risk, and, as long as they do their job well and make money from their investment, our income is safe and secure forever.  We don’t have to worry about things going wrong; others take all the risk and we, the members of the human race, get the great bulk of the rewards.

The owners can make money improving and then selling the leasehold rights; the more money they make from each sale, the more money we, the members of the human race, will get for the rest of time.  We can hope and pray that the people who buy property rights are greedy: if they are, they will work very hard to make money for themselves, leading to higher incomes for the members of the human race forever.

We don’t have to worry about environmental problems, at least not on private land: all the people who own rights have enormous amounts of money invested.  Each property has a kind of deposit on it that we, the members of the human race, are holding in our treasury.  If they harm the land, we can cancel their leasehold rights, and use the deposit to fix the damage and restore the land to its original condition. We can keep this system for as long as we want.

If we ever change our minds, or if the needs of the human race ever change in the future and future generations want something else, the system can be reversed without any need for trauma, violence, or without any need to ever take anything from anyone.  We clearly gain far more in benefits by allowing socratic leasehold ownership of the land in the Pastland Township than we give up.

Income from the Township

Kathy buys a leasehold on the lot where she wants to build.  She hires people to build a nice 1500 square foot home with a porch fronting the lake and a dock for her boat.  It is pretty nice, but she is thinking about taking an extended vacation to explore the lands in the west and decides the house will be a burden.  She offers her leasehold for sale and finds a buyer willing to offer $50,000 for it, knowing that he will also have to make a leasehold payment of 1/5^th of this amount, or $10,000, to the human race.

If you have ever taken a cruise, you know from experience that the cabins are cramped.  They make them as tiny as they can so they can get as many people on the ship as they can.  A lot of people would like apartments so they could have some space.  People buy leasehold lots zoned for apartments and build the apartments.  They then split off the titles for the individual apartments and sell leaseholds on them.  (This is very common in Hawaii.) Say that 50 apartments sell for an average price of $20,000.  We get $4,000 a year as leasehold payments on each apartment, a total of $200,000 a year as leasehold payments on all of them.

People build grocery stores, shopping malls, hair salons, and other retail establishments.  These people may not sell the leaseholds on the improved properties right away, but eventually they will sell them, and the leasehold payments will go up.  As time passes, the income base of the human race increases steadily.

The Pastland Forest

A few miles away from the Pastland Farm there is a forest.  This forest has been producing lumber for millions of years.  Before humans arrived, this lumber went to animals: beavers cut trees to make the dams and dens to raise their families.  Deer, moose, woodpeckers, carpenter bees, and other animals browsed and ate the forest plants.  Anything that was left went to huge quantities of termites that have been the most abundant animals on the planet since they first evolved hundreds of millions of years ago.

This forest is bountiful; it pours forth immense quantities of lumber for the benefit of its (animal) inhabitants each year.  The dominant species in any area gets first claim to the things the land there produces and contains.  Humans are here now.  We get the first claim on the bounty of nature.  We can collect the bounty of this forest before it goes to the animals and use it for our benefit.

We could collect this bounty many different ways.

We could hire people to operate the forest just as we hired people to operate the Pastland Farm.  We could hire people to determine the maximum sustainable yield the forest could generate and then have our managers mark trees for cutting and then hire loggers to remove the designated trees. We could then sell the trees and use part of the money to pay the cost of removal of trees and the manager’s salary, leaving the free cash flow of the forest.

We could decide that humans can’t really own forests; since no one owns the forest, no one owns the bounty it produces or the free cash flow that represents the money from the sale of that bounty.  We could have meetings and elections to determine what happens to this free money each year.

That is one option.

We could also decide that we, as the dominant race, are the lords of the land, including the forested land. We could decide that we have the right to use science, logic, and reason, to evaluate land management techniques and determine which one will best meet the needs of the landlords. We could hire a professional in this field to come up with a system that will lead to a permanent, automatic, and risk-free income that we can expect to grow continually, as the people who interact with the forest on a day-to-day basis figure out ways to improve the health of the forest, so it produces more lumber and other things that can bring benefits to humans at lower costs.

Frances has spent her adult life studying and testing various land tenure systems.  She understands all of the options and tells us that the socratic leasehold ownership system she designed for the Pastland Farm creates the most perfect possible alignment between the interests of the people who make day-to-day decisions on the land and the landlords of the Earth (the human race in this case).  It works for farms.  It works for homes.  It works for forests.

The same system that works for the Pastland Farm will work for the Pastland Forest.  The Pastland Forest is quite large, so she recommends we break it up into several smaller parcels and sell leaseholds on some of the parcels, leaving other parcels unowned and natural.

Frances tells us that the buyers and owners of leaseholds have incentives to improve the properties the leaseholds cover.  The Pastland Forest is just as nature made it, with the trees crowded together in some places, and with various kinds of brush and shrubs competing for water and nutrients.  The leasehold owners can hire people to remove logs in the most crowded areas first, giving the remaining trees more nutrients and increasing their growth rates.  They may find that animals have removed nutrients from the land over the years, and these nutrients need to be replaced.  They may find insect infestations that they can remove with simple, safe, and non-destructive practices.  Leasehold owners will be able to get and keep any increases in cash flows they generate.  They will look for ways to drive up the bounty of the properties under lease.

If the owner of the leasehold on the Pastland Forest can increase the free cash flow of the land, she will find her leasehold title is ‘worth’ more money. ‘Worth’ more means that, if she offers to sell it in a market, she can get more money than she paid for the leasehold.  It turns out that this particular owner is greedy. She wants to get as much money as she can.  This motivates her to work very hard.

Her first priority is to make absolutely sure that the interests of the human race are always protected.  We get every penny of the amount she has promised us as a leasehold payment before she gets a dime.  She has five times the amount of the leasehold payment invested in the property.  (The leasehold payment is always 20% of the price so the price, which is the investment, is 5 times the leasehold payment.  This is always true for every socratic leasehold ownership investment.)

We have created certain rules to protect the forest.  She has to make sure these rules are followed.  Any mistake could cost her millions of dollars: she will make absolutely sure that nothing that she can prevent harms this forest.

After she has met these needs, she can keep any money she makes from the forest.  The more it makes, the more she keeps.  There are a lot of ways to make forests more bountiful.  A higher bounty means more money for her as long as she owns and a huge capital gain when she sells.

We can hope that the buyer of this leasehold is greedy and selfish.  If she is, we know that she will do whatever it takes to make sure that the interests of the currently living members of the human race are always protected.  We want our money. She will make sure we get it. She will also do whatever it takes to make sure that the interests of future members of the human race are protected.  They want the land protected and improved, so it will provide even more wealth for them in the future than it provides for us in the present.   If she can find any way at all to make this happen, she will do it.

The Pastland Quarry

People who want to build houses will need lumber, stones for the foundations, and sand and lime to make mortar. The leasehold owners of forests will make lumber available, but builders also need stones, sand, and lime.

One of our people sees a hill that is made of sand and rocks on one side and limestone on the other side. At a general meeting, she says this would make a good quarry and asks if we would consider creating and selling a leasehold on it.

The human race gains if we agree to this request.

The buyers of the leasehold rights to the Pastland Quarry will own the right to remove gravel, sand, and rocks from the quarry.  (If this is not on the list of potentially harmful changes, they don’t even have to ask permission; if it is on the list, they will have to know for sure that they can get the necessary permits before they will bid on the quarry, because it is worthless without the permits.)

They will get the gravel, sand, and rocks, for the cost of removing them.  They can then sell these materials for whatever the market will bear. Now that the Pastland Township is under construction, there is a huge demand for building materials, so they will be able to sell these materials for very high prices.  Since the owners of the leasehold on the quarry obtain the materials for nothing or virtually nothing, and sell these materials for very high prices, the quarry will generate extremely high free cash flows.

People know this.  They formulate their offers on the property accordingly.  Say that you think that this land will eventually produce a free cash flow of $24,000 a year.  What might you offer for it?  If you offer $1,000 as a price, your leasehold payment will be $200 a year.  Clearly you can justify making this leasehold payment with $24,000 a year to pay it.  You may try to buy the leasehold for this amount and submit this bid, but if you see a pile of envelopes in the bid box, you can be pretty sure that other people have bid more than you and you won’t win.  If you want to win, you will have to make a reasonable offer on this leasehold.

What is the right amount to offer? With this particular free cash flow, you wouldn’t expect anyone to offer more than $100,000.  The leasehold payment on this will be $20,000.  If the buyer borrows the money at 4%, she will pay $4,000 in interest on the loan.  This would make the total payment (leasehold payment plus interest) equal to the free cash flow.  Most likely, no one is going to offer more than $100,000 for this leasehold.

Perhaps several people would like to buy it for less.  If you could buy for $50,000, your leasehold payment would only be $10,000 a year and interest would only be $2,000 a year, for total payments of $12,000 a year, which is half of the free cash flow. The quarry will produce a flow of free money in the amount of $24,000 a year.  If you can buy the leasehold for $50,000, you will be able to keep half of this free money for yourself.  Clearly, the leasehold on the quarry is a very good deal at this price.  You would probably expect this leasehold to sell for a price very close to $100,000.

We gain four ways by agreeing to create this leasehold and sell it:

1.  Every person on Earth will get more money each year than we would have gotten if we hadn’t agreed to the leasehold sale.  Whatever the leasehold payment is on the quarry will be divided among the human race.

2.  We will be able to buy mortar, stones, sand, gravel, rocks, and other quarried products in stores.

3.  People will build homes, stores, condominiums, and other structures. Eventually, the leaseholds on these structures will sell and the leasehold payments that had been very low on the unimproved land will rise to very high levels.

3.  The cost of everything made of mortar, sand, gravel, rocks, and other quarried products will fall, our money will go farther, and we will be able to buy still more.

Other Real Estate

The members of the human race are joint landlords of the world.

If we don’t want any parts of the world to be private, we can simply not sell any rights to any parts of the world.  If we sell a great many leaseholds and then, after some reflection, decide that we sold rights to too much of the land, we can use the money in the buyback reserve fund to buy back any rights that have already been sold.  We can set the degree of ownability of the land to any level we want.  If we want progress for some time, so that we can have factories to make enough machines to allow us to live comfortably and in prosperity, but then want ownability to end, we can make this happen, creating the wealth we need through ownability and then going back to natural law societies for as long as we wish. We, the members of the human race, are in charge.

If we want more properties to be private, all we have to do is create more leasehold titles and sell them.

We, the members of the human race, do not consider ourselves to be the owners of the planet.  We are, however, the dominant species.  As such, we are the only species in a position to make rules about the use of the world and enforce them.  (Other species may have great powers and abilities but can never make humans conform to their laws.  Lions can easily kill humans in combat, but they can’t claim certain land for their exclusive use and make and enforce rules that keep us off of the land they have claimed.) Because of our abilities, we are the lords of the land, or the landlords of the planet earth.

Frances wants to set up a system to make it easy for us to put any desires the landlords of the planet may have into action.  She sets up a website where people may request that certain parts of the world be made private.

The Mansion

Let’s say that you come into money and decide you want a house better than anything that could be built on the township, because of the limited lot sizes in the township.  You find a property that you decide is the ideal property for your mansion.  So we have a name to refer to it, let’s call it the Cliffside lot.

The Cliffside lot has 100 feet of private ocean beach; it has a cliff that overlooks the beach that is solid granite and would be a perfect place to build a home. One side of the home would have the ocean view; the other side looks back on some forested mountains.  There is a freshwater stream flowing through the property, with a waterfall that goes into a pond, which then flows into the ocean.

The forested side has fruit trees and grape vines; you can go to your back yard and pick cherries, apples, pears, peaches, and as many grapes as you want.  Deer come to a meadow near the stream to eat and drink, and butterflies play on the flowers of the fruit trees.  It is a very nice lot.

This land is not private.

It is not owned at all.  It is in the inventory of land that the landlords of the human race have not yet discussed.  All such land is considered to be unowned and unownable, available for the use of everyone, provided they follow whatever rules we decide to pass involving the use of unowned land.

You can go to the website and request that it be made private.  You can describe the land and explain that you want a leasehold to be created on the land and then allow people who are interested in buying this leasehold to submit bids.  The human race will have meetings on a regular basis and will evaluate whether it wants to grant your request.

On the website, you can explain why granting this request will benefit the human race: you can explain that you will bid on the leasehold and, if you win, you will build your dream home there.  If we approve and sell the leasehold, we will begin getting leasehold money right away on it.  You will not own the home itself; you will only own the right to lease the land and its improvements for the rest of the time you wish to own, up to the end of your life.

At some point, the leasehold will sell.  Because it will have a mansion on it, it will sell for an extremely high price. The human race will get a leasehold payment that is 20% of this ‘very high price.’  The next owner will probably improve it further, to make more money on it.  The market value (price) will go up each time it is improved. When it sells, this will translate to a higher income for the human race.

Let’s say we approve your request.

Now you must enter a bid on the leasehold that the landlords are willing to accept.

To bid, you have to offer a price and a leasehold payment, where the leasehold payment will always be 20% of the price you offer.  The computer is set up so it won’t accept your bid unless you fill in two blanks, one for the ‘price,’ the other for the ‘leasehold payment,’ and the number you enter into the ‘leasehold payment’ box is exactly 20% of the number you enter into the ‘price’ box.  For example, if you offer $1,000 as a price for the lot, you also have to offer $200 a year as a leasehold payment, or the computer won’t let you bid.

You really like this building lot.

But after you posted your request, a lot of people saw your glowing description of the land and decided to check it out themselves.  Many people fell in love with this wonderful lot.  Some of them also wanted to build their dream homes there. If you want to win the auction, you will have to compete with these people and outbid them.

Eventually, someone will win this auction.  Whoever wins will have agreed to make a leasehold payment to the human race each year for the right to control this part of the world as private property.  Whoever wins will have agreed to pay the human race more money each year for the right to control this property than any other person on Earth was willing to pay.

This same process will work for every property that we make private.  The human race is agreeing to allow certain parts of the world to be private.  These parts of the world will not be available for the use of other members of the human race, only for the use of the private leasehold owners.  We must give up the right to use these parts of the world.

In exchange, we get money.  We give up the land over time, and we get money over time to compensate us.  We, the members of the human race and landlords of the world, get compensated for each and every day of ‘loss of use’ of each private part of the land.  As long as we believe we are getting enough to compensate ourselves for the loss of use of these parts of the land, we don’t have to do anything: we will get paid over the course of time for every property.  We don’t just get some random amount that is set by some government bureaucrat; we get paid an amount set by a market that pits all members of the human race against each other.  This market only allows one person to control each property: the one person who places the highest value on the right to use that property and is therefore willing to pay more money to use that property than anyone else on Earth is willing to pay.

This will be the same for every property sold with socratic leasehold ownership.

Buyers will offer both prices and leasehold payments.

As prices go up, so must the leasehold payments.  When the bidding ends, the one person who is willing to pay the human race the greatest amount of money each year for the right to take this part of the planet out of the ‘inventory of unowned parts of the planet’ will get the rights to this land.

 

 

 

16:  The Pastland Township

Several people would like to build homes on the land.  There is a 640-acre parcel of land (one mile by one mile) fronting a lake.  One of our people, a former city planner from Shanghai named Chan, has drawn up a plan showing how this would look if it were developed into a master-planned community.

His rendition includes a map that shows where all of the roads and sidewalks would go, the sizes of the lots, the locations of parks, schools, and other public areas, and the locations that would be zoned for stores, workshops, offices, and other business facilities.

The map shows a total of 100 building lots for single family homes, laid out in a suburban style.  It shows another 100 sites for stores, another 100 for office buildings, and has several other parcels that are designated on the map as sites for apartments and condominiums.  Chan was a city planner back in the future and understands everything finished cities need.  He has put them all on the plan, including maps for the sewer system, the water system, electric system, underground tunnels connecting important areas, parks, and other facilities that we would like to have if only we had land to build on.

Chan says that we can have this town if we want.  We can set up a system where private individuals may buy and own rights to the individual lots; they will develop them.  We can build the common facilities out of the income we get from the owners of the property.

Kathy raises her hand and asks about a building lot she particularly likes, adjacent to the lake.  She asks how much money we might ask for that lot, if we were willing to sell it.

Frances says that, if we want to benefit from the land forever, we are better off not to sell freehold rights to the land.  We can sell leasehold rights to the building lot, just like we sold leasehold rights to the Pastland Farm. We can use the same system: we can offer it for sale with a leasehold payment that is exactly 20% of the price paid for the leasehold, just as we did with the leasehold on the Pastland Farm. (The original price was $10 million with a leasehold payment of $2 million, exactly 20% of the leasehold price; each sale thereafter resets the leasehold payment to 20% of the sale price.)

How much should we ask?

She says there is no reason for us to even think about this.  We can let people submit bids.  At our monthly general meeting, we can discuss the bids on the various parcels and decide if we like any of them.  If we get a bid on a property that we like, we can accept it.  If not, we can leave things as they are.

Frances says that we aren’t really taking any chances by doing this.  We are only allowing people to submit offers.  If we decide not to accept offers, nothing has changed.  We are like the pretty girl at the dance who came to the dance after having decided she isn’t going to dance with anyone, no matter what they say to her.  The boys can come up to her and try to change her mind.  She may stick to her resolution and not dance with anyone. She isn’t hurt by being there, even if she turns down all the guys.  Perhaps a guy will change her mind and she will dance.

If we don’t accept bids, we are like the pretty girl who sits at home and feels sorry for herself, because she doesn’t feel like dancing, rather than going out and letting the boys try to convince her to change her mind.  If we do accept bids, we aren’t bound to anything until the majority of the members of the human race have been swayed and we have decided we are better off to allow a second leasehold than to refuse the offers.

Even then, we aren’t really bound to anything.  We will get a price and an offer of a yearly leasehold payment.  We can still put the price money into escrow.  Each year, we will get money from the buyer/owner of the leasehold we have agreed to allow.  If we ever decide we made a mistake, we can buy back the leasehold. If the property has not been improved yet, we can buy it back with the money in the buyback fund.  If the property has been improved, we can use this money supplemented by whatever amount is necessary to pay the higher market value of the property, with this excess paid back from the increases in the flows of value the land generates for a few years.

We can’t really lose from this.

In 21^st century Hawaii, people buy leaseholds on vacant lots, build homes on the lots, and then sell leaseholds on the improved properties all the time.  People make money doing this.  People will be able to make money doing it in Pastland as well.

Frances wants us to do this. Again, she points out that we will never be locked into anything.  We can set it up as a ‘trial’ system, just like we set up the leasehold for the Pastland Farm.  We can hold the price in reserve, offering a buyback option for buyers of leaseholds on lots.  If we ever decide we don’t want the land to be private, we can wait until the leaseholds are offered for sale (and this must happen eventually; either people will sell while alive or they will die and their estates will sell the leaseholds to distribute the proceeds to heirs) and buy them back.

After some discussion, we decide that we will let people submit bids on lots they like.  Each bid will include both a price and leasehold payment.  The leasehold payment must always be 20% of the price.  (That is what defines this particular kind of leasehold ownership.) For example, if you bid $1,000 for a lot, you must also bid $200 as a yearly leasehold payment.  You will pay both, just as Kathy did for the Pastland Farm: you pay the 1,000 to become the owner of the property rights and then another $200 a year to remain the owner of the property rights over time.

Every three months from here on, we will hold a meeting where we will go over the bids.  We can consider what we will be giving up to accept a bid and what we will get in return: we give up the right to use this land as common property; we get a lump sum up front, and a yearly payment, and the benefits of growth and improvements.

If we think all of the offers we get are too low, we can reject all of them.  If we like some of the bids, however, we can accept them.

The buyers will pay the price at closing, just as what happened with Kathy and the Pastland Farm; each year they will make leasehold payments to the human race that are exactly 20% of the price they paid for the leaseholds they own.

Why might we want to agree to this?

This is one tiny development on a tiny part of the world that most of us never use for anything.  Since most of us don’t use this land for anything, most of us don’t benefit from its existence in any way.  If we sell leaseholds on a part of the Earth that people aren’t using anyway, from then on until the end of time, wealth will flow to the human race from this land.  The buyers/owners of these leaseholds will have incentives to improve the land and then sell the improved leaseholds, leading to higher and higher incomes for the human race from then into the future, for the rest of the time that the leasehold is private.

If we ever change our minds and want to take this land back to ‘unowned and unownable’ status, we can wait until the leaseholds are offered for sale and buy them back.  We can benefit from this land as long as we want without taking any risk.

Improvements

In most cases, the land won’t be worth much to the buyers of the leasehold rights until they have made the improvements.  They will still have to make their leasehold payments, however.  They will want the land to begin generating revenue (if they intend to sell or rent it out) or value (if they intend to build something to use personally) as soon as possible, so they will begin work as soon as they can.

Many of these people will build homes, offices, shops, or other facilities that they intend to sell later.

They naturally want to sell for the highest prices they can get.  We will be happy every time a leasehold owner sells a leasehold for more money than she paid for it: it means that we will get more money from then on from this property.  We always get a yearly leasehold payment that is 20% of the price the current owner paid for the property.

We will start accepting bids and more and more of the land in this 360-acre parcel will be private.  The people will only be buying the rights to develop the land in accordance with the master plan.  If a lot is zoned for offices, the buyer can only use it for offices; if a lot is zoned for a resort hotel, it must be used as a resort hotel. We get the same benefits by allowing partial ownability rights for this land as we got by allowing partial ownability rights for the Pastland Farm.

The investors make money managing risk, and, as long as they do their job well and make money from their investment, our income is safe and secure forever.  We don’t have to worry about things going wrong; others take all the risk and we, the members of the human race, get the great bulk of the rewards.

The owners can make money improving and then selling the leasehold rights; the more money they make from each sale, the more money we, the members of the human race, will get for the rest of time.  We can hope and pray that the people who buy property rights are greedy: if they are, they will work very hard to make money for themselves, leading to higher incomes for the members of the human race forever.

We don’t have to worry about environmental problems, at least not on private land: all the people who own rights have enormous amounts of money invested.  Each property has a kind of deposit on it that we, the members of the human race, are holding in our treasury.  If they harm the land, we can cancel their leasehold rights, and use the deposit to fix the damage and restore the land to its original condition. We can keep this system for as long as we want.

If we ever change our minds, or if the needs of the human race ever change in the future and future generations want something else, the system can be reversed without any need for trauma, violence, or without any need to ever take anything from anyone.  We clearly gain far more in benefits by allowing socratic leasehold ownership of the land in the Pastland Township than we give up.

Income from the Township

Kathy buys a leasehold on the lot where she wants to build.  She hires people to build a nice 1500 square foot home with a porch fronting the lake and a dock for her boat.  It is pretty nice, but she is thinking about taking an extended vacation to explore the lands in the west and decides the house will be a burden.  She offers her leasehold for sale and finds a buyer willing to offer $50,000 for it, knowing that he will also have to make a leasehold payment of 1/5^th of this amount, or $10,000, to the human race.

If you have ever taken a cruise, you know from experience that the cabins are cramped.  They make them as tiny as they can so they can get as many people on the ship as they can.  A lot of people would like apartments so they could have some space.  People buy leasehold lots zoned for apartments and build the apartments.  They then split off the titles for the individual apartments and sell leaseholds on them.  (This is very common in Hawaii.) Say that 50 apartments sell for an average price of $20,000.  We get $4,000 a year as leasehold payments on each apartment, a total of $200,000 a year as leasehold payments on all of them.

People build grocery stores, shopping malls, hair salons, and other retail establishments.  These people may not sell the leaseholds on the improved properties right away, but eventually they will sell them, and the leasehold payments will go up.  As time passes, the income base of the human race increases steadily.

The Pastland Forest

A few miles away from the Pastland Farm there is a forest.  This forest has been producing lumber for millions of years.  Before humans arrived, this lumber went to animals: beavers cut trees to make the dams and dens to raise their families.  Deer, moose, woodpeckers, carpenter bees, and other animals browsed and ate the forest plants.  Anything that was left went to huge quantities of termites that have been the most abundant animals on the planet since they first evolved hundreds of millions of years ago.

This forest is bountiful; it pours forth immense quantities of lumber for the benefit of its (animal) inhabitants each year.  The dominant species in any area gets first claim to the things the land there produces and contains.  Humans are here now.  We get the first claim on the bounty of nature.  We can collect the bounty of this forest before it goes to the animals and use it for our benefit.

We could collect this bounty many different ways.

We could hire people to operate the forest just as we hired people to operate the Pastland Farm.  We could hire people to determine the maximum sustainable yield the forest could generate and then have our managers mark trees for cutting and then hire loggers to remove the designated trees. We could then sell the trees and use part of the money to pay the cost of removal of trees and the manager’s salary, leaving the free cash flow of the forest.

We could decide that humans can’t really own forests; since no one owns the forest, no one owns the bounty it produces or the free cash flow that represents the money from the sale of that bounty.  We could have meetings and elections to determine what happens to this free money each year.

That is one option.

We could also decide that we, as the dominant race, are the lords of the land, including the forested land. We could decide that we have the right to use science, logic, and reason, to evaluate land management techniques and determine which one will best meet the needs of the landlords. We could hire a professional in this field to come up with a system that will lead to a permanent, automatic, and risk-free income that we can expect to grow continually, as the people who interact with the forest on a day-to-day basis figure out ways to improve the health of the forest, so it produces more lumber and other things that can bring benefits to humans at lower costs.

Frances has spent her adult life studying and testing various land tenure systems.  She understands all of the options and tells us that the socratic leasehold ownership system she designed for the Pastland Farm creates the most perfect possible alignment between the interests of the people who make day-to-day decisions on the land and the landlords of the Earth (the human race in this case).  It works for farms.  It works for homes.  It works for forests.

The same system that works for the Pastland Farm will work for the Pastland Forest.  The Pastland Forest is quite large, so she recommends we break it up into several smaller parcels and sell leaseholds on some of the parcels, leaving other parcels unowned and natural.

Frances tells us that the buyers and owners of leaseholds have incentives to improve the properties the leaseholds cover.  The Pastland Forest is just as nature made it, with the trees crowded together in some places, and with various kinds of brush and shrubs competing for water and nutrients.  The leasehold owners can hire people to remove logs in the most crowded areas first, giving the remaining trees more nutrients and increasing their growth rates.  They may find that animals have removed nutrients from the land over the years, and these nutrients need to be replaced.  They may find insect infestations that they can remove with simple, safe, and non-destructive practices.  Leasehold owners will be able to get and keep any increases in cash flows they generate.  They will look for ways to drive up the bounty of the properties under lease.

If the owner of the leasehold on the Pastland Forest can increase the free cash flow of the land, she will find her leasehold title is ‘worth’ more money. ‘Worth’ more means that, if she offers to sell it in a market, she can get more money than she paid for the leasehold.  It turns out that this particular owner is greedy. She wants to get as much money as she can.  This motivates her to work very hard.

Her first priority is to make absolutely sure that the interests of the human race are always protected.  We get every penny of the amount she has promised us as a leasehold payment before she gets a dime.  She has five times the amount of the leasehold payment invested in the property.  (The leasehold payment is always 20% of the price so the price, which is the investment, is 5 times the leasehold payment.  This is always true for every socratic leasehold ownership investment.)

We have created certain rules to protect the forest.  She has to make sure these rules are followed.  Any mistake could cost her millions of dollars: she will make absolutely sure that nothing that she can prevent harms this forest.

After she has met these needs, she can keep any money she makes from the forest.  The more it makes, the more she keeps.  There are a lot of ways to make forests more bountiful.  A higher bounty means more money for her as long as she owns and a huge capital gain when she sells.

We can hope that the buyer of this leasehold is greedy and selfish.  If she is, we know that she will do whatever it takes to make sure that the interests of the currently living members of the human race are always protected.  We want our money. She will make sure we get it. She will also do whatever it takes to make sure that the interests of future members of the human race are protected.  They want the land protected and improved, so it will provide even more wealth for them in the future than it provides for us in the present.   If she can find any way at all to make this happen, she will do it.

The Pastland Quarry

People who want to build houses will need lumber, stones for the foundations, and sand and lime to make mortar. The leasehold owners of forests will make lumber available, but builders also need stones, sand, and lime.

One of our people sees a hill that is made of sand and rocks on one side and limestone on the other side. At a general meeting, she says this would make a good quarry and asks if we would consider creating and selling a leasehold on it.

The human race gains if we agree to this request.

The buyers of the leasehold rights to the Pastland Quarry will own the right to remove gravel, sand, and rocks from the quarry.  (If this is not on the list of potentially harmful changes, they don’t even have to ask permission; if it is on the list, they will have to know for sure that they can get the necessary permits before they will bid on the quarry, because it is worthless without the permits.)

They will get the gravel, sand, and rocks, for the cost of removing them.  They can then sell these materials for whatever the market will bear. Now that the Pastland Township is under construction, there is a huge demand for building materials, so they will be able to sell these materials for very high prices.  Since the owners of the leasehold on the quarry obtain the materials for nothing or virtually nothing, and sell these materials for very high prices, the quarry will generate extremely high free cash flows.

People know this.  They formulate their offers on the property accordingly.  Say that you think that this land will eventually produce a free cash flow of $24,000 a year.  What might you offer for it?  If you offer $1,000 as a price, your leasehold payment will be $200 a year.  Clearly you can justify making this leasehold payment with $24,000 a year to pay it.  You may try to buy the leasehold for this amount and submit this bid, but if you see a pile of envelopes in the bid box, you can be pretty sure that other people have bid more than you and you won’t win.  If you want to win, you will have to make a reasonable offer on this leasehold.

What is the right amount to offer? With this particular free cash flow, you wouldn’t expect anyone to offer more than $100,000.  The leasehold payment on this will be $20,000.  If the buyer borrows the money at 4%, she will pay $4,000 in interest on the loan.  This would make the total payment (leasehold payment plus interest) equal to the free cash flow.  Most likely, no one is going to offer more than $100,000 for this leasehold.

Perhaps several people would like to buy it for less.  If you could buy for $50,000, your leasehold payment would only be $10,000 a year and interest would only be $2,000 a year, for total payments of $12,000 a year, which is half of the free cash flow. The quarry will produce a flow of free money in the amount of $24,000 a year.  If you can buy the leasehold for $50,000, you will be able to keep half of this free money for yourself.  Clearly, the leasehold on the quarry is a very good deal at this price.  You would probably expect this leasehold to sell for a price very close to $100,000.

We gain four ways by agreeing to create this leasehold and sell it:

1.  Every person on Earth will get more money each year than we would have gotten if we hadn’t agreed to the leasehold sale.  Whatever the leasehold payment is on the quarry will be divided among the human race.

2.  We will be able to buy mortar, stones, sand, gravel, rocks, and other quarried products in stores.

3.  People will build homes, stores, condominiums, and other structures. Eventually, the leaseholds on these structures will sell and the leasehold payments that had been very low on the unimproved land will rise to very high levels.

3.  The cost of everything made of mortar, sand, gravel, rocks, and other quarried products will fall, our money will go farther, and we will be able to buy still more.

Other Real Estate

The members of the human race are joint landlords of the world.

If we don’t want any parts of the world to be private, we can simply not sell any rights to any parts of the world.  If we sell a great many leaseholds and then, after some reflection, decide that we sold rights to too much of the land, we can use the money in the buyback reserve fund to buy back any rights that have already been sold.  We can set the degree of ownability of the land to any level we want.  If we want progress for some time, so that we can have factories to make enough machines to allow us to live comfortably and in prosperity, but then want ownability to end, we can make this happen, creating the wealth we need through ownability and then going back to natural law societies for as long as we wish. We, the members of the human race, are in charge.

If we want more properties to be private, all we have to do is create more leasehold titles and sell them.

We, the members of the human race, do not consider ourselves to be the owners of the planet.  We are, however, the dominant species.  As such, we are the only species in a position to make rules about the use of the world and enforce them.  (Other species may have great powers and abilities but can never make humans conform to their laws.  Lions can easily kill humans in combat, but they can’t claim certain land for their exclusive use and make and enforce rules that keep us off of the land they have claimed.) Because of our abilities, we are the lords of the land, or the landlords of the planet earth.

Frances wants to set up a system to make it easy for us to put any desires the landlords of the planet may have into action.  She sets up a website where people may request that certain parts of the world be made private.

The Mansion

Let’s say that you come into money and decide you want a house better than anything that could be built on the township, because of the limited lot sizes in the township.  You find a property that you decide is the ideal property for your mansion.  So we have a name to refer to it, let’s call it the Cliffside lot.

The Cliffside lot has 100 feet of private ocean beach; it has a cliff that overlooks the beach that is solid granite and would be a perfect place to build a home. One side of the home would have the ocean view; the other side looks back on some forested mountains.  There is a freshwater stream flowing through the property, with a waterfall that goes into a pond, which then flows into the ocean.

The forested side has fruit trees and grape vines; you can go to your back yard and pick cherries, apples, pears, peaches, and as many grapes as you want.  Deer come to a meadow near the stream to eat and drink, and butterflies play on the flowers of the fruit trees.  It is a very nice lot.

This land is not private.

It is not owned at all.  It is in the inventory of land that the landlords of the human race have not yet discussed.  All such land is considered to be unowned and unownable, available for the use of everyone, provided they follow whatever rules we decide to pass involving the use of unowned land.

You can go to the website and request that it be made private.  You can describe the land and explain that you want a leasehold to be created on the land and then allow people who are interested in buying this leasehold to submit bids.  The human race will have meetings on a regular basis and will evaluate whether it wants to grant your request.

On the website, you can explain why granting this request will benefit the human race: you can explain that you will bid on the leasehold and, if you win, you will build your dream home there.  If we approve and sell the leasehold, we will begin getting leasehold money right away on it.  You will not own the home itself; you will only own the right to lease the land and its improvements for the rest of the time you wish to own, up to the end of your life.

At some point, the leasehold will sell.  Because it will have a mansion on it, it will sell for an extremely high price. The human race will get a leasehold payment that is 20% of this ‘very high price.’  The next owner will probably improve it further, to make more money on it.  The market value (price) will go up each time it is improved. When it sells, this will translate to a higher income for the human race.

Let’s say we approve your request.

Now you must enter a bid on the leasehold that the landlords are willing to accept.

To bid, you have to offer a price and a leasehold payment, where the leasehold payment will always be 20% of the price you offer.  The computer is set up so it won’t accept your bid unless you fill in two blanks, one for the ‘price,’ the other for the ‘leasehold payment,’ and the number you enter into the ‘leasehold payment’ box is exactly 20% of the number you enter into the ‘price’ box.  For example, if you offer $1,000 as a price for the lot, you also have to offer $200 a year as a leasehold payment, or the computer won’t let you bid.

You really like this building lot.

But after you posted your request, a lot of people saw your glowing description of the land and decided to check it out themselves.  Many people fell in love with this wonderful lot.  Some of them also wanted to build their dream homes there. If you want to win the auction, you will have to compete with these people and outbid them.

Eventually, someone will win this auction.  Whoever wins will have agreed to make a leasehold payment to the human race each year for the right to control this part of the world as private property.  Whoever wins will have agreed to pay the human race more money each year for the right to control this property than any other person on Earth was willing to pay.

This same process will work for every property that we make private.  The human race is agreeing to allow certain parts of the world to be private.  These parts of the world will not be available for the use of other members of the human race, only for the use of the private leasehold owners.  We must give up the right to use these parts of the world.

In exchange, we get money.  We give up the land over time, and we get money over time to compensate us.  We, the members of the human race and landlords of the world, get compensated for each and every day of ‘loss of use’ of each private part of the land.  As long as we believe we are getting enough to compensate ourselves for the loss of use of these parts of the land, we don’t have to do anything: we will get paid over the course of time for every property.  We don’t just get some random amount that is set by some government bureaucrat; we get paid an amount set by a market that pits all members of the human race against each other.  This market only allows one person to control each property: the one person who places the highest value on the right to use that property and is therefore willing to pay more money to use that property than anyone else on Earth is willing to pay.

This will be the same for every property sold with socratic leasehold ownership.

Buyers will offer both prices and leasehold payments.

As prices go up, so must the leasehold payments.  When the bidding ends, the one person who is willing to pay the human race the greatest amount of money each year for the right to take this part of the planet out of the ‘inventory of unowned parts of the planet’ will get the rights to this land.