Financial Democracy - An Improved Alternative

In this essay I propose an improvement on current democratic systems.


In this system of government there is some separation of powers thus ensuring that atleast the people have a little say in who rules them. But still the people get robbed rampantly by the rulers who then waste the money left and right on useless projects in an effort to line up their and other people's dirty pockets. Though the people select their rulers every few years, usually those who promise to rob the most get elected. Though the citizens are assured that they will not be robbed and only the rich will the robbed in actuality taxes affect EVERY CITIZEN and affects the poor the most because it is impossible to exempt the poor from paying indirect taxes. Taxes affect the middle class more than the rich. In kleptocracy the people have little control over government spending.

In the current democratic systems the powers can be classified like this:

  1. Constitutional
  2. Legislative - This has the following powers
  3. Executive
  4. Judiciary

Financial Democracy

In financial democracy - I propose this improvement. That the power of kleptocracy & debtocracy is separated/removed from the legislative. In Financial Democracy the system will be like this.

  1. Constitutional - Can be ammended only by direct referrendum of people and not by legislature.
  2. Legislative - This has the following powers
  3. Executive - Much of the executive will be disbanded because they will not be needed.
  4. Judiciary

In this system not a single rupee/dollar will pass through the hands of the rulers. They have the power to make laws but they will not have the power to rob the people who elected them. They will not have the privilege of wasting other peoples money.

Now the question is how to finance the activities of the government. Here are my proposals for that. First the legislative will organize through the internet the projects that the people require to be done like defense/paying the judiciary etc. and the people of the country will voluntarily contribute to the different projects in order to get what they want. Now I hear you scream what if the defense doesn't get enough funds to pay the soldiers? Fine if thats what the people want then thats what people will get. If the people dont want a standing army then who are you to scream for the army. Disband the army and send them home. After all the people have voted with their purses that they dont want an army. On the other hand if the people really feel terrified of external threats they will gladly sell their last piece of assets to fund the army. Personally I think armies belong to the dark ages and are not required anymore (especially if you arm the people).

Here are some other ideas for you to consider:

Now I hear you ask, what if everyone is selfish and no one pays for anything? I ask you if the people collectively dont want to fund any government activity then who are you to want otherwise? If you still want to fund a government, collect like minded people and conduct a referrendum to change the constitution back to kleptocracy. Personally I think many government activities will be funded by the people even if they are not forced to fund it because it is in their self interest to fund certain common activities like education, judiciary, prisons etc.

Financial Democracy will give ALL the powers to the people for the first time in history.

Practical ways to achieve Financial Democracy.

Will financial democracy work? We will have to try and see. It certainly will not work without the internet or computers. Financial democracy would not have been possible 20 years ago.

Solution 1

The government will first make a list of important expense accounts and give them codes like (the most important expenses are listed first):

CodePurpose of expense
A1Pocket money for ministers
A2Palatial homes for ministers
A3Jet transportation for ministers
A4Presidential palace
A5Presidential inauguration party
A6Vanity wars
A7Empire building expenses of bureaucrats
...... And so on to other unimportant expenses like:
A91397173875Government Savings (A blanket account that receives amounts that have not been allocated to other accounts, govts cant use this amount for ANYTHING). Though the phrase 'government savings' is an oxymoron as current govts do not know how to save.

Now for all direct taxes collected by the government, the tax slave will indicate on his return the list of codes that he finances with his tax and the amounts that he allocates to each of those codes.

For all indirect taxes the merchant will collect for each receipt the social insecurity number of the purchaser and the social insecurity receipient will have registered with a govt website how he wishes his indirect taxes to be divided by a list of codes and percentages allocated to each of them.

In case of Value subtracting tax collected between businesses, the tax paying business will determine how the tax will be divided among the different codes. Tax paying businesses have much more right in redistributing the tax that they pay than anonymous government bureaucrats. Tax payers are not slaves yoked to the grindstone only to fund the government. They must also have a say in how the government spends it.

Solution 2

Start with a small country like an island country. These countries have little or no taxes and financial democracy can be implemented easily by removing whatever taxes are left. If it works there then a bigger country can try it. If it doesn't work there, then dont fear the big countries will gladly bail you out and heave a sigh of relief that they dont have to axe their confiscatory taxes and cut government expenditure. To make financial democracy work the legislature should continuously think on how to make doing business there easily. They should think about how to help and remove all hinderences to commencing and conducting economic activity there.

Another approach that can be tried without any risk by any country big or small is:

  1. Start Projectwise Fund Collection (PWFC).
  2. Cut back the rate of taxes to zero over a number of years.
  3. As soon as all taxes reach zero, change the constitution to financial democracy.

Since such an approach uses a number of years to roll out financial democracy we will be able to spot any problems and correct it in time.

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