For decentralized economy and how state can survive

For
centuries people where interested in creating absolutely perfect state where
everyone is happy and satisfied, free and equal. They were writing books,
pamphlets, articles about utopia and each of them were different from each
other. The idea of ideal state is more relevant nowadays due to economic and
social problems.

In my
research paper I am going to discuss Bergonia, which is the first attempt of
creating utopian state online. The creator Joseph Charles Cometti visualizes every aspect of the state, which is considered to be
ideal.                                                                                                                                                                                                                              
Bergonia is an imaginary country with geographical location and history.
We can find any kind of information about this country which is connected with
people, religion, economy, social life, government, ecology, etc. Bergonia is
Utopian type of country with decentralized democratic socialism.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

In the paper
I will discuss sustainability of democratic socialism and decentralized economy
and how state can survive without market driven economy, without income tax.

Before we
discuss Bergonia, we have to understand what is Democratic Socialism. It is a political ideology that advocates political democracy alongside social ownership of the means of production with an emphasis on self-management or democratic management of economic institutions within
a market socialist or decentralized socialist planned economy.

Democratic socialists hold that
capitalism is inherently incompatible with the democratic values of liberty,
equality, and solidarity; and that these ideals can only be achieved through
the realization of a socialist society. Democratic socialism can be supportive
of either revolutionary or reformist politics as a means to establish socialism. Democratic
socialists believe that both the economy and society should be run
democratically—to meet public needs, not to make profits for a few. To achieve
a more just society, many structures of our government and economy must be
radically transformed through greater economic and social democracy so that
ordinary citizens can participate in the many decisions that affect their
lives.

We must mention that there are
different approaches towards democratic socialism but nowadays it became very
popular in USA and supporters of Democratic Socialism are members of Senate and
Congress and people find idea of Socialism quite appealing, but we must not
think about Soviet understanding of Socialism which is more connected with
Marxian Socialism and always associated with destruction and non-democratic
values.                                                              My
attempt is to show you state with decentralized democratic socialism economy in
theory and discuss pros and cons with already realized ideas of socialism.

 

 

A complicated
constitutional structure of government of Bergonia is designed to diffuse
power.  The more Bergonians see of the U.S.
Presidency, the more they know they don’t want a single powerful head.

In Bergonia the legislative branch is supreme, and the
executive power is divided.There is no strict separation of powers, that has positive sides but in
practice separation of powers has more advantages. Although the various organs
of government each have well-defined powers, they often are allowed– and
required– to blend their authorities.  

The national government consists of a unicameral Congress,
a President who
chairs a powerful Executive Council that supervises a Prime
Minister and the various ministries.  Some of the
leaders of Congress sit on the Executive Council.  The president of
Bergonia does not have the power which USA president has, except in the sphere
of foreign relations.  

We should mention that Bergonians prefer local government.  They want the national
government to protect the nation, establish and regulate the basic monetary,
financial, transportation and energy systems, protect environment, and assist
state and local governments, but fundamental
lawmaking power resides with the 31 states.  Of course the
complexities of industrialized society often require national action, but
Bergonians keep power devolved to the states and to local government. 

Bergonias Socialist economy is consists
of worker-owned
cooperatives, federated into large enterprises and syndicates, selected
infrastructure monopolies, “federated planning” with open markets in
retail sectors.

Decentralization as everything on the
earth has two sides: It can
help the organization grow overall, it encourages accountability and transparency,
leads us to innovation and flexibility. On the other hand it is not efficient at pursuing high-level
government goals due to the non-concentration of decision-making power,
Centralization saves money because it avoids duplication within the administration.
For decentralized economy it is not easy and fast to implement political
reforms and
policies when decision-making power is not concentrated.

It has to
create equality and consistency across regions since, in theory decisions
are taken considering the welfare of the whole country and not of a part of it. There is overlapping of authority and hence it may lead
to conflict between top level and lower level management which is not a good
outcome for any state because coordination at all levels is at the core when it
comes successful running of a state.

It may be possible that people to
whom work is delegated may not be competent enough to take such important
decisions which in turn can put state into danger of losing its credibility and
profitability. Especially when there are worker owned and managed cooperatives.
Workers can manage situation at the very beginning of the state, after
revolution, when society needs time to develop and realize new ideas, but after
the first phase it in not profitable for state to give decision making power in
this sector.

There are three basic types of
economic enterprises in Bergonia :

This economy consists of hundreds of thousands of independent
worker-owned and worker-managed cooperatives(also referred to in law as
“corporations”).  

Large enterprises are structured federations of
functional, self managing cooperatives.  Nearly all the manufacturing,
distribution and wholesale sectors are organized on this cooperative model.

There are a few big monopolistic corporations,
charted by Congress, each one either handling a crucial area of the economy or
a manufacturer of a massively complex and socially/politically important
commodity.  The peculiarities of Bergonian tax policy make it convenient
to monopolize these economic activities that are taxed– primarily what they
call “energy transactions.”  This economy also consists of a
large number of shopkeepers, professionals and craftsmen.                                                                                                                                       In a decentralized
economy, the policy regulation is localized within production units instead of
being done by the state or bureaucracy. It can be seen as democracy from below
where production units are controlled socially by the workers and not by a
Soviet style central authority. Decentralized economies are more socialist by
nature than Marxist-Leninist style of economies as they actually give power to
the workers and not to a vanguard party representing the working class.

 As Cooperatives  have 
less capital incentives, finance can
become an issue for them. Cooperatives can face difficulties in receiving loans
from financial institutions, such as banks, which is why the cooperative
business model may only work better for a business with a lower start-up cost.

With centralization of power, decision-makers can quickly
respond to issues as they emerge, but under a cooperative model, all owners
would weigh in on the decision-making process, which will take more time. In
cases where decisions must be made fast, cooperatives might not be effective.
It is also reluctant to borrow on terms that exceed their going interest rates.

If state
ownership is rejected as a proxy for the commons and if ownership in
worker-controlled enterprises is in the hands of the workers, then these groups
of workers essentially become their own capitalists. They have ownership rights,
mobilize their own finances, and control and reinvest “their” surplus for their
own advantage.        

The
significance of having legally authorized property rights was driven home in
the aftermath of Argentina’s 2001 economic crisis. While workers took over
shuttered factories, they needed the clear collateral of property rights to
avoid being denied financing and credit to purchase components and supplies in
advance of sales. State gave into this demand, but only on the condition that
the workplaces become co-ops, meaning workers inherited the debts of the
“recuperated” factories and were also responsible for their losses. The most
militant workers balked at such an arrangement. They wanted a role in managing
the workplaces, but argued the state should legally take them over, finance
their renewal, and link them together in a plan across workplaces. Those
demands were generally defeated. Workers ended up with co-operatives and were
triply undermined as competitors within capitalism: they started with
facilities capitalists had left undercapitalized and uncompetitive; they were
in debt and they had to put their own savings into the facilities or accept
lower wages to address the issues of debt and new investment.

The case of
Argentina clears doubt on the notion that having more worker-controlled
workplaces or co-ops readily translates into an increasingly egalitarian social
order. Without an alternative institutional mechanism for coordinating
productive activities, competitive markets transform differences in assets,
skills, local advantages, and product valuation into inequalities between
workers and communities. The negative impact of such inequalities on social
solidarity was evident in the former Yugoslavia, which had implemented full
market socialism. The incorrect distribution of historic and geographic
advantages meant that inequalities across firms were also expressed regionally.

Sending
workers who have failed to find jobs back into the competitive market, or
offering workers just entering the workforce a chance to compete with those
already established, sounds a lot like solutions offered by the libertarian
right. And it ignores the fact that the one place with such a program — Italy —
has unemployment rates double those of the USA.                                                                                                                                          One
model that appears, to better address the problem of fragmented working-class
ownership is the Quebec Solidarity Fund (QSF) — one of the examples of “real
utopias”.

The QSF is
distinct in that the state subsidizes workers to invest in a “solidarity fund”
and places ownership and investment decisions not in the hands of dispersed
workers or sub-groups of workers but in a larger collectivity — in this case, a
central union body. While they believe that the QSF doesn’t challenge
capitalism, it can contribute to the larger project of doing so. This is not
fully true. Putting labor leaders in charge does not in itself guarantee a better
politics. Indeed, the QSF was originally designed to divert populist attention
from radical demands like control of private financial institutions — not to
democratize the economy.

More
ambitious proposals that slowly collectivize property without directly limiting
capital’s power are even more likely to come up against serious barriers. The
Meidner Plan in Sweden is a useful and quite obvious illustration.

The Meidner
Plan was designed by the LO (Sweden’s labor central) in the 1970s, that
proposes an annual levy on profits that would then be converted into shares and
placed in a central fund controlled by unions (which at the time represented
over 80 percent of workers). The funds could be democratically allocated to
regional and sector development and, over time, majority ownership of the
nation’s productive assets would shift from private owners to the Swedish
working class. But the issue of time turned out to be a serious problem:
throughout the transition, the Swedish economy would remain dependent on the
same private corporations the plan wanted to expropriate. Warning that they
would instinctively hold back long-term investment if their property rights
were threatened, and arguing that efficiency, stability, and even living
standards would suffer irremediable
damage
if the transfer of ownership took place, corporations mobilized aggressively
against the Meidner Plan.

Formal
equality in co-ops doesn’t necessarily mean that everyone participates equally,
as in elected democracy, bureaucracies and elites (and indifference) readily
thwart the promise of equal voting rights. Additionally, over 90 percent of
co-ops are consumer co-ops, meaning the main owners aren’t the people who work
there. Even in worker–owned cooperatives, membership and employment don’t
always coincide.

To conclude,
co-ops, once an integral part of radical political movements, are now largely
integrated into the capitalist order. They may lobby for particular changes,
but they no longer mobilize alongside those fighting capitalism.

Bergonian revolutionary doctrine holds as a statement of
principle that governmental and
economic bureaucracy should always impose as little a burden on the individual
as possible– in order to lessen the common citizen’s hassles. 
This is in keeping with the utilitarian
perspective common in Berg policy-making, which is to consider the immediate effect of a policy on
the happiness of the people. Therefore every economic enterprise must pay a payroll tax.  It is
the equivalent of a tax on the “workers share” of the collective enterprise’s income.  It is
not a “withholding” from individual pay, so no part of the payroll
tax is in anyway chargeable to individual workers, since no individual ever
become liable for taxes.  Instead it is seen as a tax on the collective’s net income, before the workers pay
themselves.  The payroll deductions are calculated with a simple flat
percentage of the net amount the workers pay to themselves. 

No income taxes, except on the
self-employed. Thus, except for
the self-employed, individuals do not pay income taxes at all– it
is too much bother and hassle. Bu when we are speaking about the state which
claims that is has liberty and equality for everyone how democratic is this for
self-employed people to pay for everything what is free in Bergonia (such as
education, healthcare).  People also
pay no personal property taxes for their personal possessions, including automobiles,
campers & boats.

Tax collections account for the bulk
of every state’s revenue, which is needed to invest in and repair
infrastructure, maintain public services such as police and fire departments,
and pay other government employees — to list but a few examples. Without an
income tax, these states often need to find another source of revenue.

Seven U.S.
states currently don’t have an income tax: Alaska, Florida, Nevada, South
Dakota, Texas, Washington and Wyoming.

The main
benefit, proponents say, is that states with no income tax become a beacon for
growth. They’re better at creating jobs and keeping a core of young, educated
workers from moving to other states. Others, however, are not so sure.

They’re
driven by the same line of thinking: Cutting the income tax will boost
take-home pay for everyone. It’ll make the state more attractive than its
neighbors, drawing new businesses, creating jobs and sparking an influx of
talented workers.

A variety of
economic policy groups have pushed back over the past few years, raising
questions about whether any of those claims are true.

The
Institute on Taxation and Economic Policy points out, that states with no
income tax haven’t really created more jobs than others. Texas, which is at the
center of America’s oil industry, has certainly outperformed the national
average in job creation as energy prices surged over the past decade. But job
growth trailed population growth in the other eight no-income-tax states,
according to a 2013 ITEP report.

It is
obvious that decentralized democratic socialism and decentralized economy is not
solution for economic and social problems. For some time that may help to
develop some parts of economy but at the end it causes more problems. And here
we may have a question if people are aware of dangers and negative sides of
democratic socialism why do they speak, write and create utopias with this
idea. Why socialism is so appealing for XXI century people. It is easy to be
fascinated with the ideas of equality, freedom, liberty, welfare system, but
not only socialism can bring it to us. Cometti created the state on this
principle not to praise the idea of socialism, but to make us think how we can
use different model in order to restore and develop our states, especially it
mostly goes to USA, which was and still is seen as the leading country in every
aspect. He knew all the negative sides of the democratic socialism and still
gave us puzzles to think how to live better not only for ourselves.

To create
ideal state, to promote protection of human rights, equality, freedom is the
work which takes centuries to deal with. Thomas Moore in “Utopia”, James
Harrington in “The Commonwealth of
Oceana” tried to show us what can be done and also things that can’t be
realized. That is why they are called utopias.

Decentralized
economy and socialism can’t solve our problems. Bergonia is not even created in
order to solve something. It even makes socialists ideas more uncertain. The
state which just takes care in itself and does not have global understanding of
issues can’t last long.

Democratic
Socialism is not sustainable not only just because the error in itself but the
reason is the human itself, who can’t live in the state without any chance to
develop his/her conditions, human is not made to freeze in one phase. Each of
us need aim which leads us to create something wonderful and outstanding and
without competition we can’t accomplish it.

 

Author:

x

Hi!
I'm Eileen!

Would you like to get a custom essay? How about receiving a customized one?

Check it out