Our nation was born in the Age of Enlightenment when extreme economic and political inequalities motivated revolutions. Today, through peaceful means, we again require radical change for similar reasons. The New Enlightenment details the major public policy changes that are needed to create a fundamentally more just and democratic society. Reforms that compromise ideals in response to our dysfunctional political system would be a surrender, not an appropriate challenge to it.
The 34 public policies detailed will, if instituted: Lift tens of millions of Americans out of poverty to a standard of living that now exists in the middle class; substantially improve the standard of living of tens of millions more; fundamentally improve our election, lobbying and media systems; enhance democracy with an innovative, new democratic system, and congressional rules reforms; create a $300 billion annual federal surplus; increase GDP by $1.4 trillion. Costs or revenue gains resulting from instituting each policy is included. The New Enlightenment fully supports its policy proposals on economic, moral and other grounds, and promotes the formation of The New Enlightenment Citizen’s Union (that may evolve into a new political party) as the organizational structure of the required political movement for the New Enlightenment transformations. All great social movements were founded on moral grounds. So the one we urgently need now also will be.
If Instituted The New Enlightenment policies will:
• End unemployment and reduce full-time work hours to 36 hours per week, while creating a minimum tax-free annual income of $34,980 for full-time work. Expanding and reforming the EITC and raising the minimum wage to $11.10 per hour will accomplish this. Everyone’s take-home income whose income now is under $160,000 will rise, and rise proportionally more the lower the income due to lower taxes and the new EITC.
• Transform the economic system to one where most economic activity will be performed by worker-owned and controlled businesses at the end of the designed 20-year transition period.
• Institute a TV and radio station license requirement to offer generous allotments of airtime free of charge to four qualified candidates per national public office contest, within a thoroughly detailed system. Also, support qualified candidates with other media subsidies.
• Institute a license renewal requirement for worker ownership and control of air media companies. Loans, grants, tax benefits, and subsidies will support the ownership transfer, as it would for other kinds of media businesses.
• Eliminate tuition for public colleges.
• Enhance democratic functioning with new, innovative democratic forms. Average citizens in deliberative groups involving 0.1% of the citizenry will develop some public policies.
• Create shared prosperity and a true democracy through other beneficial programs.
The necessary revenues will be generated by the following taxes, which will also create a $300 billion annual surplus: • More progressive income tax rates with a 55% maximum rate. • A small, highly progressive wealth tax • Pollution taxes that will raise revenue and reduce pollution. • A corporate tax system that inherently will end tax haven abuse. • Reduce military and other expenditures. • A financial transactions tax. • Eliminate the cap on the employer social security portion of the payroll tax (employees at all income levels will pay no payroll tax). • Replace the estate tax with a progressive inheritance tax that increases taxes on large wealth transfers without forcing the sale of inherited family farms and other businesses.
Now is the time for a New Enlightenment.
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The New Enlightenment
A Twenty-First Century, Peaceful American Revolution
By Robert Bivona
NECU PressCopyright © 2017 Robert Bivona
All rights reserved.
Now Is the Time for The New Enlightenment
Now Is the Time for The New Enlightenment
During the Enlightenment, people imagined and acted on a vision of a radically more just world
The original Enlightenment period in the 18th century was a time when many people in Europe, and later in the American colonies, shared a vision of a transformed world. The more widespread use of printing presses, more extensive roadways and newly created postal services needed to distribute periodicals and other print media allowed their means of mass communication, print media, to dramatically increase public awareness of societal issues. There was an explosion in the number of books and other publications. Literacy rates increased greatly, and debating societies and other public forums were used to discuss the important issues.
As a result, many people were able to imagine the possibility of a fundamentally more just world order than the one in which they were living. An order based on reason, the ideals of equality for all, democracy and fundamental individual human rights. More importantly, they also acted on their new and radical vision. During this period of revolutionary transformations, the powers of monarchy, the privileges of the nobility, the political power and authority of the Catholic Church were overturned. There were also dramatic revolutions in science and philosophy. The American Revolution (1775–83) was an integral part of the Enlightenment period.
Enlightenment revolutionaries strove to create more egalitarian societies
The awareness of the importance of economics to politics was a fundamental part of the Enlightenment. The Enlightenment revolutionaries experienced the injustice of the majority of the wealth of their society being controlled by a tiny fraction of the population. This small minority used their vast wealth to control the political and social order. So Enlightenment revolutionaries formed more egalitarian societies where political leaders were accountable to the majority, and governments were designed with the intention to ensure that public policy served the ideals of democracy, equality for all, reason and basic individual human rights. America was one of these societies.
America was the most egalitarian society in the world
In America's early years it was the most egalitarian society on the planet, and our Founders were proud of these conditions. In a letter from Monticello dated September 10, 1814, Thomas Jefferson wrote:
"We have no paupers. ... The great mass of our population is of laborers; our rich, who can live without labor, either manual or professional, being few, and of moderate wealth. Most of the laboring class possess property, cultivate their own lands, have families, and from the demand for their labor are enabled to exact from the rich ... such prices as enable them to be fed abundantly, clothed above mere decency, to labor moderately and raise their families. ... Can any condition of society be more desirable than this?" Jefferson contrasted these conditions with an England of paupers and plutocrats: "Now, let us compute by numbers the sum of happiness of the two countries. In England, happiness is the lot of the aristocracy only; and the proportion they bear to the laborers and paupers you know better than I do. Were I to guess that they are four in every hundred."
George Washington, nine months before his inauguration as the first president, predicted that America "will be the most favorable country of any kind in the world for persons of industry and frugality, possessed of moderate capital, to inhabit ... it will not be less advantageous to the happiness of the lowest class of people, because of the equal distribution of property."
After Alexis de Tocqueville's famous journey to America in the 19th century, he returned to France and wrote that nothing "Nothing struck me more forcibly than the general equality of conditions ... the influence of this fact ... has no less empire over civil society than over the Government; it creates opinions, engenders sentiments, suggests the ordinary practices of life, and modifies whatever it does not produce ... the equality of conditions is the fundamental fact from which all others seem to be derived, and the central point at which all my observations constantly terminated."
Early America was the world's most egalitarian society. Today, we are the outliers in the other direction — we are the most unequal of all the developed countries. On a per capita basis, we produce over 30 times the amount of goods and services per year than when the country was founded. Yet, in 2012, almost 50 million Americans were in poverty and over 20 million were severely poor, with incomes less than one half the official poverty income.
During America's early years England's 1% were so rich that the country's average national income was nearly as high as that of the colonies, despite the much greater prosperity of the majority of Americans. Today, America's 1% are taking a greater share of national income and wealth than the old English aristocracy did, and a larger percentage of the country's income and wealth than any other advanced country.
We have moved far from our founding ideals
We are now far from the degree of egalitarianism that existed at our founding, of which Jefferson was so proud. The inequality and injustice in our society is extreme and its extent is not commonly reported. Important parallels exist to our conditions now and those that existed prior to, and that motivated, the Enlightenment revolutions.
Wide agreement exists that some degree of economic inequality is necessary and just, and that there is a limit on how extreme it should be. But most people are not aware how extreme economic inequality is now, and that it is beyond this limit. In Part 1 and Part 4, Note 1, I will describe further how extreme our economic inequality is and why it is not economically or morally justifiable. It is economically, politically and socially harmful.
Although most people, both on the left and the right, feel that some things are fundamentally wrong in the country now, most do not know the extent and seriousness of the wrongs. Whether you already knew them or learn of some here, we hope you will join us in imagining a more just world order and in acting on this new vision. Together, we can accomplish the institution of the innovative solutions of the New Enlightenment, just as those of the original Enlightenment acted by instituting visionary and innovative solutions needed for their time.
Most Americans greatly underestimate our economic disparities
The chart on the next page, created using national poll data, well summarizes important information on how our country's wealth is distributed and how little most people know about it. It is worth exploring.
The bottom bar, labeled "ideal," represents what most people believe would be the ideal wealth distribution — different shades of grey represent the different quintiles (fifths of the population). The chart shows that the average American believes it is justified for people to have different levels of wealth. Average Americans believe that people who contribute more to the welfare of the country deserve more than an average amount of the country's wealth. People in the bottom quintile, on average, contribute less and therefore deserve less, in their view. (But, as we will see later, at the extremes of the wealth distribution, wealth and degree of societal contribution may not be positively correlated.)
As you can see, the average opinion is that people in the bottom quintile deserve about half of what they would have if wealth were distributed equally into each quintile, or about 10% instead of 20% of the country's wealth. The opinion is that people in the top quintile justifiably or ideally should have about 60% more than what they would have if wealth were distributed equally into each quintile (about 32% instead of 20%).
Actual U.S. Wealth Distribution Plotted Against the Estimated and Ideal Distributions
The middle "Estimated" bar shows the average of what people estimate is the actual distribution of wealth. It expresses awareness that inequality is far more extreme than is considered ideal. People estimate the bottom 20% to have only about 2% of the country's wealth — a small fraction, one-fifth, of what would be ideal, and the top 20% have almost double what they consider ideal.
Now look at the top bar, which expresses the facts of the wealth distribution. It seems there has been an error because only three quintiles are showing, so two quintiles are missing. But as I mentioned in the introduction, the total wealth of the poorest 40% of Americans is negative. The bottom two quintiles are invisible because they are negative or too small to appear on the chart. The bottom 20% has -1.4% of the country's wealth (has debt greater than assets), and the next 20% has 0.3% of the country's wealth, so the bottom 40% has -1.1% of the country's wealth. They are in a condition worse than having no wealth at all.
In 2013, Forbes magazine researchers found that the wealthiest 400 people had over $2.3 trillion. Using Federal Reserve data for the rest of the population, this is more than the total wealth of the bottom 60%, or 190 million Americans — a level of inequality far worse than most people imagine could exist. It is almost incomprehensible, so if you would like to have a better sense of how vast this disparity is, consider the analogies in Part 4, Note 10.
If you have only one penny and have no debts, you have more wealth than the total wealth of the 128 million poorest Americans. Most people would consider someone with more wealth than the total wealth of 128 million Americans to be very wealthy. So if you have a penny and no debts, congratulations; now you are considered wealthy. But likely not as wealthy as any of the 400 Americans with total wealth that exceeds the total of all the GDPs of 121 of the 189 nations for which the World Bank records GDP. Wealth disparities result from, and contribute to, income disparities, which are also very large and growing.
The majority of Americans are not aware of how concentrated wealth is because the extremely wealthy live isolated from the rest of society; most people will have no contact with this small economic elite, nor will they ever have any sense of what that elite controls. Also, our mass media do not express many facts related to this issue, either at all or with the emphasis, detail or repetition that many far less important issues receive.
As part of an international study by scholars at the Harvard Business School and Thailand's Chulalongkorn University, a U.S. survey revealed that Americans estimate that the ratio of CEO pay to median worker pay is about 30 to 1. In reality, the average S&P 500 company CEO earned 354 times what the median U.S. worker did in 2012. Americans said that ideally that gap would be 6.7 to 1.
Performance bonuses, stock options and exorbitant salaries are tax deductible, so taxpayers are subsidizing the CEO pay gap. And CEOs routinely receive performance incentives even when they fail to hit the productivity targets that were supposed to trigger the bonuses. How does this happen? The corporate CEO compensation process in public companies CEOs commonly strongly influence, directly, or indirectly, through allied board members. Also, dozens of the largest American corporations routinely set performance targets for huge bonuses so low that they're effectively meaningless.
Media "pundits" often express the view that American voters care little about inequality, but to the degree this is true, it is mainly due to the fact most Americans don't realize how extreme inequality is. Today's public policy rests on a foundation of ignorance. The general public has no idea what our society is really like.
Now, one-third the U.S. population is either in poverty or low-income (less than two times the poverty level income) and one-fifth are food insecure. Our national definition of poverty is not generous. In 2015, the official poverty line for a family of four was $24,250, or $6,062 per person per year, or $505 per month.
Food insecure households are those in which there are days when there is not enough money to purchase food needed to maintain health or normal activity levels. The percentage of Americans saying they did not have money for food at least once in the 12 months prior to a Gallup poll more than doubled from 9% in 2008 to 20% in 2013. (6% of Chinese in 2011 said the same, down significantly from 16% in 2008.) Certainly, most of these people could not buy food many more times than once over the prior 12 months.
Official government statistics have 14.3% of U.S. households food insecure for the same time period. However, this statistic excludes households in their category "marginal food security." This category has as part of its definition "Households had problems at times ... accessing adequate food, but the quality, variety, and quantity of their food intake were not substantially reduced." If people have problems at times accessing adequate food they are food insecure, therefore the Gallup poll statistic is a better measure of the true level of food insecurity.
Researchers from the Harvard School of Public Health, Brandeis University, and Loyola University, in an update of their report The Economic Cost of Domestic Hunger calculated the direct and indirect cost of adverse health, education, and economic productivity outcomes associated with hunger as $167.5 billion for 2010. They also found that expanding the Supplemental Nutrition Assistance Program to all food insecure households would cost about $83 billion a year. Our nation pays $84 billion more per year for hunger to exist than we would pay to eliminate it.
Fifty-one percent of Americans experience poverty at some time before age 65. But our official definition of poverty does not expose the true number of Americans in extreme economic hardship. The National Center for Children in Poverty at Columbia University estimated in 2008 that "families typically need an income of at least twice the official poverty level ($42,400 for a family of four) to meet basic needs." The Economic Policy Institute has also determined that although the income to meet basic needs depends on local living costs it averages at about 2.4 times the official poverty income. According to a University of Massachusetts study, the share of prime working-age adults who can't generate enough income to meet their basic needs shot up from 31% in 2000 to 38% in 2010. In the years leading up to the recession, the bottom 80% of the American population had been spending around 110% of its income.
The average income of the bottom 20% in 2011 was $9,187, while the average income of about the top 1.7 million households was $1,530,773, and one person had an income of $4.9 billion — he paid a tax rate lower than the average schoolteacher.
The tax, regulation and government expenditure policies created by a political system determine how an economic system functions. If we had a functioning democracy, the best interests of the majority would be served by the economic system through the political system. What polls indicate most people consider the "ideal" wealth and income distributions would not only be possible; it would not be possible for ones significantly different from them to exist in a well-functioning democracy.
The graph on the left compares the income gains from 1980 to 2008 of the top 1% to the bottom 90%. The graph on the right shows that the middle and lower classes have done poorly relative to the upper class since 1970. Middle class is defined as those with an income 67% to 200% (two-thirds to double) of the overall median household income, after incomes have been adjusted for household size (totals not equal to 100% due to rounding).
Greater economic disparities exist now than before the Enlightenment, as the table shows, for income inequality. The first three columns of the table include data from Gregory King's classic early study of British income inequality that published the information on 26 classes of persons in England and Wales in 1688. The fourth column is calculated by multiplying the first and third columns.
Income Distribution in 17th Century Britain
INCOME INEQUALITY IS FAR MORE EXTREME NOW THAN IN MEDIEVAL TIMES.
Economic inequality was one of the most important motivations for the Enlightenment period's societal transformations — one compelling reason for a New Enlightenment. And as you will see, more reasons exist. Our political inequality is also extreme. Public policy bears virtually no relationship to the preferences of the poor and the middle class.
Excerpted from The New Enlightenment by Robert Bivona. Copyright © 2017 Robert Bivona. Excerpted by permission of NECU Press.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Table of Contents
INTRODUCTION, PART 1, NOW IS THE TIME FOR THE NEW ENLIGHTENMENT, PART 2, THE WAY TO PROSPERITY FOR ALL Policy 1, The Most Immediate Way to a More Just Sharing of Prosperity, While Increasing Economic Activity, Reducing Full-time Work-hours and Eliminating Unemployment; Policy 2, Increase Marginal Tax Rates on the Wealthy; Policy 3, A System to Facilitate Widespread Establishment of Worker-Owned and Self-Directed Enterprises; Policy 4, Raise the Minimum Wage; Policy 5, A Small and Highly Progressive Wealth Tax; Policy 6, A Reemployment System Rather Than an Unemployment System; Policy 7, Provide Free College Education; Policy 8, Increase Social Security Payments: Social Security Plus; Policy 9, Increase Funding for Public Defenders, Reform Criminal Laws, and Support Inmate Rehabilitation; Policy 10, Replace Estate Tax with a Progressive Inheritance Tax; Policy 11, Corporate Tax Reform Including the Ending of Tax Haven Abuse; Policy 12, Reduce Military Spending; Policy 13, Reduction of Other Wasteful Spending; Policy 14, A Carbon Tax; Policy 15, Equal Charge for Nuclear Power Plants; Policy 16, Hazardous Emissions/ Release taxes; Policy 17, Financial Transactions Tax; Policy 18, Real Property Transfer Tax; Policy 19, Mortgage Interest Deduction Elimination; Policy 20, “Too Big to Fail” Bank Fee; Policy 21, Miscellaneous Taxes, Fees, and Expense Reduction PART 3 THE WAY TO A GOVERNMENT OF, FOR, AND BY THE PEOPLE; Policy 22, Provide Free Candidate Airtime and Newspaper Space; Policy 23, Support Free Candidate Mailings; Policy 24, National Ballot Access Standards; Policy 25, Eliminate Gerrymandering; Policy 26, Voting System Reform: Instant Runoff Voting; Policy 27, Other National Election Standards Reforms; Policy 28, Enhancing Democracy with New Democratic Forms; Policy 29, The Structure and Support of a New “Fourth Estate”; Policy 30, Lobbying Reform; Policy 31, Congressional Rules Reform; Policy 32, Community Broadband; Policy 33, Community Radio; Policy 34, FCC Reform PART 4 INFORMATION AND ARGUMENTS SUPPORTING POLICIES; Note 1, Moral, Economic, and other Justifications for Increasing Taxes on High Incomes and Instituting Taxes on Wealth; Note 2, Economic Stimulus Including Employment Impact of All Policies; Note 3, Simultaneous Invention; Note 4, High-Income Taxpayers’ Response to Tax Rate Changes; Note 5, The Most Extreme Tax Increase Proposal in U.S. History; Note 6, Revenue Resulting from Proposed Corporate Tax Estimate; Note 7, Descriptions of Some Well-Studied Worker-Owned and Controlled Enterprises; Note 8, The Postal Service; Note 9, “Government of the People Act” Defects; Note 10, Analogous Examples to 400 People Having the Wealth of 190 Million People; AFTERWORD