PART 2: How to implement the great reset?

The article is proposing a solution for the problem described in Part 1: Good-bad profit.

Historical development of our economical system

After the second world war, Europe was divided in half. Which led to a situation where the west started working with the American-based economic model and the east with the Soviet-based economical model. In addition, both economies and political cultures in south and north Europe are different significantly still today. As the Soviet Union collapsed and the iron curtain fell, the competition between east and west in Europe opened. Meanwhile, the European Union expanded, and the European monetary union was established.

Because of different economic incentives built-in in history in different European regions, Europe has not been able to build a real own economic system serving European Citizens. Instead, the EU has mainly been “creative” in building the power structure in Europe. An example of this creativity is that the EU collects its taxes with debt as they are not able to collect taxes in EU member states. And don’t get me wrong, government debt is not a bad way of collecting taxes. Actually, it is the most equal way of doing it.

"Government debt is not a bad way of collecting taxes. Actually, it is the most equal way of doing it."

Europe as part of the neo-mercantilism world economy

The problem with the system is that the debt has been used to build power structures in Europe. Meaning those parties with power who support the stronger development of Europe have received significant subsidies from the European Union. The purpose of this is clear and understandable. What seems to be a missing understanding of change happening in our society??

After the ’90s, the availability of information increased significantly among common citizens of Europe, and it means that hierarchical power structures established before, are not as efficient as before. Simply put, it’s not enough that a smart man tells people how things are and how to behave anymore, as almost any citizen has this possibility these days. This means if the European Union is to persist, it needs to work more equally for every citizen.

"After the ’90s, the availability of information increased significantly among common citizens of Europe, and it means that hierarchical power structures established before, are not as efficient as before"

What can we do about it?

How could this all be achieved? I believe that we only need to set basic principles and act according to those principles. Beautiful speeches about equality and freedom are not sufficient anymore, people already know better. Instead, we should put our money where our mouths are.??

Next, a list of actions for doing exactly that:

Basic income for all citizens

• Promise to European citizens: “We always provide food and housing to all our citizens”

Collecting taxes via added government debt

• We destroy the current system where lobbying harms democracy. Instead of governments serving companies, governments serving citizens.
• Harm tax can be collected, but collected taxes are always and only targeted to mitigation of the harm.
• Removing harm tax from actions adding value to society, such taxes as income- and profit taxes.
• A consumption tax can be collected for having a control tool for excess consumption.

Targeting government company injections to actions increasing competition

• No support to large or listed companies. Injection targeted only to SMEs to add competition. As competition benefits Citizens by decreasing the profit of companies.

Separating intangible assets and tangible assets to own currencies.

• As intangible assets and tangible assets, demand and supply work significantly differently. We should have a different measure for evaluating benefits (added value to citizens) in these systems.
• Protects the value of tangible assets in case of an intangible asset bubble.
• An exchange course would take place between these currencies.

The basic right to stand as a candidate in political elections to all citizens.

• An electronic system where to sign as a candidate.
• Election funding from the government, with a method where a citizen can target their part of the funding to the candidate they wish.

Why do we tax adding value to society the most?

The list can seem a bit weird at first, but let me explain again. I’ll start with the taxes. In the current system, political parties represent stakeholders who compete in the system. This means that all parties try to lobby the benefits of their stakeholders to the system as much as possible. In taxes, this means that those who lobbied the best pay a lot fewer taxes than those not able to lobby for their benefits in the system. For example, in Finland taxes and tax-like payments (such as a pension) for employees and employers can be up to 70% of the total payments made by an employer. As for capital and systematic tax avoidance design, the richest Finns have been estimated to pay 4% as an effective tax on their income due to corporate structuring and tax planning.?

By collecting taxes as government debt, no tax lobbying, tax design, or unequal taxation would exist. As the government would just take debt and put out more money, which would decrease the value of existing money equally in proportion. And think about the removal of bureaucracy the system would bring.

Surely harm taxes have a purpose, and these taxes could still be collected. As long as all the collected taxes would be assigned to mitigate the harms of the actions and not be used for income transfers. Consumption taxation could also be left for having a tool to control excess consumption.?

We can take care of all EU citizens if we want to.

What about basic income and statements that all citizens will be taken care of? If this would be what the EU would state and work on, I think the values of the EU would become something citizens could align to. Basic income would secure sufficient demand on the basic goods market and thus prevent failures in providing goods for citizens' basic needs.?

Removing bureaucracy and opening markets for real competition.?

A combination of low bureaucracy, equal taxation, and a basic income would bring an equal Europe where incentives are set for making real productivity profit. Real productivity profit means serving the needs of citizens, by providing goods and profitable services to citizens. And no, I am not suggesting central government planning on the economy. All markets that are working without government intervention should not be touched in any other way but making sure the market has sufficiently high competition. As once again, competition decreases profit, and purchasing power of citizens will get better.?

The current neo-mercantilist trend where governments support companies proportionally based on the amount of equity will only make big players stronger. When the strongest are strong enough, competition ceases to exist. This is the trend we are seeing, which will and already has led to money monarchies. Well, if you look into the past, humankind has lived in a monarchy society for some time, so the current model is not that surprising. Anyhow, I believe humans can do a lot better in their lives than serving kings and priests. So, back to the point. If government injections should be implemented, they should only be implemented for SMEs and the purpose of increasing competition.

"When the strongest are strong enough, competition ceases to exist."

What about inflation? No matter - it will bring the industry back to Europe.

Depending on the amount of basic income, inflation would affect the EURO currency significantly. It would not necessarily be a bad thing. Decreased value of the Euro currency would work in a similar way that China has manipulated its currency. So it would most likely decrease the concentration of manufacturing in China. Most likely the US would need to get along with the model as their Exports to Europe would decrease otherwise. For avoiding psychological harm and transactional inconvenience, automatic devaluation of EURO currency based on inflation level should be set as part of the system. Minimum salary and basic income should be bound to an inflation index increment.

Demand/Supply of intangible and tangible assets are completely different.

And the need for two currencies. As stated in the list, demand and supply are completely different in tangible and intangible markets. This means that intangible items can be copied at so a low cost, that the supply is almost unlimited. It provides the possibility for exponential scaling of profit, which leads to a situation where investors hunt possible scalable companies and invest in them. And when you cannot see a limit of possible profits, you can evaluate your company to a value of billions without even making any profit. We’ll fair enough, people do gamble so let them do that. But let’s not gamble with the function of tangible markets at the same time. As gambling is risk-taking and risking proportionally sufficient demand on tangible markets compared to intangible markets will cause a risk of decreasing demand problems within tangible markets if sufficient purchasing power is not maintained. Lack of sufficient demand will always lead to supply problems. If supply is driven down because of non-functional markets, it will not be as easily replaced as in intangible assets. As tangibles are not as easily copied as intangible assets.

"Tangibles are not as easily copied as intangible assets."

Elections and moving toward a truly democratic society

One of the problems in the current system is that we determine representative party democracy as democracy, which it is not. As mentioned lobbying and the current political systems where parties compete with each other and try to gain systematic benefits for their stakeholders. As we see these parties represent a minority of citizens, as the voting percentage drops all the time.?

"One of the problems in the current system is that we determine representative party democracy as democracy, which it is not."

The least we could do is to state that each citizen should have the basic right to stand as a candidate in elections, just by signing up. This means that we should also move away from list elections to provide sufficient opportunities for these citizens to get elected. And to gain sufficient support for the government, elections should be held in two parts. Parties surely could still exist as freedom of association should not be threatened. It is just that people have a choice to participate in government actions without having to align their thoughts according to party politics.

Democratic elections cannot be based on purchasing power

Another point is the election funding model. We see that if you don’t have an extremely good angle and network, you will need funding of tens of thousands of euros to get elected in elections. It isn’t a democratic system if you need to be rich or funded by rich people to get elected. Election funding could be provided by the government, based on the allocation made by citizens to candidates during the election. No other funding would be approved. And yes, I know surveillance of outside funding would not be 100% waterproof, but at least the system would give a better chance to those without connections to have funding for their campaign. And if outside funding would lead to disqualification of the candidate, it at least would have significant risks for the candidate.?

And yes, the system described is something completely different from the one we currently work with. It’s not based on US capital or Chinese manufacturing, but it would be a European system. A system that takes care of its citizens and treats them equally. A step from neo-mercantilist money monarchy toward true democracy and equality of opportunities. A system where adding value to citizens' life is most profitable and so forth rewarded the most. Instead of competing for scraps of money and serving the needs of money monarchies.

"It would be a European system. A system that takes care of its citizens and treats them equally."

If you are looking for a sustainable way to implement the great reset , this is it.

And feel free to read more about the current state of our so-called democracy.