Countries and states are artificial constructions of groups of people. States are supposed to be an institutional vehicle that provides a stable framework for people to live in. However, many states are currently set up to preserve the state itself. States secure their own continuation by large armies, treason laws, tax mandates and more. These rules make it difficult for states to adjust and be flexible. Up to the current day (2020), citizens are forced to swear an oath of loyalty to their states. People and parties who suggest a change to the setup or design of the state are branded traitors. However, states should rather be flexible in terms of their borders and priorities. Peoples of different territories should be allowed to form their own small states, or join other states if they wish. Wars should not be waged to keep unions and borders intact.
Many state borders, especially in Africa, are artificial and cut peoples and ethnic groups into different states. These borders also force different peoples, who do not always see eye-to-eye, into common states where they clash regularly. Therefore, the International Party will encourage current governments to start a process to delegate more power to cities, districts and counties. These could in time regroup to form confederacies, who could, in turn, eventually cooperate within a larger world confederacy.
Experience and economic theory have shown that governments tend to continuously grow and become large and ineffective. This phenomenon does not comply with the vision and mission of the International Party. To attain efficiency, the Intentional Party strives towards small governments. The proposed policies sets a basic framework to limit the size of government. It mainly focus on points that are different from the typical frameworks of liberal democracies.
To retain the purchasing power of a currency, central banks tend to have an inflation target. Most advanced economies target 2%, while emerging countries tend to have higher targets. At 2%, prices will double in 35 years, and in 75 years, they will quadruple. Thus, in a normal lifespan everything will cost four times more just due to inflation of 2%. With inflation of 6%, everything will cost 60 times more! To keep up with this inflation, wages need to grow excessively. This creates artificial tension in labour markets and result in strikes and protests. Most of all, interest rates need to be higher to protect bank deposits and loans from losing real value. Besides this, interest income are taxed on the nominal value, of which a big part is actually provision for inflation. Thus, inflation is a hidden tax.
However, the question remains if central banks should manage interest rates at all (except for a ceiling to protect against abuse). Should interest rates not rather be determined by market forces of demand and supply? To prevent inflation, perhaps central banks should not create new reserves on demand and in excess of economic growth. Rather, new money can be created at the rate of economic growth and given to government as a transfer payment (gift).
Fiscal policy, whereby governments attempt to influence business cycles by counter cyclical spending, has landed most governments in large debt problems. In practice, politicians tend to increase spending during down-swings but hardly reduce spending during upswings. Therefore, despite the theoretical novelty thereof, governments should avoid the temptation of using fiscal policy to smooth the business cycle. In fact, in order to limit exposure to financial risks, governments should aim to have no debt.
Taxes can be used for two key purposes: to fund government expenditure (consumption and investment) and to redistribute income and wealth. Due to its dead-weight cost, tax systems should aim to minimally distort equilibrium positions in the free market. This can firstly be attained by taxes that mirrors the economic structure. Therefore, earmarked taxes should be applied where practical. Thus, consumption taxes such as VAT should be used to fund government consumption, while progressive taxes on income and wealth are suitable for investment and redistributive purposes. Secondly, tax distortion can also be reduced if it has a low administrative and compliance cost. This can be attained by keeping the tax code simplistic and easy for all to understand.
In the possible scenario where robots replace humans in the workforce, only the owners of capital will still be able to earn an income. Thus, as unemployment numbers rise, capital or wealth taxes will play an ever increasing role. It implies that the tax burden on the wealthy will gradually increase. Naturally, their incentive to avoid taxes will also rise along higher burdens. One favourite method to avoid taxes is relocation to tax havens. To counter this incentive, tax systems should aim to tax economic activity where it happens. However, in a global world with ever more cross-border transactions and payments, taxing local activity will become a challenge.
For the International Party, social security should be a safety net to assist people without an income, regardless of their age or abilities. However, it should not be a way to escape work and contributing to the economy. Also, these systems should aim to be simple to understand and low in administration cost.
Looking forward, the progress of technology is expected to disrupt markets and social structures significantly (time marker: 2020-2040). Eventually, intelligent and dexterous machines might replace human labour, pressing the case of a universal income grant.
Humans are only one of countless species on planet earth, but have conquered large swathes of land and driven many other species to extinction. Uncontrolled population growth creates an ever growing demand for food and resources, resulting in ever more wild land being converted to farmland and cities. Though it may not look so from a distance, farming is perhaps one of the most environmentally damaging human activities. Vast bio diverse areas of land, such as rain forests (and even grasslands), are ploughed and converted into fields for only one species (the crop), effectively a ‘green desert’. Herbicides eliminate all plant competition to the crop. Pesticides eliminate all insect life in the field. Given this reality, a sound environmental policy will impact on and incorporate agricultural policy. It will consider population growth and urbanisation.
Given half the world’s population is still rural, but urbanising at a fast rate, there is much potential for humankind to construct its new cities in a sustainable and green manner. We have a new proposed way to build cities such that they are more economical in terms of transport, space usage, energy consumption, food production, aesthetic appearance, noise pollution, tranquillity and environmental footprint. We present a simple picture of a green-belt city with an underground rail system (subway) as main transport method. More details are also presented , starting with the design of the buildings, followed by the neighbourhoods and finally the city as a whole.
Various methods has so far been unable to solve the huge unemployment problem in some regions, especially Africa. Self-serving cooperatives, which runs parallel to the free market, has potential to rapidly employ masses of people. Most of the goods and services people consume are produced in their immediate surroundings, such as education, health, security, housing, maintenance, hairdressing, restaurants etc. Typically, households spend around 80% of their income on local products and services and 20% on imported products. The ‘self-serving cooperatives’ policy aims to organise poor people such that they can supply mostly in their own needs.
Economies function more efficiently when markets are subject to free competition. To ensure enough competition, the cost of entry and information should be as low as possible. Economies burdened by more administrative regulations tend have a higher cost of entry, less competition and ultimately lower levels of efficiency and wealth. It is therefore the aim of the International Party to lower administrative regulations and barriers to entry, while advancing the spread of information.
The principle argument on which the following policy proposals are based is that medical consultation fees will decline if the supply of medical doctors and specialists are increased. Health policies of the International Party therefore mainly focus to train and register more doctors. Besides this, the provision of preventative health care is considered an important strategy to improve public health at an affordable cost. The design of these policies rests on two main principles namely competition and health insurance. Competition could ensure higher service standards at public hospitals (notorious for their low standards and mismanagement).
Classical health insurance tends to be very expensive due to huge administrative costs and cross subsidisation. Also, patients who are pro-actively insured tend to be insensitive to the price of medical services. This insensitivity results in an over-demand that push up general costs. As an alternative, reactive ‘insurance’ could be used, where patients will pay instalments (instead of premiums) on loans which are aligned to their personal medical expenses.
The International Party view this recreational drug policy only as a possible strategy. This policy should first be tested in some towns, and if successful, rolled out on a wider scale. The principle thought is: if you can’t stop it, regulate it.
Despite banning most narcotic drugs, many people still purchase them on the black market and use these drugs on a regular basis. Due to the criminal status of most drugs, there is no legal consumer and health protection related to the quality of these products. Some users get addicted and sometimes overdose and die. An alternative to the outright ban of recreational drugs is perhaps the licensing of legal venues where consumers could purchase and use approved drugs under supervision. This will result in some quality assurance while also create a commercial incentive for drug companies to develop healthier recreational drugs. Legal drugs should be much cheaper than illegal ones, and this will reduce the demand for dangerous street drugs. However, drug use should not be encouraged, especially addictive ones. Most drug abusers start with cigarettes at a young age. To limit drug addiction, the nicotine content of cigarettes should be reduced gradually until zero.
Income inequality results in feelings of unhappiness among the lower income groups due to lower status and financial difficulty. Many governments prescribe a minimum wage in an attempt to alleviate the wage difference. However, it has the risk to lower demand for labour, thus causing a larger problem. Besides, much of the inequality is not due to very low wages at the bottom end, but rather due to extreme high wages at the upper end. Top managers in the corporate world have the power (directly or indirectly) to decide over their own compensation, and tend to reward themselves handsomely. Their super salaries is not a reflection of demand and supply, their own productivity or value add. Therefore, to curb their selfishness, the International Party proposes to link the maximum wage in any firm to the lowest wage in that firm. In such a case, if management wishes to raise their own compensation, they will have to raise the compensation of the lowest paid employees first.
The main purpose of a prison should be to keep dangerous people out of society, not to be a punishment for transgressions. Therefore, to lower the number of people imprisoned, courts should give those found guilty of minor transgressions the option of corporal punishment. Many people would prefer a brief physical pain infliction to long term psychological torture.
Prisons and prisoners are a huge burden to tax payers. Prisoners are given secure accommodation and food at the expense of the state. Sometimes prisoners are also unproductive since they do not work. Even though prisons have the mission to rehabilitate prisoners, they end up being a ‘school for criminals’. In order to lower costs and improve rehabilitation, prisoners should be allowed to work and earn their keep. Prisons should be designed in such a way to allow labour intensive factory and farm production. As such, the produce of the prison could be sold to pay prisoners a salary, which they can use in turn to pay for lodging and food. This will serve as an incentive to them to work hard, earn better and purchase better food and rooms. Private companies should also be allowed to set up factories on prison grounds to create jobs for prisoners. This could be an opportunity for private companies to access cheaper labour.