Monday, March 26, 2018

Digital subscriber royalty: Facebook & Amazon. A Basic Income resource for the people

John D Rockefeller, through controlling oil supply, and Andrew Carnegie through steel supply, created hugely successful enterprises that grew on technological advances and expanding markets.  In largely controlling the market (i.e. monopoly), they were able to amass vast fortunes through the control of prices.     

The Free Lunch - Fairness with Freedom explains how such unfair situations can be resolved beyond anti-trust and fair competition laws - (which Rockefeller manipulated in his favour) and beyond the heavy taxation of profits (which accountants can conceal).  The book shows how to deal with natural and commercial monopolies which arise when people want a share of the good things of life which are held by a minority. Including such things as land, bank money creation, minerals, technological advances such as radio spectrum, etc.   

Hardened champions of capitalism might allege that the 'the market' must have free rein to bring the good life for all and thereby solve the socio-economic problems of poverty along with a fairer distribution of wealth achieved through tax. The last 20-30 years at least shows that they are misled and mislead. Some markets have a basic fairness about them with fluid supply matching flexible demand and steady or openly adjusting prices - the ideal world. But a free market will never bring fair distribution and  reasonable prices in a monopoly situation. 

In the case of land for instance, where everyone has a desire to have a home; due to our highly developed cities where high values relate to high demand, not many people can be satisfied. The way to tackle the land monopoly is to tax the value of land each year everywhere, use it for public goods and services and, or, distribute the proceeds in the form of a regular basic income. The tax, a type of rent paid by the freeholder (to the state that guarantees the owner's title), would resist the monopoly forces which now deprive many people of reasonably priced places to live. It would induce a greater supply by lowering prices, whereas schemes such as Help to Buy only add to demand by pumping in more money - with prices maintained or rising. 

The book examines several monopoly situations that could be addressed in a similar way.  To the list can now be added what is happening as the internet giants of the past 20 years are coming of age and clearly paying very little tax. Philip Aldrick writes about this in The Times   'In the era of digital monopolies we are being taken for suckers' . He examines the way our personal data is being harvested free and sold on, bringing huge profits for such as Google, Amazon, Facebook, etc. 

According to the principles outlined in The Free Lunch for monopolies there could be a case of the state charging these near-monopoly digital firms relating to their national user numbers and distributing it in the form of a basic income to all citizens.  The value of the product they are handling, our data, has arisen purely through our initial action of signing up so it is a fair deal for us to be given a share of the profit we are the origin of. 

It might also make the data privacy issue clearer so that if I were to take an annual fee for signing up with Facebook I would also sign up to allow Facebook to crunch my data for sale to others.  Facebook makes $16bn net annual income of which say a 33% fee (appx $5bn) divided by an estimated 2bn users worldwide would give subscribers $2.5 dollars pa. Not a lot, but given the total income of the digital giants is around $100bn the aggregate fee for most people could be over $12 pa, merely considering the new digital firms.  But digital marketing information capture started with digitally-read plastic loyalty cards, so clearly any firm or organisation attracting subscribers can exploit customer data for profit and should acknowledge that potential with a annual royalty to the subscriber.  Thus to be fair to the digital giants (they are not a special case) any profit-oriented organisation or even non-profit wanting to sell on personal data should give a royalty to the subscriber.     

Our society is now dependent on the digital way of business - Amazon, Facebook, banks, utilities, retailers, etc, etc,  - so it would be invidious to merely select their own subscribers for the basic income payback. What is needed is for governments to receive the income stream, from a digital subscriber levy or royalty on every listed subscriber and to pass it on as a part of a national basic income scheme (a.k.a. Citizen's Income; Citizen's Royalty). 

To quote the book, The Free Lunch, wealth sources arise:
  'a successful society generates them...are usually limited in supply... are vital to modern living, they are in high demand and are valuable'. 
This new digital wealth source arising entirely from us as individuals and from our actions is waiting to be appropriately redirected back to us via a basic income.  Taxation justice for digital monopolies would start be addressed. Such is a way to a fairer society. 

The book is at a new special price of £3 inc p&p UK      

Posted by Charles Bazlinton. Author The Free Lunch - Fairness with Freedom

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