Human and/or Animal: The Morals, Ethics and Responsibilities of the Highly Intelligent Part One of Three

DAVID RALPH MACKERETH dmackereth@canimac.com

Preface

Does Humanity revere the Economic System as a replacement to Religion?

“How could you, a mathematician, believe that extraterrestrials were sending you messages?” the visitor from Harvard asked the West Virginian […] “Because the ideas I had about supernatural beings came to me the same way my mathematical ideas did,” came his answer. “So I took them seriously.” Sylvia Nasar, A Beautiful Mind: The Life of Mathematical Genius and Nobel Laureate [Nobel Memorial Prize in Economic Sciences] John Nash (1998)

“Everything we think of as great has come to us from neurotics. It is they and they alone who found religions and create great works of art.” Marcel Proust, In Search of Lost Time, The Guermantes Way (1920)

“[M]en of genius are often subject to violent emotions and irrational passions. […] genius is the ability to leave entirely out of sight our own interest, our willing, and our aims, and consequently to discard entirely our own personality for a time, in order to remain pure knowing subject, […]” Arthur Schopenhauer (1788-1860)

“Over a time span of 100,000 years we are all Africans. And over a time span of 300 million years we are all amphibians. […] Since animals evidently have feelings and emotions similar to ours, why do they not have legal rights and moral standing similar to ours?” Freeman Dyson, The Scientist As Rebel (2006)

“The world is now dominated by an animal that doesn’t think it’s an animal. And the future is being imagined by an animal that doesn’t want to be an animal. […] Many of our most common beliefs spring from an underlying refusal to accept that we are organic beings. […] It is nonsense that our gifts have made us something that isn’t animal.” Melanie Challenger, How to Be Animal: A New History of What It Means to Be Human (2021)

“Our duties towards animals are merely indirect duties towards humanity. Animal nature has analogies to human nature, and by doing our duties to animals in respect of manifestations of human nature, we indirectly do our duty to humanity.” Immanuel Kant, Groundwork of the Metaphysics of Morals (1785)

To recap Part One, I put forward five questions:

1 – Did you ask to be born? Yes / No

2 – Did you request the skills, traits and attributes you were born with? Yes / No

3 – Did you choose your birthdate? Yes / No

4 – Did you stipulate the location of your birth? Yes / No

5 – Did you organize the education/training for your formative years? Yes / No

And suggested we should contemplate whom/what should benefit from individual innate human characteristics: himself/herself or all of Humanity and/or all the Biosphere. These five questions apply equally to the animal kingdom! This essay – the first of two parts on Economic issues –identifies areas where modifications could significantly benefit Mankind and the Biosphere.

“Those who are morally well-adjusted look after those who are not; those who are talented look after those who are not.” Mencius, Chinese Confucian philosopher (372-289 BCE)

“I find it valid to understand man as an animal before I am prepared to know him as a man.” John Ernst Steinbeck, Jr., 1962 Nobel Prize in Literature

“Man is a rope tied between the animal and the Superman –a rope over an abyss.” Friedrich Wilhelm Nietzsche, Thus Spoke Zarathustra (1883-1885)

“For the study of political economy, you need no special knowledge, no extensive library, no costly laboratory. You do not even need textbooks nor teachers, if you will but think for yourselves.” Henry George (1839-1897), sparked several reform movements of the Progressive Era (1896-1917)

“The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.” Joan Violet Robinson, Marx, Marshall and Keynes (1955)

“95 per cent of economics is common sense made complicated, and even for the remaining 5 per cent, the essential reasoning, if not at all the technical details, can be explained in plain terms.” Ha-Joon Chang (South Korean Institutional Economist), 23 Things They Don’t Tell You About Capitalism (2010)

Q.E.D.: Humans can earnestly comprehend Economics when needless complexity is removed.

“As wealth and the wealthy are valued more in a city, so goodness and the good are valued less […] what is valued at any particular time becomes the common practice, what is not valued is neglected.” Plato, Republic (c.375 BCE)

“A merchant may, perhaps, be a man of an enlarged mind, but there is nothing in trade connected with an enlarged mind.” James Boswell (1773), Scottish Biographer, Diarist, Lawyer

“What is a man if he is not a thief who openly charges as much as he can for goods that he sells?” Mohandas Karamchand Gandhi (1869-1948)

“No one can be a great thinker who does not recognize, that as a thinker it is his first duty to follow his intellect to whatever conclusions it may lead.” John Stuart Mill, On Liberty (1859) “Growth for the sake of growth is the ideology of the cancer cell.” Edward Abbey, The Journey Home (1977) Including unreasonable economic growth!

This Economic essay (Part A) scrutinizes the following: Corporate Taxation, Understanding Profit, Paying Income Taxes, Redefining GDP, Zero-Based Budgeting, Stock Market, Self-Organizing Markets, Derivatives, Too Big Too Fail, Debts, and Interest Rates.

The U.S. economy will be referenced throughout; distinctly the world’s largest GDP at U.S $25 trillion. China at approximately U.S. $18 trillion GDP follows; however, it is difficult to obtain the necessary information to have a meaningful discussion. With the Chinese population 4.5 times larger than the U.S., and the nearest GDPs of Japan and Germany at approximately U.S. $4 trillion: positions the U.S. in a league of its own (per current GDP theory). All GDPs were estimates provided by the IMF for 2022.

New approach to Tax on Corporate Profits to benefit all Stakeholders

How did we end having the most productive corporations paying more than their fair share of Public Expenditures? Should we penalize the most profitable corporations or encourage them to concentrate on what they do best: provide goods and services and necessary employment for those wishing to work in the private sector and earning profits for shareholders.

“Virtually all the real national income upon which the standard and quality of life depend is generated by industrial corporations. […] Only human beings can bear the burden of taxation, so what are the ultimate impacts of taxation on business profits.”

Frank S. Capon, Profit: The Nature, Size and Role of Profit in a Technological Society (1984)

“Believing as I do that taxation should be levied for revenue only, and that other fiscal objectives are illusory, wasteful, and vicious.” Winston Leonard Spencer Churchill (1874-1965)

A Tax on Revenue approach results in the Corporate Taxpayer paying fair market value for its use of roads, education, healthcare, public safety, financial markets, exports/imports services etc. As Profits do not reflect the extent Corporations make use of Public Services.

Applying a modest percentage to a corporation’s top line revenue (to calculate its contribution to Public Services) would both simply the Corporate Tax Process and enhance the Public’s desire to better understand their particular Income Tax System. Allowing accountants and lawyers assisting Corporations to reduce (ideally eliminate) their Income Tax payments to apply their talents to better serve Humanity and the Biosphere. Some would classify the conduct of these income tax experts as treasonous.

“A large portion of our gain did not come from anything we accomplished at Berkshire, adding that about $29 billion of that $65.3 billion gain came from changes to the tax law.” Warren Buffet, CNN Money, February 24, 2018

Q.E.D.: Some U.S. Corporations significantly benefited from the 2017 Trump Income Tax Reduction Program, adopting little effort!

The government with input from citizens should determine the total Revenue to be received from Corporations. This amount would be divided by the estimated GDP for the coming year to arrive at the Corporation Tax Rate on Revenue. In 2021 U.S. Corporations paid approximately U.S. $375 billion in Income Taxes: dividing that by the GDP of U.S. $25 trillion results in a Corporation Revenue Tax of 1.5 %. More likely the U.S. $375 billion should be higher to adequately cover the Corporations use of infrastructure, education, security, and all the other services provided by the U.S. Government; requires further discussion. If a Corporation cannot afford to pay 1.5 % of revenues towards its use of Public Services, it may not have the right to be in business!

This approach has Corporations operating in a Capitalist Democracy with the ability to apply their Net Profits as they see fit; however, paying their fair share of the Public Services consumed, and deferential to applicable laws and regulations.

The Corporations earning the highest Profits would not be subsidizing less profitable ones. And without a Tax on Income, there should be less reason for a Corporation to send funds offshore!

We find at the Institute on Taxation and Economic Policy an April 2021 article by Matthew Gardner and Steve Wamhoff: “At least 55 of the largest corporations in America paid no federal corporate income taxes in their most recent fiscal year despite enjoying pretax profits in the United States.”

Q.E.D.: U.S. Corporate Income Tax is a Shell Game, and participating professionals/experts should be held accountable for this Legalized Theft!

Profit: a simpler calculation than Quality

Compared to a Government servicing the countless needs of their citizens, a Corporation’s primary function in providing its goods and services is to earn ROI (Return on Investment).

“All sectors need to agree on a single formula measure profit –whether from a social, economic, or accounting viewpoint.” Frank S. Capon, Profit: The Nature, Size and Role of Profit in a Technological Society (1984)

“For the engine which drives Enterprise is not Thrift, but profit, […] Were the Seven Wonders of the World built by thrift? I doubt it.” Winston Leonard Spencer Churchill (1874-1965)

“This is the project for the next generation of economists: To calculate and internalize all the costs of our way of doing business, and then to create a global marketplace in which the price of every product tells the ecological truth.” Adbusters 141 (Jan/Feb 2019), Anti-Capitalist (Advertising Free) Canadian Magazine

Q.E.D.: All costs (including social and environmental) incurred by a product or service must be calculated to arrive at a legitimate Corporate Profit.

“The dilemma is that this value creation is currently hidden in, indeed excluded from, our economic assumptions and measurements, largely because growth and progress are measured in money, and money does not give us information about the health of ecological or social systems.” Don Tapscott and Anthony D. Williams, Macrowikinomics: New Solutions for a Connected Plant (2012)

If modern-day Humanity wishes to have as many people as is possible enjoying acceptable living conditions; then Corporations need to ‘Thrive’ and be ‘Profitable’. However, based on a definition of Profit that is agreed to and meaningful to all Stakeholders on Planet Earth (including those representing the Biosphere).

Paying taxes: an honourable exercise

“The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.” Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (1776)

Theoretically, one would think a citizen who has paid to his/her Government all of the costs of services received should feel rather pleased with themselves, especially in a keen economic environment. And even better to have additionally contributed towards the needs of others who have not been able to pay their fair share. However, ask a hundred U.S. taxpaying citizens today if they are pleased with the amount of taxes paid, and most likely all hundred believe they overpaid. Effort is needed to reverse this thinking: the paying of adequate Taxes may be the most important obligation for a citizen of the modern world. And changing the terminology from ‘Income Taxes’ to just ‘Taxes’ may assist the dialogue. As most of the U.S. Government Revenues (approximately 85 %) derives from Employee Earnings and Payroll Taxes, which do not relate to ‘Income’ associated with Corporations.

Q.E.D.: U.S. individual citizens are the financial foundation of the U.S. Government/Country.

“Having signed the law awarding $1.4 trillion of tax relief to the country’s richest individuals, he’d [President George W. Bush] reimbursed the people who had paid his ticket to the White House, but the smiling pose of “compassionate conservatism” was becoming hard to hold amidst the gradual recognition of both its fraudulence and rigidity.” Lewis H. Lapham, Age of Folly: America Abandons its Democracy (2016)

Q.E.D.: Political contributions can be recoverable!

Redefining GDP to account for Gross Dominant Position countries

“Mr. Hoover was an engineer. He knew that water trickles down. Put it uphill and let it to the people at the bottom and the people at the top will have it before night, anyhow. But it will at least have passed through the poor fellow’s hands.” William Penn Adair Rogers (1879-1935) American humorous social commentator.

Simon Kuznets, the man who invented GDP, “warned in his first report to the U.S. Congress in 1937 that the welfare of a nation can […] scarcely be inferred from a measurement of national income.” Wikipedia (Gross Domestic Product)