The mal-distribution of wealth is the inevitable result of the operation of existing Capital Markets. Unless we reduce Capital Markets' importance or change them, people will continue to consume too many natural resources and invest in things that destroy the environment. A relatively simple change to markets in goods and services will remove the need for many toxic Capital Markets. The resulting savings will free up Capital to address global warming, species extinction and the trashing of the environment.
Alvin Chan has created this excellent description of the underlying cause of wealth inequality. Bruce M. Boghosian’s Ted Talk and article in Scientific American give more detail. The underlying cause is that wealthy people pay relatively less for the same goods and services than poor people, increasing wealth disparity.
We need some disparity in wealth to keep economies operating, but too much disparity slows the economy and destroys both the economy and the environment in which it exists.
Redistributing wealth with taxes is one way to alleviate the problem. Means testing is another, but both are bandaid solutions and do not address the underlying issues. The cheaper solution is to make the value to the person of any transaction the same, independent of their wealth or whether they are a buyer or seller. This levels the economic playing field, resulting in a less unequal and more efficient economy.
A Community Capital Market (CCM) makes electronic payments for goods and services of equal value to the buyer and seller. They have the advantages of low cost to implement, no cost to transfer Capital, and doubling the rate of Capital investment for a given amount of money.
A CCM sells 50% of the profit from a goods and services transaction to the buyer as a discount on the buyer’s next transaction. It means the value of each transaction is the same for both the seller and the buyer. The economic objective of free markets is to arrive at a price where both buyer and seller receive the same relative value from the same transaction. A CCM comes close to achieving that outcome within the market for goods and services while removing the need for the existing forms of Capital Markets like stock, real estate, and insurance Markets.
CCMs make transactions with a monopoly, oligopoly, or monopsony fair and equal to buyers and sellers with the simple change of sellers sharing future profits of a business with customers.
It was difficult to build CCMs at scale until the advent of computers and ubiquitous communications. Today with low-cost computation and transmission of information, new ways of organising the exchange of value are possible. CCM is one such way, and there will be many more.
