Friday, September 01, 2017

Self-Financing Community

There are two sources of income - Labour and Capital. What you get paid for your work. What you own gets paid. Half the world's population get an income of less than $3,000 a year. If a community of 150 people had 75 people with an income of less than $3,000, they could lift everyone above that level in two ways:

1) With contributions from those earning more than $3,000
2) With dividends from a Community Wealth Fund (CWF)

If living below that level was how you defined poverty, a self-financing community could end poverty in that group if contributions from that group's income, and from the group's CWF were sufficient. The bigger the group's common capital, the lower the need for this to come from contributions from others. 

With time, all the finance needed to ensure the death of poverty for this group is a CWF that get's paid enough to pay everyone a Universal Basic Income. If people don't get poorer, and the fund can earn 3% a year, that would require a fund up to $7.5 million (75 times $100,000 which earns $3,000).

If you assume the CWF starts from zero, the full amount would need to come from the 75 people earning more than $3,000. To have zero poverty, you need people willing to contribute somewhere between $0 and $3,000 each on average. The person earning $3,001 may not be willing/able to contribute. The person earning $300,000 may be willing and able to contribute a full $3,000 (1% of their income), or more.

To kill poverty, we need to be willing and able. There are 7.5 Billion of us. One way to kill poverty would be to build 50 million self-financing communities of 150.

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