Thursday, April 5, 2018

Localism Needs a Strong Economic Base

Is it possible to localize cultural preferences? While I've hoped for similar outcomes from knowledge use systems, there are important economic considerations as well. For instance, groups of individuals in new communities would have difficulty organizing purely on shared values, without an economic framework that could make functional decentralization a real possibility.

Just the same, it's time to explore new means for moving forward, as Washington's gridlock is unlikely to be resolved any time soon. In a recent Brookings article, "Is constitutional localism the answer to what ails American democracy?", the authors write:
Our urgent call for a new civic ethos reflects our belief that the old New Deal structure that relies on centralized standardized solutions does not align with the variety of life in America today.
Even though a rethinking of non tradable sector activity would be key for such efforts, today's non tradable sector activity is caught in a tangled web of interdependence at local, state and national levels. True decentralization would require reassessing these complicated connections, so as to move past the problems they still pose for independent action.

What's more: As "Johnny" of Granola Shotgun recently noted, retail designations are no longer the panacea for many communities they once were, in terms of providing local taxation revenue. How might new communities meet mutual obligations on different sets of terms?

Plenty of discussion needs to take place, before groups can envision settings that are conducive for working with others on mutually agreeable terms. There's three central economic aspects to this process, in particular: Local infrastructure commitments, incremental ownership options (for all residents), and circumstance in which taxation will still apply. Time arbitrage as a component of wealth creation, also creates internal revenue and time coordination flows - flows which otherwise would have been dependent on other sources for ongoing maintenance and upkeep of shared spaces.

Individuals would naturally gravitate towards groups which share similar resource capacity for infrastructure commitments and ownership responsibilities, hence infrastructure outcomes would reflect this reality. The good news for groups with limited resource capacity? As a society, we're getting close to the technological momentum that makes possible a much wider range of affordable infrastructure - some of which would require far less maintenance, than infrastructure requirements which evolved in the 20th century.

When would taxation still be necessary within the equilibrium corporate structure that provides an economic base for new communities? One example occurs when local citizens take part in ownership options which provide dividends within the equilibrium corporation's tradable sector role, for production of building and infrastructure components. What makes this particular income taxable at county, state and national levels, is that it represents product separate from time capacity. Most important for the equilibrium corporate structure, however, is to ensure that compensation for time based product is not subject to any taxation, since time is scarce and not capable of output multiplication.

The digital era makes it possible to form new communities in which participants have shared interests and values. Just the same, similar identities are but a starting point, as these new groups would also need to agree on similar means of resource accommodation and commitment levels. Everyone would need to be in agreement re the purpose of basic infrastructure settings, and how those settings could assist them in their own personal goals and aspirations.

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