The theory starts with Birdsell’s density equilibrium concept.
“Density is a ratio exploring the relationship between people and space” and “ A density equilibrium system is based upon the broad biological assumptions, a balanced condition in nature for all life”.
In his work, Birdsell describes density equilibrium persists in the world that maintains an equilibria that populations are subject to whether by choice or natural forces. The full construct as it applies here can be found in my work on The Evolution of Capitalist Economic Growth: Socio-economic Considerations On Population Production and Resources pp 2.
From an estimated sustainable Equilibrium we create an industry window or target such that in monetary policy, the fed would say ‘we will target a slow and steady 2 percent growth rate’ that prevents rapid monetary inflation. In the Industry growth ‘target window’ we attempt to achieve a rate of industry growth that captures the needs of population growth at the lower end and does not exceed resource sustainability at the upper end. An upper and lower bound. The management of such has threefold checks on density equilibrium and is consistent with evolutionary growth of our social system, I have further work on this in Modern Capitalist Evolutionary Growth.
- Composite extraction and emissions resource system
- Industry target entry rates
- Innovation and efficiency constraints
In the Production, Materials, and Emissions Composite System (PMECS) materials use would be calculated in a manner consistent with financial accounting, they are accounted for at the final goods level. Resources include use of material inputs where natural resource extraction occurs and where excretion into the natural environment occurs (accounting for air, water, ozone, and material waste). A tiered system ensures that using greater resources increases the costs too greatly to be profitable by the check in place on industry size. Industries making greater efficient use of resources and investing in technological advancement that reduces pollution and waste will produce better than organisations that do not and will profit more. An environmental check.
The goal of environmental checks is acomplished by targeting a window of Infant Industry Entry, reducing individual corporation size through tight competition that has two goals: increase the size of the middle class to largely industry owners, and to ensure tight competition to innovate. The target achieved in the former helps to achieve the goal of corporation size/share and prevent one company from solely profiting from the large degradation of our planet and resources. It also keeps society within the resource use window according equilibrium density, a positive check on environment. While this component adds to greater diversity and egalitarian society, it is not explicitly required to achieve the end goal of resource constraint and equilibrium density. The PMECS should be able to accomplish that objective, however my theory is analyzing the Infant Industry component as an additional tool to balancing economic activity via encouraging entry and reducing inflation that could otherwise be induced by PMECS tax. A balanced approach that targets both service and production simultaneously, to determine if we achieve a greater social benefit and directed growth using the tool.
What are the effects of flooding the market with infant industry and putting downward pressure on production from large organisations through tax and environmentally related policy controls? One significant change would be in the stock market. The wealthier class would have a choice to increase their income via investment in smaller businesses for their additional income rather than favoring business that is over-exhausting the environments resources. This is not uncommon currently. Smaller businesses experience fast growth and buying a large number of shares can allow a large investment return, often of 70 to 300 percent, dependent on industry sector and economics conditions. Innovation will be a heavy investment sector, in particular green innovation, this is also the current status in the market so not much changes here. Larger changes will likely be the number of smaller businesses on the market. This attracts investment to help these businesses thrive. It boosts a company’s brand and image, helping a healthy company become more successful. It creates more financial liquidity to help these companies succeed. It comes with accountability, as a prospectus must be filed with the U.S. Securities Exchange Commission (SEC) with a profile, summary, and projections and an initial public offering (IPO). Projections reports must be filed with the SEC and companies are held accountable for their actions and performance. Better benefits to employees give companies more social accountability because they can offer stock options as benefits to employees. For more information on how going public impacts small business, visit the Securities Exchange Commission. In short we should see minor changes in the stock market that reflect the changes made in the economic environment that include greater structure, stability, and support for small business, greater support for green innovation, and greater social accountability both environmentally and in benefits of ownership and investment income for the middle class.
Taxes would change. While taxes would remain fair use for resourceful companies, taxes are higher for non-resourceful companies, promoting efficiency under the (PMECS). Some of this tax revenue offsets extended student loan subsidy. Entrepreneurs need risk mitigation to engage in entry. College would be provided for by the government but student loans would persist for living and other expenses. Qualified degrees for industry entry would have an extended two years to begin repaying loans during which they have an open business that meets requirements for industry entry targets. Interest would be paid on their loans. When a company is stable at two years and has proven successful the government will pay a portion of student loan debt for infant Industry owners under a certain retained earnings criteria. This achieves the goal of attaining the target entry numbers in industry, but is still under analysis due to that entry and exit with respect to economic fluctuations can be ambiguous. The tax and stock market changes should not cause a shock to the economy. The changes would be slow. Current degree holders who meet the requirements would be a slow opening for the system, but new Industry Entry would take several years to begin. Major changes would not begin to take place for four to six years and would increase incrementally thereafter. Of course current corporations would be on a tiered status to meet objectives slowly over a decade. The first major change occurring would be in green innovation and efficiency as grandfathered industry strives to meet criteria. In ten years we would expect to see both grandfathered industry and infant industry numbers begin to start aligning with desired goals.
This work is still in progress, check back for updates
- Economic Models
- Data Sets and Econometric Analysis