Thursday, August 12, 2010

Goodwill Capitalism - Pros and Cons of GeeCees

This is part 3 of a series of posts on Goodwill Capitalsim. Please read the previous posts on Prelude to Goodwill Capitalism, Introduction to Goodwill Capitalism and Earned and Borrowed GeeCees before continuing on with this post.

Pros of GeeCee Economy
  • One of the primary objectives of the Goodwill Capitalism is to offer a universal guarantee for critical social welfare or social security programs like healthcare, retirement, pension and education by assigning the financing (not delivery or management) of those services through governments and to leave the wealth creation initiatives to businesses.
  • A significant outcome of this division of responsibilities will be increased cooperation and goodwill among the citizens, between neighbors, among families and between strangers. Goodwill Capitalism will empower people, businesses and countries to succeed without sacrificing their lifestyles or core values.
  • Remember how business is always about maximizing profits and minimizing costs? Well, with GeeCees, it is possible to achieve both without sacrificing customer satisfaction and founding principles- because a satisfied customer means profits - literally!

  • Goodwill Capitalism might appear to be a huge welfare program - but actually it is a great cost cutting program and empowerment program. Many of the programs are already running in one form or another. Only problem is that the entities picking up the tab are widely distributed between the public, private and the not-for-profit sectors. In fact, because of the many new job opportunities in a GeeCee economy, fewer people than now will be taking advantage of these programs.
  • Even though GeeCees are borrowed at zero percent interest rates - it is not exactly true. Yes in a way, if I borrow 10 GeeCees today, I have to repay 10 GeeCees - no matter when I return them. But the exchange value of those 10 GeeCees will be different and will depend on the Money Equivalent of GeeCees prevalent at that time. Of course, conversion of GeeCees to cash is only available to businesses whose industry falls into the category of Life's essentials.
  • Many government welfare programs and the work of charitable organizations will no longer be needed. Medicaid, Medicare, Social Security, 401(k), and other retirement programs are not relevant anymore.
  • In a GeeCee economy many overheads and legacy costs are eliminated for businesses - at least they will not be mandated by laws. Therefore, business operations become flexible and nimble, with plenty of cash available for innovation and growth and less money tied up for indirect costs. GeeCees act as a price equalizer in a global economy because companies are no longer carrying the overhead costs related to their employees' quality of life and lifestyle needs (which is main contributor to global inequalities). Salaries will reflect the employee's true contribution at work and their value to the business instead of the many add-ons that we have now.
  • Employment opportunities increase because there is no more need for permanent employment. Job security is no longer important, because basic necessities are taken care of. Therefore people will choose jobs that they are passionate about. Employer-employee relationships will last as long as it is mutually beneficial. There is no pressure on either to save jobs for jobs sake. Job satisfaction will be at its highest. Seniority does not have the same implications as before, therefore any job is a good job for any age
  • Temp jobs will become the main source of employment - again because, there is no longer a need for employees to look for long term jobs. Many menial and low key jobs where there is a high employee turnover can now work temp. Worker ages no longer matters. There is no retirement age - because all of the liabilities go away - except those related to safety. Companies would prefer to retain senior employees for their experiences, if there are no legacy costs involved. People's mobility improves and businesses can respond dynamically to market stimulus because of shorter hiring and firing cycles. Employers may keep a steady pool of trained temps (from the government recommended pool of job ready workers) without worrying about benefits and healthcare.
  • The objective of the government and private service centers and training centers is to remain current with labor requirements and forecasts and then maintain a constant pool of skilled and trained workers available for those positions at all times.
  • Productivity increases. People are willing to take risks and explore new ideas. Individual entrepreneurial spirit and innovation will flourish and economy will take off.
  • Globalization will continue to thrive, only on an even keel - without the exploitation of labor markets and currency rates.
  • Crimes and corporate scandals will be reduced because there is a better chance to succeed being appreciated for good work than for fraud or short cuts.
  • Local communities will flourish and environmental and energy issues will be solved. The high costs associated with research and development of new technologies and materials are now subsidized with Earned GeeCees so that prices remain competitive with traditional technology products.
  • Governments and politicians may use their Goodwill Capital as leverage to implement new policies and programs. It will be possible for politicians to run longer election campaigns without the need for money, but instead based on their goodwill capital alone. Similarly Governments may be required to build a certain level of good will capital within their own people and possibly with other countries before waging war or taking on controversial international issues relating to trade, environment and humanitarian violations. The amount of Goodwill Capital will actually strengthen their voting power in the United Nations or other international forums.
  • Without Goodwill Economy, the population shift from rural areas to urban centers will continue unabated. With GeeCees, population growth will spread out evenly all across the land because people can find work closer to their places of residences anywhere in the country - instead of just around major metropolitan centers.
  • Of course, GeeCees will restore consumer confidence. Traditional monetary economy will thrive when people feel confident about their future and consumer activity will increase.

Cons of GeeCee Economy

  • There is increased potential for abuse and fraud. For example, people could keep rewarding GeeCees to each other in a continuous loop which would be fairly difficult to break, if the number of people in the loop is large enough to camouflage the presence of the loop. However, the auditing features and the digital track record will eventually bring it out in the open. A good analogy would be the frequent bubbles and market corrections that repeat in the free market economy. Regular monitoring should be part of the implementation process in a Goodwill Economy.
  • There will still be bums who may never want to work. Every society ends up with few delinquents who are emotionally unstable or addicted to some behavior or drugs that they cannot function well in society. It is possible that such people will only be encouraged to continue in their behavior, because of the security blanket that GeeCees provide. But such people will always be there in any society. GeeCees actually helps out family, friends and caretakers of such persons by allowing them the flexibility to take time off busy schedules and help them in a pro-active manner.
  • In many success stories, it is the fight to survive that brings out the best in people - or the worst as well. I am not sure how a security blanket such as GeeCees will help motivate people or challenge them. But if you look at people in any society, the really aggressive entrepreneurs and inventors are a small percentage of the overall population. These types will continue to be motivated and inspired professionals and entrepreneurs even in the GeeCee economy. My guess is that there will be many more success stories because of a revitalized and cooperative marketplace.
  • Will there be any incentives left for students to pursue the rigors of professional studies or training such as those required for physicians, lawyers, soldiers and scientists to name a few? Or will everybody take the proven, easy path because there is really no need to burn that midnight oil? I believe that GeeCees or no GeeCees; people will always seek out challenges and overcome them. The good thing about the Goodwill Economy will be that only the most committed individuals will pursue such rigors and therefore we might end up with the best professionals that we can ever hope for.
  • People always seek power and recognition. Money is power. Can GeeCee counter it? Well, I don't know. It all depends on the implementation. I believe that we will have to create new sources of power and recognition for those who continue to battle it out for wealth. Just as there are GeeCees for parents being good mothers and fathers, there should be GeeCees for professionals and workers for meeting and exceeding their objectives and goals in the financial world.
  •  As I mentioned in the Pros section, governments and politicians may build up Goodwill from their people - but there are some tricky issues when it comes to comparing who has built up more capital. For example, a country or state with larger population may have built up larger Goodwill than a country or state with sparse population. How do you say that the X number of GeeCees from Country 1 is equivalent or weightier than the 3X number of GeeCees from another country? I have discussed many ways to take care of such situations, but for now, lets' consider this as a possible problem.
  • There is also a big potential for people making a good situation look bad, only to come back and remedy the bad situation just so as to earn GeeCees. Basically, fake a good deed in order to earn GeeCees. For example, a fireman actually setting a building on fire and then rescuing the people in the building - or a teacher not covering important topics until the end of the semester and then working overtime to help out the kids in a desperate situation - of course, there are safeguards in our system even now, about taking care of such situations, but there is a potential for abuse, if the oversight is not strong enough. That is why I recommend that the oversight committee or the monitors should not only be in powerful positions, but they need to well trained and there should be remote auditing of the system as well - that is, monitors who are not from the same geographic area as the people that they are auditing.
  • Governments and markets could still combine against the common good by tightly controlling the product mix that can be marked as life's essentials - but in the end people can still vote with their GeeCees and money.
... click here to read about implementing Goodwill Capitalism...

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