I think it should be possible to address social problems using "Pattern Language" techniques. Here is a simple example that includes a serious proposal. I posted this to Facebook a couple years ago, but I might start using this framework here.
Problem:
Businesses externalize costs to save money and increase profits. That is, they force others to pay for their choices and actions. Examples of externalized costs include: government subsidized wages, pollution... These externalized costs must be born by someone, often society at large.
Solution:
Force businesses to pay externalized costs.
Initial Steps:
Choose a particular large externalized cost that is directly affecting a large number of people and force internalization.
The Carrot/Stick
The stick can be forced redistribution of profits. To protect new companies and marginal businesses, penalties should not accumulate indefinitely. Suppose the limit was one year without carryover. If the business owed $80,000 for externalities last year and this year it was $20,000, paying $20,000 this year would clear your externality debt. This requires safeguards to prevent gaming the system.
If a business is identified as having an unpaid externality debt the business would be restricted in how any profits are accumulated and distributed:
- No pay, entire package, for anyone in the company (e.g. the CEO) could more than 25 times the median (not mean) wage for the company. Any amount over 25x would be taxed at 100%. The number 25 is not arbitrary. Over time, investments can be counted on to return at least 4% per year after inflation. Suppose a CEO invested an amount 25 times the median wage for their business. They could withdraw the median wage from their investment every year, forever, without touching the principle.
- No investor returns until the externality is paid. This means no dividends, no stock buybacks, no acquisitions of other businesses, no investments unrelated to the current business. Profits would have to be distributed inside the company (buying new equipment, hiring new people, increasing worker pay...).
- No accumulation of cash more than some amount calculated from the debt. If you have tons of cash, you should pay your debt.
Business can continue forcing costs on others but they are limited in how they can distribute profits. This is not ideal but it is much better than the current situation.
Initial Externality Proposal:
Let workers keep what they have earned.
Wages are often subsidized by government. Government provides a safety net in the form of SNAP, medicaid, AFDC, WIC, TANF... Effectively, when businesses do not pay a living wage government steps in to make up the difference. That is, businesses externalize the cost of wages by having government tax everyone to make up the difference.
The profits of a company come from a number of sources (workers, capital investment...), but rank and file workers are a big source. If the wage at a company cannot support life, then the company is too poor to pay the CEO or investors large amounts.
Each company can receive an externality bill for their portion of safety net programs affecting their workers. For example, If a 10 hour a week worker receives $400/month in SNAP (food stamps), the company is responsible for roughly 1/4 of that amount because they work 1/4 time. That is an externality bill of around $100/month.
Attacking subsidized pay encourages higher wages and reduces the amount government has to spend on the social safety net.
