The idea is to remove private investment from the system, the next problem is how. If it is enough to declare private investments are no longer advised for the obvious reasons, then that would be an easy way out. Now some other ideas ...
- A "don't positively support it" solution. This is easy, it only means not to use state resources to support private investment. When an investor invests money, a certain understanding exists between investor and recipient. Currently this relation is supported by law and judicial procedures, affording the investor the comforts available to real commerce. Since productive commerce is productive, it deserves these comforts, the common interest is served by productive commerce. It makes sense to "do something in return". This is not true for private investment, it is not productive, rather parasitic. It should therefore be excluded from judicial support.
In practice that can take a simple form: wherever money is invested outside the framework of political finance - which is not necessarily nefarious - all understandings and contracts will be void in court. The money transferred is a transfer of money for void reasons, a donation. The recipient of the money can therefore accept the money, and declare it its own. The recipient can then do whatever it likes with the money, even declare the business a shell to attract investor's money, which is then going to be lost to it. These shell businesses perform a service to the common interest: discourage private investment.
- An "no legal gains" solution. The problem with investment lies primarily in its quest for profit above the invested sum. Sometimes people like to invest in efforts not aimed at making profit. The transferred money, though not a simple donation, is meant to provide working funds. When the effort fails, the money is lost. When it is payed back without profit or even with a profit, the end effect is still positive. If someone has saved funds on its bank account, perhaps for a bad financial period, this can only be a good thing. If this money is invested to further non-greed goals, that is even better.
To remove the greed-investing, but not the social-investing, the solution can be to make sure that capital will not be allowed to generate more capital. That is the aim of greed investing, but not of social investing. Profit separate the two. A solution can be to declare all investor profits illegal and liable to confiscation. This confiscation can be done by the state, or by the party invested in.
- A "law enforcement at the point of spending" solution. Presently, there exist only laws on how one is allowed to acquire money. Once it has been acquired - legally or illegally - there are no limits on spending. However, there is a fairness limit to what one person can possibly acquire by working productively. In seeing that some people work to the absolute maximum of physical endurance (and beyond), yet acquire nothing but poverty, it is clear that what one gets is not necessarily what one deserves. Things become murky at the other end: at one time someone did invent the wheel. What was the economic value of that ? The true economic value is possibly greater then the entire current economy. What is the economic value of scientific understanding, which may not become apparent after the discoverer is dead. To make matters worse: there are many skilled financial experts who will reap the financial rewards of other people's discovery, and pretend they earned it. A famous example is the telephone, it is a known problem. The discoverer is probably an expert in his field of discovery, not an expert in extorting money from society. In many cases the discoveries are made out of idealistic motivations, the discoverer doesn't even want money.
Solution seems easy: money is not deserved for ``actual economic value'', because it is impossible to compute (will often be negative without anyone yet knowing), and because it doesn't work. Money is deserved for actual hourly effort, it is deserved for sweat, not product. It is the talent of one person to produce 100 hockey sticks a day, it is the talent of another to make an invention. Now it is clear that there exist sums of money that can not be fairly gained. This opens up the possibility of law enforcement at the point of having and spending.
In a market economy, there can be a great deal of volatility of wages. Sometimes someone can perform a service that people are willing to pay a lot of money for. Sometimes a person is only able to perform this service for a limited time in its life. What is wrong with that. One could make a grumpy argument that the person shouldn't be as greedy, not demand so much money for itself. True as that may be, the money was earned using agreed trades, and it usually is about luxury services. Nobody needs to buy them, but people do. The person is providing an actual service, unlike the private investors, it can't be blamed from that angle.
Law enforcement at the point of spending does not appear to be simple. But something may be possible, different amounts of money have different qualities. Money at the lowest end is `life or death' money. Money above that is `health or suffering' money, money above that is `comfort or discomfort money', above that `luxury or comfort money'. Money above that becomes a political force, is cutting so much into the resources of society that it is becoming a generalized strain, `Political or luxury money'. Now the money spending steps into a new arena, from the personal into the collective. People who have nothing to do with the group making someone rich, have to deal with the Big Spender, provide it services. Is that fair, no its not. So, that seems to be a fair cut off point: once the quality of the amount of money turns from personal luxury to amounts of political interest, society should reserve for itself the right to deny individual people to own so much money, however they acquired this money.
Such a limit will be high in practice. People who have reached the peak, will be presented with a choice: stop and look at yourself, what are you doing ? Then they could relax a bit on their greed, and enjoy life. Or they could attempt to become criminals and evade detection. If they become criminals, they put themselves in danger. That is something worthwhile for society, as we do not need people who are so exclusively greedy.
If the resources of a country become limited, it can be a choice to limit spending further, and disallow levels of luxury to preserve the unity of the people.
This means in practice: an upper limit to personal total wealth, including items owned. Wealth earned above the limit can be confiscated by the state. To prevent corruption it should probably be an automatic law. No doubt rich people will give money away to their close circle, but continue to control it. This way the limit can be exceeded by a certain factor.
The state can delegate its power as political capitalist. As a function of this, the state can decide to allow someone or group to own more money. This is a political choice, some kind of public permit system.
As an example of how this currently fails: there are individuals in this world who own so much money that if spend for the common interest, it could provide clean water for every human. That is a clear example of political level money of the highest order in private hands. If nothing else, it is an insult to the sovereignty of the people at large, however this money is spend. It is not up to an individual to make such decisions, they have no right, especially because in most cases the money will only in part be fairly earned. Who supports the business of the rich person ? Where was their cut ?
Because the limit would be high, the large group of people who dream of luxury and riches are not denied the fulfillment of their dream. In fact more people may see it fulfilled, as money above a certain extend become distributed. If someone is no longer allowed to own X money, instead only Y money, that has the potential to make X/Y people reach the peak, instead of just one person. Even the dreams of wealth could see chances improved ...
- A "rotate currency" solution. The greatest threat to end capitalism comes from rival private capital, it has effectively resisted nationalizations before. Among threats are selling and therefore devaluation of the currency, rival investments, (continue with) sponsoring of deception campaigns through mass media, even investing in violent extremist groups and terrorism. The most decisive way to collapse this threat is perhaps to declare the value of the currency to have become 0, and to confiscate extreme wealth (ownership of mines, estates, large companies*). This reduces to nothing all hoards of wealth, and makes it impossible to convert it. It is easy to hide billions on secret bank accounts, not as easy to hide a large mining company.
For every person a limited amount of money can be converted, for instance all debts and savings up to a reasonable amount. This to minimize impact on real people, and keep the economy going (mortgages, consumer debt, life savings). Companies that more or less accidentally hold now worthless old currency because they trade with the country, can by exception have this currency converted to the new currency, to maintain trust in the currency of the country. What with reserves in foreign banks ? Case by case compensation depending on whether the country has acted as a positive force, not compensating all privately owned banks (who represent private investment) ? The currency and power would then be in a cleaner state, without the burden of the past. From then on it should become illegal to own above a certain (reasonable) level.
The old cash could get a new design feature, and be introduced quickly as new money. Old cash could be converted up to a maximum per person (carry along money yes, massive fortunes no). All regular bank accounts under a certain maximum credit can be automatically converted to the new currency currency to it. When it is certain there aren't massive hoards of cash stored by future private investors, the old cash could be kept going as it is. The operation would then be confined to collapsing credit on bank accounts and seizing property. Hoards of gold and the like are of course confiscated for the same reasons: prevent rival private investorism. Gold should probably be dumped on the market as a regular commodity, reducing its value to what it naturally should be.
This certainly seems to be a daring plan. The larger the area that pursues rotation of currency, the more stable it probably will be. It may be best to keep the currency not convertible, that it can not be traded except for tourists or international trade (and some practical exceptions like immigration). Currency speculation should be resisted, it isn't productive anyway. Money rides in value with the local economy: if you have a lot, make sure the local economy does well.
I can imagine currency rotation to become a complete failure for some reason, perhaps even because of a practical and not strategic mistake. It could be overkill, perhaps not worth the trouble. The rich are especially smart about what to do with their money. But even the threat of "currency rotation" would at least not work in their favor. Someone holding the currency without good trading reasons could end up with nothing, so the rich might have a hard time moving their wealth to different currencies. Hopefully it leaves their wealth stuck with nowhere to go, nowhere to hide. revenge, but everything with protecting democratic capitalism from rival financial terrorism. Individuals who see wealth or companies confiscated should therefore not be compensated at all (unless they are the original entrepreneur). Large companies are to be donated to their workers, unless they fall in the (semi) monopoly sector *) Formerly rich - perhaps having been rich for generations - are left with what ordinary people have. If they want more they can apply for a job somewhere, like everyone else. Under democratic (properly administered) capitalism, ordinary jobs should (eventually) see better compensation, it is in their interest to make it work once they are past a certain point.
It is possible that universal suffrage may not be enough to achieve a government that is loyal to its people, it may be necessary to give rich people less power over government. Rich power are virtually by definition disloyal to the people and the common interest. History seems to suggest that union leaders and leftist parliamentary politicians pose the greatest threat to progressive democracy, because unlike right-wing politicians, managers and bankers, they retain a level of credibility. They have used this credibility to undermine progressive democracy, and return the situation to what it was, with their previous positions intact (the obvious aim).
When a democratic revolution is to succeed, it is to take control of the currency. Currency policy may be the most difficult and technical part of taking state power. Without it, all policies have to deal with hostile private investorism, currency manipulations. Should a progressive government succeed in restructuring the economy, the banks might dump the currency - or commit other acts of financial warfare - and wreak havoc with international trade, thus bringing the economy in trouble, thereby "proving" the government was incompetent and the policies were "bad". The government will have a choice: relieve the capitalists of their power and take it on itself, undo the changes and get the capitalists on their side again. Once a conservative group takes power and returns parts of the economy to private control, the capitalists could end their negative instruments, making it appear that the conservatives have a "successful" policy. Although the economy will be saved from trouble, it isn't the result of good policy, but the result of being popular with the capitalist power, who then restore international trade and currency policy to favorable values. The government is the sometimes misbehaving pet of capitalism. As long as this situation persists, the democratic government is the small wheel on the ship. Because of this, right-wing pundits can correctly point to "for the economy" dangerous left-wing policies, because indeed the economy can suffer. But not necessarily from direct policy, rather from capitalist power. Capitalist power does not have to act as a conscious effort: when the policy is negative for their wealth, they have a natural interest to move away their wealth from that currency, causing devaluation. Whatever power capitalists have, it is always negative for progressive policies, because progressive policies have the object of collapsing their wealth, distributing it more fairly. Naturally they act contrary to that effort, even destroying a national economy if that saves their wealth. I don't claim to understand it all, but taking control is always better.
Rotation of currency is aggressive way to clear capitalist power, like resetting a computer. If an attempt to improve society does not want to contemplate restructuring the money system and seizing all large value, the attempt may be destined for long term failure. Capitalism may grow back.
Several centuries of Capitalism, and still the exact same problems.