[[epistemic status: I present a rough outline, and appreciate all feedback, with the expectation that details require nuance and testing before action.]]
TL;DR - I seek the most complete policy for the internalization of externalities; I do not expect Donor NFTs to capture the entire scope of the externalities we face. Fundamentally, that internalization must act through some form of governance; we cannot expect each transaction's values to be wholly aligned for all participants on their own. In contrast, the preponderance of value, for each constituent in a governing body which internalizes externalities, may give government-regulated-internalization traction.
An Example of A Cure?
Back in the '90s, researchers identified that the high rate of accidents at intersections was partly diminished when the stoplights BOTH spent a few seconds glaring red, together. It was a simple fix to cut vehicle mortality by a quarter. Yet, not many mayors were reading those research publications, nor did they have the funding or motive to take action. It took a while for the stoplights to change.
Yet, what if you had written-up a Proposal: "Convert the StopLights Across America!" with an estimate of the value, cost-structure, and a 'business plan' for the activity? If only there was a place, like a Stock Exchange, or Kickstarter, where investors could bid toward that Proposal! Like Kickstarter, your money only moves into the Proposal once it hits its funding requirement. Unlike Kickstarter, you aren't rewarded with just a mug or a toy. It must have a path to generating a return in order to pull investors toward it. The people who run the operations of the Proposal could try working-out some payment plan with each mayor, but that's a fool's errand. Instead, let a wealth tax absorb enough to pay the investors a return, as a percentage of the measured benefit to the public of that proposal.
So, if the government assessed that the total value to the public of all those avoided accidents was $10 Million/yr, then they would need to increase their rate of wealth tax that year by, for example, $3 Million. (A 30% return to the investors who funded public benefits seems fine to me.) That pile of money goes to pay all the normal costs of the operations of the proposal, (no CEO bonuses!) while ALL remaining cash goes to the investors as a dividend. Considering that the proposal would only have operating costs for the few years required to convert stoplights, while that benefit would be paid-out to investors year after year, the returns from funding such a Proposal would be competitive with business investments. That is the key concept: Helping others can be SO EFFECTIVE, that investors would WANT to put their money toward it. And, if the hope is to ONLY help in those ways which are most effective, then this naturally aligns the incentives of the investors toward that most-effective good.
"What about corrupt government?"
Yes, that's basically the argument against everything, even though the government is already corrupt and ineffectual, so most changes would still be an improvement. I would rather dive into details of accountability, without expectation that "we would be able to pass that into law, here in the US". Rather, I presume that we will have numerous opportunities to try our own variations of governance in a few decades, regardless of political inertia among land-dwelling nations. I plan for when we can make that move, because that is a far more likely future than one where the US changes course. ("Sea-steading" waits only for the cost of materials/fabrication and demonstrations of reliability, before the largest migration in human history.) In that light, yes, we can pile-on transparency and accountability, homomorphic encryption of person data, instantaneous updates from the whole public without waiting for elections, verifiable functioning of protocol and legislation (or else it is dropped!) all to help limit and dissuade corruption. We certainly can't make all that happen in this country, but we know what we could do, once we have somewhere else to go.
The core concept I cling to is that, unlike mere privatization or government-awarded contracts, a Market for Externalities keeps a check upon the quality of the service provided, and the tax is fixed as a percentage by legislation. With government in the role of diplomat, justice, legislator, AND the research body that accounts for Proposals' impacts, then the remaining tasks of bureaucracy could be devolved into a set of Proposals. Insofar as we can account-for and price-in externalities, we improve our allocation and decision-making, NOT just for philanthropic dollars, but for the whole pool of investments.
Where would you like more detail? What concerns do you have? What else could help? Thanks!
Thank you for your detailed response! I am glad when we explore the design-space; to find a decent idea, we must find the patterns amongst many.
In regards to each specific option you mentioned:
So, the key difference I have with all of those mentioned is that I propose an incentive for regular, self-interested investors to pay for benefits. That certainly would not happen in each other method. (And yes, those taxes and dividends would be retroactive, similar to the prizes for social good you mentioned.) Without material rewards for the investors, we will only pull a few tens of billions in philanthropic dollars toward benefits every year, while my goal is to internalize externalities in totality or close to it.
This is a critical distinction, because there are a few hundred trillion dollars sloshing around in businesses and real estate, NOT because the investors like capitalism - rather, they like a high rate of return! :0 Due to the efficiencies available in the space of positive externalities, we can give investors that rate of return, while keeping the lion's share of the benefits in the public. Investors would look at their distribution of assets and say "oh, I was only holding this real estate as a HEDGE against inflation, I'd rather put my cash into a diversified portfolio of public benefits, because they earn an annual return of greater than 12%!" That's how we can get tens of trillions thrown toward beneficent work. Just give them enough cash back that they are happy. (...and, that shift in assets would lower the price of urban real estate, once they clear out of it!)
[[It's also worth noting that the article you gave to dismiss wealth taxes only showed that "European countries had all kinds of weird exemptions, while they didn't exclude basics like your farm or small business, so some people suffered... they also let the millionaires leave - which they did." Elizabeth Warren's wealth tax plan, in contrast, is shown in that same article to address those concerns. Compared to the disincentives from sales tax and income tax, I'd prefer a progressive-rate wealth tax only, with a hefty cut taken from those who leave citizenship behind.]]
I see some form of governance as essential to enforce taxation; and that taxation is the only reliable means to gather the broadly-distributed value of most positive externalities, in order to reward investors. Without that reward-structure, we're leaving tens of trillions of dollars on the table, when we could be spending that on public benefit. So, what might that governance look like? A smart contract, binding sea-steaders into a loose federation, perhaps? I look forward to any other ideas that come up! It should seek to internalize as much as possible, ideally leaving no externality untouched, so that pricing is an accurate representation of public value, and allocation is efficient. Then, I wouldn't be so worried about markets ruining planets. :)