Friday, October 3, 2008

The Just Third Way Solution to the Financial Crisis

Antonio Betancourt, Guest Blogger

The economic and financial crisis we are witnessing is nothing less than the end of the system as we know it. The economic systems we inherited from the 18th and 19th centuries are dying; they are in state of coma, and they will not recover. Both the capitalist paradigm behind the so-called market economy, with the glorification of individual greed, and the socialist paradigm behind the so-called communist or command economies, with the glorification of envy, are based on vices that will never lead to justice. These two systems were deficient from the very beginning. These two systems fulfilled whatever promise they had within the limits of their principles. Neither is equipped to address the demand of the masses of today's world for participation as new owners in the new global economy.

Capitalist and socialist economic paradigms lead (perhaps unintentionally) to two kinds of monopolies: political power, and financial and economic-money power. The capitalist system creates great concentrations of economic and financial power in a few representatives of the private sector. Capitalism renders the majority of the population dependent on that minority, for wages for hire, salaries, employment, price setting, credit, etc.

The socialist model is even more monopolistic. Socialism creates concentrated power in the bureaucracy of the State or government. This concentration of political power with economic, and financial power, control over the money supply and the economy, is carried out by a much tighter monopoly than in the capitalist system by the State bureaucracy. In socialism the majority of the population depends on a tiny minority for their economic "empowerment."

Neither system was designed to empower the masses. Half of the 20th Century and the beginning of this 21st century witnessed the necessity of empowerment and participation of the masses in the economy as well as in the political, technological and cultural affairs of the countries, regions and ultimately the world. History is characterized by an enlightened, educated minority who led the rest of the population who were kept ignorant, and lacked the education and enlightenment to lead. Today we have a situation in which the masses are enlightened and educated: they want to lead, and take responsibilities for their lives and that of their surroundings. In other words, economically speaking, the people of the world are demanding not just employment and wages, but participation in the way capital and wealth is created, and credit is allocated. There is a necessity to retire the two present systems of economic monopolies and create a real expanded "Market Economy for the Masses."

To do this, the Wall Street Model is powerless and so is the New Socialist Model represented by Chavez of Venezuela and the new radical left. The world economy — beginning with the US and the industrialized nations — needs to adopt the ideas of Louis Kelso (the founder of the ESOP) and his followers since the 1960s. (KelsoInstitute.org, cesj.org, or widp.org,). The world needs a total democratization of the economy by democratizing access to money and credit for the masses. Since the 1970s, the financial and legal instruments have been created for the economic transformation of the world, to a true democratic, justice-based economy.

If we want a real political democracy, we must first create a foundation of real economic democracy. Today we have a dysfunctional political democracy that has resulted in economic plutocracy. This is the reason democracy is not working and expanding in the developing world, whether Iraq, the Middle East, Africa, and Latin America. The masses have to become the owners of the new wealth that will be created now and into the future, not just wage-workers for hire. This is plagued with insecurity in today's economy. Only ownership is the solution. "One person, one vote/one person, one owner." This will be "real representative democracy."

The $700 billion of the bailout plan should not be given to the monopolies that created and are an intrinsic part of the problem. This money should be allocated to the masses following Binary Economic Principles that are proven to bring economic empowerment to ordinary citizens. This will harness the wealth creative power, the productive ingenuity of people everywhere. Democratizing $700 billion in the US would allow people to access credit for economic activities, and repay that credit with the profits and revenues of their enterprises. Access to self-liquidating loans that would move the masses to participate in the economy of the country and in the economy of the world will create new owners of corporate assets that are producing wealth everywhere.

For more information on what I am talking about please log onto the web site of the "Center for Economic and Social Justice." They are the gurus in the Economic Justice, Own or be Owned Movement.

Donations to CESJ are tax deductible in the United States under IRC § 501(c)(3):





1 comment:

Bob said...

Democratizing capital ownership, as called for in "Own or Be Owned", is not enough by itself. Real economic democracy requires a shift from faux to real money, because otherwise ownership even by the "masses" will be in the dreamworld of exponentially expanding debt, which is the opposite of real wealth. Economic democracy therefore requires not merely ownership of just returns from one's own labor and the universal human right of access to ownership of the dividends from capital investment, but access to the process of creating money and credit, which requires a political revolution.

Tony Betancourt combines all three of these human rights in this statement of October 2nd, 2008: "Economically speaking the large populations of the world are demanding not just employment and wages, but participation in the way capital and wealth is created, and credit is allocated. There is a necessity to retire the two present systems of economic monopolies and create a real expanded Market Economy for the Masses."

When the bulk of money is invested in debt, not in the real economy, gaining access for the masses to the faux economy would be a cruel fraud, and subsidizing debt by taxing the masses to bail out the current owners of debt would be a double fraud because this would make the victims in the real economy accomplices to the world's greatest ponzi scheme.

Bob Crane