On Usury and Other Dishonest Profit, Part XXXIV

As we noted in the previous posting in this series, Capital Homesteading is a dead letter until and unless it can be implemented. That is what we will address in this posting.

The political feasibility of capital homesteading is already soundly established by reassuring the rich that their accumulations will not be taxed to achieve the goal of widespread capital ownership. The tax burden imposed to meet legitimate government expenditures, pay down the deficit, and fund welfare programs during the transition, is another issue. This, however, should decrease over time as more and more people become better able to meet their own needs through widespread capital ownership without redistribution, and the increasing tax base helps pay down the deficit and, ultimately, reduces the tax rate to what is required to pay current government expenditures for a much-reduced bureaucracy.

Pro forma calculations prepared in conjunction with CESJ's universal health care proposal suggest that the deficit — at least as it existed before the current bailout and stimulus spending spree — could be paid off in 20 to 30 years, assuming all new capital formation is financed through the use of pure credit and all new capital is broadly owned. The bottom line is that, not only would the wealth of the rich be safe from redistribution, it would be worth more in real terms as the currency in which the wealth is denominated appreciates, and more people become empowered with effective demand in the form of profits that can be spent on consumption instead of reinvested to finance capital formation.

The specific process of implementing a Capital Homesteading program is given by Father William Ferree, S.M., Ph.D., "America's greatest social philosopher," in Introduction to Social Justice. Asserting that the rich — and the politicians presumably dependent on the rich ("they") — "won't allow" Capital Homesteading is to misunderstand or fail to appreciate the act of social justice — or politics itself.

First, of course, the only reason politicians are dependent on the rich is because they think they need their wealth to purchase votes. They have yet to discover the obvious fact that you don't really "buy" votes with anything other than good government, and by delivering the best government at the lowest possible cost to the taxpayer. The non-rich outnumber the rich by millions, so that (logically) if you want to "buy" votes, you give the non-rich a more direct and more valuable benefit than you give the rich — and do it in a way that does not harm the rich.

To bring this to the attention of the politicians takes, in the beginning, a single individual. He or she reaches out to one other, and so on, until a critical mass is reached. This is brought to the attention of the politicians who want to get elected, and they are presented with capital homesteading. If we assume there are a million millionaires (including the "pluses" with billions) in the United States, there are approximately 299,000,000 votes of people who are not millionaires.

This makes a program such as capital homesteading not only economically feasible, but politically viable. The "carrot" for the rich is the future security of their wealth, otherwise viewed as a treasure house for the politicians to pillage as soon as they can get enough popular support. The "stick" is, frankly, the threat of redistribution that is going to take place, one way or another, if "they" (hardly a monolithic group, anyway) don't go along with Capital Homesteading.

The choice is both obvious and logical: either be left with your current accumulation intact by sharing future ownership opportunities, laying the foundation of a sound economy and currency, a peaceful and prosperous social order . . . or watch taxes and civil disorder increase, the economy continue to collapse, and the social order implode. We just have to remember that the rich didn't get to be rich by being stupid. Making a good case that benefits them as much as everybody else will (except for anyone driven insane by the possession of or desire for wealth and power) be a "slam dunk" both economically and politically.

That takes care of the "rich and powerful." The only question that remains is how to handle the non-rich and non-powerful, that is, most of the people in the world, who through Capital Homesteading would in most cases have the realistic opportunity to become owners of a significant stake of capital for the first time in their lives. In the next (and final) posting in this series, we will look at how to handle the "problem" of how to train non-owners in their new responsibilities and duties as owners.