" 'They' won't let us/you." What "they"? Who is this "they"? Please be specific! "They" is defined in the dictionary as "the generalized 'other'." A "generalized other" can do nothing. It takes a particular (that is, identifiable and specific) "other" to carry out an act as definite as preventing Capital Homesteading or anything else. What people usually mean when they say " 'they' won't let us/you," is that our social institutions are badly organized. If so, these institutions are inhibiting or preventing the practice of virtue, specifically, the acquisition and possession of private property in the means of production. That being the case, the solution (as Rev. Ferree makes clear in Introduction to Social Justice) is to organize and carry out "acts of social justice" to restructure our institutions so that they once again assist us in our acquisition and development of virtue instead of operating to our detriment.
"It's impossible." It's astonishing how often something people don't want to do or don't understand is "impossible." It's impossible to have a stable society without a god-king. It's impossible to sail across the ocean-sea without falling off the edge of the earth. It's impossible for a remote and heterogeneous collection of colonies to unite and break away from the mother country. It's impossible to fly. It's impossible to go to the Moon. On the contrary, as Rev. Ferree pointed out. As he explained in Introduction to Social Justice, "Another characteristic of Social Justice, . . . is that in Social Justice there is never any such thing as helplessness. No problem is ever too big or too complex, no field is ever too vast, for the methods of this Social Justice. Problems that were agonizing in the past and were simply dodged, even by serious and virtuous people, can now be solved with ease by any school child." (47)
And so on. Excuses could be multiplied ad nauseam, but what's the point? They are excuses, not reasons. The principles supporting Capital Homesteading have never been successfully challenged despite decades of demands that critics get explicit about what, exactly, is wrong with them. The best anyone has ever been able to do is to claim, based on other principles, that Capital Homesteading or the Just Third Way is crazy, stupid, evil, or some other handy pejoratives as helpful as they are scholarly. This, of course, is much easier than actually arguing. As Chesterton explained,
It is no good to tell an atheist that he is an atheist; or to charge a denier of immortality with the infamy of denying it; or to imagine that one can force an opponent to admit he is wrong, by proving that he is wrong on somebody else's principles, but not on his own. After the great example of St. Thomas, the principle stands, or ought always to have stood established; that we must either not argue with a man at all, or we must argue on his grounds and not ours. We may do other things instead of arguing, according to our views of what is morally permissible, but if we argue we must argue "on the reasons and statements of the philosophers themselves." (G. K Chesterton, Saint Thomas Aquinas: "The Dumb Ox." New York: Doubleday Image Books, 1956, 95-96.)So, aside from panic-stricken excuses, injured pride, and a general feeling of individual helplessness, there is nothing to prevent a "Capital Homestead Act" from being enacted. The only things remaining are to outline (briefly) how Capital Homesteading works, and figure out where the money is to come from. For the full-blown program, of course, interested readers should go to Capital Homesteading for Every Citizen (2004). Because the question as to where we are to get the money is of such paramount importance, we will cover it first.
The "money question" is actually easy to answer, once we understand a few basic concepts, the most important of which is that "money" is anything that can be used in settlement of a debt. The Capital Homestead Act proposes a number of programs so that every man, woman and child could get interest-free (though not "cost free") capital credit from a local bank. Consistent with the tenets of the classic "Banking School" of finance and the real bills doctrine, future earnings of the capital purchased would pay off the loans, including bank service fees and premiums to cover capital credit default insurance and reinsurance. Every member of a family would get access to this special credit by setting up a tax-sheltered Capital Homestead Account (CHA) — like a "Super-IRA" — at a local bank or other financial institution.
It is critical to understand that no money is or can be created under Capital Homesteading until and unless a "financially feasible" capital project is brought to a commercial bank for financing. It is not a case of creating money, then spending it. Instead, a sound investment is identified, properly vetted by the bank and the insurance company, and then — and only then — is the money created to loan to the "Capital Homesteader."
This is based on classic banking theory embodied in the real bills doctrine. Briefly, a commercial bank can create money — remember, defining "money" as anything that can be used in settlement of a debt — at will, without inflation or deflation. This, however, is only so long as the amount of money created does not exceed the present value of an existing asset or future stream of income from an asset to be financed by taking a lien on the future asset to a bank for "discounting" (sale to the bank).
The piece of paper or other medium that conveys a lien (a legal claim to an asset — "a charge or security or incumbrance upon property," Black's Law Dictionary) is called a "bill." If the bill represents something of actual, definable value, it is a "real bill." If it is fraudulent, it is called a "fictitious bill." Having value, a real bill can be exchanged for something else of value, thereby functioning as "money."
That answers the question as to where the money is to come from. In our next and final posting in this series, we'll look at how Capital Homesteading would work.