News from the Network, Vol. 3, No. 40

A lot of attention has been focused on China these days. The Wall Street Journal has been making the right kind of noises that something must be done other than currency manipulation. Of course, what must be done, both to recover economically and to make the economy strong again, as Dr. Harold Moulton pointed out approximately seventy or so years ago, is to focus on production and employment. Instead, what the Wall Street Journal is advocating is increasing the rate of current savings and ignoring the potential of future savings.

This may be too off the wall, but, what the heck, give it some thought. "Saving" is inevitably yet incorrectly defined as cutting consumption, i.e., "savings" consists of existing accumulations of unconsumed income in money form. From an accounting point of view, however, the best way to save is not to cut costs, but to increase revenue. The problem is how to do that when you either cannot get a (better) job, or lack the means to acquire income-generating capital.

There is an answer.

In 1935 Dr. Harold Moulton, president of the Brookings Institution from 1916 to 1952 wrote The Formation of Capital to counter the Keynesian New Deal. He explained that, contrary to the Keynesian definition of savings, saving can take place in the future rather than the past or present. Consistent with classic banking theory, you do this by "monetizing" the present value of future marketable goods and services in which you have a private property stake. This is the way that most corporate finance has been carried out for 200 years.

In 1961 in The New Capitalists, Louis Kelso and Mortimer Adler expanded on Moulton's work and developed a way that wage workers and other ordinary citizens could use the techniques described by Moulton to become owners of capital without reducing current levels of consumption and without risking any existing accumulations of savings they might have. The subtitle of their short book is significant: "A Proposal to Free Economic Growth from the Slavery of [Past] Savings."

In 2004, The Center for Economic and Social Justice ("CESJ") published Capital Homesteading for Every Citizen as an application of the principles of Moulton and Kelso and Adler in a proposal to "save" the Social Security System and allow every citizen to accumulate income-generating assets for retirement.

Of course, this may require a little stretching of the mind rather than stretching the budget, but it can be done. The problem is getting the word out to prime movers and door-openers. In furtherance of that, here's what's been happening this week:

• The big news this week is Norman Kurland's attendance and participation at the Canada-U.S. Brownfield Summit in Buffalo, NY yesterday. Norm was a panelist presenting new possibilities for financing urban redevelopment and the right-sizing of cities. Mr. Robert Colangelo, Executive Director of the National Brownfields Association, and Mr. John Dondanville, an Association member from Detroit, were very positive about Norm's presentation, as were two of the mayors who attended. Mr. Colangelo and Mr. Dondanville stated they wanted to schedule another meeting at CESJ in November, time and date to be determined.

• Michael D. Greaney joined "HARO," or "Help A Reporter Out" this week. So far he has sent out responses to a number of queries, orienting them along the lines of the Just Third Way. A primary objective is to spread the word that Norman Kurland, one of the world's leading experts in the theory and practice of the Just Third Way, is available for interviews and speaking engagements.

• Sales of The Formation of Capital by Dr. Harold G. Moulton have been extremely encouraging. Even without any marketing, sales have been significant, passing both Capital Homesteading for Every Citizen and Supporting Life: The Case for a Pro-Life Economic Agenda. Although "mainstream" economists don't seem to appreciate Moulton's work, ordinary people with common sense seem to be picking up on things.

• Guy Stevenson has been reposting the current "Halloween Horror Specials" on AIP News, the website of Alan Keyes's "America's Independent Party." Reception seems to be very positive, getting several hundred hits. Apparently the common sense approach of the Just Third Way appeals to anyone who will take the time to think about the situation.

• Michael D. Greaney has been posting a significant number of Just Third Way items on social networking sites, such as Facebook and LinkedIn. There has been some very good response generated. Spreading the word in this fashion is one way to assist us in getting doors opened to prime movers and to those who might be able to get us to prime movers.

• As of this morning, we have had visitors from 46 different countries and 47 states and provinces in the United States and Canada to this blog over the past two months. Most visitors are from the United States, the UK, Canada, Australia and Brazil. People in Trinidad and Tobago, Lithuania, Bangladesh, the United States and India spent the most average time on the blog. The most popular posting is "I Do Believe in Spooks" in the current Halloween Horror series, followed by "The New Manifest Destiny," "The New Banking Rules," the unpublished letter to the Wall Street Journal on the errors in the op-ed piece, "The Case for the 'Repeal Amendment'," and "We are Seeing the Future and It Doesn't Work."

Those are the happenings for this week, at least that we know about. If you have an accomplishment that you think should be listed, send us a note about it at mgreaney [at] cesj [dot] org, and we'll see that it gets into the next "issue." If you have a short (250-400 word) comment on a specific posting, please enter your comments in the blog — do not send them to us to post for you. All comments are moderated anyway, so we'll see it before it goes up.

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