Thursday, October 28, 2010

To the People of Ireland and the World

In Dublin on Monday, April 24, 1916, forces of the Irish Republican Brotherhood and the Irish Citizen Army, supported by 200 members of Cumann na nBan (League of Women) occupied the General Post Office on Sackville Street, later renamed O'Connell Street in honor of the Great Emancipator, proclaiming an Irish Republic. After fighting that lasted a week, the rebels surrendered. They were imprisoned, and all of the leaders with the exception of Eamon de Valera, technically still an American citizen, were tried and executed in secret.

A critical provision of the proclamation, read before entering the General Post Office, was to assert the importance of ownership as the basis of the indefeasible sovereignty and independence of every Irish man and woman:

We declare the right of the people of Ireland to the ownership of Ireland, and to the unfettered control of Irish destinies, to be sovereign and indefeasible. The long usurpation of that right by a foreign people and government has not extinguished the right, nor can it ever be extinguished except by the destruction of the Irish people.
Today, the effective exercise of the natural right of the people of Ireland to the ownership of Ireland, while no less sacred now than then, is even more remote and less attainable than it was immediately preceding the sacrifice of Éirí Amach na Cásca, the Easter Rebellion. The size of the current deficit — 22% of GDP — dwarfs in relative size even the deficits incurred by the other "PIIGS." It is an incredible tsunami of debt that, under existing financial and economic assumptions, can only result in the economic destruction of the Irish people.

There is, however, hope — and a way of getting out of what threatens to be a disaster unequaled in scope for a century and a half, not since An Gorta Mór, "The Great Hunger," before which even the worst possibilities presented by today's impending financial catastrophe pales into insignificance.

There are, nevertheless, lessons to be learned from the Hunger, even if there is otherwise no possible comparison. The most obvious is that the Famine was completely avoidable, and would have been, had the great mass of Irish men and women been direct owners of the land. More than enough food was produced in Ireland to keep everyone alive and comfortable during even Black 47, the worst year of the Famine, but it was exported in payment of debt (usually incurred at the gaming tables of London and Paris) and to provide income for absentee landlords.

Today's financial disaster was also completely avoidable:

• Had the Bank of Ireland discounted and rediscounted loans to fund financially feasible and properly vetted capital projects instead of engaging in open market operations to purchase government debt securities and finance gambling on the stock market, the deficit would necessarily have been limited to existing accumulations of savings, whether domestic or lured in from abroad.

• Had such credit been extended in ways that made every Irish man, woman, and child, instead of the government and foreign investors, a direct owner of the agricultural, infrastructural, industrial and commercial assets of Ireland, the income generated by that ownership would first have paid for its democratic acquisition, then provided a "second income" to supplement and, in some cases, replace wage income.

• Had financing for new capital formation come from the expansion of commercial bank credit, the income from capital would have generated sufficient effective demand to keep the economy on an even keel while the banking system provided adequate financing for any feasible capital project, whether agricultural, commercial, or industrial.
Instead, the financial resources of the nation were expended on increasing the size of government, taking away the personal sovereignty of each Irish citizen to the extent that the government took over, and driving the country to the brink of ruin.

A way out?

Yes!

• Pass enabling legislation to create a "Irish National Citizens Land Bank" to take immediate title at no cost to all government-owned land, natural resources, and infrastructure. Every Irish citizen and legal resident of the country would immediately receive one no-cost, non-transferable, voting and fully participating equity share in the INCLB, making the declaration in the Easter Proclamation a reality.

• The use of all land and natural resources held by the INCLB would be determined by an elected central authority, located outside of Dublin (possibly Meath) with mandatory input from local, county, and provincial authorities. Existing shares in the INCLB would be surrendered without compensation at death or on immigration, and new shares issued at birth or on declaration of permanent resident status.

• The INCLB would acquire additional land, natural resources, and infrastructure at fair market value when it came on the market, exercising a right of first refusal for all such offerings.

• Financing for acquisitions would come from discounting loans for the purchase at the Bank of Ireland.

• All income from leasing and usage fees above the costs of administering the INCLB would be distributed to shareholders as a dividend, to be taxed as regular income.

• Pass legislation to establish "Homeowners Equity Corporations" as a way to solve the housing crisis.

• Reform the commercial and central banking system to prohibit government borrowing and discourage non-productive private sector borrowing, especially for stock market speculation, except out of existing accumulations of savings.

Reform the tax system to encourage wealth accumulation and a more just distribution of the costs of government.

• Implement a program of "Capital Homesteading."
These and other steps can be taken almost immediately. With the rise in economic growth in which everyone, not just a few participate, the deficit can be reduced dramatically as people take back the economy from the government, and start to take care of their own needs out of their own incomes.

More than fifteen centuries ago the Irish saved civilization. It's time to do it again.

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