The stock market continues to go up . . . no, down . . . no, wait, it's up again . . . uh, down. Actually, the safest (and sanest) thing for anyone to do these days is to realize that the stock market is not the main leading economic indicator. Frankly, it's not really an economic indicator. It's a speculative secondary market where prices for debt and equity issues rise and fall with changes in emotions, jumping wildly between panic and exuberance.
From the perspective of binary economics, the standard "productivity" measure isn't much better. Productivity is defined as production per labor hour. It's considered good when productivity rises, and bad when it falls.
There are more than a few problems with this. First, of course, it assumes that capital produces nothing, that advanced technology — which can operate without any direct human input to produce marketable goods and services — only enhances labor. On the contrary, technology replaces labor.
Second, the fewer workers you have in the productivity calculation, the better. Productivity rises when you cut redundant people, that is, eliminate jobs. From the standpoint of economic recovery, you can have a rising productivity rate that, if looked at objectively, signals an economic downturn. As Harold Moulton pointed out, the two primary areas of focus in an economic recovery are employment and production. You can force a rise in productivity, however, by getting rid of workers, working the remaining workers harder, and accepting a lower production of marketable goods and services — a decrease in both supply and demand.
It would be much better to increase both supply and demand by passing a Capital Homestead Act, but word may not be getting out on that fast enough — people are too busy trying to second guess the stock market. There are other problems, of course, but we have better things to do — like work for Capital Homesteading by 2012. With that in mind, we've advanced the Just Third Way in the following ways this week:
• Norman Kurland had a meeting with an EPA representative who was interested in learning about the possibilities in Just Third Way type financing — that is, pure credit as described by Dr. Moulton in The Formation of Capital (1935) and refined by Kelso and Adler in The New Capitalists (1961). The meeting was very positive.
• The CESJ core group has begun reviewing the outline for a revision of the 2004 policy guide, Capital Homesteading for Every Citizen. New projections for capital accumulations as well as the results of recent investigations into monetary theory will be incorporated into the revision.
• The CESJ core group has also begun work on a major article detailing recent research in monetary theory. It is anticipated that this article will be condensed for the revision of Capital Homesteading.
• Sales of CESJ and UVM publications exceeded expectations for February. A selection of what is available can be found in the Just Third Way "Bookstore" on the panel to the right of this posting.
• 2011 marks the 50th anniversary of the first publication of The New Capitalists. This is significant not only as an historical event, but because the subtitle of the book gives possibly the best one-sentence description of what we hope to accomplish in the Just Third Way: "A Proposal to Free Economic Growth from the Slavery of [Past] Savings."
• As of this morning, we have had visitors from 45 different countries and 48 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 Philippines, the UK, India, and Canada. People in Venezuela, Hong Kong, Germany, the Philippines, and the United States spent the most average time on the blog. The most popular posting this past week was once again "Thomas Hobbes on Private Property," followed by "Aristotle on Private Property," "Seeing the Nose on Your Face," "The Right to Choose," and "The Problem with Money, Part VI: Say's Law and the Real Bills Doctrine."
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.