While things are not yet as bad in the world today as they were in Ireland in the 1840s, most people are as dependent on wage system jobs as the Irish were on the potato. Not surprisingly, however, Thornton's observations and remedies can readily be applied to the current situation. If we understand that both land and technology are capital, and that we don't have to confiscate, condemn, or redistribute existing capital for people to become owners of capital, then it is possible for everyone on earth to become an owner of a capital stake that has the capacity to generate an income sufficient to meet common domestic needs adequately. The new capital would not come from existing productive assets, whether land or technology, but from capital that has not yet been formed, that is, financed.
Due to the disproved belief that it is impossible to finance new capital formation without first cutting consumption and accumulating money savings (and being careful to realize that "increases in production" and "decreases in consumption" are two different things), new capital has remained a virtual monopoly of the already wealthy. By returning to the Banking Principle and rejecting the Currency Principle, however, it is possible to finance the acquisition of as-yet unformed capital out of "future savings" instead of past savings, thereby making it possible for everyone to become an owner of capital.
There is also the problem of giving the State a broader role than it really should have. Thornton's amended proposal from 1874 does make sense when we take the nature of land and natural resources into account. There's only so much there. How do you ensure equality of opportunity to all and, at the same time, respect the natural right of private property . . . without redefining the substantial nature of private property, thereby abolishing it? As Thornton commented,
"To insist upon the immense benefit to the entire peasantry of these transformations, immediate and prospective, would be but to repeat once again what has already been repeatedly urged throughout this volume. What rather I feel to be incumbent upon me is to admit that completest realization of the benefit anticipated would still fall far short of what I conceive would result from a really perfect land system. According to my ideal on that subject, there should be no property in land save that of the whole nation in its corporate capacity; and those Asiatic countries in which the State, as trustee for the nation, is sole landed proprietor, would, in my opinion, be infinitely to be congratulated, were there but adequate security that the rights involved in the trust would be duly appreciated and judiciously exercised by those who have to administer it."
First things first: keep the government out whenever possible. The government is a very powerful and very specialized tool essential to a well-run social order. That does not mean, however, that the government can do anything and everything better than the private sector. As Thornton himself admitted, unconsciously undermining his amended proposal, "Really, it does look as if private energy were unable to survive the torpedo-like touch of governmental support. Certainly, from Indian railways downwards, every private enterprise languishes which government guarantees." (William T. Thornton, A Plea for Peasant Proprietors. London: Macmillan and Company, 1874, 255.)
In other words, if you want to guarantee failure, get the government involved in what should be private enterprise. The problem is, can the private sector do what it appears that only the State can do?
That raises the question of the State's proper role, which is to ensure that everyone has equal opportunity (not results), and that abuses are corrected and the malefactors punished. The solution is that, instead of vesting corporate ownership of the land, natural resources and infrastructure in the State, why not vest corporate ownership of such capital in . . . a private, for-profit corporation? If owned by every citizen as a right of citizenship by granting each citizen a single no-cost, non-transferable, voting, fully participating share in the corporation, we could achieve Thornton's "corporate ownership" of land without vesting it in the State. Everyone would thereby become an owner of the land.
Tenants who are also shareholders of the land-owning corporation would take leases. As tenants, of course, their rights would be defined by the lease — into which, as owners, they would have some say-so. Having clearly defined rights of property as actual owners and a just leasehold is much more secure than having the State protect the sometimes vague "beneficial ownership" conferred by statute, and infinitely better than the tenancy-at-will that afflicted Irish agriculture throughout the 19th century.
We've embedded these principles in CESJ's proposed "Citizens Land Bank" (CLB) that is a private sector alternative to State ownership of land and infrastructure. A CLB would be a for-profit, professionally-managed, citizen-owned-and-governed community land planning and development enterprise, designed to enable every citizen of a community of any size to acquire a direct ownership stake in local land, natural resources and basic infrastructure.
• A social vehicle for every man, woman and child to gain, as a fundamental right of citizenship, a single lifetime, non-transferable ownership interest in all the Bank's assets, share equally in property incomes from rentals and user fees from leases or use of the Bank's assets, accumulate appreciated equity values from enhanced land values, and gain an owner's voice in the governance of future land development.
• An innovative legal and financing tool empowered to borrow on behalf of all citizen-shareholders and service the debt with pre-tax dollars to meet the land acquisition, capitalization and operational needs of the Bank. The CLB shelters from taxation the equity accumulations of citizen-shareholders and protects the outside assets of the citizens in the event of loan default or if the enterprise fails.
• A social tool designed to encourage a just, free and non-monopolistic market economy. It applies the democratic principles of equal opportunity and equal access to the means to participate as an owner as well as a worker. It demonstrates that anything that can be owned by government can and should be owned, individually and jointly, by the citizens.
• A major feature in a proposed national economic agenda known as "Capital Homesteading for Every Citizen," which is designed to reform existing monetary, credit and tax barriers to provide every American an equal opportunity to share in the governing powers and profits from new entrepreneurial ventures, new technologies, new structures, and new rentable space built upon the land. Capital Homesteading offers a "Just Third Way" of reversing unsustainable federal deficits and debt, and revitalizing and growing the American free enterprise system in a sustainable and environmentally sound way.
What a CLB is Not:
It is not socialism or communism (which are systems based on the abolition of private property in the means of production). It does not take away property rights from present owners, nor does it redistribute current accumulations of wealth or income.
It is not the Wall Street model of capitalism (where ownership of the means of production and ownership power are concentrated in the top 1% of society and artificial barriers exclude non-owners from equal ownership opportunities).
It is not a non-profit Community Investment Corporation, Land Trust, Land Bank, Land Foundation, or any other legal vehicle in which ownership of land, natural resources and basic community infrastructure are owned collectively (i.e., where no one has a property stake) or by any state monopoly.
It is not a land monopoly owned or controlled by a small elite of local or outside investors or political leaders.
It does not provide shares that can be sold, transferred, pledged to others or used as collateral to meet a citizen's consumption needs.
It is not an amateur or unstructured approach to land development or "management by committee."
It is not a vehicle for owning or financing local enterprises competing in the marketplace.
Benefits of a CLB
It would provide a private sector means by which homes, enterprises, rentable space and technologies built upon the CLB-owned land can be broadly owned by workers and other local stakeholders.
It would generate a new source of taxable incomes from new and expanded private sector jobs and ownership stakes.
It would empower each citizen and family with the means to build an adequate and secure income, and with a real voice in the development decisions of the community.
It would provide every citizen with income to contribute to the costs of running an effective local government and providing essential public services, as well as for his or her own well-being.
It would offer hope of eventually eliminating the dependency of any citizen on welfare or charity of others or fear of technological displacement.
How Could We Get the CLB?
Suggest to President Obama that he abandon his half-trillion dollar "job creation" boondoggle to rebuild infrastructure and persuade Congressional leaders to support CLBs as part of a program to accelerate rates of non-inflationary, private-sector economic growth, green jobs and energy independence.
Get your legislator(s) behind a Federal law or executive order that provides comparable tax and capital leveraging features as is presently provided under Federal laws governing employee stock ownership plans (ESOPs) for the benefit of private sector workers and the corporations and worker cooperatives in which they work.
Obtain state and federal exemptions from property taxation on assets held by a citizens land bank.
Finance the rebuilding and development with Federal Reserve monetization of loans made by local commercial banks to enable citizen land banks to acquire development land from current owners and investors.
There. Could anything except Capital Homesteading itself be easier?