Guest Blogitorial: Real Change for the Better

By Dan Parker

With the dismantling of the original Occupy Wall Street encampment and others like it around the world, it is up in the air as to which way the movement will go. Hopefully, the protestors will work at creating viable alternatives to the present system, and move beyond media stunts that ignore property rights. Active 'occupy' participants are of course already doing this to some degree, but there needs to be much more work in this direction. As a starting point, the focus has to be more on the specifics of how our monetary and financial systems have led to today's problems. The first step in creating a viable solution is having detailed knowledge of the problem.

Although there will no doubt be some violence in the protests, including that sparked by agent provocateurs, it is likely the main thrust of the change movement will be peaceful. Given the increasing knowledge about how the money system really works among the protestors and general population alike, serious monetary reformers look to play an increasingly important role in the upcoming change. Many of these monetary reformers are not only accredited economists, they also have insider knowledge and experience working with the current system; sometimes at very high levels in both governmental institutions and private industry.

The experienced, accredited reformers have also thought long and hard about the problem, and offer many promising avenues for sustainable, peaceful change. The best way forward seems to be the solution offered by economists such as Norm Kurland. The concept is known as binary economics and has been under development for decades. Mr. Kurland also has a law degree, which is useful for incorporating the necessary legal framework around the new economic system.

Mr. Kurland was a close colleague for eleven years of Louis O. Kelso, author of binary economics and inventor of the Employee Stock Ownership Plan (ESOP). Collaborating with Kelso, he authored and lobbied the first and subsequent ESOP legislative initiatives in the U.S. Congress. Business Week magazine described Kurland as "the resident philosopher of ESOP in the capital." In 1985, President Reagan appointed Mr. Kurland as deputy chairman of the bipartisan Presidential Task Force on Project Economic Justice, to promote economic democratization through ESOP reforms in Central America and the Caribbean.

Robert Ashford is another champion of binary economics. He is a Professor of Law at the Syracuse University College of Law, in Syracuse, New York. He teaches subjects including Binary Economics, Business Associations, Corporations, Securities Regulation and Professional Responsibility. Ashford holds a J.D. with honors from Harvard Law School. He also holds a B.A. with majors in physics and English literature from the University of South Florida, where he graduated first in his class.

In Canada, Winnett Boyd unsuccessfully pushed to have binary economics adopted by the Progressive Conservative party in the 1970's. Boyd is perhaps best known for being the engineer in charge of the design of the Orenda jet engine, which powered the Avro Arrow among other jets. The Orenda was the most powerful jet engine in the world in the late forties and early fifties. In short, Boyd was a world beater when it came to solving complex problems. When Boyd was promoting binary economics in the early 1970's, it was presented as an improvement in an economy with little debt compared to today. In today's financial climate, binary economics could more be considered as a necessary development, rather than as just an improvement on the economy.

What is most promising about binary economics is that it proposes growing the economic pie to increase the productive wealth of the bottom 99%, without taking anything from the top 1%. In this way it is non-confrontational. The super-rich would remain free to do what they saw fit with their accumulated wealth. However, the trillions of dollars that are created from nothing each year by the private banks would be available for interest-free loans to each and every adult to acquire shares of productive property; instead of just the well connected. In essence, binary economics promotes a truly free-market type of capitalism; one with widespread ownership.

As Wikipedia relates "Binary economics is a theory of economics that endorses both private property and a free market but proposes significant reforms to the banking system. The aim of binary economics is to ensure that all individuals receive income from their own independent capital estate, using interest-free loans issued by a central bank to promote the spread of employee-owned firms. These loans are intended to: halve infrastructure improvement costs, reduce business startup costs, and widen stock ownership.

Binary economics is a minority discipline, hard to place on the left-right spectrum. It has variously been characterized as an extreme right-wing ideology and as extremely left-wing by its critics. The 'binary' (in 'binary economics') means 'composed of two' because it suffices to view the physical factors of production as being but two (labour and capital which includes land) and only two ways of genuinely earning a living _ by labour and by productive capital ownership. Humans are usually considered as owning their labour, but not necessarily the other productive factor — capital.

Binary economics is partly based on belief that society has an absolute duty to ensure that all humans have good health, housing, education and an independent income, as well as a responsibility to protect the environment for its own sake. The interest-free loans proposed by binary economics are compatible with the traditional opposition of the Abrahamic religions to usury. Binary Economics was proposed by American lawyer Louis Kelso in his book The Capitalist Manifesto (1958). The title of the book is best viewed as a thing of its time, being a Cold War reference in opposition to communism.

Employee Stock Ownership Plans (ESOPs) are compatible with some of the principles of binary economics and were sparked by some of the leading advocates. The idea stems originally from Louis Kelso & Patricia Hetter Kelso (1967) Two-Factor Theory: The Economics of Reality; and then from conversations in the early 1970s between Louis Kelso, Norman Kurland (Center for Economic and Social Justice), Senator Russell Long of Louisiana (Chairman, USA Senate Finance Committee, 1966 — 1981) and Senator Mike Gravel of Alaska. There are about 11,500 ESOPs in the USA today covering 11 million employees in closely held companies.

Binary economics also rejects conventional financial savings doctrine (that there must be financial savings prior to investment) — no financial saving is necessary if money is already being created out of nothing (Ed — only instead of being largely used for speculation by the 1%, it would go towards productive endeavours by the 99%). The theory asserts that what matters is whether the newly-created money is interest-free, whether it can be repaid, whether there is effective collateral and whether it goes towards the development and spreading of various forms of productive and the associated consuming capacity. Very fundamentally, binary economics rejects the claim of conventional economics that it promotes a 'free market' which is free, fair and efficient.

The two economics also differ on the subject of democracy. Conventional economics upholds the periodic political vote. Binary economics does the same but deepens democracy by arguing that productive capital would be more widely distributed too. In binary economics, freedom is only truly achieved if all individuals are able to acquire an independent economic base."

How the current protest movement shakes out will be interesting. There is no doubt a faction that relishes confrontation, rather than thoughtfully created alternatives. However, it is difficult to see these people as being in the majority, particularly in Canada. One reason for the relatively low levels of violence is no doubt the high standard of living in North America and Europe. However, even here, Canada with its history of largely peaceful evolution would seem poised to be a world leader in enacting needed fundamental financial changes.

Those who think tinkering with the existing system is a sustainable solution do not understand the basic math behind compound interest, or that general populations can only be fooled for so long. In a short ten years or so, awareness of the massive injustice inherent in our current money system has grown dramatically (along with the inevitable indebtedness that is mathematically guaranteed by compound interest). What is more, it is the young, internet savvy future leaders who are most aware of the reality of our current money system and its defects.

Futurist Alvin Toffler is enough of an insider that he has dined at the U.S. White House. In one of his books, he gave an astute assessment about the need for fundamental change. He wrote: "We are left with only one option. We must be willing to shape ourselves and our institutions to deal with the new realities. Much depends on the flexibility and intelligence of today's elites, sub-elites and super-elites. If these groups prove to be as short-sighted, unimaginative and frightened as most ruling groups in the past, they will resist the [needed change] and thereby escalate the risks of violence and their own destruction."

Other insider involvement in the occupy movement will likely play a large part in supporting the peaceful part of the protest. As usual, most mainstream media have conveniently overlooked the critical concept of who is really behind the occupy movement. Patrick Henningsen provided some enlightenment when he wrote in The Guardian that: "Although the global Occupy movement has branched out in an open-source way, many of its participants and spectators might be completely unaware of who actually launched it. Upon investigation, what one finds is a daisy chain of non-profit foundations, all tied together by hundreds of millions per year in operational funding. The original call for Occupy Wall Street came from non-profit international media foundation Adbusters. Like many non-profits, Adbusters receives its funding and operating capital from other behind-the-scenes organizations. According to research conducted by watchdog Activistcash, Adbusters takes a significant portion of its money from the Tides Foundation, an organization partnered with one of Wall Street billionaire oligarch George Soros's foundations, the Open Society Institute."

When one traces change initiatives to establishment figures like Soros, it is tempting to see the entire initiative as irredeemably compromised. However, many change agents have the astounding view that all the super-elites think alike. Personal experience and common sense would dictate otherwise. There are of course super-elite figures who are in support of needed fundamental change today, as has been the case throughout history.

How to bring the various change agents at all levels together behind a viable alternative to the present system is a tall order. Still, binary economics could be prototyped in one area, and a truly free market would see that it would take over from the less efficient conventional economics, and become the new norm. As economically independent individuals obtain income from automated production and are increasingly freed from 'busy work' by binary economics, there would be more and more ability to engage in the creative work necessary deal with the challenges of the future.

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