The last couple of days seems to have generated quite a bit of discussion in the media about how to (re)establish income equality and achieve sustainable economic growth. The focus seems to be on showing how the proposals currently out of the table really don't do anything other than perpetuate the unjust system that caused the problem in the first place. The obvious thing to do, then, is to start looking at solutions that are not out on the table (crazy thought) . . . and to join us this Friday outside the Federal Reserve Board of Governors building in Washington, DC (on the Constitution Avenue side) from 11:30 am to 1:30 pm . . . and bring some Spam, Coke, and Hershey Bars to share.
Or you could write letters to the Wall Street Journal and other periodicals to alert them to the fact that there is an alternative to the present system (and send CESJ some donations for Spam, Coke and Hershey Bars):
Kamran Dadkhah has the right of it in his letter in today's Wall Street Journal addressing "Changes in Income Inequality and Economic Growth." Increasing tax rates to try and equalize income and stimulate economic growth puts the cart before the horse by implying that the economic growth has already taken place so that it can be redistributed — an illogical assumption at best.
I disagree, however, that education works toward equalizing income. On the contrary, education results from having a surplus to spend on education. It does not itself cause the surplus. We would otherwise not have the spectacle of students burdened for decades with unrepayable loans taken out to finance education.
The real key to unleashing people's entrepreneurial potential is to open up equality of access to the means of acquiring and possessing private property in capital: capital (not consumer) credit. The venture capitalist is essential for financing startups and speculative ventures. The way to sustainable economic growth, however, is to finance expansion by discounting and rediscounting bills of exchange drawn on the present value of future marketable goods and services. To generate the mass purchasing power necessary to keep the economy going, it is also essential that ownership of the capital that will produce this wealth is broadly and directly owned by people who will use the income first to pay for the capital, and then for consumption, not reinvestment.