As we have seen in this series, what constitutes a “just economy” has evolved over the past couple of centuries or so into two warring philosophies. On the one side are those who assert that only a private sector elite should be in charge of everything. These are the capitalists.
On the other side are those who assert that only a State bureaucracy should be in charge of everything. These are the socialists. Left out in the cold are those who posit something else, a Just Third Way that transcends the mistakes of both capitalism and socialism.
The Just Third Way is founded on the natural law — that is, the dignity of the human person . . . each human person, not just a private or governmental elite that demands the subservience of “ordinary” people to wealth. Anything else and we might as well stop where we are, for if a system does not take into consideration the dignity of each human person — the real human dignity, not just provision for material needs — then we might as well stop where we are.
No, the purpose of civil society, any more than domestic or religious society, is not primarily to meet the material needs of people. The meaning and purpose of life — as we have noted before — is to provide the proper environment in which human beings can acquire and develop virtue by exercising their natural rights.
Both socialism and capitalism prevent or inhibit most people from exercising their natural rights, particularly liberty (freedom of association/contract) and property (and is making increasing inroads on life), and thereby prevent their becoming more fully human. There is, however, a solution. That is to recognize, implement and protect the three principles of economic justice, and apply them in the four pillars of an economically just society. Only in this way can the dignity of each human person be respected.
The Three Principles of Economic Justice
Participation: This is the input principle that demands equal opportunity for every person to contribute to the production of society’s marketable wealth both as a worker and as an owner of productive assets as a fundamental human right.
Distribution: This is the outtake principle which holds that the contribution of labor to the economic process should be compensated at the market-determined rate (or “just wage”) for each particular type of human contribution to the production of marketable wealth. This principle dictates that the contribution of capital should be compensated by the “just profit” generated by the project or enterprise. Profit is determined by the market-based rental value of contributed capital assets, or by the gross revenues resulting from market-determined “just prices” less the market-based cost of the factors of production, including labor.
Harmony: This is the feedback principle that balances and restores participation and distribution within the economic system. This principle was referred to by Louis Kelso and Mortimer Adler as the “principle of limitation” and by others as “social justice,” as it calls for the restructuring of the economic system to restore participative and distributive justice.
The Four Pillars of an Economically Just Society
1. A limited economic role for the State.
2. Free and open markets within a fair and just legal system as the best means of determining just wages, just prices and just profits.
3. The restoration of private property, especially in corporate equity and other forms of business organization.
4. Expanded capital ownership, individually or in free association with others.
These principles and pillars are applied in a proposal called “Capital Homesteading for Every Citizen.” In order to focus attention on the need for Capital Homesteading (and the monetary and tax reforms that go along with it), plan on attending the annual Rally at the Fed in Washington, DC on April 26, 2013.