Question: When poor workers
compete with rich owners for financing out of existing savings, who comes out
on top? Answer:
Who cares? Worker ownership can be
financed better out of future savings than past savings. In any event, worker-owned companies (well,
those with Justice-Based Management features) tend to be more profitable
than other companies.
Thus, in the long run, the problem solves itself. Studies collected by the (U.S.) National
Center for Employee Ownership in Oakland, California, show that worker-owned
enterprises that combine profit sharing and participatory management (e.g., “Justice-Based Management”) are
usually significantly more efficient and competitive than those that are not worker-owned.
Consequently, enterprises that are not worker-owned will tend either to
become worker-owned for their own advantage, or go out of business because they
cannot compete. Thus, we can avoid the
issues of how privatization was unfairly handled, the dilution of existing
ownership rights, or forcing existing owners to sell when they don’t want to
sell. This is where a Capital
Homesteading program can have the most beneficial effect.
Replacement capital deals with existing shares, that is, existing
assets. When a company expands, or a new
company starts up, however, new shares can be issued. These can be sold by extending access to
capital credit to every child, woman, and man in Poland regardless of their
pre-existing savings, all repayable from the future earnings of capital (i.e., “future savings”).
Capital can be accumulated through a tax-sheltered “Capital Homestead
Account (CHA)” (i.e., a personal equity shares
accumulator) established in the name of each citizen at a local commercial
bank. The government would allocate each citizen a voucher entitling him or her
to purchase new “qualified” shares on credit without risking any savings or
other assets or reducing their consumption income from other sources.
Dividends and paid-for shares when distributed from their shelter in
the CHA to the CHA account holder to increase his or her consumption income
would be taxable at the same rate as other earnings. Viewed from the system level of a market
economy, by enabling each citizen to become a capital owner without reducing
his or her consumption from other sources of income, growth in the system’s
productive capacity would therefore be balanced through market forces with
growth in consumptive capacity, with reduced need for redistribution through
government taxation or charity.
