Tuesday, April 9, 2013

Own or Be Owned, IV: The Abundant Economy

Two assumptions that many people take for granted is that “economic scarcity” means that human wants and needs can never, ever be satisfied, and that the only way to finance new capital formation is to reduce wants and needs in order to have the wherewithal to do so.

Both assumptions are wrong.  First, economic scarcity only means that at any specific point in time, a specific quantity of anything exists, and — at that point in time — you cannot use the same resource in two different ways.  It says nothing about whether there is enough of that resource to meet demand for it, or doing more with less, or finding substitutes if demand is greater than the supply.

No, it just means that a resource cannot be more than it is, and it can’t be in two places at the same time.  (The philosophical equivalent is the principle of contradiction/identity.)  As for the presumption that human wants and needs can never be satisfied, the whole theory of marginal utility assumes that, yes, you can be satisfied.  You will just be less satisfied with each additional unit of whatever you’re using to satisfy yourself until you reach zero satisfaction, and adding any more will result in negative utility.

Countering this sort of thing, Kelso's second book in 1961 with Adler was subtitled "A Proposal to Free Economic Growth from the Slavery of [Past] Savings."  It was based on Kelso's "pure credit" concepts for financing sustainable and ecologically sound growth.

This would allow every market economy to grow in a sustainable manner with productive credit and asset-backed money with assets that pay for themselves out of "future savings" from the earnings of capital. Such "leveraged financing" for turning propertyless workers into owners is now working in thousands of U.S. companies following U.S. laws encouraging leveraged Employee Stock Ownership Plans or "ESOPs", a financing tool invented by Kelso in the 1950s.

Kelso’s invention of the ESOP allowed millions of workers to become capital owners without risking a cent of past savings or reducing consumption.  The question then becomes, “Where do we go from here?”

Kelso's broader Just Third Way global vision would provide equal opportunity for every citizen to become a shareowner of productive capital assets.  This would include rentable land and natural resources, ever-advancing technologies, including labor-displacing robotics, rentable space, infrastructure, new energy systems, patents, etc.

Access to the means of acquiring and possessing private property in capital would finally be recognized as a realizable fundamental human right as stated in Article 17 of the Universal Declaration of Human Rights.


1 comment:

nail-in-the-wall said...

Philosophies at War

"Since nature has associated private property in a very special manner with the existence and development of the family, it follows that the State should diffuse private property through the family that its functions may be preserved and perfected.

If the bringing of children into the world is today an economic burden, it is because the social system is inadequate; and not because God's law is wrong. Therefore the State should remove the causes of that burden. The human must not be limited and controlled to fit the economic, but the economic must be expanded to fit the human [person].

Since the family by nature is prior to the State, and more sacred than the State, it is the duty of the State to establish such external conditions of life as will not hamper a Christian home life."

~ Fulton J. Sheen, Philosophies at War, Conspiracy Against Life, 1943, (p129).