We’ve been attending the annual ESOP Association conference this week. The big thing being addressed was the threat to eliminate the tax-deductibility of dividends paid through an ESOP. It is being characterized as some sort of “tax subsidy.” We’re not certain of the logic behind this, but tax deductibility of dividends paid through the ESOP is no more a “tax subsidy” than any other form of compensation that is deductible as a legitimate business expense.
Another troubling aspect of the government’s lack of understanding of private property through an ESOP is the spread of the idea that professionals who value company shares in the ESOP should be fiduciaries. This would be an extraordinarily bizarre thing to do. A valuation is by law required to be "fair" . . . and someone doing a valuation really cannot be expected to be fair if he or she is not independent, and can hardly be independent if he or she is a fiduciary! This would be a “Catch-22”-type law, in which you must both be and not be independent (or be and not be fair) in order to do a valuation.
In other news:
• Some people at the ESOP conference were very interested in the Homeowners Equity Corporation (HEC) as a possible solution to the ongoing housing crisis. Despite what you hear in the news about prices recovering, the situation remains grim for people in the real world. The HEC is described inthis free download.
• Mid South Building Supply, Inc., a 100% worker-owned company, won two communications awards this year instead of their usual one. The communications materials were very attractive, but did not sacrifice the main purpose, which is to communicate the importance of worker ownership.
• In a completely unexpected development, we were describing the Just Third Way to some fellow attendees at lunch, and one of them asked if we had ever heard of something called “distributism.” We of course said yes, and explained how the Just Third Way differs with respect to the source of financing for widespread ownership and the role of the State. (There is also the fact that the neo-distributists of today have redefined private property and claimed a “mandate” for small ownership in place of Chesterton and Belloc’s preference, but that is an issue for another day.) There does seem to be a growing dissatisfaction with what is increasingly viewed as a “Chestertonian” or “distributist” elite establishment out of touch with people in the real world, and intent on silencing all opposition to a “way” for which people not “in the know” have a hard time discerning the principles in any way that makes sense. There is still (at least potentially) a great deal of good that could come out of the distributist movement and the Chestertonians, but they seem far more interested in imposing their views on others, right or wrong, and in alienating possible allies, than in working for meaningful and achievable worker ownership in a politically effective manner without destroying the current system.
• As of this morning, we have had visitors from 65 different countries and 54 states and provinces in the United States and Canada to this blog over the past two months. Most visitors are from the United States, Canada, the United Kingdom, Australia, and India. People in El Salvador, Pakistan, France, Portugal, and the United States spent the most average time on the blog. The most popular postings this past week were “Thomas Hobbes on Private Property,” “Aristotle on Private Property,” “Social Justice IV: The Characteristics of Social Justice,” “Defining Money, VII: The Expanded Law of Reflux,” and “Defining Money, II: The Medium of Exchange.”
Those are the happenings for this week, at least that we know about. If you have an accomplishment that you think should be listed, send us a note about it at mgreaney [at] cesj [dot] org, and we’ll see that it gets into the next “issue.” If you have a short (250-400 word) comment on a specific posting, please enter your comments in the blog — do not send them to us to post for you. All comments are moderated anyway, so we’ll see it before it goes up.