The Just Third Way does not guarantee ownership by
anyone. The goal is equality of
opportunity, not equality of results.
The idea that society should be arranged in such a way as to guarantee
results is one of the deadliest traps of modern civilization. It leads to worship of the State as the only
body that can (allegedly) guarantee results just by ordering people around.
So what’s the other deadly trap? The assumption that the only way to finance
new capital formation is to cut consumption and save. This locks an economy into either capitalism
or socialism, with no hope of real equality of opportunity — the only true kind
of equality.
As we see it, the fundamental difference between both
capitalism and socialism, and the Just Third Way, is that both capitalism and
socialism assume as a given that the only way to finance new capital formation
— and thus ownership opportunities — is by accumulating savings, then financing
new capital.
If we respect the natural right of private property, this
effectively restricts virtually all new capital ownership to those who are
already rich and can afford to save the amounts necessary to finance advanced
capital instruments.
If we do not respect the natural right of private property,
we redefine it in such a way as to abolish it, so that the State in some form
presumably ensures that everyone gets what he or she needs
The only solution is if we realize that past savings are not
only not the sole source of financing for new capital formation, but are
actually the worst (because it necessarily cuts consumption, violating Adam
Smith's dictum that the purpose of production is consumption, and decreasing
the demand for new capital), we can get out of the capitalist/socialist trap
that restricts ownership to either a private sector elite or a State
bureaucracy.
Since the reinvention of commercial banking in the 16th
century, and the invention of central banking towards the end of the 17th, it
has been possible to finance new capital formation by turning the present value
of future increases in production into money that can be used to finance new
capital formation. By making these
financing techniques available to qualified borrowers, and replacing traditional
collateral with capital credit insurance and reinsurance, people without
capital can become capital owners without existing wealth being redistributed.
If someone is unable to take advantage of these financing
techniques, he should be assisted in charity. If he chooses not to take advantage
of them, that should be a free choice, and he should suffer the consequences,
or reap the benefits, however it works out.
The goal of the Just Third Way is to make it possible for everyone to
own capital, not to force them to do so if they do not choose to do so.
The goal is freedom, not slavery to either the State or a
wealthy elite.
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