As we saw yesterday, America — the world — needs a “new frontier.” Nor can it be a frontier restricted to an élite or a chosen few, but must be open to every human being who chooses to take advantage of the opportunity.
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| Capital. It's not just the head of a cow anymore. |
Nor can the
frontier be limited to land, a finite resource, albeit renewable if taken care
of. No, the new frontier must consist of
all forms of capital, anything by means of which people can earn what Turner called
a “competence,” i.e., a reasonably
secure income sufficient to meet a family’s needs.
This will amend
Turner’s statement to “So
long as the potential for
self-liquidating productive capital exists, the opportunity for a
competency exists, and economic power secures political power.” (Turner,
“The Significance of the Frontier in American History,” op. cit.,
223.) The frontier need not be limited
by the amount of land, but by the
creative potential of the human person.
This is the basis of the “Capital Homesteading”
concept proposed by the Center for Economic and
Social Justice (CESJ). Briefly, the Capital Homestead Act is a comprehensive legislative program
of tax, monetary, and fiscal reforms to make every citizen a shareholder in the
technological frontier. It is designed to connect every child, woman,
and man to the global economy as a fully empowered participant and owner of new
technologies through private property, that is, direct ownership of all forms
of productive capital.
This “Economic Agenda
for the Twenty-first Century” provides an outline for leaders committed to
restructuring the legal and financial system to grow the economy at maximum rates
with no inflation. This can be done in
ways that build a Just Third Way version of economic democracy as the essential
foundation for effective political democracy — just as Turner pointed out is
essential.
Capital
Homesteading for every citizen offers a private property, free market-oriented
alternative for saving the Social Security System as a national retirement
income security plan. At the same time, the Capital Homestead Act offers
a new national policy to foster life-long “capital self-sufficiency” as a
means to achieve true economic independence for all Americans. If implemented, capital ownership would be
systematically de-concentrated and made directly accessible to every person,
without reducing property rights of the wealthy.
The idea is that
every individual gets the right to purchase capital assets represented by newly
issued shares of stock in financially sound corporations. The full stream of income attributable to
those shares is paid out to the new shareholder, who first uses the dividends
to pay for the shares, then — after the shares are paid for — to meet his or
her living expenses.
To encourage
corporations to pay out all earnings to their owners (shareholders own the
corporation, and are entitled to the income generated by what they own),
dividends would be tax deductible to the corporation. They would be treated as ordinary income by
the shareholder, with a tax deferral if the dividends are used to make payments
on the shares.
Corporations
would finance growth not by retaining earnings, but by issuing new equity
shares. Of course, this raises the question
of where the new shareholders are to get the money to pay for the shares —
which is what we’ll look at tomorrow.
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