Yesterday we raised the eternal question, if capital ownership is so good, why aren’t more people owners? The answer is that the rich who control existing money and credit aren’t likely to let go of it, and most people who are not rich do not generally have access to new money creation that would enable them to purchase new capital that pays for itself out of its own future earnings, and thereafter provides income for the owner.
|Kelso: "If the machine wants your job, buy the machine."|
One exception to the general rule of lack of access to money and credit for acquiring new capital is the Employee Stock Ownership Plan (ESOP), invented by lawyer-economist Louis O. Kelso, and first implemented in Monterey, California, U.S.A. in 1956. It was not made a part of U.S. law until 1974, however (in the U.S., if something is not legally prohibited, you can do it; you don’t need a law to say what you are allowed to do), whereupon “the Expanded Ownership Revolution” really took off.
Since 1974, then, ESOPs have enabled millions of owners in thousands of companies to become capital owners without them putting up a cent of their existing savings or taking any reductions in pay or benefits. Today, more than 10 million American workers without past savings are 100% owners of their companies, as described in The Just Third Way and other writings at www.cesj.org).
|Money and credit are to economics what the vote is to politics.|
Equal personal access to the political ballot gives every citizen a share of control under political democracy. In the same way, sharing equal opportunity and effective means to become a personal owner of private property would provide each person with the means of participating in a non-monopolistic market-based form of economic democracy.
Democratic access to money and credit (and to insurance for collateral) can help everyone contribute their labor inputs and their own capital assets to the production of marketable goods and services. The key is to make it possible for everyone, not just workers employed by corporations, to use the “ESOP technique” to acquire “self-liquidating” capital.
All people could then become independent and afford what they need, and a good bit of what they want. And they would do this without becoming permanently dependent on charity or welfare distributions from whatever any ownership élites, politicians, or government bureaucrats who control the State. Every person could purchase new capital using newly created money, with the loan secured by capital credit insurance and reinsurance, and repay (and cancel) the money when the capital becomes productive and starts generating income.
|"But without my money monopoly, I'm no better than YOU!"|
Today, monopoly capitalists, central bankers, Nation-States, and unions of Nation-States control the money and capital credit systems of the world. Citizens organized to promote Just Third Way reforms, however, can legitimately demand legal and systemic reforms to the central banking and capital credit systems affecting their future ownership opportunities. Besides other Just Third Way reforms, every citizen now deprived of equal ownership opportunities would share with all other members of society access to personal power to advance economic democracy in the money and capital credit systems that affect their economic wellbeing.
Under socialist assumptions, justice no longer means that in an exchange I should get something back of equal value for my labor or capital contributions to the productive process, or a pro rata share in accordance with what I contribute to a common effort. No, I get what I want or need because I want or need it, assuming the State or collective determines what I need. Might makes right.
|"Ordinary people as good as I? I'll have to think about that."|
This makes perfect sense, given the monopoly over money and credit the world’s élites enjoy — control over access to money and credit being the chief means by which any élite can control future ownership opportunities . . . for themselves. Given the monopoly over money and credit, the only way democracy and justice in the socialist sense can exist is if somebody takes wealth away from the (capitalist) élite, and transfers it to whatever élite controls the beneficent State (socialist) bureaucracy for redistribution . . . at least by the élite’s way of thinking.
What people like Secretary Tillerson, once the head of the world’s largest oil company, don’t realize, however, is that under the Just Third Way’s version of economic democracy and justice, all that today’s capitalists really would stand to lose is not their current wealth (they can keep that for the rest of their lives). But the few with monopoly power over today’s money and credit system, would no longer determine who will share ownership of future wealth opportunities because of their monopoly.