All eyes today are on the stock
markets of the world instead of the productive, primary markets. We’ll give in to popular pressure and explain
why this is a bad idea, but that’s as far as we’ll go:
• The Downer Dow. Just in case you’re starting to panic (as of
this writing the Dow has gone down by nearly 1,000 . . . so far), it might be
good to keep one or two things in mind. One,
the stock exchanges of the world are what is known as “secondary markets,”
essentially secondhand shops (or “shoppes”, if you prefer Ye Fake Olde Englishe
yt is actually deliberately archaic Jacobean) for used debt and
equity. Stock exchanges produce
nothing. They are clearinghouses where
people who want to sell financial instruments meet other people who want to buy
financial instruments. Everything else
being equal (the economists’ favorite copout), it doesn’t matter who or what
owns the “underlying” (financial language for the asset the financial
instruments represent) as long as it, a, exists, and, b, is productive. Yeah, yeah, yeah, we know that “everything
else” is NOT equal; for example, recent analyses by the European Investment
Bank have found that on the average SOEs (“State-Owned Enterprises”) have ROIs
(“Returns On Investment”) approximately half that of privately owned
businesses, and that — according to the National Center for Employee Ownership
(NCEO) in Oakland, California — 100% worker-owned companies with participatory
management and profit sharing typically outperform otherwise comparable firms
by 150%. (Translation: privatize SOEs by
selling them to the workers and instituting Justice-Based
ManagementSM and you can expect a 300% increase in ROI.) Two, the Crash of 1929 did not cause the
Great Depression of 1930-1940. It was,
rather, a trigger that revealed serious weaknesses in the U.S. financial
system, such as combining investment and commercial banking and the lack of
adequate collateral for business loans.
With commercial banks creating money willy-nilly for stock market
speculation, when the bubble burst they stopped all un- or inadequately
collateralized lending, even to otherwise sound businesses . . . which
immediately became unsound when they could no longer obtain credit and loans
were called. Businesses that a short
time before had been blue chip companies were forced to lay off workers or even
went bankrupt. With the repeal of
Glass-Steagall and the obsession with the stock market today, the primary,
productive market is already in trouble and has been for some time. Instead of bailing out Wall Street, then (as
we predict people will start demanding), there should be a focus on repairing
Main Street, with something like Capital Homesteading.
 |
| "Uh, guys, you both misunderstood. . ." |
• Slavery and Socialism.
Talk about grasping at straws. In
today’s Wall Street Journal there was a letter to the editor from an
academic carefully explaining that “Slavery Was a Dystopic Form of Socialism” (WSJ
02/28/20, A-3). Uh, yeah, uh,
Kingfish. Socialism being defined succinctly
(if not entirely clearly when people in general don’t understand property) as “the
abolition of private property,” it is difficult to figure out how extending
private property to the right to own other human beings — an exaggeration of private
property to the point of criminality — is the same as the abolition of private
property! We’re reminded of the capitalist
and the socialist who defined “distributism.”
The former declared that what G.K. Chesterton meant by distributism is
what he (the capitalist) meant by “democratic capitalism,” while the latter asserted
that what G.K. Chesterton meant by distributism is what he (the socialist) meant
by “democratic socialism”! Capitalism
and socialism are the same thing!! Of
course, from a Just Third Way perspective the whole discussion is nonsense, as this
comparison matrix reveals.
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| "Can't we own capital, too? Are we chopped cabbage?" |
• Ukraine Privatization. The
rather gloomy
picture of the Ukrainian economy painted by the International Monetary Fund
is actually a golden opportunity for the country. Ukraine is faced with privatizing 1,500 SOEs,
but with only the usual suspects — rich domestic investors and rich foreign
investors — as potential buyers. What
they should do — according to the late Walter Reuther, president of the United
Auto Workers union — is to sell existing SOEs to the workers and keep fixed
costs low by taking future increases out of profits instead of adding to costs. For future growth, institute a Capital
Homesteading program to make every Ukrainian an owner.
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| "I'll smile when I'm a capital owner." |
• Shop online and support CESJ’s work! Did you know that by making
your purchases through the Amazon Smile
program, Amazon will make a contribution to CESJ? Here’s how: First, go to https://smile.amazon.com/. Next, sign in to your Amazon account. (If you don’t have an account with Amazon,
you can create one by clicking on the tiny little link below the “Sign in using
our secure server” button.) Once you
have signed into your account, you need to select CESJ as your charity — and
you have to be careful to do it exactly this way: in the
space provided for “Or select your own charitable organization” type “Center for Economic and Social Justice
Arlington.” If you type anything
else, you will either get no results or more than you want to sift through. Once you’ve typed (or copied and pasted) “Center for Economic and Social Justice
Arlington” into the space provided, hit “Select” — and you will be taken to
the Amazon shopping site, all ready to go.
• Blog Readership. We have had visitors from 34 different
countries and 46 states and provinces in the United States and Canada to this
blog over the past week. Most visitors are from the United States, Canada, the
United Kingdom, Spain, and the Philippines.
The most popular postings this past week in descending order were “Fulton
Sheen on ‘the New Christianity’,” “Philosophies
at War,” “Stewardship,”
“News
from the Network, Vol. 13, No. 8,” and “Social
Justice IV: The Characteristics of Social Justice.”
Those are the happenings for this
week, at least those 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.” Due to imprudent language
on the part of some commentators, we removed temptation and disabled comments.
#30#