This is the second half of the annual year-end news round-up. We’re bringing it out today as Friday is New Year’s Day. This year, instead of editing items from past News from the Network blog postings, we put them in as they originally appeared. Thus, you should substitute “Economic Democracy Act” for “Capital Homesteading,” and adjust mentally for other things that might have turned out slightly differently than anticipated. . . .
• Just Third Way Videos. On Wednesday, July 1, 2020, CESJ’s Director of Research, Michael D. Greaney, taped a video show that began what has become a regular feature of CESJ’s outreach, at least to a Catholic audience. More than 25 videos have been recorded this year on Sensus Fidelium, a “Catholic” YouTube channel. While the language used is often tailored for that particular audience (e.g., “the new things” means “socialism, modernism, and esotericism,” each of which has its own special meaning within that milieu), by and large the shows are usually about the rise of socialism and the infiltration of the ideas into the whole of society, and prepared the ground for a presentation (eventually) on the Just Third Way of Economic Personalism. A short sample of the format can be seen in this relatively short video (twenty minutes) on Ten Battles Every Catholic Should Know.
• New York Times and Worker Ownership. As reported on the blog of the National Center for Employee Ownership, in the opinion of experts (with whom, for a change, we concur) the pandemic will change ownership patterns in the United States. Due to the increased anxiety over sustainability, there will be an increase in the number of mergers and buyouts (no doubt by executives wearing Brooks Brothers suits purchased in the bankruptcy sale). This will further concentrate the ownership of America’s corporate wealth. On June 25, former Secretary of Labor Robert Reich wrote a piece advocating “a fairer economy in which employees receive a share of corporate profits.” As he closed his article, echoing the late Walter Reuther’s 1967 testimony before Congress, “It’s impossible to predict what kind of America will emerge from the crises we’re now experiencing, but the four-decade trend toward higher profits and lower wages is unsustainable, economically and politically. Sharing the profits with all workers is a logical and necessary first step to making capitalism [or, better, economic personalism — ed.] work for the many, not the few.” Over half a century ago Walter Reuther said “Profit sharing in the form of stock distributions to workers would help to democratize the ownership of America’s vast corporate wealth.” On June 30 of this year, Dr. Timothy Wu of Columbia University noted in the New York Times that the government should be encouraging worker buyouts. As he said, “While worker buyouts have been rare and are overly complex, Congress could encourage them by allocating some of the recovery funds to equity investments by employees looking to acquire their company.” Well . . . as the NCEO blog points out, it’s not all that difficult. CESJ suggested something similar in its paper, “Universalizing Capital Ownership.”
• Ownership Giveaway? According to the blog of the National Center for Employee Ownership (NCEO) in Oakland, California, “Alexandria Ocasio-Cortez (D-NY) has introduced H.R. 6851, a bill that would ‘require major corporations receiving Federal aid related to COVID–19 to make annual payments of equity to employees of the corporation while such aid is outstanding.’ The bill applies only to public companies. It would require that a grant of equity be made to all full- and part-time employees. The grant could be directly in shares, restricted stock grants, or an ESOP, and would be allocated to each individual employee.” This would appear to be a step in the right direction, but the problem is that it is linked to an extraordinary situation that — hopefully — will not continue much longer, it does not include everyone, and it does not appear to be a purchase of capital repaid with future profits, but a one-time grant, a tokenistic nod in the direction of the need to move from a wage system, to an ownership system.
• A Better Way? As we said, AOC’s initiative is a tentative step in the right direction, but it’s tokenistic. As an alternative, we suggest something along the lines of the CESJ paper, “Universalizing Capital Ownership.” A short-term or temporary expedient or giveaway is not going to solve the underlying problem, which is characterized by extreme concentration of the ownership of capital in fewer and fewer hands, and the displacement of human labor from the production process by the same capital. What is needed is a way for ordinary people to become owners of capital without taking away anything from the already-wealthy.
• Traditional, or Non-Traditional? Also according to the NCEO blog (and to continue using question marks in our subheadings), “The House Armed Services Committee has added a provision to the 2021 National Defense Authorization Act that would add an ESOP company as a ‘non-traditional business’ eligible for the Department of Defense’s “Other Transaction Authority” (OTA).” In English, that means an ESOP company would qualify to get DOD contracts for which it wouldn’t otherwise be eligible due to already having gotten contracts recently — a way that the DOD tries to prevent the same companies from always getting contracts and shutting out others, sort of “sharing the wealth” by making more companies that they haven’t “traditionally” dealt with have a chance.
|Dr. Harold Moulton|
• U.S. Savings Rate is Up. According to a brief mention in the Wall Street Journal, the U.S. per capita savings rate is up to over 20% . . . but America is not “saved,” meaning the much-vaunted recovery is a hollow shell. As Dr. Harold Moulton showed in his 1935 classic, The Formation of Capital, periods of recovery and economic growth are preceded not by increases in saving, but by decreases! Come again? Yes. In order to justify increasing production, hiring more workers, and acquiring additional capital, a rational business owner or manager wants to be reasonably assured that there is a market for what is produced; after all, the first principle of economics is, “Consumption is the sole end and purpose of all production” (Adam Smith, The Wealth of Nations). This makes sense, for if people are saving, they aren’t consuming, and there’s no market for more goods and services that people aren’t buying, anyway. But if people are spending instead of saving, where is the money to come from to finance new capital formation? From the expansion of commercial bank credit. And if you’re doing that, why not make it possible for anybody who is creditworthy to purchase capital? And also have a program to make as many people as possible creditworthy? That was the point of the two books by Louis Kelso and Mortimer Adler, The Capitalist Manifesto (1958) and The New Capitalists (1961).
• Show Us the Money! The People’s Republic of China, like many of the early socialists, is not against capitalism. No, it’s against capitalism — and capitalists — that doesn’t finance socialism. As the Wall Street Journal reported (“Hong Kong Endures As Financial Hub,” 07/24/20, A-1, A-9), while civil liberties and just about everything else have been curtailed in Hong Kong, the Chinese government is making every effort to preserve the financial system that generates cash from capitalist activity. On the mainland, too, capitalism is encouraged, as long as it doesn’t get in the way of socialist goals, and in many cases joins with socialism in common endeavors. This is at a time when religious and ethnic minorities continue to be targeted for liquidation, a goal consistent with that of socialism as a replacement not for capitalism (which it willingly accepts as a partner), but for traditional organized religion, be it Judaism (although not much of a “problem” in China), Christianity, Islam, or Tibetan Lamaism. In socialism, “religion” is a social phenomenon, what David Émile Durkheim described as “the group’s worship of itself,” with “God” as a “divinized society,” represented by the government, which functions as the “Mortall God” described by Thomas Hobbes in Leviathan.
• Coming “Cull” of Workers Over 50. According to “Market Watch,” there is a great purge coming of workers over the age of fifty and probably those younger than sixty-five, since any termination on reaching the age of sixty-five automatically counts as retirement. Workers older than fifty but younger than sixty-five may very well find themselves unemployed instead of “early retired,” which will be a disaster if they don’t have enough wealth built up to live on before they can retire. This, of course, is yet another argument for a Capital Homesteading program as soon as possible.
• New CESJ Board Members. CESJ welcomes Eugene Gordon and Rick Osbourne to our Board of Directors. Both Gene and Rick have been working to spread the message of the Just Third Way and the Capital Homesteading proposal to their communities and audiences. Gene is also the founder and executive director of Descendants of American Slaves for Economic and Social Justice, based in St. Louis, Missouri (www.das4esj.org). His group, a strategic partner of CESJ is reaching out to the local community to develop a model of Capital Homesteading that would apply the discount power of the St. Louis Federal Reserve to create equal capital ownership opportunities for every person, from birth until death. Rick Osbourne is the creator of Joe Lunchbuckett, who ran a virtual campaign for President on the Capital Homestead plan.
• Jobs AND Ownership. Although it is true that the Just Third Way focuses on capital ownership “by as many as possible of the people,” we also recognize that most people today and in the foreseeable future will gain the bulk of their consumption income from jobs, which means wages. Nor are we opposed to that in any way . . . although some very silly commentators have claimed without a shred of evidence that our opposition to the wage system means the same as opposition to a just wage. What we really say is that relying on wages and welfare alone turns people into permanent dependents of whoever pays them or gives them money, and that is de facto slavery, which is inconsistent with the dignity of the human person. That is why it is gratifying that the short series on this blog on what to do about the refusal of people to return to work when they are getting more by not working is so gratifying. Nowhere do we say in “To Work, or Not to Work?” “Would the Unions Go For It?” or “A Way to Finance ‘Green’ Infrastructure” do we say anything about abolishing wages, although we hint strongly at abolishing the wage system. For quite some time, a couple of centuries or so, we fully expect that most people will continue to center their income generation efforts on a job that pays wages. It just won’t be a wage system job, as an increasing share of income would come from capital ownership, forcing employers to pay the real market rate of wages if they want to hire workers. After all, if you want to know the real value of something, check the price of the alternatives in a free market.
• Stakeholder Capitalism. In the Wall Street Journal a recent article spoke about the illusion of “Stakeholder Capitalism” (“ ‘Stakeholder’ Capitalism Seems Mostly for Show,” WSJ, 08/07/20, A-15). It seems that last year about this time the Business Roundtable issued a statement, signed by “more than 180 companies committed to ‘deliver value to all stakeholders’.” Following up with the signatories of the statement, the 30% of signatories that responded did so in a way that indicated they considered it a meaningless gesture. According to its website, the Business Roundtable “is an association of chief executive officers of America’s leading companies working to promote a thriving U.S. economy and expanded opportunity for all Americans through sound public policy.” What is interesting is that the Business Roundtable doesn’t appear to consider ownership a valid claim on “stakeholder” status . . . unless you own a large number of shares. For example, the sole mention of worker ownership on the Business Roundtable site was the note that they had filed an amicus brief taking the stand that the courts should make it more difficult for ESOP participants to sue Plan trustees for breach of fiduciary duty (they were concerned that the courts would allow what were essentially “frivolous lawsuits,” that most courts get rid of as fast as they can, anyway). As for minority shareholders, they backed a proposal that would take away most rights from anyone who owns less than $2,000 worth of a company’s shares. This seems to be contrary to the interests of stakeholders with a claim rooted in the natural law, in favor of a vague and undefinable “stakeholder” status that has whatever meaning — if any — corporate management assigns to it.
• Pope Francis and Woman. Also in the Wall Street Journal was the announcement that Pope Francis, head of the Catholic Church, has appointed six women to the group that oversees Vatican finances (“Pope Francis Names Six Women To Vatican’s Economic Council,” WSJ, 08/07/20, A-7). This gives us something of an antinomous feeling. On the one hand, the Vatican Council for the Economy clearly benefits from new blood from outside the Citta’s Old Boy Network that has done more to stifle effective action than the Protestant Reformation. On the other hand, the appointments seem to have been made because the new members are women, not because they are the most qualified. On the other, other hand (we’re starting to look like Kali here), women often seem to take more interest in the picky little details like where a few million or so Euros went without backup or support. On the other, other, other hand, the way the appointments were made kind of relegates them to the status of tokens. On the other, other, other, other hand (do octopi have hands?) we have previously advocated that key positions at the Vatican that do not require the priestly status be filled by qualified laity who do not have a vested interest in a Church career or in feathering their own nests; since women cannot be ordained (despite the obligatory discussion about women’s ordination in the article), a qualified woman is the ideal candidate for a high office at the Vatican, since she can’t use it to leverage herself into a bishopric or the papacy (or screw things up by campaigning against the pope to advance her own interests). In other words, we like what was done, but the way it was done comes off as just a trifle second-rate.
• Poor Zalenski. You have to pity the president of Ukraine, Volodymyr Zalensky. As reported in the Washington Post (“Ukrainian Stole Billions, U.S. Alleges,” 08/07/20, A-9), he is connected to one of the country’s most rapacious oligarchs, Ihor Kolomoisky, who is now suspected of pocketing so much money stolen from PrivatBank that he is accused of having nearly caused the collapse of the economy. Zalensky’s reform efforts were already on the skids, which is not exactly unexpected. Whatever his personal integrity, Zalensky probably found out very quickly that using legal and ethical methods to institute reforms often goes nowhere, while using fire to fight fire (i.e., illegal, unethical, or questionable methods) often brings about a worse state of affairs. We’re reminded of what happened to the reforming mayor of New York, Abram Stevens Hewitt, who was elected on a promise to clean up the city after the wreckage left by Boss Tweed, and found himself boxed in. Personally honest and of the highest integrity, corruption under Hewitt reached heights exceeding that under Tweed’s control. Frankly, without the Just Third Way of Economic Personalism and the ability to offer the people of Ukraine a deal so much better than the current system, Zalensky will probably go nowhere, and the country will only get worse.
• ESOPs and Economic Recovery. According to the National Center for Employee Ownership (NCEO) in Oakland, California, ESOPs can play a vital role in restoring the U.S. economy, as a recovery that benefits only the rich and is focused on speculative gains on Wall Street fueled by inflating the currency is not exactly what could be called sustainable. As Loren Rodgers notes on the NCEO blog, “[t]he Temporary Federal ESOP Grant Program Act (S 4236) was introduced by Sen. Ron Johnson (R-WI) on July 21, 2020, and is cosponsored by Sen. Tammy Baldwin (D-WI). The bill has the potential to create new ESOP companies, to expand the amount of employee ownership in current ESOP companies, and to inject working capital into ESOP companies to make them stronger.” Consequently, “[t]he U.S. economy will recover from the COVID-19 outbreak, but the distribution of the benefits of that recovery remains an open question. A recovery that accelerates the concentration of wealth will increase the fragility of our economy, and this bill recognizes that employee ownership can both strengthen the recovery and ensure that working Americans receive a just share of future economic growth. If American workers have a larger ownership stake in the post-COVID economy, the recovery will be both broader and deeper.”
• Expanded Ownership and the Pandemic. The NCEO also reports that companies with ESOPs seem to be faring better on the whole than non-ESOP companies in the current situation. As reported on the NCEO blog, in response to a survey of ESOP companies, “[t]he survey received 160 responses from a fairly diverse group of ESOP companies. Two-thirds of respondents said that being employee-owned has had a very or somewhat positive effect on their handling of the COVID-19 pandemic. Most of the remaining third reported neutral or no effects, and just 3% of respondents reported negative effects.”
|Deal with the actual, not the ideal|
• Stakeholder Capitalism. There has been a strong turn recently toward “stakeholder capitalism,” in which the interests of shareholders — “owners” — are marginalized or repudiated in favor of “stakeholders,” e.g., customers, workers, society, the environment, etc., etc., etc. The idea is that businesses are more than organized ways of people joining together to produce marketable goods and services for consumption. No, businesses are something with an independent existence that has certain moral responsibilities separate from the people who ostensibly own them. To any Aristotelian-Thomist, of course, the concept of a human abstraction (such as a business) that has an independent existence apart from the human minds that created it is not to be considered. It is “Platonic” rather than “Aristotelian”; collectivist instead of individualist or personalist. The bottom line is that “stakeholder capitalism” is another word for socialism, albeit one that makes the paradoxical link between socialism and capitalism a little more apparent than otherwise. Of course, making everyone a capital owner, as described in the proposals of the Center for Economic and Social Justice (CESJ) would obviate the need to change the meaning of ownership, but no one seems to be thinking along those lines, least of all any of the crop of politicians running for office this year.
• Patricia Hetter-Kelso and SCORE. “SCORE” is a project of the European Union focusing on development of renewable energy sources that are co-owned by the consumers themselves. As it says on their website, “In this context, consumer (co-)ownership in RE [“renewable energy”] has proven to be an essential cornerstone to the overall success of energy transition. When consumers acquire ownership in RE, they become prosumers, thus generating a part of the energy they consume. Like this, they are reducing their overall expenditure for energy. At the same time, consumers receive a second source of income from the sale of excess production. Hence, positive behavioural changes in energy consumption can occur.” Patricia Hetter-Kelso is on the SCORE advisory board, and appears to have had more than a little input into their investigation of the Consumer Stock Ownership Plan model for the energy industry.
• Polish Economists’ Policy Paper. A group of Polish academic economists has gotten in touch with CESJ, and have been looking over materials on binary economics and the Just Third Way of Economic Personalism. They have found the paper, “The Just Third Way: How We Can Create Green Growth, Widespread Prosperity and Global Peace” the most helpful piece, “as it provides specific recommendations for achieving equitable labor wage and capital wage.” They have also been “quite astounded” by the extent of CESJ’s work and its grounding “in John Paul II’s teachings on economy and justice.” They came across CESJ when reading an article by Krzysztof Nędzyński on the concept of the Catholic Welfare State, published by “the Jagiellonian Club,” a conservative Polish think tank. The group is putting together a policy paper with the working title “Poland of Thirty-Eight Million Capitalists: A Plan for the Post-COVID Future” that will incorporate the Just Third Way.
• Own or Be Owned in Louisville, KY. CESJ member MeShorn Daniels is using CESJ’s slogan “Own or be Owned” and one of CESJ’s designs for his “Man Up” Radio Show, which airs Saturday mornings 9:00 am, on WLOU 1350 AM/104.7 FM in Louisville, Kentucky.
• Federal Reserve and Interest Rates. During the meeting at Jackson Hole, Wyoming, the Federal Reserve announced that it is willing to accept higher inflation . . . despite its mission of establishing and maintaining a stable currency (which is fundamentally impossible under Keynesian economics or Modern Monetary Theory). The idea of adopting the Just Third Way and the prospect of eliminating systemic inflation or deflation seems completely alien to them.
• Economic Democracy or Capital Homesteading? As some readers may have noticed, we are in the process of “rebranding” the Capital Homestead Act as the Economic Democracy Act. Don’t worry, though: we’re still keeping the terms “Capital Homestead” and “Capital Homesteading,” and the variations. Just be aware that when you see the term “Economic Democracy Act,” it means the same as what we meant and still mean by “Capital Homestead Act,” especially if we happen to have a slip of the tongue and use the older term.
• The November Happening. We decided (at least for today) that “November Happening” is a good neutral way to describe the upcoming, er, election in the United States. In our opinion, none of the candidates, major or minor, has the right vision to lead the U.S. and the world out of the current “situation” (another somewhat weak way of describing what is going on now). Interestingly, the three blog postings we’ve had on the subject over this past week have proven rather popular. In the first one, we showed how Biden could win. In the second, we showed how Trump could win (notice we’re saying could, not would). In the third, we showed how all of us could end up winners, regardless who ends up being president. The postings have proven to be rather popular.
• Surge of Imported Goods. The basis of “Say’s Law of Markets” is Adam Smith’s first principle of economics as stated in The Wealth of Nations (1776), “Consumption is the sole end and purpose of all production.” This is the basis of binary economics, the economic theory of the Just Third Way of Economic Personalism. In contrast, Keynesian economics disregards production as almost unimportant. The key thing in Keynesian economics is demand, not supply, both of which must be integrated for a rational system. As far as Keynes was concerned, the only way for most people to generate effective demand is by means of a wage system job. What people produce is irrelevant as long as they get paid for it. In fact, under certain circumstances, it is better to produce something of no utility at all in order to provide a job to keep up demand for other goods! (Yes, Keynes actually said that.) Obviously, the Keynesian assumption and focus on jobs even for worthless goods and services creates waste, encourages consumerism, assumes that life is only for material things, and is generally bad for everyone. That is why a short article in today’s Wall Street Journal should worry more people than it does, “Freight Networks Overwhelmed By a Surge of Imported Goods” (WSJ, 09/11/20, B-5). Both Adam Smith assumed that in a rational economy everyone produces what he or she consumes, either directly, or to trade to someone else for what others produce. Creating unproductive demand is a recipe for disaster, as should be obvious from the amount of debt that now burdens the world.
• Rethinking Saving. It is becoming more evident every day that the whole Keynesian system needs a complete overhaul. At the heart of it — made evident by the economic slowdown caused by the pandemic — is what Dr. Harold G. Moulton called “the economic dilemma.” That is, if you save to invest in new capital, demand falls to the point where the new capital isn’t needed because there’s not enough demand. If, however, you spend instead of savings, there is enough demand to justify financing new capital . . . but not enough savings to finance it! That is, if you assume that all savings must come from restricting consumption in the past. If you rethink saving and realize that savings can also come from increasing production in the future, the so-called economic dilemma solves itself. Instead of turning unconsumed production from the past into money to finance new capital, you turn unproduced consumption in the future into money. This is, in fact, what commercial and central banks were invented to do: create money backed by future production, and cancel the money once the new capital becomes productive and the goods and services produced are sold and consumed.
• Rethinking Retirement. Consistent with the way to resolve the “economic dilemma” described above, we need to rethink saving for retirement. Instead of foregoing consumption today, we should make it possible for everyone to purchase new capital that pays for itself out of its own earnings. That way, virtually everyone could have adequate income not only for retirement, but for his or her entire life. We need to shift from “retirement” income to “entirement” income (sorry).
• Federal Reserve Keeps Interest Rates Low. In an incredibly expected moved, the Federal Reserve Board of Governors again voted to keep interest rates down to ensure that their buddies in government and on Wall Street don’t have to pay too much to keep buying votes and playing the market. Of course, the idea that interest-free (but not cost-free) credit should be provided to turn displaced workers and everyone else into owners of advanced automated machinery via the Economic Empowerment Act (formerly the Capital Homestead Act). This would allow every child, woman, and man to be productive, bring basic industries back to the U.S. (or establish and maintain them in every country that wants to ensure its own basic needs are covered), restore a stable and asset-backed reserve currency, halt, even reverse environmental degradation, and quite a number of other things, too numerous to mention. The Economic Empowerment Act is not a panacea, but it is a more just basis for an economy than the world has been saddled with for the past two centuries or so.
• Massive Income Shift. The Rand Corporation just released a study and people are expressing shock . . . shock . . . as in Louis-in-Casablanca’s “shocked to find that gambling is going on in here.” Of course, the “shocking” finding is that median pay for working stiffs is around $50,000, while the non-wage income of the upper 1% has skyrocketed. According to the study, if recent income gains had been distributed “equitably” (although the criteria for equitability are not evident), wage earners would be getting $109,000 median income. Of course, no one is talking about how if wage workers were getting more than twice what they are now the price level would probably more than double, leaving wage workers worse off than before, but so what? From a Just Third Way perspective, the solution is obvious: diminish the role of speculative stock market gains, and make people productive with both labor and capital so they can share equitably in gains on a rational and moral basis instead of hinting not-so-subtly that the greedy upper 1% should surrender their ill-gotten gains to the wage serfs.
• World Day of Prayer for the Care of Creation. On September 1, 2020, Pope Francis delivered his message for the care of creation. It is a short document, relatively easy to get through . . . but somewhat disappointing. There is nothing actually wrong with what the document says. The problem is more with what is not said. The message seems to be that if people just do what was right, the world would be a much better place. This is almost — but not quite — what the socialists and modernists have called “the Kingdom of God on Earth.” There are a few hints that could be taken as alluding to what Pius XI proposed as an acceptable alternative to the Kingdom of God on Earth, namely, the Reign of Christ the King (which is not of this world, as anyone familiar with the New Testament can tell you), but it’s very muffled. What seems to be missing is the whole point of the natural law social teachings of the Catholic Church for the past 200 years: that the purpose of life is to become more fully human to prepare for your final end, whatever it might be; life is not an end in itself, or “anything goes.” This applies to all faiths and philosophies.
• Save the Economy By Spending. This week in the Wall Street Journal, there was an article relating how Federal Reserve officials plan on saving the economy again: spend more money. (“Top Fed Officials Urge More Spending,” WSJ, 09/24/20, A-3.) As Jean-Baptiste Say pointed out over two hundred years ago, however, you don’t stimulate economy activity be consuming more, but by producing more . . . as long as people own both labor and capital so that all production can be used for consumption income. Otherwise, “multiplying barren consumptions” as Keynesian economics requires simply makes the problem worse.
|Doug Keck, EWTN Bookmark|
• EWTN Bookmark. Michael D. Greaney, CESJ’s Director of Research, appeared on EWTN’s Bookmark show with Doug Keck on Sunday, September 27, 2020, at 10:00 am EDST (US). The book was be Ten Battles Every Catholic Should Know.
• Is Pope Francis Wary of Economics and Finance? With the resignation of Cardinal Angelo Becciu, there may be an explanation of Pope Francis’s sometimes puzzling attitudes towards economics and finance. The fact that a high ranking Vatican official was able to get away with what he was doing as long as he did suggests that Pope Francis may be so uncomfortable with financial matters that he lets presumed “experts” guide him even against what would be his better judgment were he better informed on the subject. True, many people are uncomfortable with economics and finance, but the principles of the Just Third Way of Economic Personalism are based on common sense, and could go a long way toward reducing the discomfort or eliminating it entirely.
• Employee Ownership Month. October is “Employee Ownership Month,” and both the ESOP Association and the National Center for Employee Ownership are making a special effort this year to ensure that more people know about, well, employee ownership. It is particularly appropriate this year, as it appears (without doing actual statistical sampling) that worker-owned companies seem to have a survival edge in times like these over more conventional ownership structures. It’s definitely something to think about: how can you keep demand up and keep people producing when they can’t go out? Let their capital, automated and otherwise, do the work, while the capital owner gets the income.
• America’s Small Business Development Centers. As reported by the National Center for Employee Ownership, the annual conference of America’s Small Business Development Centers is making worker ownership a special focus. As noted above, in times of stress and economic downturn, worker-owned companies have a higher survival rate and healthier (financially) than otherwise comparable companies.
• Fratelli Tutti Encyclical. Although Pope Francis’s new encyclical, Fratelli Tutti — which means “All Brothers” in Italian; the “real” title is “On Fraternity and Social Friendship” — is being characterized as Pope Francis’s legacy, there appear to be some very confusing passages in the document. From the perspective of the Just Third Way, with its basis in the Aristotelian-Thomist understanding of natural law (the same conceptual paradigm within which Catholic social teaching is framed), the treatment of private property is especially troubling. As we noted in a blog posting earlier this week, “Pope Francis and Fratelli Tutti,” the language appears to make a distinction between private property as a natural right, and all other natural rights. In Thomism, of course, this would violate the first principle of reason on which the entire philosophy of Aristotle and Aquinas is based — the law of contradiction and the law of identity, two ways of saying that contradictions are not allowed — thereby nullifying the encyclical as an authentic teaching document. That is why at the end of the posting we respectfully requested that Pope Francis withdraw the document and reissue it later with clarifications and corrections.
• The Need for Justice University. If nothing else, the fuss being made over Fratelli Tutti is a graphic demonstration of the need for “Justice University.” As one correspondent noted, “Justice University should teach logic (formal logic), Latin, and Greek. It should also teach ancient philosophy according to the scholastic method. One cannot think at all if one does not understand formal logic.” This reiterates what the solidarist jurist and student of Fr. Heinrich Pesch, S.J., Dr. Heinrich Rommen, noted in his book on the natural law, that getting away from the absolutes of the natural law based on human nature and going with somebody’s idea of God’s Will based on faith leads inevitably to pure moral relativism, even nihilism.
• Inside the Vatican Magazine. A new article by CESJ’s Director of Research appeared in the October issue of Inside the Vatican magazine, “Economy: Socialism, Modernism, and Catholic Doctrine” . . . pretty good for an interfaith treatment of the subject. Naturally, we urge all our readers to subscribe to Inside the Vatican, even if they’re not Catholic or even Christian. With the shape society is in today, all people of goodwill need to get organized and restructure the social order, the sooner, the better.
• WHAT “Recovery”? The headline of an article in today’s Washington Post reads, “New Jobless Claims Increase to 898,000 In a Sign Recovery Could Be Stalling” (10/16/20, A-18). The first thing that pops into our heads is, “What is this ‘recovery’ to which they refer?” An economy to be just must function for the benefit of everyone, and that means that every participant in economic life — and all of us are that, given that economics refers to the production, consumption, and transfer of wealth — must be able to 1) produce, 2) consume, and 3) transfer (exchange) wealth. When you have almost a million NEW “jobless claims” in an economy in which there are 7.2 million “officially” unemployed according to the BLS (and 12.6 million when unofficial figures are added in), serious questions can be raised as to just how the powers-that-be define “recovery.” If only a few people are growing richer while the rest at best lose ground slowly, something needs to be done to ensure that everyone have the opportunity and access to the means of becoming productive. We suggest rather strongly that the Economic Democracy Act (formerly known as the Capital Homestead Act) be implemented at the earliest possible date.
• Worker Ownership for a Sustainable Economy. According to the National Center for Employee Ownership (NCEO), the American Sustainable Business Council is promoting worker ownership as a solid foundation for building sustainable businesses, which translates into a sustainable economy that works for far more people than just the rich. This doesn’t answer the question of what to do to make non-corporate workers (and non-workers) productive — see the Economic Democracy Act for that — but it certainly points in the right direction, and it is far more effective than printing funny money to “stimulate the economy.”
• The U.N. and Human Rights. In the Wall Street Journal editorial “Why the UN is Making a Mockery of Human Rights” (10/19/20, p. A-17), Aaron Rhodes revealed how vulnerable democracy is to being hijacked by totalitarian regimes. Democracy ceases when it relinquishes its guiding principle — that power and rights (social, political and economic) must start with every human being, not the collective or State. What has allowed the mantle of “human rights” to be seized by such human rights abusers as China, Russia, and Cuba is the failure by all countries today to recognize and institutionalize the human connection between power and property. The U.N. can return to its democratic values and fundamental principles of freedom, justice, and peace for every person, by ratifying once again its 1948 “Universal Declaration of Human Rights,” and paying special attention to Article 17: “(1) Everyone has the right to own property alone as well as in association with others. (2) No one shall be arbitrarily deprived of his property.” While the laws of the U.S. and other democratic nations may protect the rights of existing owners, they omit the right that every person should have an equal right and access to the means to become an owner of productive capital. This first right can be achieved without depriving current owners of their property rights. Louis Kelso in his two books with Mortimer Adler offered a just third way in which the universal right to capital ownership could be realized by every person everywhere through changes in the monetary and tax systems. These principles and reforms are embodied in the “Economic Democracy Act.”
|John Manuel Pimenta|
• John Manuel Pimenta. We recently learned that long-time CESJ supporter, John Manuel Pimenta, died April 12, 2020. Cause of death is not known for certain. Born in Lucknow, India, August 19, 1930, John was the oldest of ten children. He graduated from Engineering school in Poona, India, then came to the United States in 1953 on a fellowship to do graduate work at the University of Notre Dame. After graduation, he worked for Hazlet and Erdal designing highways and bridges, including work on the Chicago Skyway, Indiana and Ohio Turnpikes, and various bridges on the Mississippi River. Later he worked for Harza Engineering in water resources, working on dams. In 1959 he married Maria Lira da Costa of Goa, India. They were married in the Notre Dame Log Chapel by the late Rev. Theodore Hesburgh, President of the University. In 1961, John was transferred to Sao Paolo, Brazil, where he was Director of Corporate Planning and later Manager of Operations. While in Brazil, he helped with the electrification of the state of Mato Grosso. John and Lira became U.S. citizens in 1963. In 1970, John became the director of the Illinois division of American Society of Civil Engineers. In 1972 he began consulting work with the Asian Development Bank and the World Bank in Washington, DC. Years later, John started his own consulting firm, Netgrowth Company, which he owned until his retirement.
• More Pressure on Social Security. Because the pandemic has interfered with the savings program of many people, a significant number of potential retirees are anticipating a larger role for Social Security and Medicare to meet basic living expenses. Of course, all this would be something of a moot point if people shifted from “saving for retirement” to “investing for income.” People are finding it harder to work during the pandemic, but machines don’t care. If people owned the machines that do the work, they wouldn’t have to worry about performing labor just to get an income. It is time to revisit the “Economic Democracy Act”. . . not that isn’t always time.
• Real Economic Stimulus. It has become extraordinarily clear that, however desperately an increasing number of people may need assistance during the pandemic, simply redistributing wealth — whether directly through the tax system or indirectly through the monetary system — is not a solution. What is needed is a program that can help everyone become productive, either through their labor or their capital. Since “creating jobs” has proven to be an extremely costly and self-defeating form of redistribution in many cases, it is evident that the only real solution is to make as many people as possible capital owners, and that means the Economic Democracy Act.
• What Kind of Credit? David Malpass, president of the World Bank Group, is concerned about the debt burden of the world’s poor. (“To Cope With Covid, the World’s Poor Need Debt Relief,” Wall Street Journal, 11/05/20, A-21.) Yes, Mr. Malpass should be concerned about debt burdens, and not just of the world’s poor, but of everyone and every country that is saddled with even one cent (or the local equivalent) of non-capital — that is, non-self-liquidating — debt. The solution is not, however, unqualified cancellation of debt, whether of individuals, business enterprises, or entire nations. The real issue is how to turn people who have debt they cannot repay into people who have debt they can pay. The answer, of course, is to make it possible for anyone and everyone to be productive with labor, capital, or both, which means the Economic Democracy Act as soon as possible.
• Economic Relief? An op-ed today’s Washington Post is properly concerned about the amount of (additional) economic relief needed during the current pandemic. The problem is that the powers-that-be are only talking amounts, not kind of economic relief. The problem is actually twofold, and is similar to the concern expressed by the president of the World Bank Group (above). That is, “economic relief” must not consist solely of simply handing out money. That’s simple redistribution, and doesn’t solve the underlying problem of lack of productive capacity. Realistic economic relief must take care of meeting people’s needs now, of course, but it must also implement a way for people to become productive with both capital and labor, and that means the Economic Democracy Act.
• Justice University. A template for “Justice University Partnerships” is being developed to try and help fill the need in Academia and elsewhere for a sound, principled, Aristotelian-Thomist approach to what is somewhat misleadingly called a “liberal arts education.” It should probably be called a “basic education,” as the principles of justice and the other virtues are universally applicable, even in the hard sciences, especially when the hard sciences are put to practical use. After all, “two plus two equals four” may be “pure math,” but “two slaves plus two slaves” equals four times the injustice. Nor should “Justice University” be construed as limited to higher education or even to Academia for “JU Partnerships.” Its programs will be useful at any level of education and for virtually all types of organizations and institutions, such as civic organizations, churches, businesses, and even families. Every individual and institution benefits when people learn how to become more fully human, which is the goal of Justice University.
• Justice University Research Fellowships. An important feature of a Justice University program might be “Justice University Fellowships.” A “JU Fellow” should be a full-time employee or the equivalent of a partnering institution who will carry on research in the Just Third Way and help advance the goal of a more justly structured social order.
• Economic Personalism. The book, Economic Personalism: Property, Power and Justice for Every Person, is now available on both Amazon and Barnes and Noble at the cover price of $10 per copy. If you’d like to “try before you buy” (or just don’t have room on your shelves for another book), download the free copy in .pdf available from the CESJ website. If you’d like to order in bulk (i.e., ten or more copies) at the wholesale price, send an email to email@example.com for details. CESJ members get a $2 rebate per copy on submission of proof of purchase. Wholesale case lots of 52 copies are available at $350, plus shipping (whole case lots ONLY). Prices are in U.S. dollars.
• Promoting Economic Personalism. At about 150 pages, CESJ’s new book is one of the most succinct as well as comprehensive overviews of the Just Third Way of Economic Personalism we have put together to date. It would therefore be good not only to expand your own understanding of the Just Third Way, but be an extremely useful tool for spreading the word to others. The book is priced low to encourage as many people as possible to buy it, and is also available as a free download in .pdf. And since everybody seems to be getting on the bandwagon for the holidays early this year, we hasten to add that it makes a great Christmas, Hanukkah, or anything else gift. You may also want to mention it throughout your social networks, local schools, churches, and civic organizations. If you know someone with a “Name,” ask him or her to endorse the book, or even write a review. And don’t forget to write a review yourself and post it on Amazon or Barnes and Noble.
• Economy of Francesco. A conference on global economics at Assisi (as in “St. Francis of”) sponsored by the Vatican is currently in process, yesterday, today and tomorrow. Obviously we haven’t received any reports yet, but the publicity brochure for the conference seemed a little short on substance, and a little top-heavy in finger-shaking and scolding, at least that was the impression we got. Of course, one cannot expect too much from publicity materials designed to intrigue people and persuade them to attend the event or attend to the outcome, but the brochure did not seem consistent with what we know of the natural law and the Catholic Church’s social teachings based on the natural law. We will have to wait and see what comes out of the conference, however, before we can make a fair and honest assessment of the effort. We do hope, however, that whatever comes out of the conference is not as confusing to us as was Pope Francis’s last encyclical, Fratelli Tutti.
• Anti-Corruption in Ukraine. Volodymyr Zelensky, president of Ukraine, is launching another attempt at anti-corruption. As is usual in this sort of thing, the effort will focus on bringing corrupt individuals and organizations to justice. That is, of course, essential, but what is really needed is underlying systemic change to minimize opportunities and means for corruption in the first place. As has been demonstrated throughout human history, if you want to minimize corruption, you need to do two things. One, make corrupt actions less profitable or even unprofitable. That is, in fact, what reformers attempt when prosecuting corruption, but it often sidesteps the need to build in systemic controls that orient the institutions and system as a whole toward justice instead of injustice. Two, empower ordinary people economically and thus politically. This gives them a direct stake in maintaining a non-corrupt system as whatever is stolen comes directly out of their pockets instead of indirectly, which is always easier to pull off. The best way to do this, of course, is with the Economic Democracy Act.
• Dr. Jane James. Dr. Jane James, a Clinical Assistant Professor of Social Work at the University of Southern California, has introduced a number of doctoral candidates to the Just Third Way and is working to present the paradigm to leaders in Academia, starting (naturally enough) with U.S.C. At present, a major focus is strategizing on how to get these ideas to the incoming administration in the United States, especially as the danger is that political leaders as well as academics and religious leaders will continue to mistake critically needed emergency measures for solutions, and not take steps to implement the Economic Democracy Act.
• Economy of Francesco. The three-day conference on global economics at Assisi in Italy sponsored by the Vatican closed last week with results that can only be called disappointing, whatever your orientation. If you were a supporter of the conference, you had to be disappointed at the near-total lack of media response. For those who watched the presentations, they came off as remarkably lacking in substance and — as is not unusual for presentations by Young People™ — tended to take the viewers’ presumed values for granted and while production values were generally good came off as pretentious fluff. The general effect was one of scolding people for not going along with some extremely vague, albeit generally well-intentioned goals with no practical means suggested for attaining them except that (other) people should do the right thing as defined by Young People™.
• Woke Capitalism. Frankly, the “other side” of the argument in favor of Big Business™ hasn’t done much better, although the arguments are presented in a somewhat more coherent manner. As described by Andrew V. Abela, Dean of the Busch School of Business at the Catholic University of America in Washington, DC, in his op-ed piece in today’s Wall Street Journal (“Woke Capitalism in a Secular World,” WSJ, 11/27/20, A-13), all that is necessary for capitalism to triumph is to adhere to a sound ethical framework . . . which sidesteps the issue of whether a system based on concentrated capital ownership and rule by Oligarchs and Plutocrats is in any way ethical to begin with. “Ethical capitalism” is, after all, a little like “happy sadness” or “white black.” In Rerum Novarum (1891), Pope Leo XIII called for widespread direct capital ownership by “as many as possible of the people.” This is the antithesis of both capitalism and socialism, as explained in CESJ’s newest book, Economic Personalism.
• New York City Ownership Initiative. According to the National Center for Employee Ownership, “On December 2, New York Mayor Bill de Blasio announced the city would start Employee Ownership NYC, an outreach program to encourage business owners to sell to their workers. ‘Enabling workers to buy their businesses is a proven model to address the wealth gap in this city—and it will be a transformative approach for businesses looking for creative ways to recover from the challenges posed by COVID-19,’ de Blasio said. ‘This approach helps anchor small businesses in the communities they serve.’”
• John Moorehouse, RIP. As regular readers of this blog are aware, a good friend and supporter of the Just Third Way, John Moorehouse, Acquisitions Editor for TAN Books (an imprint of Saint Benedict Press), died suddenly this past Saturday. We shared some thoughts in our posting of Wednesday, December 9 (“‘Farewell to a Father’”). The tribute from Inside the Vatican magazine can be found here, while the Sensus Fidelium video “Tribute to John Moorehouse” with Charles Coloumbe should definitely be viewed. Be sure to visit the GoFundMe campaign page for John’s family and make a contribution.
• The Great Reset. With all the talk about the “Great Reset,” we can’t really say that we see any difference between the Great Reset, what Hilaire Belloc wrote about in The Servile State (1912), and the general trend of the world economy since the Great Depression and the Keynesian New Deal. Where economic personalism focuses on the dignity and sovereignty of the actual, individual human person, the Servile State and the Great Reset treat most people in collectivist/elitist ways, with little or no recognition of their wants and needs as human persons, particularly the need to empower every child, woman, and man with capital ownership so they are able to exercise their rights and become virtuous.
• Justice University. Dr. Jane James of the University of Southern California has been working steadily on helping create “Justice University’s” certificate program for economic and social justice as understood in the Just Third Way of Economic Personalism. Her outreach has been both domestic and international, and the idea is to be able to implement a certificate program at any high school or university in the world to supplement, not compete with the current curriculum.
• Stakeholder Capitalism. On December 9, 2020, the Wall Street Journal ran an Op-Ed piece on the Great (or Big) Reset, “Profit Keeps Corporate Leaders Honest” (WSJ, 12/09/20, A-3). We agree with pretty much everything that was said (except for what appeared to be a misquote from Milton Friedman that sounded more like Karl Marx). The problem, of course, is that traditional capitalism was presented as if there is nothing wrong with it. That’s a little misleading, for if there is nothing wrong with the way things are now, why would the alternative sound so attractive to so many people? In any event, there was no solution suggested, which leaves the field wide-open for “Stakeholder Capitalism” or economic personalism . . . if we can get the word out to people.
• John Moorehouse. We continue to urge people to visit the GoFundMe campaign page for John’s family and make a contribution. As regular readers of this blog are aware, a good friend and supporter of the Just Third Way, John Moorehouse, Acquisitions Editor for TAN Books (an imprint of Saint Benedict Press), died recently. We shared some thoughts in our posting of Wednesday, December 9 (“‘Farewell to a Father’”). The tribute from Inside the Vatican magazine can be found here, while the Sensus Fidelium video “Tribute to John Moorehouse” with Charles Coloumbe should definitely be viewed.
• Economic Personalism. When you purchase a copy of Economic Personalism: Property, Power and Justice for Every Person, be sure you post a review after you’ve read it. It is available on both Amazon and Barnes and Noble at the cover price of $10 per copy. You can also download the free copy in .pdf available from the CESJ website. If you’d like to order in bulk (i.e., ten or more copies) at the wholesale price, send an email to firstname.lastname@example.org for details. CESJ members get a $2 rebate per copy on submission of proof of purchase. Wholesale case lots of 52 copies are available at $350, plus shipping (whole case lots ONLY). Prices are in U.S. dollars.
• Sensus Fidelium Videos, Update. CESJ’s new series of videos for Sensus Fidelium contrasting economic personalism and the Great Reset is off to a good start. The latest is “Economic Personalism v. The Great Reset.” Last week’s intro video can be found on the “Playlist” for the series. The previous series of sixteen videos on socialism is also available by clicking on the link: “Socialism, Modernism, and the New Age,” along with some book reviews and other selected topics. For “interfaith” presentations to a Catholic audience they’ve proved to be popular, with more than 72,000 views to date. They aren’t really “Just Third Way videos,” but they do incorporate a Just Third Way perspective. You can access the playlist for the entire series The point of the videos is to explain how socialism and socialist assumptions got such a stranglehold on the understanding of the role of the State and thus the interpretation of Catholic social teaching, and even the way non-Catholics and even non-Christians understand the roles of Church, State, and Family, and the human person’s place in society.
• 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 53 different countries and 50 states and provinces in the United States and Canada to this blog over the past week. Most visitors are from the United States, the United Kingdom, India, Malaysia and Canada. The most popular postings this past week in descending order were “Happy Christmas Eve” (from 2018, yet, probably brought in by the “Santa Geh Gesunder Heit” link), “News from the Network, Vol. 13, No. 52,” “A Systematic Solution to Structural Racism in America,” “JTW Podcast: RH Benson’s Lord of the World,” and “Power Follows Property.”
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.