Back in the Stone Age, i.e., 1971 . . . or maybe it was “the Stoned Age” . . . anyway, John Lennon released the bestselling song of his entire career, “Imagine.” Although the song technically gives Lennon (or Yoko Ono, whom Lennon later claimed gave him most of the lyrics and content) a somewhat equivocal “out” by inserting a strategically place “if,” the point of the piece is to get people thinking how peaceful the world would be if there was no materialism, no borders, and no religion. Ho, hum, stop us if you’ve heard this.
We’re not exactly sure why people thought the ideas expressed in “Imagine” were so innovative and why the song caused such a great stir in certain quarters. The socialists had been saying almost exactly the same thing for the previous century and a half, i.e., how peaceful the world would be without private property that turns people materialistic, and sans organized religion that makes them intolerant bigots, tra-la-la. Many of the early socialists also added that traditional marriage and family must be eliminated as well as private property and religion.
As we hinted, we’ve heard it all before. So why bring it up again?
Because we’d like you to do a real job of imagining — of a world without poverty, racism and war, achieved not by imposing them by taking away people’s natural rights of liberty and private property, but by preserving and protecting the natural rights that define us as human persons. Yes — “liberty” includes the right of free association and the integrity of your own group, be it family, nation, or world, as well as freedom of conscience and the right to choose to believe or not to believe without coercion.
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| Putin and Xi, BFF . . . for now . . . |
Let’s imagine that two world leaders who at the present time seem to be motivated by an urgent need to violate other people’s natural rights to life, liberty, and private property, experience a sudden enlightenment or perhaps a visit or two from the Spirits of What Was, Is, and Might Be. We refer, of course, to Vladimir Putin of Russia and Xi Jinping of China, both of whom it is probably accurate to describe as “President for Life.”
Putin has already taken Crimea from Ukraine, has interfered in Belarus, Kazakhstan, attempted to separate the eastern portion of Ukraine and either turn it into a Russian satellite or take it over completely, and has managed to put the world in fear of another world war from which he has backed off . . . for now. Xi has violated the rights of every citizen of Hong Kong, is pushing the envelope with Japan as far as he can, threatening Taiwan, and — business as usual — treating ethnic and religious minorities with utter contempt when he permits them to exist at all.
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| "Just get ownership to people, guys." |
Let’s imagine what it would be like if Putin, Xi, or both implemented the Just Third Way of Economic Personalism in their respective countries, which could be done virtually overnight by instituting some essential, if relatively simple monetary and tax reforms, and then moving immediately to passing the Economic Democracy Act, an aggressive program of expanded capital ownership to make it possible for every person to own a capital stake that generates sufficient income to meet common domestic needs adequately.
And how to pay for it without redistributing existing wealth or bankrupting the country? That’s where the monetary and tax reforms come in. We’ll describe the tax reforms first, as they are the easiest, not because they’re the most immediate. We also won’t get too much explanation, or this would turn into a treatise on tax reform.
· Merge all taxes (and we really do mean ALL) into a single rate levied on income above an exemption sufficient to meet common domestic needs adequately. The rate should be set to cover all government expenditures at all levels and leave a reasonable amount for debt reduction.
· Make all corporate dividends tax deductible at the corporate level and treated as ordinary income at the personal level.
· Personal income used to make debt service payments on “qualified shares” up to a pre-determined level of capital self-sufficiency will be tax-deferred until the assets are sold. “Qualified shares” are defined as full dividend payout voting shares of a corporation.
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| "I second the motion." |
Now . . . how do you pay for a program of expanded capital ownership and finance economic growth without relying on existing accumulations of savings, taxation, or issuing government debt? Believe it or not, that is conceptually the easiest part of the whole thing, as well as key to it all.
The commercial/mercantile and central banking systems of the world were invented to provide financing and transactions media for the private sector (NOT government) and provide a uniform, stable, asset-backed and elastic currency into the bargain. “Elastic”? It means that the money supply expands and contracts directly with the needs of the economy without either inflation or deflation.
· A nation’s currency must be standardized, and the standard must be objective, i.e., a basket of commodities would not be suitable, but something like the kilowatt hour would, because everyone knows — or could know — precisely what a kilowatt hour is, while a basket of commodities depends on what is put into the basket and who decides what it’s worth.
· All new money should be backed by the present value of future new capital to be financed or the market value of existing marketable goods and services to be sold. We say “should” because, frankly, it’s going to be a while before there is a sufficient tax base to support government expenditures without issuing the legal counterfeit currency that currently makes up virtually the whole of the global money supply. As the debt is paid down and governments stop issuing new debt, the currency will gradually become fully asset-backed.
· New money for new capital formation must only be created to purchase qualified equity shares to be broadly owned. All the new capital needs for a period (we recommend quarterly) would be estimated and the amount divided equally among all citizens. Citizens would thereby be empowered to have new money created through the banking system to enable them to purchase up to that amount of qualified shares.
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| "All in favor say 'OWN'!" |
It’s important to note that NO new money is or can be created in this system until and unless a qualified project is selected by the ultimate owner of the shares. We in no way advocate or even admit that money should be created and then handed out for people to invest. That’s purely inflationary. The investment is identified first, then money created to finance it. When the acquisition loan is repaid, the money is cancelled, having done its job.
This, of course, is barely the outline of an outline. The proposal is fleshed out a little in the description on the CESJ website. Of course, the question now for Putin and Xi is — can you imagine:
· Turning from the world’s leading bullies and would-be Tsar of All the Russias and Emperor of Everything into benefactors of their own people and exemplars for the world.
· Taking care of their own people’s needs first instead of as an add-on to a program of personal aggrandizement.
· Show how to put the global economy on a sound basis so it works for everyone, not just the state or capitalist elite.
· Removing the underlying causes of poverty, racism, and war.
And that’s just for starters. Of course, it doesn’t have to start with Putin or Xi. Any country in the world could do this. If, for example, Ukraine did so, Russia would have a hard time undermining the Ukrainian economy, the country would be better able to defend itself, and the separatist eastern areas destabilized by Putin would have no reason to want to separate, getting a better deal by remaining part of Ukraine. The Crimeans would probably also start agitating to get their rights — and their country — back.
And should we mention Ireland, Korea, the Holy Land, Hong Kong, Taiwan, etc., etc., etc.?
#30#
