THE Global Justice Movement Website

THE Global Justice Movement Website
This is the "Global Justice Movement" (dot org) we refer to in the title of this blog.

Monday, September 14, 2009

Ireland: Business Requires Sacrifice, Part III of III

Providing the answer to the question we posed in the last posting in this series as to how people could starve in the midst of plenty was a man we've already referenced a number of times in these postings: Jean-Baptiste Say. Say's Law of Markets, which is named for this late 18th, early 19th century political economist, states what some economists regard as a "near tautology," but which embodies a profound reality in its seeming simplicity. That is, "production = income."

Once we think about this simple equation, we realize the truth of it. Every time a "production" (i.e., a marketable good or service) is sold, it represents income for the seller. The raw materials or supplies used by the seller to produce a good or service also resulted in income for the producer of the raw materials or seller of the supplies, and so on, down the line. Thus, everything that is sold in the aggregate generates the aggregate demand to purchase it. We can therefore expand Say's Law of Markets by saying that "supply generates its own demand, and demand its own supply."

That being the case, if you can't produce, you can't consume — and if you cannot turn your existing or future production of marketable goods and services into money by drawing a bill and discounting it, the market will be restricted to those who have either accumulated sufficient savings, have jobs that pay them out of existing savings, or those who receive tax monies from the State and so have effective demand. If the economy is in a slump and goods and services remain unsold, it is because a significant number of people are not able to produce by means of their labor or capital, and thus do not have their own productions to exchange for the productions of others. Government redistribution, tax rebates, and inflation do not solve this problem. Instead, such measures make the situation even worse by maintaining, even increasing the "ownership gap."

Thus, the Irish government does not need to accept abortion or other measures contained in the Lisbon Treaty if that is contrary to the will of the majority of the people, even if "business" continues to assert it as a necessary tradeoff to gain the somewhat elusive benefits of Keynesian economic programs. The real problem is how to get ownership of the means of production into the hands of ordinary people who currently own no capital and have no savings with which to purchase capital.

That problem is addressed — and solved — by the economic justice principles developed by Louis Kelso and Mortimer Adler, and the social justice principles developed by Pope Pius XI and explained by Father William Ferree. These are combined in the Just Third Way, especially as found in the "Capital Homesteading" proposal of the Center for Economic and Social Justice.

Capital Homesteading is an analogue of the nineteenth century American programs enacted to bring about a broad distribution of the ownership of land. The proposal would expand the concept to include ownership of advanced technologies, including management, marketing and distribution systems, through equity shares in enterprises capable of competing without special protections within a free and just global economy.

A "Capital Homestead Act" would implement a national economic policy based on the binary growth model, designed to lift barriers in the present financial and economic system and universalize access to the means of acquiring and possessing capital assets. A Capital Homestead Act in any country would allow every man, woman and child to accumulate in a tax-sheltered Capital Homestead Account, a target level of assets sufficient to generate an adequate and secure income for that person without requiring the use of existing pools of savings or reductions in current levels of consumption.

Capital Homesteading would, at least, be a more rational approach to economic growth and development for Ireland than implementing the human sacrifice alternative. Moloch consumes, he does not produce.