Okay, I just realized what "concrete fruit" sounds like — it puts us in mind of the instructions on "How to Cook a Coot." Summarized, stuff the coot with a brick, cook until the brick is soft, then throw away the coot and eat the brick.
There's probably a good analogy to Keynesian economics in there, somewhere. Implementing Keynesian economics doesn't do any more good than cooking a coot, although there might be some things done at the same time as Keynesian economics or in conjunction with them that can be employed as expedients . . . as long as you don't rely on them for permanent solutions. You can probably eat a brick if it's soft enough, although you can't live too long on a diet of baked clay, just as a society can survive for a time redistributing existing wealth as an emergency measure without producing anything.
Part of the problem, of course, is that the economics of the Just Third Way just don't fit into the framework currently used by most people today. Take, for instance, the letter we read in this morning's Wall Street Journal, blaming runaway government spending for the lack of new capital formation and genuine economic growth. That's true — up to a point. The argument was that increased consumption by government or actual people ("consumers") dries up the supply of loanable funds and inhibits or prevents the financing of new capital formation.
Almost, but not quite. As we explained in the letter we zipped off (which will probably not be published),
While I share Mr. Keith Eubanks's concern for runaway government spending expressed in his letter in the 10/22/10 Journal, government spending per se is not the problem. It is government spending backed by future, possibly unrealizable tax revenues that harm the economy and undermine sovereignty — government debt, not confiscatory taxation; although high taxes cause their own problems.Okay — the version we sent didn't have the advertisement for The Formation of Capital. Or the links to the Kelso books. That would have been just a little too crass, even for us. They can find it, though, if they really need to . . . and they need it, desperately. They just don't know it, yet.
Increases in consumption do not inhibit, but stimulate capital formation. As Dr. Harold Moulton, president of the Brookings Institution from 1916 to 1952, demonstrated in The Formation of Capital (1935), demand for capital is derived from consumer demand. Periods of intense capital formation are invariably preceded by increases, not decreases in consumption. Financing for new capital formation comes not from existing accumulations of savings, but from the expansion of commercial bank credit via the discounting and rediscounting of bills of exchange.
Louis Kelso and Mortimer Adler refined Moulton's analysis in The Capitalist Manifesto (1958) and The New Capitalists (1961), adding the proviso that, for the economic benefits of growth to have the optimal effect, new capital formed via "pure credit" mechanisms must be broadly and directly owned by as many people as possible, the acquisition collateralized with capital credit insurance and paid for out of future earnings.
That's where you come in. Door opening, people. (I always hate people who call other people, "people." They're not "people persons," they're "people-people persons.") Open doors to prime movers, and to other door openers who can get us to prime movers. Don't try to sell the idea yourself — it makes you look like an opportunist, and isn't effective in most cases, anyway. What you want to do is know enough about the idea to sell the idea of the idea (I can't believe I'm saying this, either, it's another expression I hate), the sizzle, not the steak. Get the door open for the CESJ "core group." Sort of like this:
• Norman Kurland is, at this very moment, in Beijing, participating in the Caux Roundtable on ethics in business. He took a great deal of Just Third Way material with him, focusing (of course) on Capital Homesteading, but also including a couple copies of our Chinese translation of Curing World Poverty.Those are the happenings for this week, at least 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." If you have a short (250-400 word) comment on a specific posting, please enter your comments in the blog — do not send them to us to post for you. All comments are moderated anyway, so we'll see it before it goes up.
• The "Halloween Horror Specials" seem to be particularly popular, especially "I Do Believe in Spooks." Not that the longer pieces are not popular, too, but the Halloween pieces have generated a few more comments, plus more people are linking to them.
• Michael Greaney sent out a number of .pdfs of Supporting Life: The Case for a Pro-Life Economic Agenda to individuals responding to some postings in various LinkedIn groups. Requests came from Texas, Virginia, Michigan, and Colorado. If you belong to a network of that sort, consider publicizing some of CESJ's new publications, especially The Formation of Capital and Capital Homesteading for Every Citizen.
• This week we've received a sudden spate of interest in CESJ's programs, largely as the result of two things coming together: 1) greater participation in the various social networking media, and 2) alerting people to the fact that CESJ may have some viable solutions to offer. Of particular interest this week are the Citizens Land Bank concept and, especially, the Homeowners Equity Corporation as a possible approach to the foreclosure crisis.
• Theresa Gorski won a thumbs-up and two attaboys for presenting the Capital Homesteading and Homeowners Equity Corporation concepts to candidates for office in Michigan. The politicians — welche wonne! — went so far as to thank her for her efforts. Theresa wins this month's Door Opener Award, and we'll send her the prize as soon as we find something appropriate.
• As of this morning, we have had visitors from 49 different countries and 49 states and provinces in the United States and Canada to this blog over the past two months. Most visitors are from the United States, the UK, Canada, Australia and Brazil. People in Trinidad and Tobago, Venezuela, Lithuania, the United States, and Belgium spent the most average time on the blog. The most popular posting is "I Do Believe in Spooks" in the current Halloween Horror series, followed by "The New Manifest Destiny," an old posting from 2009 "We are Seeing the Future and It Doesn't Work," "The Keynesian Bloodletting," and the review of Tom Kratman's State of Chaos.