A few months ago Reuters reported that American companies had accumulated approximately $1 trillion in cash. The news service speculated that the money would be used to "go private," that is, concentrate ownership of the means of production even more so than at present by buying back their own shares from current owners. A few days ago, word was that the cash holdings of American companies had grown to $2 trillion, or approximately 15% of GDP. In other words, the largest U.S. companies, many of them in the financial services industry — the ones that are showing the most rapid growth and the highest profits — have managed in a very short space of time to pile up a mountain of cash equal to the annual "growth ring" of additional new capital that, before the onset of the current depression, was formed each year in this country.
That's a lot of money — but it gets worse. To whom does that money belong? To the companies? Well, yes . . . but who owns those companies? The boards of directors who are refusing to pay out earnings as dividends to the shareholders? No. That money belongs to the shareholders by virtue of the natural right of private property. In other words, the capitalist system, just as Karl Marx claimed in The Communist Manifesto (1848), has abolished private property even for capitalists. Shareholders do not control what they own (otherwise they would have received $2 trillion or so in dividends to spend and stimulate the economy), so they can't truly be said to own. Thus, just as Aristotle pointed out with some democratic behavior undermining democracy, capitalistic behavior is undermining capitalism. No wonder Marx said that the last capitalist will sell the rope used to hang him.
But wait! It gets worse! In The Formation of Capital, Dr. Harold Moulton pointed out that cutting consumption to finance new capital formation — or, worse, simply accumulating cash that remains unspent — undermines the economy and can, conceivably, put it into a permanent tailspin. If people aren't consuming but, instead, piling up income without spending it (especially to the tune of $2 trillion!) then $2 trillion in effective demand has been taken out of the economy, and there is that much less incentive to finance new capital, or to continue to produce using existing capital. Consequently, people lose jobs, companies go bankrupt, and the government continues to inflate the currency to provide greater profits that the corporations can pile up unspent. The end is inevitable, with each advance in the stock market bringing the ultimate reckoning ever-closer.
Inevitable, that is, under the existing system run in accordance with the disproved assumptions of Keynesian economics. These problems will be fixed in large measure by the adoption of a Capital Homestead Act, the sooner the better, but certainly no later than 2012. In the meantime,
• The Just Third Way "Bookstore" has had a surprisingly good turnout, going by the usual measures of such things. Our market research told us that, at best, approximately 2% of the population that looks at this kind of advertising actually purchases something, and, according to Amazon, we've had a 3.61% response rate — meaning that, for every 100 people who have visited the "Bookstore," 3.61 of them have made a purchase. (That point-six-one of a person bothers us . . . does that mean he or she is missing .39 of him- or herself?) We could increase that response rate if you would send the link around to your network. If you're "turned off" by the fact that the fiction has been listed first, take heart. We've completely reformatted the store so that CESJ publications are listed first, then those from the Kelso Institute, and then important books by other publishers.
• One new feature we've added to the "Bookstore" is to put up selected works by Mortimer J. Adler, as well as a link to the Center for the Study of the Great Ideas in Chicago, co-founded by Mortimer Adler and Max Weismann. We can only highlight a couple of Dr. Adler's books at a time (well, it is our bookstore, after all), but we think the ones we've selected should help not only in redirecting people's thinking back to the great ideas, but possibly inspire one or two prime movers in academia to rethink the direction that higher education — or even education in general — has been taking for the past century or so. It might even be that Aristotelian and Thomist philosophy might hold the key to the economic and political problems that accompanied the effective end of the "free" capital in land made available by Abraham Lincoln's 1862 Homestead Act.
• Pollant Mpofu in London continues his efforts to introduce the Just Third Way to the movers and shakers in the U.K. and Éire — and to African leaders as well.
• Dave Kelly has been introducing the concepts of the Just Third Way to the principals and interested parties in the Harris Neck initiative. There have been some very positive reactions to how the ideas of the Just Third Way might be applied to the effort to restore the land to the people from whom it was taken during the Second World War.
• A CESJ delegation will be attending a reception given by the Catholic Radio Association tonight at the Catholic University of America. This will be an opportunity to introduce people connected with the "Catholic radio industry" to the idea of the Just Third Way and Capital Homesteading as a Pro-Life economic agenda — and a potential "common ground" on which "Pro-Life" and "Pro-Choice" groups can meet and promote a common goal: economic empowerment of every person.
• As of this morning, we have had visitors from 52 different countries and 41 states and provinces in the United States and Canada to this blog over the past two months. Most visitors are from the United States, Canada, the UK, Brazil, and Germany. People in Croatia, South Africa, Venezuela, Poland and Canada spent the most average time on the blog. Reflecting the widespread confusion about the nature of money and credit, the most popular posting this past week has been "Pure Credit for Student Loans." This is followed by "News from the Network III.52," "News from the Network III.51," "The Problem With Distributism," and "It Ain't Rocket Surgery." After a very slight struggle, we decided not to count visits to the Just Third Way "Bookstore," even though the number of visits is more than double any of the (other) postings. It's a temporary measure until the website is redone, even though we plan on updating the intro and featuring different books at the head of the list, depending on our current areas of focus.
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.