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, February 20, 2012

Foreword to W. T. Thornton's "A Plea for Peasant Proprietors" (5)

The root cause of lack of democratic access to capital credit is a fixed belief, found primarily in Keynesian economics, but also in the Monetarist/Chicago and Austrian schools. Keynes held that for new capital to be financed, consumption must be reduced and money savings accumulated. This has resulted in a situation in modern Ireland with disturbing parallels to the 1840s. A similar problem afflicts virtually every nation on earth. The world's "social safety nets," while they have staved off the worst effects so far, are nearly bankrupt in most countries.

Fortunately, today's economic problems in Ireland and elsewhere are amenable to the same solution Thornton proposed: establish and maintain universal direct ownership of capital as fast as possible. Equally fortunate, the problem of how to finance a program of rapid capital expansion— in agricultural, industrial, and commercial capital — can easily be solved by applying advanced techniques of corporate finance, and maintained by applying sound principles of justice and market economies in our management systems.

Perhaps not surprisingly, however, while Thornton's observations and remedies can readily be applied to the current crisis, there remains a great deal of built-in resistance in politics and academia — the same barriers that Thornton faced in his day. Nevertheless, if we understand that both land and technology are simply different forms of capital, and that we don't have to confiscate, condemn, or redistribute existing capital that belongs to some people so that other people can become owners, then we quickly realize that it is possible for everyone on earth to become an owner of a capital stake that could generate an income sufficient to meet common household needs. The financing of new capital would not come from existing savings, but from the present value, the "future savings," of the capital that has yet to be formed.

We can sit idly or helplessly by while discontent, anger and despair continue to grow throughout the world. We can blame government indifference, corporate greed, or the selfishness of the developed countries or the wealthy. Or, we can look to a new way to avert the crisis and repair the economic system - empowering every citizen to become an owner of productive capital. As Thornton presaged in the concluding chapter of his 1874 revision:

"In every quarter of the United Kingdom a storm against landlordism is audibly brewing, which, if allowed to break, will shake the edifice to its foundations, not, assuredly, leaving undislocated the superstructure. Yet landlordism, even if a hundred times more unpopular than it has, so far, become amongst ourselves, might be rendered one of the most popular of institutions, by simply having its privileges, now so invidiously concentrated, made freely accessible to all - the meanest farm laborer included; and to this change in its character the only remaining impediments are legal ones, of which landlords and their legal advisers are the chief upholders." (Thornton, A Plea for Peasant Proprietors, op. cit., 265.)