As we saw yesterday, ordinary people who own no capital and have only their labor to sell are, in a modern industrial economy, ground between the upper and nether millstones of inability to produce enough with labor in competition with advancing technology to meet the consumption needs of themselves and those dependent on them, and an even greater inability to acquire and possess the technology that is making it virtually impossible for them to meet their own needs through their own efforts.
|Non-owners are basically ... well, you know.|
The obvious solution (and one that has been known for a few thousand years or so) is that for a worker to be a full member of the community he or she can’t just be a fungible provider of labor for others to buy, or a non-producer sucking away goods and services that others produced for their own benefit. No, a worker must also be an owner or (as Aristotle put it) he or she is nothing but a slave without a master, and much worse off than an actual owned slave who — as property of a master “shares” the life, status, and prestige of that master.
Well, . . . yes, a big deal. Participation in the life of the community — the politikos bios — requires that people have status equal to that of others in the community. A non-owner simply does not have equal status with an owner, and that’s that.
Yes, the State can make laws forcing equality of status, but there’s nothing behind that “equality” except the State’s coercive power. Take that away, and non-owners immediately lose status and thus equality.
The bottom line? If you want a truly politically democratic society, you’d better have a truly economically democratic society. Otherwise you’re just biding time until owners of property seize all power, or non-owners decide to divvy up what belongs to others; “Power naturally and necessarily follows property.”
The issue, then, is how ordinary people who have no savings and no (or virtually no) capacity to save the amounts required to purchase increasingly expensive technology can purchase the capital instruments that are making it impossible for them to be productive . . . and thus unable to save . . . .
|Kelso: "Every person an owner? What's wrong with that?"|
This is the problem Louis O. Kelso addressed with the invention of the Employee Stock Ownership Plan, or ESOP. By means of an ESOP, workers can purchase all or part of the company that employs them. This is not by using their existing savings (if any), or by taking cuts in pay or benefits.
Instead, the workers do what the rich have done for millennia. That is, they buy the company on credit, and pay for it out of the future profits of the company itself.
The problem is that the ESOP only covers workers in for-profit corporations . . . and then only if the company sponsors an ESOP. What about all the people who don’t work for companies with ESOPs, or who aren’t even employed?
Kelso had that covered, too. His vision was to enable every child, woman, and man to purchase capital instruments on credit, and pay for them out of the future profits of the instruments themselves. They could then use the income to meet consumption needs.
|Say: "Make my law work again."|
In this way, every consumer would be a producer, and every producer, a consumer. By financing all new capital instruments using new money created for just that purpose, and ensuring that new money was created for new capital only in ways that would create equally new owners of that capital, production and consumption would come back into balance, and Say’s Law would function again.
Freed from the presumed necessity to produce more than is consumed, people could reorient their lives to improving themselves as human beings, rather than improving the bottom line out of fear for the future.
CESJ has designed a proposal called Capital Homesteading that we think will bring about Kelso’s “ownership revolution,” and without redistribution or redefining ownership. It’s worth looking into, and can be found in great detail on the CESJ website.
Is this a Utopia? Hardly. People will still have to work, and work hard. It’s hard for some people to realize it, but being an owner can be harder work than simply following someone else’s orders. All of a sudden you’re the one responsible for what goes on, not some capitalist or bureaucrat a thousand miles away. You are the one who has to act like an adult.
Now, that might scare some people, but as things improve, people will realize that they’d rather be independent adult owners, than dependents owned by someone else. It’s a lot more fun, for one thing. It’s also a lot nicer.