Project Economic Justice: The Role of the Corporation

Today we conclude our posting of the “strategy paper” that led to the Presidential Task Force on Project Economic Justice, “Project Economic Justice: A Beachhead for Regional Infrastructural Reform,” which will be followed on Monday by the first part of President Reagan’s speech to the Task Force:

PART II
Basic Components of an Agenda for Economic Justice

It's time the people of Puerto Rico (and everywhere else) took ownership.

To succeed on the ideological front, it would help to organize on a regional basis, perhaps within a regional bank with central banking capabilities, such as the Central American Bank for Economic Integration. From such a base it would be easier to advise on the infrastructural changes that would be necessary within one or more of the developing countries willing to cooperate on the new agenda for stimulating private sector growth linked to broadened ownership.

The strategic objectives would be to maximize growth rates, jobs, and productivity of the private sector within selected countries or target areas, with a zero rate of inflation, and maximum ownership and profit sharing opportunities among all private sector workers as a supplement to free market wage rates.

The four main components of this agenda for economic justice are:

·      A new social contract with workers based on expanded capital ownership;

·      A two-tiered capital credit system for local banks;

·      A regional SDR to establish lower-tier-capital credit; and

·      The multinational corporation as a primary vehicle for accelerating private sector growth linked to expanded ownership.

Today we look at —

D. Multinationals Corporations as Primary Vehicles for Accelerating Private Sector Growth Linked to Expanded Ownership

Increase production, pay down debt.

When President Trump announced that Puerto Rico’s debt may be forgiven, he wasn’t thinking in a businesslike manner.  Most obviously, of course, when debt is forgiven, the debtor might be better off for a while (until he, she, or it needs to borrow again, whereupon nobody will lend to him, her, or it. . . .), but the creditor takes it in the neck.  In this case, it isn’t merely “the corporations” that will not get their money, it’s the U.S. taxpayer who will have to foot the bill for whatever government debt is “forgiven.”

Instead of forgiving debt unilaterally, however, why not make it possible not only for Puerto Rico to repay the debt . . . and be put in the position in the future where the Commonwealth doesn’t have to borrow again?

That is where “the corporations” can do what they do best: organize people to engage in profit-making activity.

. . . works for everybody.

American assistance to the developing countries could be vastly expanded, with reduced taxpayer support, if U.S.-based multinational corporations could be encouraged to link their investments overseas with the expanded ownership objectives called for under the Capital Homestead Act. [See author’s paper “The Future of the Multinational Corporation.”] For example, through use of ESOP financing the multinationals would not only convert their foreign employees into capital owners, but in so doing would automatically be creating a broadened political constituency for a global common market based on free enterprise principles. No troops or foreign aid could offer a more effective safeguard against future expropriations and nationalizations of U.S.-based companies around the world. This would also facilitate the transfer of U.S. know-how and technology in ways that would further peaceful growth and expanded U.S. markets.

Of course, the ESOP is only one vehicle, and may not be the best in every situation.  What is needed is a complete package, such as “Capital Homesteading,” so that the “social tool” employed in each case, whether ESOP, Co-op, sole proprietorship, partnership, Capital Homestead Account, Homeowners Equity Corporation, Citizens Land Cooperative, or anything else, can be put in place.

The bottom line here is that “the corporation” is not an enemy, but a valuable “social tool” that, like that other social tool, the State, some have misused for their own advantage.

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