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.

Thursday, July 9, 2020

Citizens Land Cooperative

As we noted in the previous posting on this subject, distributism as presented by G.K. Chesterton and Hilaire Belloc had the right idea: a wide distribution of private property in capital, by which they did NOT mean a redistribution of what belongs to someone else.  (See the final comment in What’s Wrong With the World (1910).

G.K. Chesterton

Unfortunately, Chesterton and Belloc (we’ve decided not to use “Chesterbelloc” anymore, as it was a term invented by George Bernard Shaw to ridicule the duo, not to compliment), being human (no!) made a couple of mistakes.  The major one was to assume as a given that the only way to finance new capital formation or purchase existing capital is to accumulate money savings.

That, however, is not the way most new capital is financed in an advanced economy, or even during the Middle Ages of which Chesterton and Belloc had a slightly rose-colored and somewhat distorted view.  Most new capital — including that which is “new” only in the sense that it has a new owner — is expected to pay for itself out of its own earnings within a reasonable period of time.  As a rule, capital is expected to be “self-liquidating.”

Another semi-mistake (mostly made by others imposing their private interpretations on what Chesterton and Belloc said) was to limit the form of capital that people should own to land . . . which means that most people won’t ever have the opportunity and means to own capital, nor the inclination or skill to employ the capital properly and efficiently.  “Three acres and a cow” sounds nice (until some people realize it was the old Liberal Party slogan under William Ewart Gladstone and was not intended as a person’s sole subsistence . . . or they find out what milking a cow is really like . . . cows are mean . . . not as mean as pigs, but. . . .), but by its very nature is something that most people simply can’t take advantage of . . . unless, of course, you’re willing to let most people on earth starve to death in very short order.

Hilaire Belloc

And what’s wrong with machinery?  Most people aren’t aware that Belloc actually favored industrialization.  As he pointed out in The Servile State, he just thought more people should own the machines.  Chesterton could take machinery or leave it (preferably leave it . . . until he argued with Arthur Penty who wanted to abolish technology . . . by which we assume he meant advanced technology, as abolishing all technology would mean running around in your birthday suit using your teeth and nails and nothing else), but even he admitted that some enterprises must be large.  When that was the case, Chesterton believed the enterprise should be owned by the workers on shares as a joint stock company . . . that’s right, a business corporation.

Then there was Chesterton’s troubling (to this writer) admiration of the French Revolution inserted into a number of his books, e.g., Orthodoxy, The New Jerusalem and The Outline of Sanity.  Evidently, Chesterton failed to distinguish between the different forms of “liberal democracy,” and just assumed that differences were due to differences in liberals, not in liberalism.

There are some other issues as well, such as Chesterton’s avoidance of particulars of a distributist program — even when he got specific, he hedged his bets by saying not all distributists agreed with the principles . . . which meant that they weren’t actually distributist principles, then.  That, however, is a topic for another day.  What we’re interested in today is how to make it possible for everyone to own a limited asset like land as private property without degenerating into socialism or capitalism.

There may be a number of ways to do it, but we think that what we call the “Citizens Land Cooperative” (we’re open to other names; we’re more concerned with the substance) that makes it possible for everyone to be a private property stakeholder in the land and natural resources.

What Is a Citizens Land Cooperative?

A “Citizens Land Cooperative” (CLC) is designed to be a for-profit, professionally-managed, citizen-owned-and-governed community land planning and development enterprise. As we noted, we’ve also called it the “Citizens Land Development Corporation” (“CLDC”), “Citizens Land Bank” (“CLB”), and the “Community Investment Corporation” (“CIC”).  By any name, it is designed to enable every citizen of a community of any size to acquire a direct ownership stake in local land, natural resources ,and basic infrastructure.

Yes, we do mean everyone.

A CLC would be a social vehicle for every child, woman, and man to gain — as a fundamental right of citizenship — a single lifetime, non-transferable ownership interest in all the CLC’s assets, share equally in property incomes from rentals and user fees from leases or use of the CLC’s assets, accumulate appreciated equity values from enhanced land values, and gain an owner’s voice in the governance of future land development.

A CLC would be an innovative legal and financing tool empowered to borrow on behalf of all citizen-shareholders and service the debt with pre-tax dollars to meet the land acquisition, capitalization and operational needs of the CLC. The CLC would shelter from taxation the equity accumulations of citizen-shareholders and protect the outside assets of the citizens in the event of loan default or if the enterprise fails.

In a truly free market, everyone can win.

A CLC would be a social tool designed to encourage a just, free and non-monopolistic market economy. It is designed to apply the democratic principles of equal opportunity and equal access to allow every person the means to participate as an owner as well as a worker. It demonstrates that anything that can be owned by government can and should be owned, individually and jointly, by the citizens.

A major feature in a proposed national economic agenda known as “Capital Homesteading for Every Citizen,” which is designed to reform existing monetary, credit and tax barriers to provide every American an equal opportunity to share in the governing powers and profits from new entrepreneurial ventures, new technologies, new structures, and new rentable space built upon the land. Capital Homesteading offers a “Just Third Way” of reversing unsustainable federal deficits and debt, and revitalizing and growing the American free enterprise system in a sustainable and environmentally sound way.

What the CLC Is Not

It is not socialism or communism (which are systems based on the abolition of private property in the means of production). It does not take away property rights from present owners, nor does it redistribute current accumulations of wealth or income.

Well . . . not far off.

It is not the Wall Street model of capitalism (where ownership of the means of production and ownership power are concentrated in the top 1% of society and artificial barriers exclude non-owners from equal ownership opportunities).

It is not a non-profit Community Investment Corporation, Land Trust, Land Bank, Land Foundation, or any other legal vehicle in which ownership of land, natural resources and basic community infrastructure are owned collectively (i.e., where no one has a property stake) or by any state monopoly.

It is not a land monopoly owned or controlled by a small elite of local or outside investors or political leaders.

It does not provide shares that can be sold, transferred, pledged to others or used as collateral to meet a citizen’s consumption needs.

It is not an amateur or unstructured approach to land development or “management by committee.”

It is not a vehicle for owning or financing local enterprises competing in the marketplace.

The Benefits of the CLC

It provides a private sector means by which homes, enterprises, rentable space and technologies built upon the CLC-owned land can be broadly owned by workers and other local stakeholders.

It generates a new source of taxable incomes from new and expanded private sector jobs and ownership stakes.

It empowers each citizen and family with the means to build an adequate and secure income, and with a real voice in the development decisions of the community.

It provides every citizen with income to contribute to the costs of running an effective local government and providing essential public services, as well as for his or her own well-being.

It offers hope of eventually eliminating the dependency of any citizen on welfare or charity of others or fear of technological displacement.

What Does The CLC Need to Become Operational Nationally?

Support of the White House to persuade Congressional leaders to support citizen land banks as part of his stimulus agenda for accelerated rates of non-inflationary, private-sector economic growth, green jobs and energy independence.

A federal law or executive order that provides comparable tax and capital leveraging features as is presently provided under Federal laws governing Employee Stock Ownership Plans (ESOPs) for the benefit of private sector workers and the corporations and worker cooperatives in which they work.

State and federal exemptions from property taxation on assets held by a CLC.

Federal Reserve monetization of loans made by local commercial banks to enable citizen land banks to acquire development land from current owners and investors.