Today’s blog posting is adapted from the book, Economic Personalism, which you can get free from the CESJ website, or from Amazon or Barnes and Noble.
For centuries workers have understood that when technology advances it usually means they will lose their jobs to machines that can do the work better and cheaper. Sometimes advancing technology creates more new jobs than it displaces, although this is not always a benefit. The cotton gin created an enormous demand for labor that was filled by expanding the number of human beings owned as slaves. The Industrial Revolution largely eliminated most production by small and family-owned enterprises and turned millions of people into “employees” dependent on private employers and the State.
In the age of robotics and automation, as the rate of technological advancement accelerates, the rate of job creation slows. Finally, a point is reached at which the number of jobs eliminated by technology exceeds that of new jobs created.
Of particular importance in this respect are the technological advances in any of the key sectors of the economy, especially energy, agriculture, and robotics. Financed in traditional ways, the ownership of new technologies becomes concentrated. This undermines the ability of most people to gain a living income through their labor or from future capital ownership opportunities.
Financed in ways that allow everyone to have an equal opportunity and means to become an owner of them, the new technologies would shift from having a disruptive effect on the social order to being capable of benefiting every person. Technological advances would no longer be seen as a threat to ordinary people, but as serving their pursuit of a better life.
Abraham Lincoln’s 1862 Homestead Act illustrates the importance of widespread capital ownership. In the nineteenth century, a growing number of people were cut off from ownership of technology. This ensured that a combination of the English and European type of liberal democracy (individualist and collectivist, respectively) would emerge in the United States in the twentieth century.
That this should happen in America, “the last, best hope of Earth,” was a disaster. Not by coincidence, it could be traced to the failure to maintain an ownership society so that economic democracy could continue to support political democracy. Only the Homestead Act slowed the drift into the Welfare/Servile State, and then only until the available land was taken.
To extend Lincoln’s Homestead Act to a technologically advanced economy and restore the institutions of American liberal democracy, we propose an “Economic Democracy Act” (formerly “Capital Homestead Act”). The idea is that instead of being limited to land (which is finite), an Economic Democracy Act would include all forms of productive capital, with particular emphasis on the infinite frontier of advancing technology.
The concept is simple and could be applied in any society in which productive activity takes place. Specific details, such as required legislation, money, and tax reforms, and so on, would have to be tailored to fit particular circumstances and cultures. (See Norman G. Kurland, Dawn K. Brohawn, and Michael D. Greaney, Capital Homesteading for Every Citizen: A Just Free Market Solution for Saving Social Security. Arlington, Virginia: Economic Justice Media, 2004.)
In general, however, people without capital would have equal access to no-interest (but not no-cost) commercial bank loans to purchase capital shares to be repaid with the full stream of future profits, with the new money only created to purchase specific capital, and the loan collateralized with capital credit insurance. As the new capital assets generate profits, the loan would be repaid with the future pretax stream of future profits, thereafter providing the new capital owners with a stream of dividend income.
By empowering every citizen with capital ownership (not just private-sector workers as with the ESOP, e.g., teachers, fire fighters, law enforcement, military, government workers, as well as those who are unable to work, such as children, the disabled, and the elderly.) and protecting the private property rights of all owners, democratic economic control and thereby political control would be restored to every person. This would gradually reverse today’s concentration of economic and political power in the hands of the relatively few who own capital. It would also spread future ownership and power to every citizen, without violating property rights of existing capital owners.
In addition, technological solutions are being developed to address the environmental crisis facing every nation, every human being, and all life on our planet. With expanded access to sound financing, more green technologies, renewable energy systems, and processes for more efficient, non-polluting use of natural resources can be developed and commercialized.
Given these levers of change — Education, Politics, Money and Credit, Tax Policy, and Technology — our social environment can be brought into closer conformity with human nature, that is, with the natural law. This would lay the foundation for a personalist society that promotes the full dignity and development of every human being.
#30#