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The Problem. Throughout history the rich and powerful owned the things that produced the wealth. When land and people were what produced wealth, the rich and powerful owned land and people. Today the things that produce most of the wealth are land and technology. And technologies -- such as machines, robots, rentable structures and advanced marketing systems -- are replacing people at their workplaces and threatening their family incomes. And today who are the rich and powerful? The people who own the land and the technology (capital). Do you feel economically insecure, poor or powerless? You are economically vulnerable if you don’t own -- as your private property --the land and technology that produce most of our wealth.
Economic power -- which is tied closely to political power -- comes from property and the means to acquire property. In today's 21st century, global economy, the most significant forms of property are in advanced technologies and corporate equity. When ownership is concentrated, power is concentrated. This is why most people are powerless. The wealth-producing power of an individual worker has not increased much over the last 1,000 years. Poor people and most non-property owners can only produce insecure subsistence incomes from their jobs. Some people, however, profit from the work that the technology does by owning shares in the companies that use that technology. These people become rich and powerful because they own the things (capital) that produce most of our wealth. We think that everyone should have an equal opportunity to own shares in companies that use advanced technology. Taking the U.S. economy as an example, we would like to see programs that help the poor and all Americans become owners of American Industry. Every family could then earn income from jobs and income from the capital it owns.
With access to the right kind of credit -- capital credit -- everyone could gain ownership in America’s technological growth. Today, many people can buy on credit cars, TV sets, stereo equipment, furniture, clothing and homes. Certain home loans are guaranteed by the Federal Government’s FHA and Veterans’ programs. However, these purchases are not income-earning property. They sometimes make the borrower poorer and more economically vulnerable. Every year America adds about $2 trillion worth of new productive assets in both the public sector and private sector, or $7,000 for every man, woman, and child. The way we finance new assets creates few new owners. This “growth frontier” could be operated for profit, but with ownership spread out to every citizen.
The Capital Homestead Act is a modern version of Lincoln’s Homestead Act of 1862 which offered a piece of the land frontier to many propertyless Americans. Lincoln’s Homestead Act was the most successful economic initiative in America’s history. It laid the foundation for America’s rise as the world’s greatest industrial power. Unfortunately, the land frontier ran out and most Americans were never given a chance to share in the ownership and profits of our high tech industrial frontier. Capital Homesteading reforms would take nothing away from present owners, but would link every American to the profits from industrial growth. Every citizen could gain a share in power over technological progress and the tools and enterprises of modern society. Through widespread ownership all citizens would participate in the economic process, just as they now participate in the political process through access to the ballot. The Capital Homestead Act proposes a number of programs so that you, workers and others, including the poorest of the poor, could get from your local bank low-cost capital credit. Such credit would enable you and every member of your family to set up a personal Capital Homestead Account to purchase part ownership in companies whose tools (including machines, management structures, and information systems) make them the most efficient and most profitable organizations known to mankind. These wealth-generating companies include Microsoft, AT&T, MCI, General Electric, General Motors, Ford, IBM, U.S. Steel, Du Pont, etc. Workers could get their capital credit through employee stock ownership plans (ESOPs) set up by new and expanding companies. And all citizens could share in the profits, capital growth, and control of local land development through for-profit Community Investment Corporations (CICs).
Access to capital credit -- which helps make the rich richer -- would thus become a fundamental right of citizenship, just like the right to vote. Using its powers under Sec. 13 of the Federal Reserve Act, the Federal Reserve System would supply local banks with the money needed by the poor, by workers, by utility customers, and by other non-owning citizens to purchase on credit newly issued shares representing newly added machines and structures. These purchases would be paid off with tax-deductible dividends or capital earnings of these companies. Nothing would come out of your pocket or reduce the funds you use to put bread on the table. Within a relatively short period of time, you would be a full owner of your shares. For the rest of your life, you would receive a decent and regular income from the earnings of the capital you accumulate over the years. Then you would have income-producing property to pass on to your children. This is how Capital Homesteading works.
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P.O. Box 40711, Washington, D.C. 20016 - Phone: 703-243-5155, Fax: 703-243-5935 thirdway@cesj.org (e-mail) |
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