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People and Things

 

Labor1and Capital2,

People and Things:

We get wages from our labor

and profits3from our things.

 

Things that make money

and dividends4bear;

they’re ours if we have

an ownership share.

 

When apps and robotics

start taking our jobs,

with dividends coming,

there’s no need for sobs.

 

How can we buy assets5

if money we lack?

With capital credit6

insured loans7we pay back!

 

With interest-free credit

for citizens all,

we’d buy our new shares

from the firms great and small.8

 

With all our investments

those firms would acquire

equipment and robots,

so our profits grow higher.

 

With company profits,

our loans we’d repay.9

As capital owners,

we’d greet the new day!

 

Then firms making money

from things that they sell,

would pay us our profits,

so we all could do well.10

 

Labor and Capital,

People and Things:

Would you rather be owned

or own capital things?

 

© 2012, rev. 2018  Dawn Brohawn


Notes:
 

By “Labor” we mean every type of human input used to produce marketable goods and services — including manual, managerial, intellectual, creative and entrepreneurial.  Back to top.

 

By “Capital” we mean every type of non-human input used to produce marketable goods and services — including equipment, robots, land, software, patents, and intellectual property.  Back to top.

 

Profits are what owners receive after the company’s goods or services are sold and all costs are subtracted from the sales revenues.  Back to top.

 

Dividends are profits that are paid out to the shareholders, based on the number of shares they own.  Back to top.

 

Assets — in other words, capital — are things that produce goods and services. They can be owned by a corporation, which in turn is owned by its shareholders.  Back to top.

 

Capital credit is a type of credit used to buy a productive asset (capital) that pays for itself with the full stream of its own future profits. This is different from consumer credit used to buy things that don’t pay for themselves out of their own profits.  Back to top.

 

This refers to loans covered by “capital credit insurance” to protect a lender against the risk that a particular loan won’t be repaid. Such insurance provides an alternative to traditional forms of “collateral” (assets a lender can seize if a loan isn’t paid back). This use of insurance overcomes the “collateral barrier” blocking capital ownership by today’s “have-nots,” and provides a means for every citizen to purchase income-generating capital.  Back to top.

 

The proposed strategy called “Capital Homesteading” would enable every citizen, no matter how poor or rich, to acquire each year an equal allotment of interest-free capital credit (capital loans) to buy “full dividend payout,” voting shares. This “just free market” approach would create asset-backed money when local banks take approved expanded capital ownership loans to the discount window of their regional Federal Reserve to be “monetized.” (This means turning one form of money, such as a business loan contract accepted by a bank, into a form of current money — currency — that can be spent throughout the economy.)

The newly created money would be used by citizens to buy new and transferred shares in profitable companies. In turn, the companies would use the new asset-backed money to purchase needed plant, equipment, land, robots, etc. that contribute to the production of marketable goods and services.  Back to top.

 

This refers to “self-liquidating” (self-repaying) capital credit, where a loan is repaid with the full stream of the asset’sfuture, pre-tax corporate profits (also called “future savings”). No interest would be charged on these loans to buy capital assets, because nobody’s “past savings” are lent out. There would only be a one-time service fee “discounted” (subtracted by the banks from the total loan amount) to cover administrative expenses, profit, and loan risk insurance. A citizen’s share of profits would first be used to pay off his or her Capital Homestead loan. After the loan is repaid, those profits would provide to the citizen an independent stream of income.  Back to top.

 

10 This explains how every person can share in equal ownership opportunities in future capital growth and transfers. In terms of empowering every citizen, access to capital credit becomes to economic democracy what access to the ballot is to political democracy.

Enshrined in Article 17 of the United Nation’s Universal Declaration of Human Rights, the equal right of each person to acquire private property (the full rights of ownership) in capital could finally be realized. The reformed economic system would allow every child, woman and man to become financially independent, and to prosper and develop to his or her fullest human potential in the Age of the Robots, artificial intelligence and self-driving vehicles.  Back to top.