by Professor Robert Ashford, © 2000 Robert Ashford, reprinted with permission of the author.
Binary economics simultaneously offers (1) a rigorous, new conception of economics and (2) a more open, competitive and democratic private property system. It offers a new paradigm for understanding economic efficiency, growth, and justice that is foundationally distinct from left-wing, right-wing or mixed centrists theories and strategies. As an economic theory, it holds that broad-based capital acquisition on market principles has a potent (but presently untapped) distributive relationship to growth that is independent of productivity gain and governmental strategies to redistribute or regulate demand.
To enable people to capitalize on the potent distributive relationship between voluntary capital acquisition and growth, a binary economy requires modest reforms in the market infrastructure governing corporate finance so that all people (not merely a minority of the people) are vested with competitive capital acquisition rights to acquire capital with the earnings of capital. Combining the salient principles of the Homestead Acts and capital credit insurance such as that offered by the Federal Housing Administration, with a return of the Federal Reserve to its original Congressional mandate under Section 13 of the Federal Reserve Act to allow for the discounting of eligible productive credit, binary economic strategies offer economically to empower poor and working people everywhere without redistribution.
Impartial analysis reveals that the binary approach (1) rests on reasonable assumptions, (2) has internal consistency, and (3) provides plausible descriptions, predictions and prescriptions. It offers important insights for achieving enhanced growth and more broadly shared economic prosperity by way of voluntary ownership-broadening market transactions. Accordingly, based on widely accepted principles underlying the philosophy of science, professional ethics, secular morality, and spiritual values, I believe institutions of higher education have a special responsibility to teach binary economics in most contexts where issues of economic efficiency and justice are taught or considered. The contexts include course segments, courses, certificate programs, majors and degree programs in economics, political science, sociology, business administration, philosophy, history, theology and law. In the legal realm, rigorous exposure to binary economics is necessary to enable lawyers to help people to identify and secure their essential rights and responsibilities. Professional ethics governing other professional occupations and academic disciplines also call for the introduction of binary economic principles in contexts where the discipline explicitly or implicitly employs conventional approach to economics in its positive or normative analysis.
To place the forgoing observations in context, consider the book by economists Robert L. Heilbroner and Lester C. Thurow, entitled Economics Explained: Everything You Need To Know About How the Economy Works and Where Its Going, (1998). This book, and others like it, are widely used at universities throughout America to set forth a linear (left-wing, mixed centrist and right-wing) paradigm for understanding economics intended to define for economic majors and non majors alike the universe of accepted economic theory and practice on questions of efficiency, justice, and public policy. Yet, I submit that given two class periods with almost any class of students exposed to such teaching, a trained binary economist could convince many, if not most, of the students that there is indeed something very important omitted from the conventional paradigm that is highly relevant in shaping their professional and personal decisions in life. In effect, higher education teaches students there is nothing beyond the conventional economics paradigm that can or should be taught when in fact there is. The responsibility to teach binary economics is especially vested in law schools in light of the underlying role of lawyers to enable people to identify and secure their essential rights and responsibilities. But the responsibility also rests elsewhere throughout the academy in a wide array of subjects including economics, business, political and social science, history and philosophy.
With the publication of Binary Economics, by Ashford and Shakespeare, there is now a text book suitable for teaching binary economics in undergraduate, graduate and professional schools everywhere.