Transcript Document
Peoples’ Capitalism A Plan for Prosperity and Economic Justice James S. Albus, Ph. D. http://www.JamesAlbus.org http://www.PeoplesCapitalism.org A Fundamental Question Why does poverty exist in a world of plenty? Modern technology has the capacity to produce enough goods and services for everyone to have a healthy diet, a decent place to live, good medical care, and a good education Walk into any mall or supermarket, the shelves are stuffed with products in attractive packages Manufacturers would gladly produce more -- if only there were more customers http://www.PeoplesCapitalism.org What is the Problem? For business, the problem is NOT in producing goods & services -- but in attracting customers For consumers, the problem is NOT that they are without need -- the world is filled with people that need more food, better housing, better medical care, better education 2,800,000,000 people live on less than $2 per day This is a vast untapped market These are potential customers! The problem lies in the distribution of income http://www.PeoplesCapitalism.org Causes of the Problem Are: 1. For most people, income is derived from sale of labor and intellectual skills • Wages and salaries are costs to be minimized • Globalization produces a race to the bottom • Modern technology reduces need for labor 2. Economic growth is far below its potential • Monetary policy is the wrong tool for fighting inflation • Monetary restraint limits investment & growth • 3% growth is maximum considered sustainable http://www.PeoplesCapitalism.org What is a Solution? 1. Make everyone a capitalist. Provide credit for capital investment to all. 2. Increase the investment rate by 100% Generate > 6% GDP growth rate 3. Invent a new tool for controlling inflation Based on saving withholdings http://www.PeoplesCapitalism.org PEOPLES’ CAPITALISM The Economics of the Robot Revolution James S. Albus 1976 New World Books • What -- Issue credit to everyone for investing in productive enterprises • How much -- Double rate of capital investment -- About $6000 per capita indexed to GDP -- Double investment in R&D • New tool – Savings accounts replace monetary restraint for controlling inflation • Result – GDP grows at > 6% per year without inflation -- Per capita income floor rises to $1600 in 10 years -- to $29,000 in 40 years -- to $58,000 in 50 years For details, see “A Plan to Eliminate Poverty” at http://www.PeoplesCapitalism.org Per Capita Income Floor $60,000 Double investment 6% growth rate $50,000 50% increased investment 4.6% growth rate $40,000 50% increased investment 3% growth rate $30,000 $20,000 Assumptions: Borrow at 3% ROI = 8% Payback period = 30 years $10,000 0 10 20 30 40 years http://www.PeoplesCapitalism.org 50 Financing Mechanism Federal Reserve would open discount window & issue credit to member banks who would make loans to individuals for investment in approved list of enterprises Details of how this might work can be found in -- CAPITAL HOMESTEADING For Every Citizen Norman Kurland, Dawn Brohawn, Michael Greaney 2004 Economic Justice Media See also: BINARY ECONOMICS The New Paradigm Rodney Shakespeare and Robert Ashford 1999 University Press of America http://www.PeoplesCapitalism.org Savings Accounts Purpose: To replace monetary restraint as a mechanism for controlling inflation Rational: Enables Federal Reserve to increase investment rate without fear of inflation Effect: Saving withholding rate indexed to inflation -- If inflation low, savings withholdings = 0 -- Provides powerful fast-acting feedback to stabilize prices http://www.PeoplesCapitalism.org Summary 1. Make everyone a capitalist. Provide credit for capital investment to all. 2. Increase the investment rate by 100% 3. Use savings accounts to control inflation 4. Achieve sustainable economic growth > 6% http://www.PeoplesCapitalism.org Benefits • • • • • • • • • • Income floor rises to $29,000 in 40 years Poverty ceases to exist No income ceiling Everyone benefits from productivity gains Jobs are plentiful Profits are high Welfare is unnecessary Retirement is secure for everyone Medical and elder care are available to all Environmental solutions are affordable http://www.PeoplesCapitalism.org So What’s the Problem? Why don’t people see the beauty of this? Why hasn’t it been adopted? -- or introduced as legislation? -- or debated in the public forum? Good Questions If you would like to offer suggestions or join the debate E-mail me at [email protected] http://www.PeoplesCapitalism.org