Abundance
Is Possible
The rights of the
individual include the rights of liberty, secure incomes,
access to productive property through an expansion
of capital ownership and trusteeship, access to the
commons, free markets, and the secret ballot, while
the responsibilities of the individual include a continual
concern for the rights and interests of others.
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Summary
of Economic Justice
•
State-issued interest-free (except for small administration
cost) repayable money for public capital investment (which
can be constructed or managed by the private sector) thereby
halving the present cost.
•
State-issued interest-free (except for administration and
possible loan insurance cost) repayable money for private
new productive investment if wide ownership is thereby furthered,
such ownership to provide a first secure income. Tax and other
incentives for wide capital ownership.
•
State-issued interest-free (except for administration and
possible loan insurance cost) repayable money for small and
start-up businesses.
•
Debt-free issuance to maintain a stable level of prices thereby
founding a second secure income (in addition to any income
coming from labor).
•
Debt cancellation for poor nations implementing a Global Justice
fresh start.
•
Re-thinking on taxes.
•
Concentrate on real productive investment and deter lending
for inflated asset prices.
N.B.
Over time, in the Global
Justice economy, interest-free money will come to replace
interest-bearing money and not be in addition to it. Since
it is replacing, it cannot be inflationary.
It is a condemnation of present unfree,
unfair and inefficient finance capitalism throughout the world
that there is an undoubted and huge pent-up consumer demand
(in the form, for example, of poor people wanting basic necessities).
At the same time, there is also an undoubted physical capacity
to provide those necessities. Yet the poverty remains.
The main reason is that the
poor, no matter how arduously they work, are insufficiently
productive and will remain insufficiently productive while
they are confined to the often meagre, often unobtainable,
and always uncertain, benefits of labor. Without access to
the other factor that produces wealth – capital –
the poor will be with us forever.
A slightly different way
of looking at the situation is the analysis of Social Credit.
This observes that, as things are at present structured, there
is always insufficient demand (in the form of unsatisfied
consumer needs) to buy what has been produced, let alone what
is capable of being produced. The Social Credit solution is
to increase demand by the issuance of debt-free money.
The GJM Economic Justice
proposals, however, attack the problem of poverty by both
ensuring that the poor have access to productive capacity
(which creates a counter-inflationary situation) and by issuing
debt-free money for a second secure income. The
consequence is a just society with a stable level of prices
and a balanced growth.
Differential
Interest Rates
In referring to interest-free
money, it should be understood that associated with the issuance
would be a small cost for administration expenses and, in
certain circumstances (private sector wide ownership), a possible
cost for loan insurance. That said, in the Justice economy,
there would be two broad types of interest rate:–
i) interest-free (as qualified
by the paragraph above) for Justice purposes
ii) interest-bearing for
those parts of the economy not covered by the Justice proposals.
Financial
and Physical Feasibility
Conventional economics asserts
that financial savings are required before there can be capital
investment. That is untrue. Because nowadays generally all
money is fiat money – created out of nothing
at the press of a computer button – there is not, and
cannot be, a shortage of money for capital investment.
Nor, generally, are physical
savings required before there can be production. There may
be a shortage of a material (in which case, its price may
rise or there may have to be a substitute material) and there
can be a temporary shortage of the relevant labour.
Yet, as everybody should
now realise, the problem is rarely, if ever, a problem of
inadequate supply through lack of capital, either financial
or physical. Rather it is a problem of
lack of demand in an economy. That lack prevents the
new investment which so often embodies the latest, and most
efficient, technology.
The matter can be summarised
by saying that whatever is physically possible
and morally right, and for which a genuine demand exists,
is financially possible. Thus the ultimate purpose of economics
– to free each person to engage creatively in the unlimited
work beyond economics, that of the mind and spirit –
becomes increasingly possible.
Moral Principles
There is an aspect to the
GJM proposals which confounds conventional economics. It is
usually asserted (or, if not asserted, implied) that justice
and economic inefficiency are incompatible.
But that is not true. In
Economic Justice, which is sensitive to Environmental Justice
and the other Justices, the justice creates
the efficiency and the efficiency creates the justice. You
can read more about this in Binary
Economics – the new paradigm, obtainable
from Amazon.com
Economic
Justice
Economic Justice has three
principles:–
• Participation
This is the right for all individuals to participate in the
economic process in order to make a living. It certainly includes
the right to own productive capital and receive the full earnings
of that capital. In short it is the right to have access to
private property in productive assets as well as the opportunity
to engage in labour. A right to labour alone is not enough.
A point to note is that when
people have access to capital they are not necessarily dependent
on labour. Indeed, those whose labour is no longer required
can be given another way of earning. The importance of having
another way is seen in the history of the Canadian cod fishing
industry (a history which is only too likely to be repeated
in the North Sea). The seas off Newfoundland were being over-fished.
But because, in order to limit the cod catch, fishermen would
have to be deprived of their livelihood, inadequate action
was taken. It is now, alas, possible that Canadian cod will
never be seen again.
•
Distribution
The principle of distribution says that individuals should
receive from an economic system what they have productively
put into it (via their labour or capital ownership). It involves
the sanctity of property and contracts in a truly free and
open marketplace. Through the distributional features of private
property within a free and open marketplace, distributive
justice becomes automatically linked to participative justice,
and incomes become linked to productive contributions. The
principle of distributive justice is inextricably involved
with the principle of participation and breaks down when all
persons are not given equal opportunity to acquire and enjoy
the fruits of income-producing property.
•
Harmony
The principle of harmony detects failure in implementing the
principles of participation and distribution, and makes the
corrections needed to restore a just and balanced economic
order for all. Unjust barriers to participation violate the
principle, as do monopolies and the use of property to harm
or exploit others. The principle opposes greed because greed
leads to the exclusion and exploitation of others.
The principle is also violated
by environmental depredation since such depredation ultimately
harms all. See Seven
Steps to Justice, Rodney Shakespeare
& Peter Challen, obtainable from Amazon.co.uk
Balanced
Growth
So exactly how is it that
the justice creates the efficiency and the efficiency creates
the justice? The answer is simple – by focussing
on and spreading productive capacity (in the forms of individually
owned capital estates), consuming capacity is also spread.
Thus supply and demand are brought into proper balance. And
if demand is still inadequate there is still the source of
additional demand resulting from the issuance of debt-free
money to give people a second secure income. One way or another,
Global Justice ensures that those with unsatisfied consumer
needs are able to satisfy them.
You
can read more about this in Binary
Economics – the new paradigm.
The importance of all individuals
– retired, babies, carers, in work, out of work, student
– owning productive capital cannot be overstressed.
Since jobs are insecure, often poorly paid, not always available
and, in any case, not all people can labor, the way forward
for the bulk of the population can only be through capital
ownership. The object of that ownership is to ensure a basic
income for all and Norm Kurland and Shann Turnbull have drawn
up a major Statement of Shared Vision. Read the Statement
of Vision now being signed by thousands!
Complementary
and Community Currencies
Complementary and community
currencies such as LETS, Time Dollars and Ithaca Hours, are
excellent additions to the armoury of monetary reform. Perhaps
even more importantly, they are run by courageous people with
the right get-up-and-go spirit who can be expected to be among
those supporting the GJM. See Complementary,
Community and Ecological currencies.
The currencies, however,
while undoubtedly complementary with a big role to play in
the future, are not enough by themselves. Rather like Grameen,
something bigger is needed.
Forms of
Capital Ownership and Management
Many and varied are the possible
forms of capital ownership and for some indication of what
is possible, including techniques by which wide ownership
can be obtained, two good sources are the following recommended
authoritative and lively books by Jeff Gates: -
• Democracy At Risk
• The Ownership Solution
Jeff believes that everybody
should own productive capital and his books give a range of
possible ways of achieving that including tax incentives.
He points out that present ‘capitalism’ creates
very few capitalists; rather, it is designed to finance more
capital for existing capitalists.
There are also many ways
by which corporations can be managed. One example is the over
150 Mondragon businesses of Spain which generally have a common
ownership but, on leaving the company, a worker is able to
cash in a capital stake. Mondragon also has inclusive managerial
structures which give workers an appropriate say in the running
of their corporations via boards or control centers. Co-ordinating
all the companies is the Corporacion Cooperativa and the whole
of Mondragon represents an outstanding example of a richly
democratic form of network governance.
The ESOPs (Employee Stock
Ownership Plans) of binary economics have several potential
variations and are associated with techniques giving the workers
a proper say. See Value-based Management at the website of
the Washington, D.C Center
for Economic and Social Justice
A writer who has new ideas
on both forms of ownership and of management is Shann Turnbull.
Shann is a fighter for justice and author of Democratising
the Wealth of Nations and other works proposing the use of
interest-free money for wide capital ownership, as well as
the reform of company structures including stakeholder councils.
Help and information on forms
of capital ownership and management is available from the
Ohio Employee Ownership Center at Kent
University, Ohio, U.S. Employee
Ownership Center at Kent University, Ohio, U.S. Aided
by the Ford Foundation, the OEOC organizes internet discussion
on various aspects of capital ownership.
Also,
highly recommended:
Capital Homesteading
for Every Citizen
–
a Just Free Market Solution for Saving Social Security
by Norman Kurland, Dawn Brohawn, Michael Greaney
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"This
splendid book explains how to build a nation in which
EVERYBODY, yes, everybody can become an owner of productive
capital. It gives an original and massively positive
solution to the need to provide proper Social Security
for everybody."
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published
by
Center for
Economic and Social Justice, USA
www.cesj.org
SEE
FLYER
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Taxes
A society has to pay for
its environment policies; its defence, its law courts; police,
roads, and much else. It is likely, therefore, that there
will always be some taxes. Moreover, no one tax by itself
can be completely fair to all.
That said, the GJM, mindful
of the need for taxes to be as simple, cheap to collect and
fair as possible, wishes to see taxes in place which do not
catch the poor more that the rich (as is too often the case
at present). The GJM does not claim that the following taxes
are the best but rather wishes that they be fairly considered
and good faith experiment made.
Money Transfer/ Transactions
Tax
A tiny percentage tax every
time money moves into or out of a bank (or similar) account.
Such a tax could replace a large range of other taxes and
would not hit heavily on the poor.
Land Value Tax
A Land Value Tax (or Site
Value Tax) is a tax on the value of land as opposed to a tax
on the improvements (such as buildings) on the land. Owners
of land benefit unfairly when, as a result of community activity,
their land rises in value. A recent example is the building
of the London Jubilee underground train system which has resulted
in a great rise in local land values. Those rising values
amount to a free gift to the land owners. Global Justice proposes
that there should be a tax on the increased values because
they are not the result of the land owners’ efforts.
The LVT is simple and costs
little to administer. It would also encourage underdeveloped
land to be brought into use. In varying degrees, land value
tax operates, among others, in Jamaica, Chile, Kenya, Pennsylvania
in the United States, some areas of South Africa, and Tanzania.
See article by Dave Wetzel
on the CCMJ
website, which was published in the New Stateman in September
2004.
Other Possible Taxes
GJM members –
and if you believe in the principles of the GJM, you are a
member of the GJM – are invited to come forward
with ideas for other taxes to replace existing taxes. It should
be remembered, however, that, while some taxes are always
likely to be necessary, a major purpose of the GJM is to ensure
that all individuals are properly productive with their own
income so that taxation for the purposes of income redistribution
becomes unnecessary.
New
Thinking
The GJM welcomes new thinking
in all areas. A good recent example is the work of Chris Cook
who observed that the UK Limited Liability Partnerships Act
(2000) had implications which may, or may not, have been intended.
As a result of the Act, it is now possible to form a corporate
body (i.e., a legal entity which has an existence independent
of its individual Members) which is a Partnership but also,
at the same time, has a collective limited liability.
There are two important new
and unintended qualities of such "new" LLPs:–
Firstly, they have an "open",
essentially collaborative and co-operative nature –
any stakeholder in an enterprise (e.g., staff, management,
investors, suppliers, service providers, customers) can subscribe
to a suitably drafted LLP Agreement and so be partners rather
than be adversaries whose contractual relationships are those
of employer/employee; investor/company; or company/supplier.
Hence Chris calls the LLP an "open" Corporate Partnership.
Secondly, the existence of
a corporate body which is also a partnership changes the nature
of Capital itself. Ownership of Partnerships consists of proportional
shares/partnership interests rather than "fixed"
shares of a par or nominal value e.g., £1.00. If such
proportional and "true" Equity is held for a defined
period of time – a phenomenon known as "Temporary
Equity" – then it enables "working" capital
to be raised outside the existing debt/interest paradigm where
banks/financiers have no interest in the success or failure
of the business other than receiving back their investment
plus fixed interest.
Chris believes that this
combination of a collaborative/co-operative "open"
nature, and new simple, flexible and truly equitable hybrid
"temporary equity" creates an optimal form of enterprise
structure which will literally reinvent current infrastructure.
So
Economic Justice demands
• State-issued interest-free
(except for small administration cost) repayable money for
public capital investment (which can be constructed or managed
by the private sector) thereby halving
the present cost.
• State-issued interest-free
(except for administration and possible loan insurance cost)
repayable money for new private productive investment if wide
ownership is thereby furthered, such ownership to provide
a first secure income. Tax and other incentives for wide capital
ownership.
• State-issued interest-free
(except for administration and possible loan insurance cost)
repayable money for small and start-up businesses.
• Debt-free issuance
to maintain a stable level of prices thereby founding a second
secure income (in addition to any income coming from labor).
• Debt cancellation
for poor nations implementing a Global Justice fresh start.
• Re-thinking on taxes.
• Concentrate on real
productive investment and deter lending for inflated asset
prices.
N.B. Over time, in the Global
Justice economy, interest-free money will come to replace
interest-bearing money and not be in addition to it. Since
it is replacing, it cannot be inflationary.
1.
Everybody must own productive capital
Over time, on market principles,
everybody in society must come to have an income from the
independent ownership of productive capital. The capital,
furthermore, must pay out its full earnings (net of reserves
for research, depreciation and development). Only then can
there be a balanced growth as well as social and economic
justice.
2.
Death taxes to spread capital ownership
What happens to the capital
estate of a very rich deceased person? Is any tax payable
under Global Justice?
The answer is that no tax
is payable on death if the estate devolves in such a way as
to spread capital ownership. Thus, if an estate worth millions
of dollars is bequeathed to only one person, a very large
amount of tax would be payable. But if the estate is bequeathed
to a number of people, none of whom end up with too large
a capital estate, then no tax would be payable. Bear in mind
that the essential point is to spread capital ownership and
the death tax rule easily makes sense.
3.
Everybody must have two secure incomes
The first secure income,
of course, comes from the ownership of productive capital
(perhaps paying out eight times more than capital does at
present).
But there is a second secure
income in Global Justice. Since interest-free repayable money
for public, private (wide ownership) and small business capital
investment is counter-inflationary there will be increased
wealth but lowered prices. In order, therefore, to maintain
a stable level of prices, the issuance of debt-free money
will become necessary. Such money has no interest attached
and is not repayable.
Thus a second secure income
becomes possible (in addition to any income a person gets
from labor, or from anything else such as a pension).
Remember – the world
has the technology and productive resources to eliminate misery,
poverty and injustice and save the planet.
So
let’s demand the Five Justices!
Monetary
Justice
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Social
Justice
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Economic
Justice
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Environmental
Justice
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Peace
Justice
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Join
the Global Justice Movement!
See
those who have joined the GJM! Compare Global Justice
with present Capitalism and Socialism!
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Global
Justice – the true, fair, democratic and efficient
solution to poverty. Global Justice means Inclusive
Justice!
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