Norman Kurland of the Center For Economic And Social Justice answers the question: How does Capital Homesteading compare to limited government and Austrian economics?:
In a nutshell, the Austrian school of economics (Hayek, von Mises) supports (1) limited government, (2) free markets for determining just prices, just wages and other costs of production and just profits, and (3) private property rights in the means of production. We agree with these principles, with somewhat greater clarity of how these fit together as three of the four pillars of an economically just market economy. Both the Austrian and Chicago schools on the right totally ignore the fourth pillar — lifting of the systemic barriers to more universal participation by every citizen to share ownership as a an increasingly important supplement to wages and salaries to increase mass purchasing power.
Thus, most of humanity under the monopoly capitalism the Austrian and Chicago schools support are left vulnerable to be replaced by machines and advanced technology and therefore increasingly economically powerless and dependent on government redistribution and charity for meeting their basic economic needs. And new job-destroying productive capital, when added, is financed in outmoded ways to further enrich the rich whose capital earnings are so vast that they cannot physically consume what the rest of the world would if they became owners in the future growth and transfers of capital assets and could share in growth profits to add to mass purchasing power. When there are more buyers with money to spend the economy will grow faster (increase rates of productive investments and private sector job growth) to meet added levels of mass purchasing power.
The problem is in the economic system, particularly in ‘tax expenditures’ in the form of tax credits, tax deductions and other special tax breaks that enable corporations to grow without issuing new shares, as well as capital credit and banking methods that depend on past savings that most citizens who live from hand-to-mouth do not have to purchase new shares if they were available.
(See our Summary of the Capital Homestead Act at http://www.cesj.org/homestead/summary-cha.htm for the comprehensive package of structural and legal reforms that would democratize future capital ownership by lifting these artificial and monopolistic barriers to a more just market economy.)
The Austrian and Chicago schools are blind to these barriers and are thus indifferent to the greed and corruption that perpetuates monopoly capitalism.
The Austrian and Chicago schools espouse competitive free markets, but no country in the world operates through free market competition. Rather, the rich have always bought political support from politicians to protect themselves from global, national and local competition. Adam Smith in his Wealth Of Nations called the system orchestrated by collusion of the rich and the politicians who sheltered them from true market competition as ‘Mercantilism.’ The Austrian and Chicago schools, funded by the wealthy elite, misuse the term “free markets” to hide the monopolistic barriers of mercantilism.
The Austrian and Chicago schools also ignore the potential of ‘future savings’ as advocated by Harold Moulton in his 1935 book The Formation Of Capital (http://www.cesj.org/homestead/reforms/moneycredit/formationofcapital_cesj.pdf) and applied by Louis Kelso and some of his followers to enable people with no past savings or collateral to become owners of entire enterprises.
Lastly, the Austrian and Chicago schools join all conventional schools of economics from left to right in assuming that all marketable goods and services are created by “labor” and therefore never treat “productive capital ownership” as a logical and potentially useful supplement to “labor” for distributing ‘mass purchasing power.’ Hence, guided by the economic gurus of the world, no government or economy to date adds expanded productive capital ownership as an important goal to achieve maximum rates of private sector growth, despite the fact that that hundreds of the wealthiest rich earn billions of dollars annually, more more than they can possibly consume.
Ask yourself, if capital ownership is so good for the few, why can’t it be good for the billions of non-owning citizens around the world? My answer is that we have been miseducated by the economists of all schools of economic thought. (See mfriedman-nk71-0 statements by Nobel Prize Winner Milton Friedman, who publicly has stated that ‘greed is good,’ that reflecting the anti-intellectual and elitist attitudes of most economists.) Hence, those seeking Justice, Prosperity, Freedom and an end to Class Warfare must be re-educated by seeing the solution as requiring a more simple and more just new system as advocated under the Capital Homestead Act.
For a scholarly presentation of the logic and basic principles of Kelso’s binary theory of economics, see http://www.cesj.org/binaryeconomics/price-money.html. A more popular presentation is at http://www.cesj.org/homestead/reforms/tax/taxnotes05-1024.pdf.
Please feel free to send these to every economist you know. Given the sad state of the global economy today, the burden of persuasion has been shifted to them to point out what is wrong with Kelso’s principles or logic or CESJ’s proposed Capital Homestead Act. When ordinary people wake up to the systemic roots of their poverty and powerlessness, neither the wealthy elite or the academic economists, will be able to stand in the way of a plan in which no one is a loser.
