On September 15, 2015, AJ Vicens writes on Mother Jones:
Pope Francis will arrive in the United States next week, with stops planned in Washington, New York City, and Philadelphia. In the nation’s capital, he will become the first pope to address a joint session of Congress. When House SpeakerJohn Boehner extended the invitation, he said Francis’ teachings “have prompted careful reflection and vigorous dialogue among people of all ideologies and religious views.” He may not have appreciated just how radical the Pope’s teachings are.
In a sharp departure from his predecessors in the Vatican, Francis’ statements on such issues as climate change, divorce, homosexuality, and abortion have rankled conservatives around the world. The pushback on some of his more progressive interpretations of Catholic teachings has also angered many Catholics, triggering what the Washington Post described as a “conservative rebellion” within the church.
But from the very beginning of his papacy in 2013, he has been especially outspoken on the issue of income inequality. Serving the poor is one of the pope’s main priorities; when he chose his name in honor of St. Francis of Assisi, he said he wanted a church that was both poor and “for the poor.” In November 2013, he wrote his blueprint for where he wanted to lead the church, a document known as the Evangelii Gaudium or the apostolic exhortation, in which he focused on this issue. Here are six of the pope’s most critical comments from the document on one of the biggest problems facing the United States:
On income inequality: “While the earnings of a minority are growing exponentially, so too is the gap separating the majority from the prosperity enjoyed by those happy few. This imbalance is the result of ideologies which defend the absolute autonomy of the marketplace and financial speculation. Consequently, they reject the right of states, charged with vigilance for the common good, to exercise any form of control. A new tyranny is thus born, invisible and often virtual, which unilaterally and relentlessly imposes its own laws and rules.”
On “trickle-down” economics: “Some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naive trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system.”
On the “idolatry of money” leading to a “new tyranny”: “The current financial crisis can make us overlook the fact that it originated in a profound human crisis: the denial of the primacy of the human person! We have created new idols. The worship of the ancient golden calf (cf. Ex 32:1-35) has returned in a new and ruthless guise in the idolatry of money and the dictatorship of an impersonal economy lacking a truly human purpose. The worldwide crisis affecting finance and the economy lays bare their imbalances and, above all, their lack of real concern for human beings; man is reduced to one of his needs alone: consumption.”
On the role of money: “Money has to serve, not to rule! The Pope loves everyone, rich and poor alike, but the Pope has the duty, in Christ’s name, to remind the rich to help the poor, to respect them, to promote them. The Pope appeals for disinterested solidarity and for a return to person-centred ethics in the world of finance and economics.”
On the ways income inequality leads to violence: “But until exclusion and inequality in society and between peoples are reversed, it will be impossible to eliminate violence…When a society—whether local, national or global—is willing to leave a part of itself on the fringes, no political programmes or resources spent on law enforcement or surveillance systems can indefinitely guarantee tranquility. This is not the case simply because inequality provokes a violent reaction from those excluded from the system, but because the socioeconomic system is unjust at its root.”
On the ways income inequality “kills”: “Just as the commandment ‘Thou shalt not kill’ sets a clear limit in order to safeguard the value of human life, today we also have to say “thou shalt not” to an economy of exclusion and inequality. Such an economy kills…Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalized: without work, without possibilities, without any means of escape.”
Thinking back on the wisdom expressed by Abraham Lincoln, who said that the purpose of government is to do for people what they cannot do for themselves, the Pope is essentially saying that government also should serve to keep people from hurting themselves and to restrain man’s greed, which otherwise cannot be self-controlled. Anyone who seeks to own productive power that they cannot or won’t use for consumption are beggaring their neighbor––the equivalency of mass murder––the impact of concentrated capital ownership.
What the Pope is really calling for is a restructuring of the system to create a more just and more productive system, under which private property in the means of production recognizes both labor (the human input) and physical capital (the non-human input) as direct independent and interdependent sources of productive input and mass purchasing power.
Access to capital ownership is as fundamental a human right as the right to the fruits of one’s labor. The key to reform is the democratization of money creation and capital credit, the “social key” to universalizing access to future ownership of productive wealth (particularly in corporate equity). This social key could enable every person, as an owner, eventually to gain income independence through the profits from one’s capital.
Today the Pope, most political and business leaders and academic economists assume that the mass of people can only earn a living through their work, and where that is insufficient, through welfare or charity. They, like most people, remain blind to the reality that accelerating technological progress makes it possible, even necessary, to solve the income distribution problems of our global economy through the widespread ownership of labor-saving technologies, that, otherwise, in combination with globally competitive cheap labor, are destroying jobs and devaluing the worth of labor. Our leaders need to recognize that people can legitimately create economic value through two (thus binary) factors of production:
- Labor (all human forms of economic work, including manual, intellectual, creative, and entrepreneurial work, one’s ownership in their own labor, and
- Capital (any non-human input to the production of marketable goods, products and services, including tools, machines, land, structures and infrastructural improvements, management systems, and patents, etc. that can be owned by people).
Most changes in the productive capacity of the world since the beginning of the industrial revolution can be attributed to technological improvements in our capital assets, and a relatively diminishing proportion to human labor. Physical capital does not “enhance” labor productivity, i.e., labor’s ability to produce economic goods. It makes many forms of labor unnecessary. Furthermore, productive capital is increasingly the source of the world’s economic growth and therefore should become the source of added property incomes for all.
With this understanding the Pope, political and business leaders and academic economists should then logically conclude that profit from the work that (non-human) technology does benefits ONLY those owning shares in the companies that use that technology. These people become rich and powerful because they own the things (physical capital) that produce most of our wealth.
In a democratic and just economy everyone should have an equal opportunity and equal access to the means to own shares in companies that use advanced technology. The United States economy, for example, should have programs that lift artificial tax and credit barriers to help every American become an owner of American Industry. Every family could then earn income from jobs and income from capital that every family member would own.
Balanced growth in any market economy depends on incomes distributed through widespread individual ownership of productive capital, all non-human means of production. Without access to and the means to acquire productive capital, people cannot produce enough to purchase the production of others.
What the Pope essentially means, while not clearly defining the scenario accurately, is that most people on the planet have no legitimate ownership claim to, and have insufficient means to purchase, what technology’s phenomenal productive capacity can generate. On the other hand, the small minority of people who own and control most of the productive instruments of society end up producing more than they can humanly consume.
Both socialism and capitalism concentrate economic power at the top. It makes little difference that under capitalism the concentration is in private hands and under socialism the concentration is in the hands of the State. Both systems are excessively materialistic in their basic principles and overall vision. Both, in their own ways, degrade the individual. Both engender economic systems that ignore and hinder the intellectual and spiritual development of every member of society.
What then would be a workable alternative economic model for moving toward a more free, more just and economically classless society?
The solution is a “Just Third Way” that offers a new vision and alternative model of development for the United States and ALL countries of the world in which they can succeed to their fullest potential within the framework of a global marketplace.
The Just Third Way is a free market system that economically empowers all individuals and families through direct and effective ownership of the means of production. From the standpoint of moral philosophy, this new paradigm views healthy self-interest as a virtue (i.e., where individual good is directed toward, or in harmony with, the common good). It views greed and envy, on the other hand, as vices, both destructive of a moral and just society. In contrast to capitalism that institutionalizes greed (creating monopolies and special privileges), or socialism that institutionalizes envy (through coerced leveling and artificial barriers to creative initiatives), the Just Third Way institutionalizes justice, tapping on the full creative potential of every human being.
The Just Third Way aims at restructuring the underlying system, balancing the demands of participative and distributive justice by lifting institutional barriers that have historically separated owners from non-owners. This involves removing the roadblocks preventing people from participating fully in the economic process as both workers and owners.
The Just Third Way offers a just free market system that economically empowers all individuals and families through the democratization of money and credit for new production. Widespread citizen access to money power would create universal access to direct ownership of wealth-creating and income-producing capital.
We desperately need to restructure the system to require that inclusionary self-liquidating capital credit be made accessible to corporate employees and other current non-owners of productive capital in order to turn them into economically independent capital owners. And, in the same way that the currently wealthy use credit to increase their wealth, and thus their incomes, this would be done under a new comprehensive national expanded ownership strategy.
As the logic and techniques of binary finance using insured, interest-free capital credit are extended throughout the economy, all new incremental productive power can automatically be built into individuals who have unsatisfied needs and wants –– without diminishing their take-home pay or past accumulation of savings. This will break the monopoly of capital ownership held by the currently wealthy –– those with functionally excessive productive power in terms of their consumer needs and wants. The savings of the currently wealthy would then flow into the most risky and speculative ventures, or for insuring capital credit for the non-rich, or for supplying consumer credit and other nonproductive forms of credit.
“Pure credit” can be defined as productive credit extended by a commercial bank, other financial institutions or a central bank in a manner independent of past savings, so that the amount borrowed plus all transaction costs are secured and repayable with future earnings from the capital assets acquired with such credit. Limiting the extension of pure credit by the central bank to current non-owners and leaving the pool of past savings open for use by the currently wealthy and for nonproductive government and consumer borrowing would result in a non-inflationary expansion of the ownership of productive capital assets.
Pure credit would free the economy to grow to the full physical limits of its workforce, available resources, technology, and the projected additional buying power of new domestic and foreign consumers.
After each increment of new capital asset formation has paid for itself from the future earnings that it produces, effective demand and effective supply would be synchronized by normal market forces––and this would continue to do so as long as the new capital became a source of an expanded income for the poor and those in the middle-class who today do not have adequate and secure incomes to meet their needs. This would enable them to produce and earn more as owners of procreative or self-liquidating capital in order to meet these needs.
From the standpoint of corporate productiveness, the binary economics approach would build all increases in capital productiveness (i.e., value added by capital assets) into workers and other non-owners. New owners would then be entitled to all the income increases attributable to their growing shares of corporate ownership. Artificial pressures for increases in labor and welfare incomes that add to costs and therefore go into the price of products sold (e.g., more pay for less work or the same work) would tend to diminish. Removing artificial restraints on capital creation would enable output to soar, resulting in unprecedented double-digit economic growth. This would, in turn, generate full employment and universal capital ownership opportunities as we build a future economy that can support general affluence for every citizen.
Wealth-creating, income-producing capital ownership is largely determined by who has access to capital credit. Just as society can structure its laws and institutions to concentrate ownership, society can reform its laws and institutions to decentralize ownership. Similarly, future corporate credit can be used to build more ownership into the same tiny group of present shareholders, as it is today. Or it can be used to create new owners, with a new social contract based on private property in the means of production for EVERY child, woman, and man.
The Pope, political and business leaders, and academic economist, need to advocate access to credit for acquiring productive capital. This needs to be enshrined in law as a fundamental right of citizenship, like the right to vote.
By adopting a national policy that broadens capital ownership simultaneously with the growth of the economy, within a relatively short period of time, each citizen would become a full owner of his or her corporate shares. For the rest of a person’s life, that citizen would receive a decent and regular income from the earnings of the capital assets he or she accumulates over the years. That citizen would have income-producing property to pass on to his or her children.
Support the Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797, http://www.cesj.org/resources/articles-index/the-just-third-way-basic-principles-of-economic-and-social-justice-by-norman-g-kurland/, http://www.cesj.org/wp-content/uploads/2014/02/jtw-graphicoverview-2013.pdf and http://www.cesj.org/resources/articles-index/the-just-third-way-a-new-vision-for-providing-hope-justice-and-economic-empowerment/.
Support Monetary Justice at http://capitalhomestead.org/page/monetary-justice
Support the Capital Homestead Act at http://www.cesj.org/learn/capital-homesteading/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/ and http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/. See http://www.cesj.org/learn/capital-homesteading/ch-vehicles/.