The GOP Unveils A ‘Permanent Save’ For Social Security — With Massive Benefit Cuts

On December 9, 2016, Michael Hiltzik writes in the Los Angeles Times:

Amid all the hand-wringing over Republican plans to eviscerate Medicare and Medicaid and repeal the Affordable Care Act, it shouldn’t be overlooked that the GOP has the knives out for Social Security too.

The latest reminder comes from Rep. Sam Johnson, R-Tex., chairman of the Ways and Means Social Security subcommittee. Johnson on Thursday uncorked what he termed a “plan to permanently save Social Security.”

Followers of GOP habits won’t be surprised to learn that it achieves this goal entirely through benefit cuts, without a dime of new revenues such as higher payroll taxes on the wealthy. In fact, Johnson’s plan reduces the resources coming into the program by eliminating a key tax –another way that he absolves richer Americans of paying their fair share, while increasing the burdens of retirement for almost everyone else.

Predictably, this plan has already been hailed by the Committee for a Responsible Federal Budget, a billionaire’s front group that likes to portray itself as a neutral budget watchdog. (The foundation of hedge fund billionaire Peter G. Peterson, whose hostility to Social Security is well-documented, provided $3.3 million in funding for the committee in 2015; that’s the equivalent of about half the group’s revenue of $7.1 million in 2014)

The group calls Johnson’s proposal “a thoughtful plan” and the product of “true leadership.” But it also says that “revenue and benefit changes both need to be on the table.” Johnson’s plan doesn’t meet that standard at all.

Typically, Social Security “reform” proposals at least pay lip service to the fact that the payroll tax has been giving the wealthy a larger and larger pass, by covering an ever-shrinking percentage of their wages and exempting the capital gains and dividends that make up a larger share of high-end income.

Johnson’s plan doesn’t mention that at all. It does, however, give higher-income beneficiaries a tax cut by eliminating income tax on benefits starting in 2045. The tax affects about 30% of retirees by treating at least half of the benefits of those earning more than $32,000 as taxable income.

By law, the tax must be credited to the Social Security system. It’s scheduled to bring in as much as $78 billion in 2025. Johnson’s rationale here is murky. If Social Security is in such bad shape that he sees the need to slash benefits, why cut its revenue, too?

Social Security’s actuaries, who analyzed the plan at Johnson’s request, agreed that it would improve the program’s finances, but noted that virtually every provision involved a benefit cut.

Let’s take a look.

Johnson’s “Social Security Reform Act” changes the program’s benefit formula to provide modest benefit increases for the lowest-earning workers in the system— those who earned up to an annual average of about $22,105 over their lifetimes in inflation-indexed pay — with cuts for everyone else ranging from 17% to as much as 43%, compared with currently scheduled benefits, by 2080.

The act would cut way back on cost-of-living increases for retirees. It would do this by cutting out cost-of-living raises entirely for retirees earning adjusted gross income of more than $85,000 ($170,000 for couples) starting in December 2018, and using the chained consumer price index to calculate the COLA for all others. (The income threshold would be adjusted for inflation.)

Johnson asserts that the chained CPI is “a more accurate measure of inflation,” but he’s blowing smoke. There are no grounds to say the index, which was heavily promoted a few years ago by yet another gang associated with Peter G. Peterson, is more accurate than the index used today. If anything, it understates price increases in housing and healthcare, which have especially pronounced impacts on the household budgets of seniors. Conservatives like it for one reason: It grows more slowly than the regular CPI, so it’s cheaper. As we explained a few years ago, using the chained CPI is a benefit cut, and one that gets larger year by year. Period.

Johnson would also cut benefits for the spouses and children of retired and disabled workers by pegging them to average wages, rather than to the wages actually earned by the worker. This pares the benefits for families earning more than the average.

Finally, the measure also raises the full retirement age, which is now pegged to reach 67 by 2022, to 69 by 2030. this means that workers taking early retirement, which is permitted as soon as age 62, would face a steeper cut in annual benefits for starting early. Johnson would increase the age up to which delayed retirement credits may be earned to 72, from 70. Workers who can afford to put off claiming Social Security will reap the great rewards from this maneuver; by their nature, they tend to be wealthier people who have the resources to live on while deferring Social Security.

Conservatives often argue that raising the retirement age is innocuous because Americans are living longer. Their lengthier retirements, it’s argued, put an unexpected strain on Social Security’s finances, and they don’t need all that money anyway.

But this change is unfair and short-sighted for several reasons. One is that life expectancy is closely tied to income, education and careers. Well-heeled persons who spend much of their lives behind a desk — congressmen from Texas and analysts at billionaire-funded think tanks, say — are more likely to live longer and can stay in their careers well into their 60s and 70s. That’s not so for workers who spent their careers in menial or physically challenging work.

Raising the retirement age is also predicated on life expectancies rising indefinitely. Just as trees don’t grow into the stratosphere, there’s no guarantee this trend isn’t finite. Indeed, just this week the Centers for Disease Control and Prevention reported that U.S. life expectancies actually declined last year for the first time since 1993, falling to 78.8 years at birth from 78.9 in 2014, statistically a major decline.

It may be unwise to draw too sweeping a conclusion from a single year’s figures, but this statistic is a reminder that life expectancy is a dynamic phenomenon, and we may merely have been living through a two-decade bump. Nature may have its own ideas about the appropriate average lifespan for members of the human race.

The bottom line is that Johnson’s plan is one of the most cynical and dishonest Social Security “fixes” to come down the Republican chute in years. It “fixes” Social Security in the same sense that one “fixes” a cat, and makes the program less relevant for millions of Americans facing retirement with ever shrinking resources.

Is this a serious policy prescription? Social Security advocates are properly aghast. As Nancy Altman, co-founder of Social Security Works, put it Friday, in the last election “no one voted for massive cuts to Social Security, nor to end the program as we know it.” Donald Trump even campaigned on a hands-off pledge.

“Trump needs to immediately reassure the American people that he will keep his campaign promise and veto this awful bill,” Altman said. “He should tweet that immediately.”

http://www.latimes.com/business/hiltzik/la-fi-hiltzik-social-security-gop-20161209-story.html

Also see http://www.foreconomicjustice.org/?p=16066.

Social Security is based on taxable earnings from JOBS in the form of payroll taxes. Because the function of technology is to “save” labor or in other words shift from labor intensive production of products and services to the non-human productive capital input, jobs are increasingly being replaced by human-intelligent machines, super-automation, robotics, digital computerized operations, etc.

President Obama stated: “What’s at stake is whether this will be a country where working people can earn enough to raise a family, build a modest savings, own a home, and secure their retirement.” As long as working people are limited by earning income solely through their labor worker wages and rely on their Social Security benefits, they will be left behind by the continued gravitation of economic bounty toward the top 1 percent of the people  that the system is rigged to benefit. The reality is that the 1 percent primarily derive their wealth through the ownership of wealth-creating, income-producing capital assets. Working people and the middle class, on the other hand, will continue to stagnate relying ONLY on their labor whose worth is rapidly eroding, resulting in a stagnated consumer economy. More troubling is that this continued stagnation will further dim the economic hopes of America’s youth, no matter what their education level. The result will have profound long-term consequences for the nation’s economic health and further limit equal earning opportunity and spread income inequality. As the need for labor decreases and the power and leverage of productive capital increases, the gap between labor workers and capital owners will increase, which will ultimately result in upheaval. Dependent on a tax on wages and salaries, Social Security will falter as tectonic shifts in the technologies of production destroy jobs and devalue the worth of labor.

The majority of Americans, dependent on labor worker wages, no longer think that jobs and labor wages will return suddenly—if at all—and at a livable earnings level, that the value of their homes will re­bound, or that their limited retirement funds will soon be fully restored. Americans are scared but attribute their worsening finances to job losses, reduced hours, wage givebacks, and overall reduced earnings. They do not understand the role of productive capital driven by technological innovation and science and the requirement for them to become capital owners whose productive assets do the work, as well as labor workers, to earn a viable economic future. And until we, as a society, understand how wealth is produced, how consumers earn the money to buy products and services and the nature of capital ownership, we will not be able to set a course to obtain an affluent quality of life for middle and working class citizens, where everyone “can earn enough to raise a family, build a modest savings, own a home, and secure their retirement.”

Unemployment and underemployment is high, and will continue to be so, and there is an accelerating displacement of labor workers by technology and cheaper foreign labor, resulting in greater economic uncertainty and unstable retirement incomes for the average American citizen––causing the average citizen to become increasingly dependent on government wealth redistribution programs, openly or disguised.

The stark reality is that we are in a depression reflected in rising unemployment and underemployment and instability that we will never escape from until we change our economic policy. Increasingly, more Americans will not be able to ever purchase a home, due to the packed inflationary wage and welfare base factored into the cost of building homes, which inflate prices, and will be forced to rent their entire life or depend on government living assistance––not able to accumulate equity that can help to sustain them in their retirement years. This is the new reality now facing people in the middle class. The uncertainty of holding onto a good job is frightening to an increasingly wider base of middle-class working citizens. When you factor in the average non-salaried worker, even with a government-mandated minimum labor wage rate of $10.00+ per hour in some states, the outcome is grim. Never mind that consumer demand continues to dwindle because of insufficient income, solely tied to labor worker wages. The impact of the decline in consumer demand due to declining labor worker wages is that production will decline or desist without sustainable consumer demand.

The solution is to CREATE new OWNERS of wealth-creating, income-producing FUTURE productive capital assets simultaneously with the exponential growth of the economy, constantly driven by more “customers with money.” Unfortunately, conventionally, most people do not have the right to acquire productive capital with the self-financing earnings of capital; they are left to acquire, as best as they can, with their earnings as labor workers, relying on past savings (the denial of consumption). This is fundamentally hard to do and limiting. Thus, the most important economic right Americans need and should demand is the effective right to acquire capital with the earnings of capital. Note, though, millions of Americans own diluted stock value through the “stock market exchanges,” purchased with their earnings as labor workers, their stock holdings are relatively miniscule, as are their dividend payments compared to the top 10 percent of capital owners.

What historically empowered America’s original capitalists was conventional savings-based finance and the pledging or mortgaging of assets, with access to further ownership of new productive capital available only to those who were already well capitalized. As has been the case, credit to purchase capital is made available by financial institutions ONLY to people who already own capital and other forms of equity, such as the equity in their home and other capital assets that can be pledged as loan security––those who meet the universal requirement for collateral. Lenders will only extend credit to people who already have assets. Thus, the rich are made ever richer, while the poor (people without a viable capital estate) remain poor and dependent on their labor to produce income. Thus, the system is restrictive and capital ownership is clinically denied to those who need it.

The solutions can be found in the Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797, Monetary Justice reform at http://capitalhomestead.org/page/monetary-justice and  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/http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/

Costco Gets Creative To Meet Shoppers’ Huge Appetite For Organics

On April 1, 2016, Janet I. Tu writes in the Seattle Times:

At Costco’s recent shareholder meeting, CEO Craig Jelinek touted the vast amounts of food the company sold last year, from 83 million rotisserie chickens to $6.1 billion worth of produce.

As for organics, one of the fastest-growing categories in food sales and one in which Costco has become a major player?

“We cannot get enough organics to stay in business day in and day out,” Jelinek told the gathered investors.

So to boost its supply, Costco is trying something new: It’s working with farmers to help them buy land and equipment to grow organics.

The effort is still in its infancy. So far, Costco is working with just one partner, loaning money to help San Diego-based Andrew and Williamson Fresh Produce buy equipment and 1,200 acres of land in the Mexican state of Baja California.

But Costco is looking at expanding the initiative. The idea is to ensure a greater supply of organic foods at a time when demand is soaring but supply has not kept up.

While other retailers might have loan programs for suppliers to upgrade equipment or offer financial incentives such as advance payments or long-term contracts, helping farmers buy land to grow organics appears to be unusual in the industry.

The nascent program joins a list of other Costco food initiatives that try to ensure the warehouse giant can meet the voluminous demand of its customers.

The Issaquah-based retailer, for instance, has a poultry plant in Alabama dedicated to raising chickens for the fresh meat and rotisserie chickens it sells.

It started working with a Mexican vendor two years ago to get wild shrimp from the Sea of Cortez, allowing the retailer to diversify from relying on shrimp caught in Thailand, where human trafficking and slave labor in the fishing industry are pervasive.

And in the last year, Costco bought cattle and is contracting with owners of organic fields in Nebraska to have ranchers there raise the livestock to ensure supply for its organic ground-beef program.

“A few years ago, Craig [Jelinek] came to me and said: ‘Fresh food — we need to have sustainable lines of supplies into the future,’ ” said Jeff Lyons, Costco’s senior vice president of fresh foods.

Behind each of the initiatives, Lyons said, are the questions: “What do we see down the road that could be a challenge in terms of supply? And what can we put in place today to grow that particular scarce resource?”

Proper soil

Organic food is one such scarce resource, its supply limited in part because the transition from conventional farming to organic farming takes several years and is costly. Virgin land that is ready to grow organics is scarce or prohibitively expensive.

Demand, meanwhile, has leapt with sales of organic food jumping from $11.13 billion in 2004 to $35.95 billion in 2014, according to the Organic Trade Association, which represents the supply chain from farmers to retailers.

“Demand is increasing. But we’re not seeing the same level of farmland,” said association spokeswoman Angela Jagiello.

While organic-food sales reached nearly 5 percent of total food sales last year, organic farmland makes up only about 1 percent of U.S. farm acreage.

“We’re not seeing the level of growth we need in domestic supply to meet demand,” Jagiello said. “It’s the No. 1 strategic issue facing the industry.”

So stretched is the supply chain that some organic packaged-food companies, such as Nature’s Path and Pacific Foods, have bought their own farms or are raising their own chickens, according to The Wall Street Journal. Restaurant chain Chipotle Mexican Grill, meanwhile, began providing financing to help farmers shift from conventional to organic food, the newspaper reported.

For Costco, the idea of loaning money to longtime supplier Andrew and Williamson Fresh Produce (A&W for short) took shape when Lyons took a tour of A&W’s Baja operations.

The supplier had heard about 1,200 acres of land in San Quintin, Baja California, that seed company Seminis wanted to sell.

The land had lain fallow for years, so it could be used immediately to grow organics, said Ernie Farley, one of A&W’s owners.

A&W, which had experience growing organic strawberries, raspberries, blackberries and tomatoes, told Lyons it wanted to pursue buying the land. The availability of this much land, not to mention that it could grow organics right away, was rare along the Pacific Coast, where acreage is often grabbed by developers.

But money was an issue. A&W didn’t have all the cash on hand it would need to buy the land outright.

And more recently, A&W has been dealing with fallout of a salmonella outbreak linked to cucumbers produced in Baja California and distributed by A&W that infected 888 people in 39 states, hospitalized 191, and resulted in six deaths in four states. (Costco says that outbreak would not have affected cucumbers it sells, since it carries only hothouse cucumbers; the ones linked to the outbreak were field grown.)

Lyons was supportive of A&W’s desire to buy the land, Farley recalls, and said that it made sense strategically for Costco to get involved, given the growing demand for organics and Costco’s desire to attract and retain customers over the next decades.

Costco ended up loaning A&W money to buy the land — neither company would say how much — and the deal is being completed.

Going forward, Costco will have first right to everything that meets its requirements that comes off that land.

In addition, Costco loaned A&W money to buy equipment to grow organic raspberries on another piece of land, also in San Quintin, that A&W is leasing.

“By helping them with financing, we got access to and purchased about 145,000 cases of organic raspberries that we normally would not have access to,” Lyons said. “Because they normally would not have done the deal or could not have done it. Or, if they could have, we may not have gotten first dibs.”

Costco is considering doing something similar with other companies, including a large group with operations in Chile and Mexico.

“There are lots of discussions going on,” Lyons said. “The challenge for the farmer is: ‘We may go down this road and what happens if something bad happens?’ We have to make sure we don’t get them in a position of financial trouble. We need to make sure the loans are totally secure. If it doesn’t work out for them, we want to continue to buy conventional from them to make sure they’re A-OK.”

Tough transition

Part of the reason the supply of organic foods is so limited is that it’s onerous to transition from conventional to organic farming.

“Traditional ag is the way it is because it yields more, which leads to less expensive food,” said Will Rodger, director of policy communications with the American Farm Bureau.

Transitioning to organic farming takes three years — the window set by the U.S. Department of Agriculture for pesticides and other nonorganic substances to wash away from the soil. The switch often also requires new equipment and new processes to grow and manage the crops.

“The difficulty is that in this three-year window, you’re using organic methods but you’re only getting conventional prices for what you’re selling,” Rodger said. “The margins right now are better on organic produce. But you have to take that three-year hit.”

Some natural-food retailers have their own programs to help suppliers or to preserve farmland.

Whole Foods, for instance, has had since 2006 a loan programto help its local producers grow their businesses. About $18 million has been lent so far, for everything from helping farmers buy equipment to building greenhouses and packing facilities, according to the company.

PCC Natural Markets, meanwhile, supports preservation of farmland through PCC Farmland Trust, which the Seattle-based co-op founded in 1999.

The trust is independent of the co-op, though PCC’s annual support for it exceeds $100,000. The trust has worked to conserve more than 1,600 acres of Washington farmland, according to PCC. Some of the crops grown on those lands end up being sold by PCC, but that is not a requirement.

Aside from Whole Foods and now Costco, “it’s very uncustomary in the [food] industry for retailers to provide capital to suppliers,” especially given the industry’s thin margins, said Burt Flickinger III, retail analyst with Strategic Research Group.

And he’s not heard of any that provide loans for land.

Doing so “secures Costco a long-term supply, rather than having that land be developed or have that farmer or food producer be selling to Costco competitors,” Flickinger said. “This way, Costco strategically locks in a long-term, high-quality source of supply which its competitors will not have access to.”

That’s important because Costco has become one of the nation’s biggest sellers of organic food.

Beating Whole Foods?

In 2014, for the first time, conventional retailers such as Costco, Wal-Mart and Kroger bested natural-food retailers, including Whole Foods, in sales of organic foods, according to the Organic Trade Association.

And last year, after Costco said its sales of organic products exceeded $4 billion annually, one investment bank surmised the warehouse giant may have surpassed Whole Foods to become the nation’s largest organic grocer.

Flickinger says that, at the least, Costco is the top seller nationwide of the types of organic foods it carries. Other retailers, though, carry a broader range of products.

Still, Costco’s increased focus on organics is significant and comes at a time when organic food is the fastest-growing food category, increasing at 8 to 11 percent a year, versus 2 to 2.5 percent for food sales overall, he said.

That Costco is working on increasing its supply of organic foods is good news to Letitia Chapman, who was shopping recently for organic fruits and vegetables at Costco in Seattle.

A few months ago, the sales rep from Seattle decided to start eating more organic food as part of a lifestyle change. While the longtime Costco shopper liked the organic produce she found, sometimes Costco simply doesn’t carry enough organics, she said.

“I tend to end up going to Whole Foods,” she said. “If Costco could get more, that would be awesome.”

http://www.seattletimes.com/business/retail/costco-gets-creative-to-meet-shoppers-huge-appetite-for-organics/

Providing capital credit loans is definitely the direction that our country needs to embrace. These loans are based on the logic of corporate finance in which the loan is specifically to form new capital assets (in this case land and equipment for farming organically-grown produce), which have been determined to produce sufficient earnings to pay off the loan and continue to produce income for the owners.

The question is who are the owners? Are they an already wealthy ownership class assembly of individuals or will new owners be created. In either case, the loan is based on the future earnings to liquidate the loan. Thus, no past savings are required to secure the capital credit loan.

From the article:

“Costco ended up loaning A&W money to buy the land — neither company would say how much — and the deal is being completed.

“Going forward, Costco will have first right to everything that meets its requirements that comes off that land.

“In addition, Costco loaned A&W money to buy equipment to grow organic raspberries on another piece of land, also in San Quintin, that A&W is leasing.

“’By helping them with financing, we got access to and purchased about 145,000 cases of organic raspberries that we normally would not have access to,’ Lyons said. ‘Because they normally would not have done the deal or could not have done it. Or, if they could have, we may not have gotten first dibs.’

“Costco is considering doing something similar with other companies, including a large group with operations in Chile and Mexico.”

What we need nationally in the short-term FUTURE, is ALL direct loans and loan guarantees should stipulate that corporations demonstrate broadened ownership of their corporations by their employees and other Americans. We should quickly reform the system to eliminate ALL tax loopholes and subsidies and provide equal opportunity to insured, interest-free capital credit to finance the FUTURE building of an economy that can support general affluence for ALL Americans.

What we need is for the Federal Reserve to stop monetizing unproductive debt, including bailouts of banks “too big to fail,” “auto companies,” and Wall Street derivatives speculators, and begin creating an asset-backed currency that could enable every child, woman and man to establish a Capital Homestead Account or “CHA” (a super-IRA or asset tax-shelter for citizens) at their local bank to acquire a growing dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income. The CHA would process an equal allocation of productive credit to every citizen exclusively for purchasing full-dividend payout shares in companies needing funds for growing the economy and private sector jobs for local, national and global markets. The shares would be purchased on credit wholly backed by projected “future savings” in the form of new productive capital assets as well as the future marketable goods and services produced by the newly added technology, renewable energy systems, plant, rentable space and infrastructure added to the economy. Risk of default on each stock acquisition loan would be covered by private sector capital credit risk insurance and reinsurance back  by the government, but would not require citizens to reduce their funds for consumption to purchase shares. ALL subsidized loan guarantees would have the stipulation that the companies benefiting from the loan infusion demonstrate NEW owners be created among their employees and others in which ownership shares are purchased on credit wholly backed by projected “future savings” in the form of new productive capital assets.

We need to lift ownership-concentrating Federal Reserve System credit barriers and other institutional barriers that have historically separated owners from non-owners and link tax and monetary reforms to the goal of expanded capital ownership. This can be done under the existing legal powers of each of the 12 Federal Reserve regional banks, and will not add to the already unsustainable debt of the Federal Government or raise taxes on ordinary taxpayers. We need to free the system of dependency on Wall Street or the accumulated savings and money power of the rich and super-rich who control Wall Street. The Federal Reserve System has stifled the growth of America’s productive capacity through its monetary policy by monetizing public-sector growth and mounting Federal deficits and “Wall Street” bailouts; by favoring speculation over investment; by shortchanging the capital credit needs of entrepreneurs, inventors, farmers, and workers; by increasing the dependency of with usurious consumer credit; and by perpetuating unjust capital credit and ownership barriers between rich Americans and those without savings. The Federal Reserve Bank should be used to provide interest-free capital credit (including only transaction and risk premiums) and monetize each capital formation transaction, determined by the same expertise that determines it today––management and banks––that each transaction is viably feasible so that there is virtually no risk in the Federal Reserve. The first layer of risk would be taken by the commercial credit insurers, backed by a new government corporation, the Capital Diffusion Reinsurance Corporation, through which the loans could be guaranteed. This entity would serve to seed the new policy direction and would fulfill the government’s responsibility for the health and prosperity of the American economy.

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/http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/.

Tech CEOs Back Call For Basic Income As AI Job Losses Threaten Industry Backlash

On February 21, 2017, Arjun Kharpal writes on CNBC:

It’s 2067 and robots have wiped out millions of jobs, AI is rampant, and unemployment is on the rise. Technology companies and CEOs have become public enemy number one.

This portrayal of the future is one tech executives are keen to avoid and has driven a growing chorus to support the idea of a universal basic income (UBI).

“There is going to be backlash when it comes to jobs,” Sayantan Ghosal, an economics professor at the University of Glasgow who has written about UBI, told CNBC by phone.

U.S. technology firms have been investing heavily in research and development of AI. Tesla with driverless cars, Amazon with workerless shops, and the likes of Google developing smarter-than-human software.

Even Sergey Brin, the co-founder of Google, recently stated that he was “surprised” by the pace of AI developments.

Basic income ‘necessary’

Over the past few months, major technology executives have come out in support of a UBI.

In an interview with CNBC in November, Tesla Chief Executive Elon Musk backed the idea.

“There is a pretty good chance we end up with a universal basic income, or something like that, due to automation,” Musk said. He reiterated his thoughts last week at the World Government Summit in Dubai, in which he said a UBI would be “necessary”.

Elon Musk, co-founder and CEO of Tesla Motors, speaks at the 2015 Automotive News World Congress January 13, 2015 in Detroit, Michigan.

Elon Musk: Robots will take your jobs, government will have to pay your wage  

Marc Benioff, chief executive of Salesforce, warned of AI creating “digital refugees”. At the World Economic Forum (WEF) in Davos in January, Benioff said there was “no clear path forward” on how to deal with the job displacement that will occur.

Other tech executives talked up the industry’s responsibility.

“We should do our very best to train people for the jobs of the future,” Microsoft CEO Satya Nadella said at Davos.

Tech firms could be in ‘firing line’

Experts say that the tech industry is growing more aware of its role in driving future automation and displacement, and companies don’t want to be at the heart of any backlash from workers.

“That is a factor. The concern that suddenly public enemy number one will be robots and they (tech firms) will be in the firing line,” Guy Standing, professorial research associate at the School of Oriental and African Studies, told CNBC by phone.

“But I think the sort of people I am meeting in the industry are more worried about the grotesque inequality and political backlash against that.”

Marc Benioff, CEO of SalesForce at the World Economic Forum in Davos Switzerland.

David A. Grogan | CNBC
Marc Benioff, CEO of SalesForce at the World Economic Forum in Davos Switzerland.

Standing is also a co-founder of the Basic Income Earth Network (BIEN), a non-governmental organisation that promotes the policy. He is currently advising Y Combinator, a large U.S. start-up accelerator, on its basic income experiment. The firm is looking into a basic income experiment in Oakland.

How a basic income project might work in the future is unclear and the technology industry is still not sure. One idea is for governments to pay everyone a monthly sum. Experts say it will not disincentivize workers because it will provide a bare minimum of living. Instead, workers will still want to get a higher standard of living by working.

But any policy will be tough to fund.

“If you think of a basic income as providing a kind of floor to the standard of living for most people, then it will far exceed current benefit expenditure,” Ghosal said.

‘Robot tax’

One way for governments to pay for a UBI is through a sovereign wealth fund, where they take a small two to three percent equity stake in all the publicly listed companies in the country and earn money in that way.

Another idea that CEOs are slowly turning towards, is the taxing of “super profits”, according to Standing. The academic told CNBC that a major technology CEO he spoke to said that he was convinced the industry would need to start making “concessions” in the form of taxing more profits.

Microsoft founder Bill Gates recently floated the idea of a “robot tax” as a way for governments to get more money in the future.

“If a human worker does $50,000 of work in a factory, that income is taxed,” Gates said in a recent interview with Quartz. “If a robot comes in to do the same thing, you’d think we’d tax the robot at a similar level.”

Academics like Standing and Ghosal say that like previous technological revolutions, workers are likely to be displaced, then retrain and get back into work. UBI would still let people work, but would give them some support as they find new skills.

“Universal basic income will provide a cushion and will allow people to rework and allow them to move and take advantage of new opportunities elsewhere,” Ghosal said.

http://www.cnbc.com/2017/02/21/technology-ceos-back-basic-income-as-ai-job-losses-threaten-industry-backlash.html

The basis of this article is a future where there will be  hordes of citizens of zero economic value.  That is, unless the system can be reformed to empower EVERY citizen to acquire OWNERSHIP in the wealth-creating, income-producing capital assets resulting from technological invention and innovation.

Because non-human productive capital is increasingly the source of the world’s economic growth it should become the source of added property ownership incomes for all. The reality is if both labor and capital are independent factors of production, and if capital’s proportionate contributions are increasing relative to that of labor, then equality of opportunity and economic justice demands that the right to property (and access to the means of acquiring and possessing property) must in justice be extended to all.

Rather than focus on Job Creation, Job Retraining, and a redistributed Minimum Guaranteed Income that holds back technological invention and innovation, our economic policies should focus on wealth-creating, income-producing capital Ownership Creation.

Given that there is no question that robotic technology will continue to expand the productivity and in large measure destroy jobs and devalue the value of human labor, the question that SHOULD be urgently addressed is WHO SHOULD OWN THE FUTURE TECHNOLOGY ECONOMY? Will ownership continue to concentrate among the 1 percent wealthy ownership class who now OWNS America, or will we reform the system to provide equal opportunity for EVERY child, woman, and man to acquire personal OWNERSHIP in FUTURE non-human capital assets paid for with the FUTURE earnings of the investments in our technological future?

Both Elon Musk and Bill Gates are significant capital owners but suggests that everyone else become dependent on the State, while they and others in the wealthy capital ownership class continue to amass more wealth-creating, income-producing capital asset formation ownership.

Their solution to the every widing income inequality gap is to redistribute income earned by those productive in society to provide a subsistence universal income without creating universal individual citizen capital ownership in the productive capital assets of the future. Of course. they want to OWN the future and provide subsistence incomes to the masses whose income sources is limited to a job.

Elon Musk represents one of the perfect examples of crony-end game capitalism disguised to the taxpaying citizens as necessary to create jobs and advance solutions to environmental enhancement. In his case, the game is played in the name of alternative transportation, planetary colonization and the environment. NO WHERE is there a stipulation that the subsidies, tax exemptions, loans and grants be conditioned on 100 percent worker owned companies, not as a collective but in individual worker titles, or that the financing is structured so that the workers will end up owning a significant share of the new capital assets and the benefits of the future wealth-creation and income generated.

While thousands of jobs will be created in the future, subsidized by taxpayer incentives, in large measure the new factories will be technologically infused with advanced “robotics,” digitalized operations, and super-automation capital assets, that will be OWNED by Elon Musk and a select narrow group of wealthy owners who get to cash in on taxpayer incentives and subsidies while the worth of the corporations accelerate.

Once again, taxpayer supported government welfare is extended to the private sector without the stipulation of broadening private, individual ownership of NEW productive capital investment related to technological innovation and invention. This is in the form of government subsidies, loan guarantees and tax incentives that are issued in the name of JOB CREATION, while oblivious to the CONCENTRATED OWNERSHIP CREATION resulting from bolstering the financial ownership interests of the awarded companies’ ownership class.

Instead of socialist redistribution of crums to the masses, what is needed is a massive loan guarantee economic growth plan which aims to balance production and consumption by empowering EVERY American to acquire private, individual ownership in FUTURE wealth-creating, income-producing productive capital asset investments and pay for their loans out of the earnings of the investments, without the requirement of past savings or any source of income. This approach embraces the logic of corporate finance, that is, that the investments will over time, typically within 3 to 7 years, produce income to pay for the capital credit extended and to continue to produce income for the corporate owners over the course of numerous years in the future.

Unfortunately, with Elon Musk’s corporate enterprises and others, the subsidies, tax incentives, direct loans and loan guarantees do not stipulate the demonstration of broaden private, individual ownership among the employees of the companies receiving taxpayer financial support. Instead the direct loans and loan guarantees are pitched as JOB CREATION measures while completely hiding the fact that a privilege ownership class benefits as the owners of investment assets.

In the short-term FUTURE, ALL direct loans and loan guarantees should stipulate that corporations demonstrate broadened ownership of their corporations by their employees and other Americans. We should quickly reform the system to eliminate ALL tax loopholes and subsidies and provide equal opportunity to insured, interest-free capital credit to finance the FUTURE building of an economy that can support general affluence for ALL Americans.

The REAL issue regarding the structural problem with the economy, which is rigged to further the CONCENTRATED OWNERSHIP interests of the wealthiest Americans at the expense of the American majority who are exponentially facing job losses and devaluation as tectonic shifts in the technologies of production require less and less labor workers to produce the products and services needed and wanted by our society, is ignored. This issue is NEVER addressed, which is the crux of the problem causing our declining economy.

What we need is for the Federal Reserve to stop monetizing unproductive debt, including bailouts of banks “too big to fail,” “auto companies,” and Wall Street derivatives speculators, and begin creating an asset-backed currency that could enable every child, woman and man to establish a Capital Homestead Account or “CHA” (a super-IRA or asset tax-shelter for citizens) at their local bank to acquire a growing dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income. The CHA would process an equal allocation of productive credit to every citizen exclusively for purchasing full-dividend payout shares in companies needing funds for growing the economy and private sector jobs for local, national and global markets. The shares would be purchased on credit wholly backed by projected “future savings” in the form of new productive capital assets as well as the future marketable goods and services produced by the newly added technology, renewable energy systems, plant, rentable space and infrastructure added to the economy. Risk of default on each stock acquisition loan would be covered by private sector capital credit risk insurance and reinsurance back  by the government, but would not require citizens to reduce their funds for consumption to purchase shares. ALL subsidized loan guarantees would have the stipulation that the companies benefiting from the loan infusion demonstrate NEW owners be created among their employees and others in which ownership shares are purchased on credit wholly backed by projected “future savings” in the form of new productive capital assets.

We need to lift ownership-concentrating Federal Reserve System credit barriers and other institutional barriers that have historically separated owners from non-owners and link tax and monetary reforms to the goal of expanded capital ownership. This can be done under the existing legal powers of each of the 12 Federal Reserve regional banks, and will not add to the already unsustainable debt of the Federal Government or raise taxes on ordinary taxpayers. We need to free the system of dependency on Wall Street or the accumulated savings and money power of the rich and super-rich who control Wall Street. The Federal Reserve System has stifled the growth of America’s productive capacity through its monetary policy by monetizing public-sector growth and mounting Federal deficits and “Wall Street” bailouts; by favoring speculation over investment; by shortchanging the capital credit needs of entrepreneurs, inventors, farmers, and workers; by increasing the dependency of with usurious consumer credit; and by perpetuating unjust capital credit and ownership barriers between rich Americans and those without savings. The Federal Reserve Bank should be used to provide interest-free capital credit (including only transaction and risk premiums) and monetize each capital formation transaction, determined by the same expertise that determines it today––management and banks––that each transaction is viably feasible so that there is virtually no risk in the Federal Reserve. The first layer of risk would be taken by the commercial credit insurers, backed by a new government corporation, the Capital Diffusion Reinsurance Corporation, through which the loans could be guaranteed. This entity would serve to seed the new policy direction and would fulfill the government’s responsibility for the health and prosperity of the American economy.

Our political leaders, academia, and the media fail to understand that our financial system has resulted in a fundamental imbalance between production and consumption. We have ignored the systematic income inequalities that persist and grow exponentially due to the steady progress of tectonic shifts in the technologies of production, shifting productive input from labor to the non-human factor of production––productive capital, as generally defined as land, structures, human-intelligent machines, superautomation, robotics, digital computerized automation, etc. Productive capital assets are OWNED by individuals and, respecting private property principles, those individuals are entitled to the earnings generated by such assets.

The significant problem has been the systematic denial of participation as capital owners on the part of the majority of consumers. While the wealthy ownership class has essentially rigged the financial system to their benefit, and by that is meant to continually concentrate ownership of productive capital among the richest Americans, the majority of Americans have been and are dependent on JOB CREATION. Yet, none of our political leaders, academia or the media addresses this inbalance with the richest Americans entitled to income growth associated with productive capital ownership and the majority facing further job losses and degradation due to technological advancement.

Ordinary Americans of so-called “middle-class position” have used consumer debt financing as a means of bettering their life with an abundance of consumer products and services. The government has used income redistribution via taxation and national debt to prop up the economy with monies spent on supporting a massive military-industrial complex comprised of a small group of owners and millions of “employed,” and various social programs to uplift the American majority’s life and prevent their decline into poverty––supported by government dependency.

The ONLY way out of this mess, if we are to not become a complete socialist or communist communal state governed by an elite class, is to embrace growth managed in such a way that EVERY American is empowered to acquire over time a viable wealth-creating, income-producing capital estate and pay for their acquisition out of the FUTURE earnings of the investments. Such is the precise means that the richest Americans continually advance their wealth and thus, income.

We need leaders who will put this issue before the national debate stage, and we need the media to put forth the questions whose answers will provide the financial mechanism specifics to reverse the ever dominant OWNERSHIP CONCENTRATION. Such concentration and the economic power that result is taking control of our representative government, with productive capital ownership channeled through plutocratic finance into fewer and fewer hands, as we continue to witness today with government by the wealthy evidenced at all levels.

We are absent a national discussion of where consumers earn the money to buy products and services and the nature of capital ownership, and instead argue about policies to redistribute income or not to redistribute income. If Americans do not demand that the holders of the office of the presidency of the United States, the Senate, and the Congress address these issues, we will have wasted the opportunity to steer the American economy in a direction that will broaden affluence. We have adequate resources, adequate knowhow, and adequate manpower to produce general affluence, but we need as a society to properly and efficiently manage these resources while protecting and enhancing the environment so that our productive capital capability is sustainable and renewable. Such issues are the proper concern of government because of the human damage inflicted on our social fabric as well as to economic growth in which every citizen is fairly included in the American dream.

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/http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/.

Let’s Bring Productivity Back To The US

On February 16, 2017, Perry Sun writes on Linkedin:

It’s way more than abundantly clear that many Americans have long felt the sting of globalization, manufacturing automation, and other realities in the form of lost jobs, greatly diminished prosperity, and little or no hope for their futures.

Just as unfortunate is that Americans in economically vibrant regions have had really poor empathy (especially Silicon Valley), much less offered token gestures to assist in finding solutions. As we’ve all witnessed, this reality manifested itself with great lucidity in the wake of the 2016 presidential election.

Our new president promises to bring back manufacturing jobs to the US, using whatever means and tactics necessary, from breaking up international trade agreements to brute-force methods of threatening import duties and publicly shaming corporate CEOs.

While these measures are welcome to many, and could indeed yield short-term results in bringing forth job opportunities, it’s uncertain as to whether they can be sustained in the long run. Companies ultimately have to make decisions in their own interests.

Lackluster Productivity in the US

Globalization and automation are the most highly cited factors in the demise of American manufacturing, energy production, and other industries. But there’s an even more elementary cause: systemically low productivity growth.

It’s been characteristically slow the past several decades, but US productivity growth has really been declining since the early 2000s with no apparent forecast for significant improvement.

The problem is that over the past several decades, we as a society have been inclined to consume more than we produce. Americans would much rather make money and spend it, than expend the effort and capital to develop new products that can be sold domestically and abroad.

Nurturing complete product life cycles in the US – from R&D to manufacturing, and ultimately retail or export – is essential to bolster our companies, make them stronger and profitable, and organically increase wages. These are the elementary ingredients that add up to a positively virtuous economic cycle.

When an economy like ours is perpetually dependent on consumer spending, the persistent demand for consumption tends to bring downward pressure on pricing as sellers compete fiercely for their customers. The end result? Manufacturers look abroad for cheaper ways to produce their products, which then allows retail companies to procure goods at lower cost.

Corporate America’s remarkable influence in politics has been a driving factor in the establishment of international trade agreements that favor cheaper US goods – the same pacts that many of us so passionately despise.

Blame NAFTA, but really, it’s the American consumer that’s the culprit.

We Need to Create and Sell Again

To right this errant sailing ship, what’s essential in the US is a common, fundamental understanding that if we can innovate, research, develop, and manufacture more within our shores, there’s more for us to sell and trade, more profit for companies to reinvest in us, and in the long run, a chance for that badly needed prosperity to return for everyone.

The American economy has always been, and will continue to be, a sleeping giant of truly great potential. There are a great many problems to solve in our society, which can also translate to great business opportunities.

Just think of all of the wonderful things we can do for healthcare, infrastructure, finance, education, environmental protection, natural energy, renewable energy, transportation, agriculture, travel and leisure, real estate, and a whole lot more – while bettering ourselves and our communities.

Tech Will Be Critical in Revitalizing Productivity

Technology already has, and continues to be substantially pervasive in all phases of a product life cycle. In the future, we’re going to have to augment and expand our expertise in programming, software development, engineering, design, CAD, high-skill manufacturing, additive manufacturing, the cloud, science, and physics among the tech-related disciplines.

To be sure, this is all going require the intellect of engineers and scientists. But just as indispensable will be a wide range of modernized vocations and disciplines to support the enormous efforts necessary to assist in product ideation, design, prototyping, testing, and manufacturing.

Capitalizing on Our Untapped Labor Potential

Reawakening US productivity naturally entails new ideas, ingenuity, entrepreneurship, and supportive public policy. But most importantly, we need an expansive, diverse, and highly available labor force.

We can’t just rely on Silicon Valley and other tech-heavy metro areas such as New York City and Boston. Our needs for labor participation will far exceed the talent pool available from these areas, and even from immigration.

We need to bring out the welcome mat to all Americans everywhere, and give them opportunities to take part in making our nation the dominant purveyor of technology and essential product solutions.

And many of the tools for training and engagement are already at our disposal: distance learning, micro-credentials, online certifications, coding boot camps, video and web conferencing, hackathons, makerspaces, and so on. Combining these with apprenticeships and paid training opportunities will be highly beneficial and absolutely worthy investments for companies looking to bolster their labor and talent pools for the long run.

In conclusion, a kind request to all of us who have economically benefited from technology: Let’s stop looking inward at ourselves as a cozy society of tech geeks earning a comfortable living, and see what we can do to make a great country even better and prosperous – for everyone, and our future.

https://www.linkedin.com/pulse/lets-bring-productivity-back-us-perry-sun

 

Elon Musk: Automation Will Force Governments To Introduce Universal Basic Income

On February 14, 2017, Dom Galeon writes on Futurism:

Recently, Elon Musk had the chance to share his thoughts on universal basic income (UBI) at the World Government Summit in Dubai. At the Summit, Musk had the opportunity to talk about the future, and the challenges the world will face in the next hundred years – including artificial intelligence (AI), automation, and the job displacement expected to come with it.

When asked about the challenges civilization is set to face in the near future, Musk began by noting the threat of artificial intelligences that surpass humanity.

He stated, “deep artificial intelligence, or artificial general intelligence, where you can have artificial intelligence that is much smarter than the smartest human on Earth, this is a dangerous situation.”

He continued by noting the importance of advancing our research into AI with caution: “I think we need to be very careful in how we adopt artificial intelligence and that we make sure that researchers don’t get carried away. Sometimes what will happen is a scientist will get so engrossed in their work that they don’t really realize the ramifications of what they’re doing.”

Musk also relayed concerns that autonomous technology will impact jobs, and he noted that we will likely have intelligent, massive-scale automation for transportation relatively soon—within the next few decades, in fact: “Twenty years is a short period of time to have something like 12-15 percent of the workforce be unemployed,” he said, pointing out the extent of how automation will disrupt car-based transportation specifically.

However, displacement due to automation isn’t just limited to transportation, it will sweep across a number of industries, and Musk argues that the government must introduce a UBI program in order to compensate for this. “I don’t think we’re going to have a choice,” he said. “I think it’s going to be necessary. There will be fewer and fewer jobs that a robot cannot do better.”

Musk believes, however, that the issue goes deeper:

“[The] much harder challenge is: How will people then have meaning? A lot of people derive meaning from their employment. If you’re not needed, what is the meaning? Do you feel useless? That is a much harder problem to deal with. How do we ensure the future is a future that we want, that we still like?”

As the UBI discussion continues, various nations and institutions have already began their own pilot programs to test the model. Finland, for example, started its pioneering UBI program this year, which was launched by the federal social security institution, Kela. It will give out €560 ($587) a month, tax free, to 2,000 Finns that were randomly selected. Similarly, eBay founder Pierre Omidyar’s philanthropic investment firm has given $493,000 to help fund a universal basic income program in Kenya.

In a couple of years (or less?), there might be enough data from these experiments for us to consider just how effective a solution UBI truly is…and whether or not Musk is right.

Elon Musk: Automation Will Force Governments to Introduce Universal Basic Income

Elon Musk is a significant capital owner but suggests that everyone else become dependent on the State, while he and others in the wealthy capital ownership continue to amass more wealth-creating, income-producing capital asset formation ownership.

His solution to the every widing income inequality gap is to redistribute income earned by those productive in society to provide a subsistence universal income without creating universal individual citizen capital ownership in the productive capital assets of the future.

Elon Musk represents one of the perfect examples of crony-end game capitalism disguised to the taxpaying citizens as necessary to create jobs and advance solutions to environmental enhancement. In this case, the game is played in the name of alternative transportation, planetary colonization and the environment. NO WHERE is there a stipulation that the subsidies, tax exemptions, loans and grants be conditioned on 100 percent worker owned companies, not as a collective but in individual worker titles, or that the financing is structured so that the workers will end up owning a significant share of the new capital assets and the benefits of the future wealth-creation and income generated.

While thousands of jobs will be created in the future, subsidized by taxpayer incentives, in large measure the new factories will be technologically infused with advanced “robotics,” digitalized operations, and super-automation capital assets, that will be OWNED by Elon Musk and a select narrow group of wealthy owners who get to cash in our taxpayer incentives and subsidies as the worth of the corporations accelerate.

Once again, taxpayer supported government welfare is extended to the private sector without the stipulation of broadening private, individual ownership of NEW productive capital investment related to technological innovation and invention. This is in the form of government subsidies, loan guarantees and tax incentives that are issued in the name of JOB CREATION, while oblivious to the CONCENTRATED OWNERSHIP CREATION resulting from bolstering the financial ownership interests of the awarded companies’ ownership class.

Instead of socialist redistribution of crums to the masses, what is needed is a massive loan guarantee economic growth plan with aims to balance production and consumption by empowering EVERY American to acquire private, individual ownership in FUTURE wealth-creating, income-producing productive capital asset investments and pay for their loans out of the earnings of the investments, without the requirement of past savings or any source of income. This approach embraces the logic of corporate finance, that is, that the investments will over time, typically within 3 to 7 years, produce income to pay for the capital credit extended and to continue to produce income for the corporate owners over the course of numerous years in the future.

Unfortunately, with Elon Musk’s corporate enterprises and others, the subsidies, tax incentives, direct loans and loan guarantees do not stipulate the demonstration of broaden private, individual ownership among the employees of the companies receiving taxpayer financial support. Instead the direct loans and loan guarantees are pitched as JOB CREATION measures while completely hiding the fact that a privilege ownership class benefits as the owners of investment assets.

In the short-term FUTURE ALL direct loans and loan guarantees should stipulate that corporations demonstrate broadened ownership of their corporations by their employees and other Americans. We should quickly reform the system to eliminate ALL tax loopholes and subsidies and provide equal opportunity to insured, interest-free capital credit to finance the FUTURE building of an economy that can support general affluence for ALL Americans.

The REAL issue regarding the structural problem with the economy, which is rigged to further the CONCENTRATED OWNERSHIP interests of the wealthiest Americans at the expense of the American majority who are exponentially facing job losses and devaluation as tectonic shifts in the technologies of production require less and less labor workers to produce the products and services needed and wanted by our society, is ignored. This issue is NEVER addressed, which is the crux of the problem causing our declining economy.

What we need is for the Federal Reserve to stop monetizing unproductive debt, including bailouts of banks “too big to fail,” “auto companies,” and Wall Street derivatives speculators, and begin creating an asset-backed currency that could enable every child, woman and man to establish a Capital Homestead Account or “CHA” (a super-IRA or asset tax-shelter for citizens) at their local bank to acquire a growing dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income. The CHA would process an equal allocation of productive credit to every citizen exclusively for purchasing full-dividend payout shares in companies needing funds for growing the economy and private sector jobs for local, national and global markets, The shares would be purchased on credit wholly backed by projected “future savings” in the form of new productive capital assets as well as the future marketable goods and services produced by the newly added technology, renewable energy systems, plant, rentable space and infrastructure added to the economy. Risk of default on each stock acquisition loan would be covered by private sector capital credit risk insurance and reinsurance back  by the government, but would not require citizens to reduce their funds for consumption to purchase shares. ALL subsidized loan guarantees would have the stipulation that the companies benefiting from the loan infusion demonstrate NEW owners be created among their employees and others in which ownership shares are purchased on credit wholly backed by projected “future savings” in the form of new productive capital assets.

We need to lift ownership-concentrating Federal Reserve System credit barriers and other institutional barriers that have historically separated owners from non-owners and link tax and monetary reforms to the goal of expanded capital ownership. This can be done under the existing legal powers of each of the 12 Federal Reserve regional banks, and will not add to the already unsustainable debt of the Federal Government or raise taxes on ordinary taxpayers. We need to free the system of dependency on Wall Street or the accumulated savings and money power of the rich and super-rich who control Wall Street. The Federal Reserve System has stifled the growth of America’s productive capacity through its monetary policy by monetizing public-sector growth and mounting Federal deficits and “Wall Street” bailouts; by favoring speculation over investment; by shortchanging the capital credit needs of entrepreneurs, inventors, farmers, and workers; by increasing the dependency of with usurious consumer credit; and by perpetuating unjust capital credit and ownership barriers between rich Americans and those without savings. The Federal Reserve Bank should be used to provide interest-free capital credit (including only transaction and risk premiums) and monetize each capital formation transaction, determined by the same expertise that determines it today––management and banks––that each transaction is viably feasible so that there is virtually no risk in the Federal Reserve. The first layer of risk would be taken by the commercial credit insurers, backed by a new government corporation, the Capital Diffusion Reinsurance Corporation, through which the loans could be guaranteed. This entity would serve to seed the new policy direction and would fulfill the government’s responsibility for the health and prosperity of the American economy.

Our political leaders, academia, and the media fail to understand that our financial system has resulted in a fundamental imbalance between production and consumption. We have ignored the systematic income inequalities that persist and grow exponentially due to the steady progress of tectonic shifts in the technologies of production, shifting productive input from labor to the non-human factor of production––productive capital, as generally defined as land, structures, human-intelligent machines, superautomation, robotics, digital computerized automation, etc. Productive capital assets are OWNED by individuals and, respecting private property principles, those individuals are entitled to the earnings generated by such assets.

The significant problem has been the systematic denial of participation as capital owners on the part of the majority of consumers. While the wealthy ownership class has essentially rigged the financial system to their benefit, and by that is meant to continually concentrate ownership of productive capital among the richest Americans, the majority of Americans have been and are dependent on JOB CREATION. Yet, none of our political leaders, academia or the media addresses this inbalance with the richest Americans entitled to income growth associated with productive capital ownership and the majority facing further job losses and degradation due to technological advancement.

Ordinary Americans of so-called “middle-class position” have used consumer debt financing as a means of bettering their life with an abundance of consumer products and services. The government has used income redistribution via taxation and national debt to prop up the economy with monies spent on supporting a massive military-industrial complex comprised of a small group of owners and millions of “employed,” and various social programs to uplift the American majority’s life and prevent their decline into poverty––supported by government dependency.

The ONLY way out of this mess, if we are to not become a complete socialist or communist communal state governed by an elite class, is to embrace growth managed in such a way that EVERY American is empowered to acquire over time a viable wealth-creating, income-producing capital estate and pay for their acquisition out of the FUTURE earnings of the investments. Such is the precise means that the richest Americans continually advance their wealth and thus, income.

We need leaders who will put this issue before the national debate stage, and we need the media to put forth the questions whose answers will provide the financial mechanism specifics to reverse the ever dominant OWNERSHIP CONCENTRATION. Such concentration and the economic power that result is taking control of our representative government, with productive capital ownership channeled through plutocratic finance into fewer and fewer hands, as we continue to witness today with government by the wealthy evidenced at all levels.

We are absent a national discussion of where consumers earn the money to buy products and services and the nature of capital ownership, and instead argue about policies to redistribute income or not to redistribute income. If Americans do not demand that the holders of the office of the presidency of the United States, the Senate, and the Congress address these issues, we will have wasted the opportunity to steer the American economy in a direction that will broaden affluence. We have adequate resources, adequate knowhow, and adequate manpower to produce general affluence, but we need as a society to properly and efficiently manage these resources while protecting and enhancing the environment so that our productive capital capability is sustainable and renewable. Such issues are the proper concern of government because of the human damage inflicted on our social fabric as well as to economic growth in which every citizen is fairly included in the American dream.

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/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/.

 

Universal Basic Income Accelerates Innovation By Reducing Our Fear Of Failure

On February 13, 2017, Scott Santens writes on Economics:

Almost two centuries ago an idea was born with such explanatory power that it created shock waves across all of human society and whose aftershocks we’re still feeling to this day. It’s so simple and yet so powerful, that after all these years, it remains capable of making people question their very faith.

The idea of which I speak is that through random mutation and natural selection, every living thing around us was created through millions and even billions of years of what is effectively trial and error, not designed by some intelligent creator. It is the process of evolution through natural selection.

It’s almost impossible for many people to accept that everything around us, including our own lives, could ever be the result of trial and error, but that’s what the scientific method has revealed. Mutations happen. Some of them work better than others depending on the environment. A longer beak here and a longer neck there can be the difference between life and death. Successful mutations are passed on. Iterations continue generation after generation. Discovering this process of evolution was one of the great accomplishments of our species. It’s also possibly the most powerful reason to support another world-changing idea — an unconditional basic income.

Let me explain.

Markets as Environments

Our economy is a complex adaptive system. Much like how nature works, markets work. No one central planner is deciding what natural resources to mine, what to make with them, how much to make, where to ship everything to, who to give it to, etc. These decisions are the result of a massively decentralized widely distributed system called “the market,” and it’s all made possible with a tool we call “money” being exchanged between those who want something (demand) and those who provide that something (supply).

Money is more than a decentralized tool of calculation however. It’s also like energy. It powers the entire process like the eating of food powers our own bodies and the sun powers plants. Without food, we starve, and without money, markets starve. A sufficient amount of money for all market participants is absolutely key to the market system for it to work properly.

If you’ve ever played Monopoly this should be apparent. The game would not work if all players started the game with nothing. Some wouldn’t even make it once around the board. Additionally, if no one received $200 for then passing Go, the game would end a lot sooner. Ultimately the game always grinds to a halt once everyone but one person is all out of money, which is inevitable. No money, no purchases, no market, no game. Game over.

Supply and Demand as Trial and Error

With sufficient money however, markets adapt and evolve based on trial and error. Someone thinks of something to create or do. If people like it, it does well. If people don’t like it, it goes away. What does well is modified. If people like the modified version, it does well. If they don’t, it goes away. If they like it enough, the original version goes away. Survival of the fittest we call it. This is the evolution of goods and services, which runs on supply and demand, which both in turn run on money and one other thing — the willingness to take risks.

Risks as Genetic Mutation

Taking risks is equivalent to random genetic mutation in this biological analogy. A new product or service introduced into the market can result in success or failure. The outcome is entirely unknown until it’s tried. What succeeds can make someone rich and what fails can bankrupt someone. That’s a big risk. We traditionally like to think of these risk-takers as a special kind of person, but really they’re mostly just those who are economically secure enough to feel failure isn’t scarier than the potential for success.

As a prime example, Elon Musk is one of today’s most well-known and highly successful risk takers. Back in his college years he challenged himself to live on $1 a day for a month. Why did he do that? He figured that if he could successfully survive with very little money, he could survive any failure. With that knowledge gained, the risk of failure in his mind was reduced enough to not prevent him from risking everything to succeed.

This isn’t just anecdotal evidence either. Studies have shown that the very existence of food stamps — just knowing they are there as an option in case of failure — increases rates of entrepreneurship. A study of a reform to the French unemployment insurance system that allowed workers to remain eligible for benefits if they started a business found that the reform resulted in more entrepreneurs starting their own businesses. In Canada, a reform was made to their maternity leave policy, where new mothers were guaranteed a job after a year of leave. A study of the results of this policy change showed a 35% increase in entrepreneurship due to women basically asking themselves, “What have I got to lose? If I fail, I’m guaranteed my paycheck back anyway.”

Meanwhile, entrepreneurship is currently on a downward trend. Businesses that were less than five years old used to comprise half of all businesses three decades ago. Now they comprise about one-third. Businesses are also closing their doors faster than new businesses are opening them. Until recently, this had never previously been true here in the US for as long as such data had been recorded. Startup rates are falling. Why? Risk aversion due to rising insecurity.

Growing Insecurity

For decades now our economy has been going through some very significant changes thanks to advancements in technology, and we have simultaneously been actively eroding the institutions that pooled risk like trade unions and our public safety net. Incomes adjusted for inflation have not budged for decades, and the jobs providing those incomes have gone from secure careers to insecure jobs, part-time and contract work, and now recently even gig labor in the sharing economy.

Decreasing economic security means a population decreasingly likely to take risks. Looking at it this way, of course startups have been on the decline. How can you take the leap of faith required for a startup when you’re more and more worried about just being able to pay the rent?

None of this should be surprising. The entire insurance industry exists to reduce risk. When someone is able to insure something, they are more willing to take risks. Would there be as many restaurants if there was no insurance in case of fire? Of course not. The corporation itself exists to reduce personal risk. Entrepreneurship and risk are inextricably linked.Reducing risk aversion is paramount to innovation.

Failure as Evolution

So the question becomes, how do we reduce the risks of failure so that more people take more risks? Better yet, how do we increase the rate of failure? It may sound counter-intuitive, but failure is not something to avoid. It’s only through failure that we learn what doesn’t work and what might work instead. This is basically the scientific method in a nutshell. It’s designed to rule out what isn’t true, not to determine what is true. There is a very important difference between the two.

This is also how evolution works, through failure after failure. Nature isn’t determining the winner. Nature is simply determining all the losers, and those who don’t lose, win the game of evolution by default. So, the higher the rate of mutation, the more mutations can fail or not fail, and therefore the quicker an organism can adapt to a changing environment. In the same way, the higher the rate of failure in a market economy, the quicker the economy can evolve.

There’s also something else very important to understand about failure and success. One success can outweigh 100,000 failures. Venture capitalist Paul Graham of Y Combinator has described this as Black Swan Farming. When it comes to truly transformative ideas, they aren’t obviously great ideas, or else they’d already be more than just an idea, and when it comes to taking a risk on investing in a startup, the question is not so much if it will succeed, but if it will succeed BIG. What’s so interesting is that the biggest ideas tend to be seen as the least likely to succeed.

Now translate that to people themselves. What if the people most likely to massively change the world for the better, the Einsteins so to speak — the Black Swans, are oftentimes those least likely to be seen as deserving social investment? In that case, the smart approach would be to cast an extremely large net of social investment, in full recognition that even at such great cost, the ROI from the innovation of the Black Swans would far surpass the cost.

This happens to be exactly what Buckminster Fuller was thinking when he said, “We must do away with the absolutely specious notion that everybody has to earn a living. It is a fact today that one in ten thousand of us can make a technological breakthrough capable of supporting all the rest.” That is a fact, and it then begs the question, “How do we make sure we invest in every single one of those people such that all of society maximizes its collective ROI?”

What if our insistence on making people earn their living is preventing those one in ten thousand from making incredible achievements that would benefit all the rest of us in ways we can’t even imagine? What if our fears of each other being fully free to pursue whatever most interests us, including nothing, is an obstacle to an explosion of entrepreneurship and truly huge innovations the likes of which have never been seen?

Fear as Death

What it all comes down to is fear. FDR was absolutely right when he said the only thing we have to fear is fear itself. Fear prevents risk-taking, which prevents failure, which prevents innovation. If the great fears are of hunger and homelessness, and they prevent many people from taking risks who would otherwise take risks, then the answer is to simply take hunger and homelessness off the table. Don’t just hope some people are unafraid enough. Eliminate what people fear so they are no longer afraid.

If everyone received as an absolute minimum, a sufficient amount of money each month to cover their basic needs for that month no matter what — an unconditional basic income — then the fear of hunger and homelessness is eliminated. It’s gone. And with it, the risks of failure considered too steep to take a chance on something.

But the effects of basic income don’t stop with a reduction of risk. Basic income is also basic capital. It enables more people to actually afford to create a new product or service instead of just think about it, and even better, it enables people to be the consumers who purchase those new products and services, and in so doing decide what succeeds and what fails through an even more widely distributed and further decentralized free market system.

Such market effects have even been observed in universal basic income experiments in Namibia and India where local markets flourished thanks to a tripling of entrepreneurs and the enabling of everyone to be a consumer with a minimum amount of buying power.

Basic income would even help power the sharing economy. For example, imagine how much an unconditional monthly income would enable people within the Open Source Software (OSS) and free software movements (FSM) to do the unpaid work that is essentially the foundation of the internet itself.

Markets as Democracies

Markets work best when everyone can vote with their dollars, and have enough dollars to vote for products and services. The iPhone exists today not simply because Steve Jobs had the resources to make it into reality. The iPhone exists to this day because millions of people have voted on it with their dollars. Had they not had those dollars, we would not have the iPhone, or really anything else for that matter. Voting matters. Dollars matter.

Evolution teaches us that failure is important in order to reveal what doesn’t fail through the unfathomably powerful process of trial and error. We should apply this to the way we self-organize our societies and leverage the potential for universal basic income to dramatically reduce the fear of failure, and in so doing, increase the amount of risks taken to accelerate innovation to new heights.

Failure is not an option. Failure is the goal. And fear of failure is the enemy.

It’s time we evolve.

Universal Basic Income Accelerates Innovation by Reducing Our Fear of Failure

Scott Santens makes his argument that “If everyone received as an absolute minimum, a sufficient amount of money each month to cover their basic needs for that month no matter what — an unconditional basic income — then the fear of hunger and homelessness is eliminated. It’s gone. And with it, the risks of failure considered too steep to take a chance on something.

“But the effects of basic income don’t stop with a reduction of risk. Basic income is also basic capital. It enables more people to actually afford to create a new product or service instead of just think about it, and even better, it enables people to be the consumers who purchase those new products and services, and in so doing decide what succeeds and what fails through an even more widely distributed and further decentralized free market system.

The author, without outright stating it, is making his case within the economic reality that technological progress has become a job killer. But a redistributed “cash payment” made equally to every citizen, while it sounds good, is not a solution to the continuous concentration of wealth-creating, income-producing capital asset ownership among the already wealthy ownership class and their heirs. This class has designed the system to ensure that their wealth in the form of past savings will ensure that will own the future productive capability of the society.

The author, without outright stating it, understands that our society will divide into a small elite who own the technology and a huge army of the unemployed living in squalor. And yes, we must put money into people’s pockets. But instead of putting money into people’s pockets, we should empower EVERY citizen to be individually productive and earn the money they put in their pockets, and that does not mean demanding that EVERY citizen be employed and work in return. There is a difference.

The author, without outright stating it, believes that technology makes workers more productive. That’s because, as with virtually all others who write along these themes, the author only see productivity as related to the human work force, and do not see the distinction between the non-human factor and the human factor of production, as independent factors of productions. Fundamentally, economic value is created through human and non-human contributions. And with technological invention and innovation killing jobs, it is essential that EVERY citizen become an owner of the wealth-creating, income-producing capital assets of the future.

A national basic income or universal basic income is a “welfare” scheme, which does not tie people to individual productive input, but redistributes through taxation of those in society who are productive to those who are unproductive or underproductive. Because it is not tied to new productive engagement, it will not strengthen the incentive to work or take risks, where there is no work to be had due to the economy’s stagnation resulting from poor consumption demand.

What we really need is monetary and tax reform, by which an annual Capital Homestead Account in the form of insured, interest-free capital credit is extended equally to EVERY citizen, without any requirement for past savings, a job, or education. The capital credit loans would strictly be used to invest in new wealth-creating, income-producing capital assets formed by qualified, successful corporations growing the economy. The capital credit loans would be repayable out of the future earnings of the investments, and once paid would continue to produce income for the new productive owners, who would use the income to satisfy their needs and wants, thus resulting in spiraling green economic growth.

The problem is that technological invention and innovation––change––makes the non-human means of producing––tools, machines, structures, and computerized processes––ever more productive while leaving human productiveness largely unchanged (our human abilities are limited by physical strength and brain power––and relatively constant). This means that fewer and fewer people are necessary to produce the products and services needed and wanted by society. But when a job is one’s ONLY way to be productive and earn an income and jobs are disappearing and the worth of labor is being devalued, we have a problem. The problem is magnified by the fact that upward of 95 percent of the products and services are produced by physical productive capital––the non-human factor–– owned by less than 10 percent of the population and highly concentrated among less than 1 percent of the population. The result is that primary distribution through the free market economy, whose distributive principle is “to each according to his production,” delivers progressively more market-sourced income to capital owners and progressively less to workers who make their contribution through labor.

Unfortunately, ever since the 1946 passage of the Full Employment Act, economists and politicians formulating national economic policy have beguiled us into believing that economic power is democratically distributed if we have full employment––thus the political focus on job creation and redistribution of wealth rather than on equal opportunity to produce, full production and broader capital ownership accumulation. This is manifested in the myth that labor work is the ONLY way to participate in production and earn income. Long ago that was once true because labor provided 95 percent of the input into the production of products and services. But today that is not true. Physical capital provides not less than 90 to 95 percent of the input. Full employment as the means to distribute income is not achievable. When the “tools” of capital owners replace labor workers (non-capital owners) as the principal suppliers of products and services, labor employment alone becomes inadequate. Thus, we are left with government policies that redistribute income in one form or another, such as a proposed universal basic income.

The capitalism practiced today is what, for a long time, I have termed “Hoggism,” propelled by greed and the sheer love of power over others. “Hoggism” institutionalizes greed (creating concentrated capital ownership, monopolies, and special privileges). “Hoggism” is about the ability of greedy rich people to manipulate the lives of people who struggle with declining labor worker earnings and job opportunities, and then accumulate the bulk of the money through monopolized productive capital ownership. Our scientists, engineers, and executive managers who are not owners themselves, except for those in the highest employed positions, are encouraged to work to destroy employment by making the capital “worker” owner more productive. How much employment can be destroyed by substituting machines for people is a measure of their success––always focused on producing at the lowest cost. Only the people who already own productive capital are the beneficiaries of their work, as they systematically concentrate more and more capital ownership in their stationary 1 percent ranks. Yet the 1 percent is not representative of the people who do the overwhelming consuming. The result is the consumer populous is not able to get the money to buy the products and services produced as a result of substituting machines for people. And yet you can’t have mass production without mass human consumption made possible by “customers with money.” It is the exponential disassociation of production and consumption that is the problem in the United States economy, and the reason that ordinary citizens must gain access to productive capital ownership to improve their economic well-being, not to a hand-out derived from government coercion that takes from those who make productive contributions as workers and capital owners and gives to those who are unable to earn a minimum sustainable income.

Binary economist Louis Kelso postulated: “When consumer earning power is systematically acquired in the course of the normal operations of the economy by people who need and want more consumer goods and services, the production of goods and services should rise to unprecedented levels; the quality and craftsmanship of goods and services, freed of the corner-cutting imposed by the chronic shortage of consumer purchasing power, should return to their former high levels; competition should be brisk; and the purchasing power of money should remain stable year after year.”

As we build general affluence for EVERY American, only then can we successfully alter the choices people must make between choosing alternative, more costly greener choices that do not threaten the environment and their very livelihood. This challenge is particularly a challenge for the property-less struggling middle class and the poor who must deal daily with livelihood issues, due to the precarious situation and loss of employment and the devaluing of the worth of labor as a result of tectonic shifts in the technologies of production resulting in less need for human worker input. Thus, realistically most people cannot be expected to sacrifice what little wealth and income they have to support more costly greener choices.

To see the change that so many Americans would like to see with respect to the support for greener choices will require that American lifestyles and tastes adopt more costly processes, products, and activities that are the greener substitute.

But the reality is that none of these changes can be practically achieved unless enough people can afford them.

Without this necessary balance hopeless poverty, social alienation, and economic breakdown will persist, even though the American economy is ripe with the physical, technical, managerial, and engineering prerequisites for improving the lives of the 99 percent majority. Why? Because there is a crippling organizational malfunction that prevents making full use of the technological prowess that we have developed. The system does not fully facilitate connecting the majority of citizens, who have unsatisfied needs and wants, to the productive capital assets enabling productive efficiency and responsible economic growth.

America has tried the Republican “cut spending, cut taxes, and cut ‘entitlements,’ eliminate government dependency and shift to private individual responsibility” and the Democrat “protect ‘entitlements,’ provide tax-payer supported stimulus, lower middle and working class taxes, tax the rich and redistribute” through government brands of economic policy, as well as a mixture of both. Republican ideology aims to revive hard-nosed laissez-faire appeals to hard-core conservatives but ignores the relevancy of healing the economy and halting the steady disintegration of the middle class and working poor.

Some conservative thinkers have acknowledged the damaging results of a laissez-faire ideology, which furthers the concentration of productive capital ownership. They are floundering in search of alternative thinking as they acknowledge the negative economic and social realities resulting from greed capitalism. This acknowledgment encompasses the realization that the troubling economic and social trends (global capitalism, free-trade doctrine, tectonic shifts in the technologies of production and the steady off-loading of American manufacturing and jobs) caused by continued concentrated ownership of productive capital will threaten the stability of contemporary liberal democracies and dethrone democratic ideology as it is now understood.

Without a policy shift to broaden productive capital ownership simultaneously with economic growth, further development of technology and globalization will undermine the American middle class and make it impossible for more than a minority of citizens to achieve middle-class status.

We are absent a national discussion of where consumers earn the money to buy products and services and the nature of capital ownership, and instead argue about policies to redistribute income or not to redistribute income. If Americans do not demand that the contenders for the office of the presidency of the United States, the Senate, and the Congress address these issues, we will have wasted the opportunity to steer the American economy in a direction that will broaden affluence. We have adequate resources, adequate knowhow, and adequate manpower to produce general affluence, but we need as a society to properly and efficiently manage these resources while protecting and enhancing the environment so that our productive capital capability is sustainable and renewable. Such issues are the proper concern of government because of the human damage inflicted on our social fabric as well as to economic growth in which every citizen is fairly included in the American dream.

Our current system is rigged to continually concentrate the ownership of capital in the 1 to 5 percent of the population. The current system is presently propelled by greed in our society, which creates dire moral implications. A new system that would ensure equal opportunity for every child, woman, and man to acquire productive capital with the earnings of capital and broaden its ownership universally does not require people to be any better than they presently are, but it does enable our society to leverage both greed and generosity in a way that honestly recognizes and harnesses productive capital as the factor that exponentially produces the wealth in a technologically advanced society.

The resulting impact of our current approaches has been plutocratic government and concentration of capital ownership, which denies every citizen his or her pursuit of economic happiness (property). Market-sourced income (through concentrated capital ownership) has concentrated in individuals and families who will not recycle it back through the market as payment for consumer products and services. They already have most of what they want and need so they invest their excess in new productive power, making them richer and richer through greater capital ownership. This is the source of the distributional bottleneck that makes the private property, market economy ever more dysfunctional. The symptoms of dysfunction are capital ownership concentration and inadequate consumer demand, the effects of which translate into poverty and economic insecurity for the 99 percent majority of people who depend entirely on wages from their labor or welfare and cannot survive more than a week or two without a paycheck. The production side of the economy is under-nourished and hobbled as a result.

While Americans believe in political democracy, political democracy will not work without a property-based free market system of economic democracy. The system is the problem, but it can and must be overhauled. The two prerequisites are political power, which is the power to make, interpret, administer, and enforce laws, and economic power, the power to produce products and services, whether through labor power or productive capital.

Kelso wrote: “In the distribution of social power, whether it be political power or economic power, all things are relative. The essence of economic democracy lies in the elimination of differences of earning power resulting from denial of equality of economic opportunity, particularly equal access to capital credit. Differences of economic status resulting from differences in advantages taken and uses made of differences based on inequality of economic opportunity, particularly those that give access to capital credit to the already capitalized and deny it to the non- or -undercapitalized, are flagrant violations of the constitutional rights of citizens in a democracy.”

We need a recognition in America that we should deliberately begin to broaden the capital ownership base in a way that is consistent with the laws of property and the Constitutional safeguards of the rights of men and women to own property and be productive.

What needs to be adjusted is the opportunity to produce, not the redistribution of income after it is produced.

The government should acknowledge its obligation to make productive capital ownership economically purchasable by capital-less Americans using insured, interest-free capital credit, and, as Kelso stated, “substantially assume financial responsibility for the economy through establishing and supervising the implementation of an economic, labor and business policy of democratized economic power.” Historically, capital has been the primary engine of industrialization. But as used, as Kelso has argued, has, as well, “been the chief cause of the institutional deformities that have created and maintained two incompatible classes: the overcapitalized and the undercapitalized.”

We cannot balance the budget without cutting out coerced taxpayer-dependent redistribution of the earnings of capital workers, which if we did at this juncture would collapse the economy and ruin lives, resulting in social strife, personal suffering and degradation, the erosion of freedom, and ultimately anarchy, which will bring on totalitarian government. While welfare, private charity, boondoggle employment and other redistribution measures are now seen as necessary, they do not have to be sustained indefinitely. There are policies that can be adopted and executed to reverse the ultimate direction of collapse of the American market economy system. Such policies are based on the recognition that as the production of products and services changes from labor intensive to capital intensive, the way in which every human being––not just a few, but every person––earns his or her income must change in the same way. At the core of this quiet revolution is the understanding and commitment to broadening the ownership of productive capital.

We need new justice-committed leaders, especially those who want to end the corruption built into our exclusionary system of monopoly capitalism––the main source of corruption of any political system, democratic or otherwise. We need to advocate the need to radically overhaul the Federal tax system and monetary policies and institute proposals to get money power to the 99 percent of American citizens who now only rely on their labor worker earnings. Under the Just Third Way’s (http://foreconomicjustice.org/… more just and simple tax system, access to ownership of the means of production in the future would by provided to every child, woman and man by requiring the government to lift all existing legal and institutional barriers to private property stakes as a fundamental human right. The system was made by people and can be changed by people. Guided by the right principles of economic justice, “we the people” can organize and demand that the system be reorganized to make true economic democracy the new foundation for true political democracy. The result of this movement of new justice-committed leaders and activists will be inclusive prosperity, inclusive opportunity, and inclusive economic justice.

The Right Has No Answer For Automation Job Loss, But The Left Does

LEIPZIG, GERMANY – SEPTEMBER 18: Robots manufacture a carbon chassis of a new BMW i3 electric car on the assembly line at the BMW factory on September 18, 2013 in Leipzig, Germany. The i3 is BMW’s first mass market electric car and the company has invested EUR 400 million into its production at the Leipzig factory. (Photo by Jens Schlueter/Getty Images)

On February 12, 2017, Caitlin Johnstone writes on Newslogue:

 If I woke up one morning to find that I had suddenly turned into a kangaroo in some happy version of Franz Kafka’s Metamorphosis, I’d probably spend my first day hopping around like a knucklehead. I’d hop over fences, hop over people, I’d sneak into one of those trampoline houses for kids and freak everyone out with sick backflips and stuff; it’d be awesome.

But if you look at how kangaroos behave in the wild, that’s not what they’re doing at all. They eat as much food as they need, then they lounge around like sunbathers on the beach. You’ve never seen such high-level chill as a kangaroo with a full belly. And there’s a very good reason for this: being able to consume more calories than you burn is a foundational evolutionary hurdle that a species must overcome if it’s to escape extinction. An animal that doesn’t have to expend more caloric energy than it consumes is a successful organism.

The majority of human technological advances are geared toward this exact end. “Gosh, it takes a lot of energy to push these building materials from point A to point B; let’s put them on some round things so we can roll them there.” “It takes an hour to cook a baked potato in these normal ovens, but check it out, here’s a machine that could cook it in five minutes.” Now we can safely travel thousands of miles in a few hours on what before would have been a months-long extremely hazardous journey. We’ve become so adept at this sort of energy-saving innovation that we’ve had to invent gyms where people can go to work off their surplus caloric amassment.

And that’s precisely the idea, because the human animal has the same ultimate goal as the kangaroo: to be able to work less and relax more. We’re such successful animals in this sense that some of us are even having trouble finding work at all, because we’ve invented machines to do a lot of it automatically. And we’ve just seen the very beginning of it. Great minds like Elon Musk and Stephen Hawking are saying that not only will robots soon replace most lower-class jobs, but that artificial intelligence will shortly be replacing most middle class jobs as well.

And humans are so crazy right now that we’re somehow turning this into a problem.

There’s a new Wired article going around titled “The AI Threat Isn’t Skynet. It’s the End of the Middle Class,” which reports on a private conference between many of the world’s leading minds in the field of artificial intelligence development. The article shares some interesting ideas and starts off sane enough, discussing the inevitability of mass job loss once artificial intelligence makes many of them obsolete, but quickly drifts into delusional cultural mind viruses when the possibility of a universal basic income is touched on.

Wired reports that according to MIT economist Andrew McAfee, a universal basic income “would only make the problem worse, because it would eliminate the incentive for entrepreneurship and other activity that could create new jobs as the old ones fade away.”

“A universal basic income doesn’t give people dignity or protect them from boredom and vice,” adds Oren Etzioni, CEO of the Allen Institute for Artificial Intelligence.

Ugh. You hear these moronic right-wing ideas everywhere, but whenever I hear them I still wonder if the person regurgitating these plutocrat-generated talking points has ever met a real human before.

“Give people dignity”? Protect them from “boredom and vice”? How “dignified” is the rat race? How bored and vice-prone is a miserable cubicle-dwelling desk jockey? How much more interested and dignified would people be if they were freed up to use their amazing human brains exploring their passions and creativity instead of pouring all their mental energy into making some millionaire into a billionaire? How much healthier and less destructive would people be if they could just do what they find interesting free from the guilt and shame of our cultural mind viruses screaming that they’re worthless if they aren’t adding more zeros to some plutocrat’s gigantic bank account?

And don’t get me started on “entrepreneurship”. There’s an entire industry in Asia right now for the practice of sealing live baby marine animals into little airtight plastic containers and selling them on keychains, where the poor creatures slowly suffocate to death over the course of a few hours or days and become landfill. All because the vendors need to be able to bring some noodles home to their kids. If they had a universal basic income they could just give the kids some damn noodles, but no, that would be “undignified”. So much better to have them sell tiny suffocating animals to passing sociopaths on the street because a robot took their last job.

How much further can you stretch this insane mentality? Could I get people to pay me to for punching a baby whale? If I could, I bet you anything Republicans would defend my entrepreneurship. “She’s got to earn a living,” they’d say. “She’s got to punch those whales to bring noodles home to her kids!” And of course establishment Democrats wouldn’t be much better; they’d just say I should get another job while compartmentalizing away from the problem and feeling good about themselves for saying something.

Bullying people into creating jobs on pain of impoverishment leads not only to the creation of unnecessary jobs, but jobs that are downright harmful. When you’ve got the President of the United States ordering the construction of water-threatening pipelines to transport an ecosystem-killing fossil fuel that we should be moving away from anyway because “jobs”, you’ve got a problem. Who’s the one with the boredom and vice problem when you’re promoting an ideology that’s so desperate to find something for people to do that it will pay them to kill our environment?

Donald Trump is not going to solve America’s job creation problem. The manufacturing jobs are gone forever; they’re not coming back, and artificial intelligence advancements are only going to make things much, much worse very, very soon. Trump might be able to coerce companies into staying in America for a little while with protectionist policies, which might temporarily make it harder for CEOs to leverage unions into accepting dehumanizing wages for workers, but none of that will do anything about the imminent job apocalypse that’s just around the corner due to rapid advancements in artificial intelligence and robotics. There’s no way “entrepreneurship” can compete with the rate at which artificial intelligence is going to accelerate in advancement. Conservatives have no answers for this problem, and neither do the fake-left neoliberals.

But the true left does. AI and automation will make it much easier for a few lucky plutocrats to make a tremendous amount of money for themselves, which is just fine and dandy, because they’ll be able to afford a lot more taxes. With those taxes, we could easily help fund the basic living expenses of everyone in America. There will still be some jobs to be had, which will provide some people with some extra gravy for whatever cool skills and ideas they have that they want to put to use, but the soul-crushing demand that people find stupid, arbitrary tasks to do in order for their existence to feel justified will be eliminated.

And so will a whole lot of other problems. People would immediately stop driving as much, for one thing. Our current climate crisis was caused by the way humans stopped living near their workplaces after the invention of the internal combustion engine; cars created the suburbs, which created the daily commute, which is easily the greatest factor in anthropogenic global warming. This idiotic demand for arbitrary expansion into entrepreneurship wastes so many resources and creates so much landfill; if people could just chill out and relax, that in and of itself would prevent so much harm. It would also free up a tremendous amount of creativity for solving the other problems we face together as a species.

It isn’t necessary to threaten people with poverty and starvation if they don’t join in the insane planet-killing rat race. Nothing can stop creative types from creating and innovative types from inventing if that’s what they’re driven to do, and the rest of the people can just chill out and feel good about themselves and enjoy their lives the way they’re meant to, like relaxing kangaroos.

http://www.newslogue.com/debate/337

Unfortunately, ever since the 1946 passage of the Full Employment Act, economists and politicians formulating national economic policy have beguiled us into believing that economic power is democratically distributed if we have full employment––thus the political focus on job creation and redistribution of wealth rather than on equal opportunity to produce, full production and broader capital ownership accumulation. This is manifested in the myth that labor work is the ONLY way to participate in production and earn income, and that individual talent and effort are what distinguish the wealthy from the non-wealthy. Long ago that was once true because labor provided 95 percent of the input into the production of products and services. But today that is not true. Physical capital provides not less than 90 to 95 percent of the input. Full employment as the means to distribute income is not achievable. When the “tools” of capital owners replace labor workers (non-capital owners) as the principal suppliers of products and services, labor employment alone becomes inadequate. Thus, we are left with government policies that redistribute income in one form or another.
 
Economic democracy has yet to be tried. We are absent a national discussion of where consumers earn the money to buy products and services and the nature of capital ownership, and instead argue about policies to redistribute income or not to redistribute income. If Americans do not demand that the contenders for the office of the presidency of the United States, the Senate, and the Congress address these issues, we will have wasted the opportunity to steer the American economy in a direction that will broaden affluence. We have adequate resources, adequate knowhow, and adequate manpower to produce general affluence, but we need as a society to properly and efficiently manage these resources while protecting and enhancing the environment so that our productive capital capability is sustainable and renewable. Such issues are the proper concern of government because of the human damage inflicted on our social fabric as well as to economic growth in which every citizen is fairly included in the American dream.
 
The majority of Americans, dependent on labor worker wages, no longer think that jobs and labor wages will return suddenly—if at all—and at a livable earnings level, that the value of their homes will re­bound, or that their limited retirement funds will soon be fully restored. Americans are scared but attribute their worsening finances to job losses, reduced hours, wage givebacks, and overall reduced earnings. They do not understand the role of productive capital driven by technological innovation and science and the requirement for them to become capital workers, as well as labor workers, to earn a viable economic future. And until we, as a society, understand how wealth is produced, how consumers earn the money to buy products and services and the nature of capital ownership, we will not be able to set a course to obtain an affluent quality of life for middle and working class citizens, where everyone “can earn enough to raise a family, build a modest savings, own a home, and secure their retirement.” The REAL solution is to build an economy of universally productive individuals and households through broadened wealth-creating, income-producing capital ownership.

The Key To Surviving In The Age Of Automation

On February 7, 2016, Richard Eisenberg writes on The Aspen Institute Web site:

A confession: Although I’m the editor of Next Avenue’s Money & Security and Work & Purpose channels, I’m not a regular reader of The Economist, the 174-year-old weekly British magazine. But its recent 11-page Special Report cover story, “Lifelong Learning: How to Survive in the Age of Automation” caught my eye and I strongly recommend others in their 50s and 60s — as well as America’s employers, colleges and policymakers — do, too. It’s online here.

The theme of The Economist’s package, by the magazine’s business affairs editor Andrew Palmer, is that training can no longer be just for people starting out in their careers, if that was ever true. Given today’s technological (the robots are coming for your job), demographic (the Millennials are coming for your job) and economic changes (the future is coming for your job), continuous learning has become essential.

What Older Workers Know

And workers — especially older workers — know it. My Next Avenue colleague, career coach Nancy Collamer, recently wrote that nearly 40 percent of workers over 50 told the Pew Research Center that they believe continuous training is essential to their future career success.  FWIW, Mark Zuckerberg gets it, too: As The Economist notes, Zuckerberg sets himself new personal learning goals every year.

Problem is, as The Economist points out clearly and bleakly, employers and policymakers are doing precious little to provide the necessary training to keep U.S. workers at the top of their game. In fact, Palmer maintains, “employers seem to be less willing to invest in training their workforces” than in the past, partly due to financial pressures and the growth of automation and outsourcing.

Employers seem to be less willing to invest in training their workforces, partly due to financial pressures and the growth of automation and outsourcing.

Lifelong Learning Seedlings Are Sprouting

Fortunately, Palmer notes, “the faint outlines” of a system connecting education to employment are beginning to emerge.

For instance, Massive open online courses (MOOCs) from the likes of Coursera and Udacity are adopting employment-focused models and granting “nanodegrees.” LinkedIn now offers courses through LinkedIn Learning and a startup called Degreed aims to be a central bank of credentials for workers.

A few businesses have developed reputations as places where workers keep learning, such as United Technologies, which pays employees’ tuition bills of up to $12,000 a year. The Economist says Microsoft’s performance review system now includes an appraisal of how employees have learned from others and how they have applied that knowledge. AT&T employees must maintain a career profile with a record of their skills and training; they can also earn Udacity nanodegrees.

Next Avenue blogger Kerry Hannon recently wrote about Huntington Ingalls Industries’ Newport News Shipbuilding Apprentice School, now available to employees of all ages (one recent 58-year-old graduate called the program “life-changing”). It was featured in the AARP Public Policy Institute report: Disrupting Aging in the Workplace: Profiles in Intergenerational Diversity Leadership.

The Role for Government

The Economist believes, however, that governments need to step up to help bring together workers, employers and education providers.

Ours could take a tip from Singapore, whose $600 million annual Skills-Future Initiative requires employers to forecast likely changes ahead for their industries and cite the types of skills they’ll need. Every Singaporean, The Economist says, now gets a $345 credit towards training courses from 500 approved providers; residents age 40 and older get additional subsidies of up to 90 percent.

The Aspen Institute’s Good Companies Good Jobs Initiative

I recently learned about a few encouraging examples of companies “making work work” during the Aspen Institute’s recent Good Companies Good Jobs webinar.

At the Anne Arundel Health System in the Baltimore area, for example, medical assistants now get trained to do some of the work physicians there did in the past. This allows the doctors to see more patients and the assistants to feel more needed — with less burnout. Equally important, said Dr. Robert Eden, who devised the system: “The patients see they have a team supporting them, as opposed to just a doctor alone.”

Eden proudly told the audience a story about his assistant Stacy and a local neurologist who traditionally wouldn’t see one of Eden’s patients unless Eden personally spoke to the physician on the phone. “Stacy called and was accidentally put through to him directly before I got on the line,” said Eden. “She said: ‘I know the case. I’ll just present it.’ He let her, and now he will take all calls from Stacy. She feels very good about that.”

http://www.nextavenue.org/survive-age-automation/

This article, regardless of the focus on life-long worker education, fails to come to grips with the reality that there will be  hordes of citizens of zero economic value, unless we can reform the system to provide equal access to acquiring future wealth-creating, income-producing capital assets resulting from technological invention and innovation, without the requirement of past savings.

While numerous authors envision a dire result as the technological revolution advances and less and less human labor is required to produce and distribute the products and services needed and wanted by society, with just a tiny few reaping ALL of the financial rewards, virtually every solution to counter the tectonic shifts in the technologies of production poses the same old redistribution approach that results in socialism, instead of making EVERY citizen individually productive through their personal ownership stakes in the wealth-creating, income-producing capital assets resulting from technological invention and innovation. They never address the issue of concentrated ownership, nor use the therm OWNERSHIP. Instead, the ONLY solution is a redistribution of income and wealth from the rich owners of breakthrough technologies to the rest of us.

What is direly needed are honest leaders with the communication talent to advocate for making EVERY person a productive contributor to societal development through their personal ownership stakes in the productive capacity of our future. This can be accomplished without the requirement of past savings or a reduction in wages (if one is employed) or benefits using insured, interest-free capital credit to finance technological invention and innovation with the credit extended paid off out of the future earnings generated by the investments. In this way, we can build a future economy to support general affluence for EVERY child, woman and man, while at the same time generating, over the short-term (say a generation), virtual full employment and simultaneously creating new private property sector capital owners, who will benefit from growing purchasing power and financial security, and not dependent on a job that is being replaced by “machines” or a welfare State of elites determining who gets what.

The problem is that technological invention and innovation––change––makes the non-human means of producing––tools, machines, structures, and computerized processes––ever more productive while leaving human productiveness largely unchanged (our human abilities are limited by physical strength and brain power––and relatively constant). This means that fewer and fewer people are necessary to produce the products and services needed and wanted by society. But when a job is one’s ONLY way to be productive and earn an income and when jobs are disappearing and the worth of labor is being devalued, we have a problem.  The problem is magnified by the fact that upward of 95 percent of the products and services are produced by physical productive capital––the non-human factor––which is owned by less than 10 percent of the population and highly concentrated among less than 1 percent of the population. The result is that primary distribution through the free market economy, whose distributive principle is “to each according to his production,” delivers progressively more market-sourced income to capital owners and progressively less to workers who make their contribution through labor.

Put into context, a recent study from researchers at Georgetown University projects that there will be 55 million new jobs by 2020 for which there will be a growing call for more educated workers with the necessary education and training to meet the demand.

This is a report that is out-of-sync with the economics of reality.

Given the current invisible structure of the economy, except for a relative few, the majority of the population, no matter how well educated, will not be able to find a job that pays sufficient wages or salaries to support a family or prevent a lifestyle, which is gradually being crippled by near poverty or poverty earnings. Thus, education is not the panacea, though it is critical for our future societal development. And younger, as well as older people, will increasingly find it harder and harder to secure a well-paying job––for most, their ONLY source of income––and will find themselves dependent on taxpayer-supported government welfare, open and disguised or concealed.

For decades employment opportunity in the United States was such that the majority of people could obtain a job that could support their livelihood, though, in most cases related to a family, it eventually required the father and mother to both work, if they aspired to live a “middle-class” lifestyle. With “Free Trade” those opportunities began to disintegrate as corporations sought to seek lower-cost production taking advantage of global cheap labor rates and non-regulation, as well as lower tax rates abroad. This resulted in a chain reaction forcing more and more companies to outsource in order to stay competitive (thus the rise of China, India, Mexico, and other third-world nation economies).

At the same time, tectonic shifts in the technologies of production were exponentially occurring (and continue to do so), which resulted (and continues to result) in less job opportunities as production was shifted from people making things to “machines” (the non-human factor) of technology making things. The combination of cheap global labor costs and lower, long-term-invested “machine” costs has forced the worth of labor downward, and this will continue to be the reality. Our only way to far greater prosperity, opportunity, and economic justice is to embrace technological innovation and invention and the resulting human-intelligent machines, super-automation, robotics, digital computerized operations, etc. as the primary economic engine of growth.

But significantly, unless we reform our system to empower EVERY American to acquire, via pure, interest-free insured capital credit loans, viable full-ownership holdings (and thus entitlement to full-dividend earnings) in the companies growing the economy, with the future earnings of the investments paying for the initial loan debt to acquire ownership, the concentration of ownership of ALL future productive capital will continue to be amassed by a wealthy minority ownership class. Companies will continue to globalize in search of “customers with money” or simply fail, as exponentially there will be fewer and fewer customers to support their businesses worldwide. Why, because the majority will be disconnected from the dividend income derived from the non-human means of production that is replacing the need for labor workers who earn wages and salaries, which are then used to purchase products and services.

Soon, industrial monopoly capitalism will reach its twin goals: concentration of productive capital ownership among the elite ownership class and work performed with as few labor workers and the lowest possible wages and salaries. The question to be answered is “What then?”

The transition to the non-human factor of production has been occurring for decades but is now experiencing exponential development––the result of tectonic shifts in the technologies of production. As costs for computer-controlled machines become less than the cost of human workers, and the skills and productivity of the machines exceed those of human workers, then robot worker numbers will rapidly increase and enable our society to build architectural wonders, revitalize and redevelop our cities and build new cities of wonder and amazement, along with support energy, transport, and communications systems. Super-automation and robotics is transforming the world of manufacturing as robots become lighter, more mobile, and more flexible with better sensing, perception, decision-making, and planning and control capabilities due to advanced digital computerization. Super-automation and robotics operated by human-intelligent computerization will dramatically improve productivity and provide skills and abilities previously unique to human workers. This will effectively increase the size of the labor work force globally beyond that provided by human workers, no matter what the level of education attained. With advanced human-level artificial intelligence, computer-controlled machines will be able to learn new knowledge and skills by simply downloading software programs and apps. This means that the years of training that apply to personal human development will no longer apply to the further sophistication and operation of the machines. The result will be that productivity will soar while the need and demand for human labor will further decline.Unfortunately, in the long term, unless the vast majority of people have a substantial and viable source of income other than wages and salaries, the impact of technological innovation and invention as embodied in human-level artificial intelligence, machines, super-automation, robotics, digital computerized operations, etc. will be devastating.

There are ONLY two options: either “Own or Be Owned.” The “Owned” model is what our society practices today and is expressed as monopoly capitalism (concentrated ownership) or socialism (taxpayer-supported redistributed social benefits). The “Own” model, or what my colleagues and I term the Just Third Way, has yet to be implemented on the scale necessary to empower every man, woman, and child to acquire private, individual ownership stakes in the future income-producing productive capital assets of the “intelligent automated machine age”––facilitated by the future earnings of their investments in the companies developing and employing this unprecedented economic power.

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Unfortunately, the disruptive nature of exponential growth in technology and its impact on productivity––tectonically shifting production of products and services from human workers to non-human means––is not understood and ignored by the economic establishment, academia, and our political leaders.While the rate of technological progress is directly proportional to the number and quality of the people engaged in the fields of science and engineering, economic policy is the mechanism that fuels investment and development of technological innovation and invention. This is where education is critical to our future societal development.

Education should be encouraged and expanded. Everyone should have the opportunity to personally develop their own exceptional innate abilities and unlock their creativity.

But except for the personal development benefit to advancing one’s education, the reality is that far less “educated” people will be necessary in the long term to produce the products and services necessary and valued by society. This is due to the exponential development of human-level artificial intelligence, which is embodied in advanced automation and robotics.

Those college graduates who do succeed within the fields of science and engineering are hired workers to do what? Our scientists, engineers, and executive managers, who are not owners themselves of the companies they work for, except for those in the highest employed positions, are encouraged to work to destroy employment by making the capital owners’ assets more productive. How much employment can be destroyed by substituting machines for people is a measure of their success––always focused on producing at the lowest cost.

We need to realize that full employment is not a function of businesses. Companies strive to keep labor input and other costs at a minimum. Private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical productive capital’s ever-increasing role.

We need to reform and restructure our economy and set as the GOAL broadened private, individual ownership of future wealth-creating, income-generating productive capital assets among ALL Americans, with capital estates ever building as the economy grows. Without a policy shift to broaden productive capital ownership simultaneously with economic growth, further development of technology and globalization will undermine the American middle class and make it impossible for more than a minority of citizens to achieve middle-class status. By changing course, over time and within a few decades, our “machined-powered” growth economy would produce greater wealth, and widespread private, individual ownership would assure prosperity, opportunity, and general affluence for every citizen. Broadened productive capital ownership would strengthen our democracy and individuals and families would be less or non-dependent on government welfare, whether disguised or not.

This prosperous society is achievable because, fortunately, in the near term, we can begin to grow our way out of the swelling unemployment and underemployment by increasing our investment significantly as a ratio of Gross Domestic Product (GDP) resulting in double-digit growth, while simultaneously broadening private, individual ownership of future income-producing productive capital investments, thus initiating the process of empowering every man, woman, and child to build over time a viable capital estate and reap the income generated. The key operative is BROADEN OWNERSHIP. Such investment would, in the short term, generate millions of new “real” productive jobs. The result would not only be that the GDP would dramatically grow but tax revenues from the high rate of economic growth would enable us to balance the federal budget, fully fund Social Security, Medicare, and Medicaid, provide Universal Health Care, Universal University Education, lower tax rates, and maintain a strong military, all simultaneously.

We have the opportunity to free economic growth from the “enslavement” of human labor and from the financial mechanisms that are based on the slavery of past savings. Technological progress, though, is no longer dependent on the number and quality of human workers. This fact will become obvious eventually to anyone who can think and analyze as they realize the reality that human labor will cease to be the primary source of wealth production in the future. As a result we can expect over the long term that unemployment and underemployment will remain high indefinitely. But the difference will be that people will drop out of the labor force voluntarily because they will be able to live off their dividend earnings via their ownership portfolios. This will create swelling demand for human workers who want to continue working. And with both dividend and wage and salary incomes for everyone there will be more customers to purchase the products and services produced, which in turn will create further dividends and earnings, which will create more customers, etc.

While the future holds less promise for universal job employment due to the ever-progressing contribution of technological-driven production using human-intelligent machines, super-automation, robotics and digital computerized operations, the jobs that will be in demand will require some mastery of technology, math, and science. As long as working people are limited by earning income solely through their labor worker wages, they will be left behind by the continued gravitation of economic bounty toward the top 1 percent of the people that the system is rigged to benefit. If we don’t re-chart our economic policies to broaden private, individual ownership of new productive capital formation, then more troubling is that the continued stagnation of the American economy will further dim the economic hopes of America’s youth, no matter what their education level. The result will have profound long-term consequences for the nation’s economic health and further limit equal earning opportunity and spread income inequality. As the need for labor decreases and the power and leverage of productive capital increases, the gap between labor workers and productive capital asset owners will increase, and the conditions will become very frightening and very chaotic.

Sadly, our leaders are not prepared and are not preparing the American people for the coming economic collapse and the next Great Depression, due to their lack of wisdom and foresight to understand that full employment is not an objective of businesses and private sector job creation opportunities are constantly being eroded by physical productive capital’s ever increasing role––as the use of human-intelligent machines, super-automation, robotics, digital computerized operations, etc. replaces labor workers to produce products and services.

The question that requires an answer is now timely before us. It was first posed by binary economist Louis Kelso in the 1950s but has never been thoroughly discussed on the national stage. Nor has there been the proper education of our citizenry that addresses what economic justice is and what ownership is. Therefore, by ignoring such issues of economic justice and ownership, our leaders are ignoring the concentration of power through ownership of productive capital, with the result of denying the 99 percenters equal opportunity to become productive capital owners. The question, as posed by Kelso is: “how are all individuals to be adequately productive when a tiny minority (capital owners) produce a major share and the vast majority (labor workers), a minor share of total goods and service,” and thus, “how do we get from a world in which the most productive factor—–physical capital—–is owned by a handful of people, to a world where the same factor is owned by a majority—–and ultimately 100 percent—–of the consumers, while respecting all the constitutional rights of present capital owners?”

The path to prosperity, opportunity, and economic justice can be found in the writings about the Capital Homestead Act. For more overviews related to this topic see my article “The Absent Conversation: Who Should Own America?” published by The Huffington Post and by OpEd News.

Also see “The Path To Eradicating Poverty In America” and “The Path To Sustainable Economic Growth“, and the article entitled “The Solution To America’s Economic Decline.”

42% Of Canadian Jobs At High Risk Of Being Affected By Automation, New Study Suggests

On June 15, 2016, CBS News posted:

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Jobs at risk from automation

More than 40 per cent of the Canadian workforce is at high risk of being replaced by technology and computers in the next two decades, according to a new report out Wednesday.

The Brookfield Institute for Innovation + Entrepreneurship at Toronto’s Ryerson University said in its report that automation previously has been restricted to routine, manual tasks. However, breakthroughs in artificial intelligence and advanced robotics now means that automation is moving into “cognitive, non-routine tasks and occupations, such as driving and conducting job interviews.”

The report said the top five occupations — in terms of number of people employed in them — facing a high risk of automation are:

  1. Retail salesperson.
  2. Administrative assistant.
  3. Food counter attendant.
  4. Cashier.
  5. Transport truck driver.

The institute put a 70 per cent or higher probability that “high risk” jobs will be affected by automation over the next 10 to 20 years, and it said workers in the most susceptible jobs typically earn less and have lower education levels than the rest of the Canadian labour force.

“We don’t believe that all of these jobs will be lost,” said Sean Mullin, executive director of the Brookfield Institute, in a release. “Many will be restructured, and new jobs will be created as the nature of occupations change due to the impact of technology and computerization.”

Robot Truckers

This May 2016 photo shows an Otto driverless truck at a garage in San Francisco. A new report suggests technology and computers could put 42 per cent of Canadian jobs at risk in the next two decades. (Eric Risberg/Associated Press)

Jobs deemed to be at a low risk of being affected by automation — having a less than 30 per cent chance — are linked to high skill levels and higher earnings, such as management and jobs in science, technology, engineering and math (STEM).

The top five low risk occupation, by employment, are

  1. Retail and wholesale trade managers.
  2. Registered nurses.
  3. Elementary and kindergarten teacher.
  4. Early childhood educators and assistant.
  5. Secondary school teachers.

The Brookfield Institute’s report said low-risk occupations are projected to produce nearly 712,000 new jobs, absent automation, between 2014 and 2024, while high-risk occupation are expected to add 396,000 over that same time frame.

On a provincial basis, Ontario has the lowest proportion — 41.1 per cent — of jobs at high risk of automation, while P.E.I. has the highest with over 45 per cent of jobs at high risk of automation over the next 10 to 20 years.

The institute also said workers in the jobs deemed at high risk in the study are disproportionately between 15 and 24 years, while workers in lower risk jobs tend to be “prime-aged workers,” between 25 and 54.

“Canada’s younger and, to a lesser extent, older populations are more likely to be vulnerable to the effects of automation,” the study said.

“We hope these findings can help contribute to an important debate about how Canada should prepare for the effects of automation and computerization on our labour force,”  Mullin said.

The institute suggested that more study is needed into high-risk occupations to determine their ability to withstand automation and technology-based restructuring.

http://www.cbc.ca/news/business/automation-job-brookfield-1.3636253

This report looks at a future where there will be  hordes of citizens of zero economic value.  That is, unless the system can be reformed to empower EVERY citizen to acquire OWNERSHIP in the wealth-creating, income-producing capital assets resulting from technological invention and innovation.

This article is about REALITY! While numerous authors envision a dire result as the technological revolution advances and less and less human labor is required to produce and distribute the products and services needed and wanted by society, with just a tiny few reaping ALL of the financial rewards, virtually every solution to counter the tectonic shifts in the technologies of production poses the same old redistribution approach that results in socialism, instead of making EVERY citizen individually productive through their personal ownership stakes in the wealth-creating, income-producing capital assets resulting from technological invention and innovation. They never address the issue of concentrated ownership, nor use the therm OWNERSHIP. Instead, the ONLY solution is a redistribution of income and wealth from the rich owners of breakthrough technologies to the rest of us.

What is direly needed are honest leaders with the communication talent to advocate for making EVERY person a productive contributor to societal development through their personal ownership stakes in the productive capacity of our future. This can be accomplished without the requirement of past savings or a reduction in wages (if one is employed) or benefits using insured, interest-free capital credit to finance technological invention and innovation with the credit extended paid off out of the future earnings generated by the investments. In this way, we can build a future economy to support general affluence for EVERY child, woman and man, while at the same time generating, over the short-term (say a generation), virtual full employment and simultaneously creating new private property sector capital owners, who will benefit from growing purchasing power and financial security, and not dependent on a job that is being replaced by “machines” or a welfare State of elites determining who gets what.

The problem is that technological invention and innovation––change––makes the non-human means of producing––tools, machines, structures, and computerized processes––ever more productive while leaving human productiveness largely unchanged (our human abilities are limited by physical strength and brain power––and relatively constant). This means that fewer and fewer people are necessary to produce the products and services needed and wanted by society. But when a job is one’s ONLY way to be productive and earn an income and when jobs are disappearing and the worth of labor is being devalued, we have a problem.  The problem is magnified by the fact that upward of 95 percent of the products and services are produced by physical productive capital––the non-human factor––which is owned by less than 10 percent of the population and highly concentrated among less than 1 percent of the population. The result is that primary distribution through the free market economy, whose distributive principle is “to each according to his production,” delivers progressively more market-sourced income to capital owners and progressively less to workers who make their contribution through labor.

The End Of Employees

Never before have big employers tried so hard to hand over chunks of their business to contractors. From Google to Wal-Mart, the strategy prunes costs for firms and job security for millions of workers

On February 2, 2016, Lauren Weber writes in The Wall Street Journal:

No one in the airline industry comes close to Virgin America Inc. on a measurement of efficiency called revenue per employee. That’s because baggage delivery, heavy maintenance, reservations, catering and many other jobs aren’t done by employees. Virgin America uses contractors.

“We will outsource every job that we can that is not customer-facing,” David Cush, the airline’s chief executive, told investors last March. In April, he helped sell Virgin America to Alaska Air Group Inc. for $2.6 billion, more than double its value in late 2014. He left when the takeover was completed in December.

Never before have American companies tried so hard to employ so few people. The outsourcing wave that moved apparel-making jobs to China and call-center operations to India is now just as likely to happen inside companies across the U.S. and in almost every industry.

United Parcel Service employees at a facility in Londonderry, N.H., pack jet-engine parts bound for Pratt & Whitney factories. The work used to be done by Pratt employees.
United Parcel Service employees at a facility in Londonderry, N.H., pack jet-engine parts bound for Pratt & Whitney factories. The work used to be done by Pratt employees. PHOTO: SIMON SIMARD FOR THE WALL STREET JOURNAL

The men and women who unload shipping containers at Wal-Mart Stores Inc. warehouses are provided by trucking company Schneider National Inc.’s logistics operation, which in turn subcontracts with temporary-staffing agencies. Pfizer Inc. used contractors to perform the majority of its clinical drug trials last year.

The contractor model is so prevalent that Google parent Alphabet Inc., ranked by Fortune magazine as the best place to work for seven of the past 10 years, has roughly equal numbers of outsourced workers and full-time employees, according to people familiar with the matter.

About 70,000 TVCs—an abbreviation for temps, vendors and contractors—test drive Google’s self-driving cars, review legal documents, make products easier and better to use, manage marketing and data projects, and do many other jobs. They wear red badges at work, while regular Alphabet employees wear white ones.

The shift is radically altering what it means to be a company and a worker. More flexibility for companies to shrink the size of their employee base, pay and benefits means less job security for workers. Rising from the mailroom to a corner office is harder now that outsourced jobs are no longer part of the workforce from which star performers are promoted.

For companies, the biggest allure of replacing employees with contract workers is more control over costs. Contractors help businesses keep their full-time, in-house staffing lean and flexible enough to adapt to new ideas or changes in demand.

For workers, the changes often lead to lower pay and make it surprisingly hard to answer the simple question “Where do you work?” Some economists say the parallel workforce created by the rise of contracting is helping to fuel income inequality between people who do the same jobs.

No one knows how many Americans work as contractors, because they don’t fit neatly into the job categories tracked by government agencies. Rough estimates by economists range from 3% to 14% of the nation’s workforce, or as many as 20 million people.

One of the narrowest definitions of outsourcing, workers hired through a contracting company to provide on-site labor for a single client, rose to 2% of all U.S. workers in 2015 from 0.6% in 2005, according to an academic study last year.

(Go here for more about the complications in counting contractors.)

Companies, which disclose few details about their outside workers, are rapidly increasing the numbers and types of jobs seen as ripe for contracting. At large firms, 20% to 50% of the total workforce often is outsourced, according to staffing executives. Bank of America Corp. ,Verizon Communications Inc., Procter & Gamble Co. and FedEx Corp. have thousands of contractors each.

In oil, gas and pharmaceuticals, outside workers sometimes outnumber employees by at least 2 to 1, says Arun Srinivasan, head of strategy and customer operations at SAP Fieldglass, a division of business software provider SAP SE that helps customers manage their workforces.

Janitorial work and cafeteria services disappeared from most company payrolls long ago. A similar shift is under way for higher-paying, white-collar jobs such as research scientist, recruiter, operations manager and loan underwriter.

According to data from the Bureau of Labor Statistics, 25% of all medical transcriptionists, who type medical reports recorded by doctors and nurses, were employed in what the agency calls the business support services industry in 2015. The percentage has jumped by more than a third since 2009, a sign that transcriptionists are being pushed out of many doctors’ offices and hospitals.

“I haven’t yet met a CEO who’s not surprised by how many people who touch their products aren’t their own employees,” says Carl Camden, president and CEO of staffing agency Kelly Services Inc. Outsourcing and consulting brought in 14% of Kelly’s revenue in 2016.

Eventually, some large companies could be pruned of all but the most essential employees. Consulting firmAccenture PLC predicted last year that one of the 2,000 largest companies in the world will have “no full-time employees outside of the C-suite” within 10 years.

Accenture is one of the world’s largest providers of outsourced labor. Along with many rivals, it is pitching chief executives on the idea that their company’s core business is smaller than they think.

“We’ve shown we can do core parts of their business better than they can do it themselves,” says Mike Salvino, who ran Accenture’s outsourcing business for seven years until he left in 2016.

Efficiency Boosters

Average revenue per employee at the largest U.S. companies has climbed 22% since 2003. The jump could reflect the growing use of contractors and temporary workers, who aren’t counted as employees. Outsourcing is having a major impact in manufacturing and might have inflated official measurements of labor productivity from 2009 to 2015.

Average revenue per employee, in 2016 dollars
Estimated number of outsourced temp workers in manufacturing
Outsourced temp workers as a percentage of direct-hire employees
Note: Revenue figures are adjusted for inflation and include about 430 companies that were in the S&P 500 from 2000 to 2016. Direct-hire employees usually have full-time jobs with benefits.
Source: S&P Global Market Intelligence and The Wall Street Journal (revenue per employee); Matthew Dey (Bureau of Labor Statistics), Susan Houseman (W.J. Upjohn Institute for Employment Research) and Anne Polivka (Bureau of Labor Statistics) (manufacturing workers and direct-hire employees)

Steven Barker, 36 years old, says companies often dangle the possibility of full-time employment but seldom follow through. He has worked contract assignments at Amazon.com Inc., where it was common during orientation sessions for someone to ask if the job could become permanent.

He says the answer usually was: “We’ll see. Anything’s possible!”

At Amazon, Mr. Barker applied to become a full-time employee on X-Ray, which lets customers access actor biographies and other information while watching movies and television shows. He was an X-Ray contractor since it was in the development stage, he says, but wasn’t offered a job interview and eventually received a generic rejection letter from the company. Amazon declines to comment.

Companies sometimes try outsourcing and then change their minds. About 70% of Target Corp. ’s information-technology jobs were outsourced when Mike McNamara became chief information officer at the retailer in 2015. About 70% of those jobs now are done by employees.

“I’m a strong believer that if you can get competitive advantage out of something, you want it in-house,” he says. “That I have better supply-chain algorithms than [my competitors] really matters.”

Few companies, workplace consultants or economists expect the outsourcing trend to reverse. Moving noncore jobs out of a company allows it to devote more time and energy to the things it does best. When an outside firm is in charge of labor, it assumes the day-to-day grind of scheduling, hiring and firing. Workers are quickly replaced if needed, and the company worries only about the final product.

About 200 UPS employees can do the work for five factories that 150 Pratt employees did for two. Pratt’s employees were unionized, but UPS’s aren’t.
About 200 UPS employees can do the work for five factories that 150 Pratt employees did for two. Pratt’s employees were unionized, but UPS’s aren’t. PHOTO: SIMON SIMARD FOR THE WALL STREET JOURNAL

Steven Berkenfeld, an investment banker who has spent his career evaluating corporate strategies, says companies of all shapes and sizes are increasingly thinking like this: “Can I automate it? If not, can I outsource it? If not, can I give it to an independent contractor or freelancer?”

Hiring an employee is a last resort, Mr. Berkenfeld adds, and “very few jobs make it through that obstacle course.”

Visitors arriving at SAP, based in Walldorf, Germany, likely don’t notice that about 30 receptionists at its U.S. facilities work for contractor Eurest Services, part of Compass Group PLC. It happened in 2014 after SAP executives concluded during a review of potential outsourcing opportunities that some managers were paying their receptionists above-market wages.

SAP handed over hiring, training and oversight of receptionists to an outside firm. They were told they could leave SAP or keep their jobs through Eurest, which pays the receptionists in line with the overall market.

SAP says the move left the company with less to manage. “Internally, when [an employee’s] skills aren’t up to par, there’s a protracted process of managing performance,” says Jewell Parkinson, the human-resources chief for SAP’s North American division. “Working through the vendor, it’s a more efficient turnaround.”

Some economists liken the strategy to Hollywood studios, which greenlight movies and then hire directors, actors, editors, special-effects teams and marketing agencies for production. All those outsiders work together to deliver the movie, but the studio has no long-term obligations after the film’s release.

When jet-engine maker Pratt & Whitney no longer wanted to handle coordinating deliveries to its factories, it hired United Parcel ServiceInc., which has thousands of logistics experts and specialized automation technology.

Kinks at the UPS facility shortly after it opened cost Pratt about $500 million in sales. Pratt says the facility is running smoothly now. PHOTOS: SIMON SIMARD FOR THE WALL STREET JOURNAL(3)

For years, suppliers delivered parts directly to Pratt’s two factories, where materials handlers unpacked the parts and distributed them to production teams. Earl Exum, vice president of global materials and logistics, says Pratt had “a couple hundred” logistics specialists. Some handlers were 20- or 30-year veterans who could “look at a part and know exactly what it is,” he adds.

As Pratt wrestled with plans to speed production of a new jet engine and open three new factories, executives decided in 2015 to centralize delivery and distribution of parts in one facility. That facility would receive all the parts, pack them into assembly kits and send them to the five factories.

UPS custom-built a 600,000-square-foot facility, roughly the size of 10 football fields, for Pratt in Londonderry, N.H. About 150 Pratt employees who handled parts at the two factories were offered a chance at retraining for production jobs. Many did, and the rest left the company or retired. UPS has hired about 200 hourly workers for the facility.

Most of the UPS employees had no experience in the field, and assembly kits arrived at factories with damaged or missing parts. Pratt and UPS bosses struggled to get the companies’ computers in sync, including warehouse-management software outsourced by UPS to another firm, according to Pratt.

The result: a 33% decline in engine deliveries by Pratt, a unit of United Technologies Corp. , or about $500 million in sales, in the third quarter of 2015.

Production was back on schedule by the following quarter, and Pratt’s Mr. Exum says the facility is running well now. The 200 UPS employees can do work for five factories that 150 Pratt employees used to do for two. Pratt’s employees were unionized, but UPS’s aren’t. The union representing Pratt workers objected to the move.

Inside the Pratt & Whitney logistics center run by United Parcel Service in Londonderry, N.H.
Inside the Pratt & Whitney logistics center run by United Parcel Service in Londonderry, N.H.PHOTO: SIMON SIMARD FOR THE WALL STREET JOURNAL

 

The flexibility of outsourced labor helps Southwest Airlines Co. shield its employee base from the ups and downs of the airline industry. The fourth-largest U.S. carrier by traffic has about 53,000 employees and 10,000 outside workers.

The nonemployees range from wheelchair pushers in airports to information-technology professionals. “We’ve never had a layoff in our history,” says Greg Muccio, Southwest’s head of recruiting. “When we look at contingent workers, we’re protecting that because what we don’t want to do is balloon up and then be in a situation where we need to lay people off.”

Outsourced workers at Google parent Alphabet arrive through staffing agencies such as Zenith Talent, Filter LLC and Switzerland’s Adecco Group AG , which alone bills Alphabet about $300 million a year for contractors and temps who work there, according to an Adecco executive.

Google wouldn’t comment on how it decides which jobs are done by contractors rather than employees. A former contractor in the search division says he got the impression from conversations and meetings that he was a nonemployee because his skill set wasn’t a core feature of the product on which he was working. He says managers also needed the ability to ramp down quickly if the project wasn’t successful.

The contractor eventually became a full-time employee. He says he was told the decision to put him on the regular payroll had to be approved by Google co-founder Larry Page, now Alphabet’s chief executive, at a product-review meeting.

The trade group Staffing Industry Analysts estimates businesses spend nearly $1 trillion a year world-wide on what it calls “workforce solutions,” or outside services to place and manage workers.

As more companies outsource jobs, the resulting improvement in some measurements of productivity puts pressure on other companies.

Bank of New York Mellon Corp. executives were asked in a 2015 earnings conference call to explain why its revenue per employee trailed other banks.

Todd Gibbons, BNY’s vice chairman and chief financial officer, said investors should focus on a different indicator “because it’s just too hard to tell exactly what’s going on with head count and how people compute it and whether they’ve got contractors in versus full-time employees and so forth.”

BNY Chairman and CEO Gerald Hassell vowed to “drive down the labor component of our company” with technology that can perform tasks currently done by people. Other companies view contracting as a stopgap until more jobs are automated, freeing firms to dispense with some workers altogether.

In January, BNY told analysts and investors that the bank has “more than 150 bots now in production.”

https://www.wsj.com/articles/the-end-of-employees-1486050443

This is another recent article that looks at a future where there will be  hordes of citizens of zero economic value.  That is, unless the system can be reformed to empower EVERY citizen to acquire OWNERSHIP in the wealth-creating, income-producing capital assets resulting from technological invention and innovation.

Because productive capital is increasingly the source of the world’s economic growth it should become the source of added property ownership incomes for all. The reality is if both labor and capital are independent factors of production, and if capital’s proportionate contributions are increasing relative to that of labor, then equality of opportunity and economic justice demands that the right to property (and access to the means of acquiring and possessing property) must in justice be extended to all.

Rather than focus on Job Creation, Job Retraining, and a redistributed Minimum Guaranteed Income that holds back technological invention and innovation, our economic policies should focus on wealth-creating, income-producing capital Ownership Creation.

Given that there is no question that robotic technology will continue to expand the productivity and in large measure destroy jobs and devalue the value of human labor, the question that SHOULD be urgently addressed is WHO SHOULD OWN THE FUTURE TECHNOLOGY ECONOMY? Will ownership continue to concentrate among the 1 percent wealthy ownership class who now OWNS America, or will we reform the system to provide equal opportunity for EVERY child, woman, and man to acquire personal OWNERSHIP in FUTURE non-human capital assets paid for with the FUTURE earnings of the investments in our technological future?

The conclusions should surprise no one who is conscious and who has even causally observed the constant shift to non-human productive inputs in the manufacturing, distribution, and sales of products, as well as the delivery of services, that has been occurring during their lifetime. The first burst of this phenomena was the Industrial Revolution. But now we are in an age of technology sophistication that is permeating every sector of industry and our day-to-day lives.

There’s nothing new about machines replacing people, but the rate of replacement is exponential and the result is that productivity gains lead to more wealth for the OWNERS of the non-human factor of production, but for others who have always been dependent on jobs as their source of income, there has been a steady decline to poverty-level labor incomes.

What must be understood (which unfortunately is not understood by conventional economists) is that there are two independent factors of production––human or labor workers and non-human or physical productive capital––productive land, structures, machines, super-automation, robotics, digital computerized operations, etc.

Fundamentally, economic value is created through human and non-human contributions.

Also what needs to be understood is that human productivity has not advanced (our human abilities are limited by physical strength and brain power––and relatively constant), but that the productiveness of the non-human factor of production––productive capital––is the reason that private sector corporations, majority owned by the “1 percent,” are utilizing the non-human factor of production increasingly to create efficiencies and save labor costs. It is the function of technology to save labor from toil and to enable us to do things that otherwise is humanly impossible without non-human input.

The critical question becomes who should OWN productive capital? The issue of OWNERSHIP is unbelievably overlooked by those in academia and politics, as well as by the author of the MIT Technology Review article. Yet we live in country founded upon private property rights.

Today, large streams of data, coupled with statistical analysis and sophisticated algorithms, are rapidly gaining importance in almost every field of science, politics, journalism, and much more. What does this mean for the future of work?

But what about China and Asia, the place where all the manufacturing jobs are supposedly going? True, China has added manufacturing jobs over the past 15 years. But now it is beginning its shift to super-robotic automation. Foxconn, which manufactures the iPhone and many other consumer electronics and is China’s largest private employer, has plans to install over a million manufacturing robots within three years. Thus, in reality off-shoring of manufacturing will eventually be replaced by human-intelligent super-robotic automation.

The pursuit for lower and lower cost production that relies on slave wage labor will eventually run out of places to chase. Eventually, “rich” countries, whose productive capital capability is owned by its citizens, will be forced to “re-shore” manufacturing capacity, and result in ever-cheaper robotic manufacturing.

“The era we’re in is one in which the scope of tasks that can be automated is increasing rapidly, and in areas where we used to think those were our best skills, things that require thinking,” says David Autor, a labor economist at Massachusetts Institute of Technology.

Businesses are spending more on technology now because they spent so little during the recession. Yet total capital expenditures are still barely running ahead of replacement costs. “Most of the investment we’re seeing is simply replacing worn-out stuff,” says economist Paul Ashworth of Capital Economics.

Yet, while the problem is one that no one can no longer ignore, the solution also is one starring them in the face but they just can’t see the simplicity of it.

The fundamental challenge to be solved is how do we reinvent and redesign our economic institutions to keep pace with job destroying and labor devaluing technological innovation and invention so not all of the benefits of OWNING FUTURE productive capacity accrues to today’s wealthy 1 percent ownership class, and ownership is broadened so that EVERY American earns income through stock OWNERSHIP dividends so they can afford to purchase the products and services produced by the economy.

None of this is new from a macro-economic viewpoint as productive capital is increasingly the source of the world’s economic growth. The role of physical productive capital is to do ever more of the work of producing more products and services, which produces income to its owners. Full employment is not an objective of businesses. Companies strive to keep labor input and other costs at a minimum. Private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical productive capital’s ever increasing role. Over the past century there has been an ever-accelerating shift to productive capital––which reflects tectonic shifts in the technologies of production. The mixture of labor worker input and capital worker input has been rapidly changing at an exponential rate of increase for over 235 years in step with the Industrial Revolution (starting in 1776) and had even been changing long before that with man’s discovery of the first tools, but at a much slower rate. Up until the close of the nineteenth century, the United States remained a working democracy, with the production of products and services dependent on labor worker input. When the American Industrial Revolution began and subsequent technological advance amplified the productive power of non-human capital, plutocratic finance channeled its ownership into fewer and fewer hands, as we continue to witness today with government by the wealthy evidenced at all levels.

People invented tools to reduce toil, enable otherwise impossible production, create new highly automated industries, and significantly change the way in which products and services are produced from labor intensive to capital intensive––the core function of technological invention. Binary economist Louis Kelso attributed most changes in the productive capacity of the world since the beginning of the Industrial Revolution to technological improvements in our capital assets, and a relatively diminishing proportion to human labor. Capital, in Kelso’s terms, does not “enhance” labor productivity (labor’s ability to produce economic goods). In fact, the opposite is true. It makes many forms of labor unnecessary. Because of this undeniable fact, Kelso asserted that, “free-market forces no longer establish the ‘value’ of labor. Instead, the price of labor is artificially elevated by government through minimum wage legislation, overtime laws, and collective bargaining legislation or by government employment and government subsidization of private employment solely to increase consumer income.”

Furthermore, according to Kelso, productive capital is increasingly the source of the world’s economic growth and, therefore, should become the source of added property ownership incomes for all. Kelso postulated that if both labor and capital are interdependent factors of production, and if capital’s proportionate contributions are increasing relative to that of labor, then equality of opportunity and economic justice demands that the right to property (and access to the means of acquiring and possessing property) must in justice be extended to all. Yet, sadly, the American people and its leaders still pretend to believe that labor is becoming more productive.

The 400 wealthiest Americans and the other 1 to 10 percent richest Americans are rich because they OWN wealth-creating, income-generating productive capital assets. The disenfranchised poor and working and middle class are propertyless in terms of OWNING productive capital assets.

Because productive capital is increasingly the source of the world’s economic growth, shouldn’t we be asking the question why is not productive capital the source of added property OWNERSHIP incomes for all? Why are we not addressing how the system facilitates greed capitalism and envy while concentrating productive capital OWNERSHIP among the 1 to 10 percent of the population?

The change that is necessary is to reform the system to provide equal opportunity for EVERY American to acquire wealth-creating, income-generating productive capital assets on the basis that the investments will pay for themselves––and on the same terms that the wealthy OWNERSHIP class now utilizes. They are able to use the investment’s earnings to pay off the capital credit loans used to finance their investments, without having to use their own money or deny themselves consumption.

A National Right To Capital Ownership Bill that restores the American dream should be advocated by the progressive movement, which addresses the reality of Americans facing job opportunity deterioration and devaluation due to tectonic shifts in the technologies of production.

There is a solution, which will result in double-digit economic growth and simultaneously broaden private, individual OWNERSHIP so that EVERY American’s income significantly grows, providing the means to support themselves and their families with an affluent lifestyle. The Just Third Way Master Plan for America’s future is published at http://foreconomicjustice.org/?p=5797.

The solution is obvious but our leaders, academia, conventional economist and the media are oblivious to the necessity to broaden OWNERSHIP in the new capital formation of the future simultaneously with the growth of the economy, which then becomes self-propelled as increasingly more Americans accumulate OWNERSHIP shares and earn a new source of dividend income derived from their capital OWNERSHIP in the “machines” that are replacing them or devaluing their labor value.

The solution will require the reform of the Federal Reserve Bank to create new OWNERS of FUTURE productive capital investment in businesses simultaneously with the growth of the economy. The solution to broadening private, individual OWNERSHIP of America’s FUTURE capital wealth requires that the Federal Reserve stop monetizing unproductive debt, including bailouts of banks “too big to fail” and Wall Street derivatives speculators, and begin creating an asset-backed currency that could enable every child, woman, and man to establish a Capital Homestead Account or “CHA” (a super-IRA or asset tax-shelter for citizens) at their local bank to acquire a growing dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income. Policies need to insert American citizens into the low or no-interest investment money loop to enable non- and undercapitalized Americans, including the working class and poor, to build wealth and become “customers with money.” The proposed Capital Homestead Act would produce this result.

Through Just Third Way reforms, economic growth would be freed from the slavery of past savings (“old money”), while creating a domestic source of new asset-backed, interest-free (but not cost free) money and expanded bank credit to finance new capital repayable out of future savings (earnings). To ensure that OWNERSHIP of future private sector growth and newly created wealth is universally accessible to every citizen, such newly created money and credit would only be available through economic democratization vehicles, administered through the competitive member banks of a well-regulated Federal Reserve central banking system.

Under the first tier, future increases in the money supply (“new money”) would be linked to actual growth of the economy’s productive assets, creating new OWNERS of new capital asset wealth through widespread access to interest-free capital credit repayable with future profits. The Federal Reserve would create (i.e., “monetize”) interest-free credit, with lenders adding their normal markup as service fees above the cost of money. This would establish an unsubsidized minimal rate for financing technological growth. This would provide the public with a currency backed by increasingly more efficient instruments of production, real wealth-producing capital assets, rather than unsustainable government debt.The creation of new money and credit would be non-inflationary and would simultaneously broaden purchasing power throughout the economy. To accomplish this, a key reform is a two-tiered interest policy by the Federal Reserve that would distinguish between productive and non-productive uses of credit.

The second tier would allow substantially higher, market-determined interest rates for non-productive purposes, for which “past savings” would remain available. The Federal Reserve would be restrained from future monetization of national deficits or encouraging other forms of non-productive uses of credit, causing upper-tier credit to seek out already accumulated savings at market rates.

Capital Homesteading would also provide through capital credit insurance a rational way to deal with risk, as well as an additional check on the quality of loans being supported by the Federal Reserve. Capital credit insurance and reinsurance policies would offset the risk that the enterprises issuing new shares on credit might fail to repay the loans. Such capital credit default insurance would substitute for collateral demanded by most lenders to cover the risk of non-payment, thus enabling the poor and others with few assets to overcome the collateralization barrier that excludes poor people from access to productive credit.

Support the Capital Homestead Act (aka Economic Democracy 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/http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/.See the article “The Absent Conversation: Who Should Own America?” published by The Huffington Post at http://www.huffingtonpost.com/gary-reber/who-should-own-america_b_2040592.html and by OpEd News at http://www.opednews.com/articles/THE-Absent-Conversation–by-Gary-Reber-130429-498.html.

Support Monetary Justice at http://capitalhomestead.org/page/monetary-justice.

Also see “The Path To Eradicating Poverty In America” at http://www.huffingtonpost.com/gary-reber/the-path-to-eradicating-p_b_3017072.html and “The Path To Sustainable Economic Growth” at http://www.huffingtonpost.com/gary-reber/sustainable-economic-growth_b_3141721.html. And also “Second Income Plan” at http://www.huffingtonpost.com/gary-reber/second-income-plan_b_3625319.html

Also see the article entitled “The Solution To America’s Economic Decline” at http://www.foreconomicjustice.org/9206/financing-future…economic-decline and “Education Is Critical To Our Future Societal Development” at http://www.foreconomicjustice.org/?p=9058. And also “Achieving The Green Economy” at http://foreconomicjustice.org/?p=9082.

Also see “Financing Economic Growth With ‘FUTURE SAVINGS’: Solutions To Protect America From Economic Decline” at http://www.foreconomicjustice.org/9206/financing-future…economic-decline and “The Income Solution To Slow Private Sector Job Growth” at http://www.foreconomicjustice.org/9872/the-income-solut…ector-job-growth.