On August 30 2013, Elise Gould writes:
In honor of Labor Day, we made a little tool––based on our project inequality.is––that shows how much you would be making if wages had kept pace with productivity, a key indicator of an economy working for all.
Economic inequality is a real and growing problem in America. Since the 1979, workers are working more, making more goods, and not reaping the rewards of their increased productivity. Instead, CEOs and executives—the top 1% of earners—now take home 20% of the nation’s income.
But it doesn’t have to be like this. Growing inequality isn’t an inevitability—it was created. It’s the result of intentional policy decisions on taxes, trade, labor, and financial regulation. But that’s the good news: if inequality is not inevitable, then it can be fixed.
Take a look, and share with your friends. And remember that American workers should be earning more than we are. To do something about it, visit inequality.is.
What should you be making?
American’s wages have lagged further and further behind productivity gains since the late 1970s, but it wasn’t always this way. After World War II, our pay rose with productivity—the more we made, the more we were paid. Today, the gap between American workers’ productivity and their wages is at an all-time high. What could you be making if wages had grown with productivity?
The problem with this analysis is that productivity gains are attributed to human labor input when in reality it is the non-human means of production––productive capital assets––that are responsible for the increased productiveness in the production of products and services.
Binary economist Louis Kelso was quoted as saying, “Conventional wisdom says there is only one way to earn a living, and that’s to work. Conventional wisdom effectively treats capital (land, structures, machines, and the like) as though it were a kind of holy water that, sprinkled on or about labor, makes it more productive. Thus, if you have a thousand people working in a factory and you increase the design and power of the machinery so that one hundred men can now do what a thousand did before, conventional wisdom says, ‘Voila! The productivity of the labor has gone up 900 percent!’ I say ‘hogwash.’ All you’ve done is wipe out 90 percent of the jobs, and even the remaining ten percent are probably sitting around pushing buttons. What the economy needs is a way of legitimately getting capital ownership into the hands of the people who now don’t have it.”
Few in academia and in the political arena understand the problem that tectonic shifts in the technologies of production present, as these shifts are destroying jobs and devaluing the worth of human labor. Most solutions put forth are based on the redistribution of private property rights to extract a tax to provide “greater wage income” and/or “forms of guaranteed welfare support income and services” to every citizen.
Capitalism in America is based on the true premise that the right to property is absolute, and the false premise that the rights of property are also absolute. For its part, socialism is based on the false premises that the right to property is not absolute, and that the rights of property may be defined in a way that removes the absolute character of the right to property––as in the extraction of the earnings of property for the purpose of redistribution.
Thus, whether a society permits private ownership, even universal private ownership, it remains socialist if the State or the community retains the right to deprive someone of his or her ownership — including the fruits of ownership consisting of control and the receipt of all or partial income attributable to whatever is owned — at the will of the State, a majority of the citizens, or for any other reason without just cause or due process, or in any way that denies that every person has the natural right to be an owner.
The effect of abolishing the absolute character of the right to be an owner, inherent in every human being by nature itself, is to make all natural rights insecure, that is, alienable. This changes the character of the natural law itself. By making any natural right insecure, all natural rights become insecure.
A society may “permit” private ownership — but that is precisely the trouble. It permits private ownership. It does not recognize and protect it as an inalienable, absolute right. This constitutes the abolition of private property as a natural right, and is the essence of socialism.
As my colleague Michael D. Greaney at the Center for Economic and Social Justice (www.cesj.org) states: “The basis of society itself is shifted from a theory of law based on reason, to a theory of law based on private interpretation of something those with power accept as the will of a god, whether explicitly or implicitly, and whether actually divine, or a manmade creation with immense power, such as Hobbes’s characterization of the State as a ‘Mortall God.’”
America has tried the Republican “cut spending, cut taxes, and cut ‘entitlements’” and the Democrat “protect ‘entitlements,’ provide tax-payer supported stimulus, lower middle and working class taxes, tax the rich and redistribute” 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.
The guarantee income proposal is yet another scheme that uses redistribution of the earnings of the productive sector to provide the source of income to those who are propertyless or under-capitalized, and solely dependent on jobs, welfare or charity for basic living.
Some conservative thinkers have acknowledged the damaging results of capitalism, based on 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.
Unfortunately, pursuing democratic capitalism has been frustrated by the systemic concentration of economic power and exclusionary access to future capital credit to the advantage of the wealthiest Americans. The so-called 1 percent rulers of corporations have rigged the financial system to enable this already rich ownership class to systematically further enrich themselves as capital formation occurs and technological industrialization spreads throughout the world, leaving behind the 99 percent to depend on income redistribution through make work “full employment” policies, government boondoggles, excessive military build-up and dependence on arms production and sales, and social welfare programs due to the lack of an alternative to full employment and the growing economic helplessness and dependency. The unsatisfied needs and wants of society are not in that 1 percent or for that matter the 5 percent; those people are not the ones who are hurting.
Once the national economic policy bases policy decisions on two-factor binary economics1, productive capital acquisition would take place through commercially insured interest-free capital credit, resulting in a quiet revolution in which economic plutocracy will transform to economic democracy. As for redistribution, there should be a substitute for inheritance and gift taxes––a transfer tax imposed on the recipients whose holdings exceeded $1 million, thus encouraging the super-rich to spread out their monopoly-sized estates to all members of their family, friends, servants and workers who helped create their fortunes, teachers, health workers, police, other public servants, military veterans, artists, the poor and the disabled.
The Federal Reserve needs to stop monetizing unproductive debt, and begin creating an asset-backed currency that could enable every man, woman and child 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, but would not require citizens to reduce their funds for consumption to purchase shares.
The end result is that citizens would become empowered as owners to meet their own consumption needs and government would become more dependent on economically independent citizens, thus reversing current global trends where all citizens will eventually become dependent for their economic well-being on our only legitimate monopoly –– the State –– and whatever elite controls the coercive powers of government.
See “Financing Economic Growth With ‘FUTURE SAVINGS’: Solutions To Protect America From Economic Decline” at NationOfChange.org http://www.nationofchange.org/financing-future-economic-growth-future-savings-solutions-protect-america-economic-decline-137450624