As the president, Senate and Congressional elections in the United States near the Nov. 6 ballot date, it is evident that none of the candidates speak of a vision for a future system of economic democracy based on equality of opportunity for every person to become an owner of productive capital. This is particularly of importance for the person elected to the presidency, as the President of the United States has the national stage at his or her disposal to espouse targeted leadership. As you read this article, the intent is to query "Who should own America?" going forward.
Why the focus on "productive capital?" Physical capital is non-human "things" owned by people used to produce products and services (productive land, resources, structures, infrastructure, tools, machines, super-automation, robotics, digital computerized processing and operations, etc. and certain intangibles that have the characteristics of property such as patents and trade names). Real physical capital isn't money; it is measured in money (financial capital), but it is really producing power and earning power through ownership of the non-human factor of production. In the law, property is the bundle of rights that determines one's relationship to things.
The reality which is ignored in our political discussions and even by conventional economists and the media is that 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. The ownership of productive capital is the source of wealth and income for the richest Americans -- not a job.
Businesses, whether small or large, or sole proprietors, partnerships, or business corporations are formed to provide products and services at a profit. Their success or failure is dependent on whether or not there are "customers with money."
Unfortunately, politicians, economists and the media focus on job creation as the only way to create "customers with money" and provide a source of income for peoples' livelihood. Yet the demand for people (labor workers who contribute manual, intellectual, creative and entrepreneurial work) is being made less necessary as productive capital is increasingly the source of the world's economic growth. What should we conclude from this assessment of reality? Well, simply that if both labor and productive 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.
The role of physical capital is to do ever more of the work, which produces income to the business owners. Full employment is not an objective of businesses. Companies strive to keep labor input and other costs at a minimum in order to maximize profit. Private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical capital's ever increasing role.
The function of research and technology is to invent 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 innovation and invention. Technological change makes tools, machines, structures, and processes ever more productive while leaving human productiveness largely unchanged (our human abilities are limited by physical strength and brain power -- and relatively constant).
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.
What we really need in this 2012 presidential election year is a national discussion on the topic of the importance of productive capital ownership and how we can expand the base of private productive capital ownership simultaneously with the creation of new productive capital formation, with the aim of building long-term financial security for all Americans through accumulating a viable income-producing capital estate.
If we are to significantly expand the population of "customers with money" and significantly grow the economy, then the ownership of productive capital must be spread more broadly and simultaneously with the growth, without taking anything away from the 1 to 10 percent of the people who now own 50 to 90 percent of the wealth controlled by businesses. Thus, productive capital income would be distributed more broadly and the demand for products and services would be distributed more broadly from the earnings of capital and result in the sustentation of consumer demand, which will promote economic growth. That also means that society can profitably employ unused productive capacity and invest in more productive capacity to service the demands of a growth economy.
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 full production and broader productive capital ownership accumulation resulting from ownership creation. This is manifested in the misguided belief that labor work is the only way to participate in production and earn income.
Thus, when politicians advocate taxpayer money spending to stimulate industry development, there needs to be a conscious policy to broaden private, individual ownership in the companies benefiting from the stimulus -- not just argue the justification for taxation redistribution and further national debt based on how many jobs would result. We also need to incentivize business corporations to pay out all their profits as taxable personal incomes to avoid paying corporate income taxes and to finance their growth by issuing new full dividend payout shares for broad-based citizen ownership.
To accomplish this we must ensure that future economic growth be financed to create new owners of expanding existing and future businesses to ensure that the consumer populous is able to get the money to buy the products and services produced as a result of substituting "machines" for people.
But how can we accomplish this goal of creating new owners of future productive capital investment simultaneously with the growth of the economy?
The solution 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 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. 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." That's what the Capital Homestead Act addresses.
The "Capital Homesteading" concept is the direction America needs to take to build an OWNERSHIP CULTURE and ensure a balance between production and consumption.