HOMESTEAD: Re: OWNERSHIP: 10,000 Binarians

[Richard Stutsman <rstutsman@worldworks.org>]

Aloha, Mr. Brandt!

Thank you for your letter.

My views are very similar to yours as you stated them below. As I wrote in my 
belated reply to your earlier posting, my views regarding piecemeal social 
engineering were overstated in my reference to Alan Zundel's stated desire that 
we keep some Keynesian policies in place permanently while implementing binary 
policies. I see binary economics as a package deal and hope that we will see 
the entire package ultimately supported and implemented, which would mean the 
phasing out of Social Security (which is in trouble, anyway, I understand), the 
corporate income tax (on profits which are distributed to shareholders), and 
other growth-inhibiting and redistributive policies which are based on a 
laboristic-only distribution of purchasing power.

What I am concerned about is that we need to be careful not to work hard to get 
some piecemeal bit of binary legislation passed which turns out to be 
ineffective or counterproductive because of failure to implement other aspects 
of the system needed to make the first parts work well. So I'm being very 
general, here, without performing due diligence.

As to whether ESOPs have been beneficial toward distributing ownership, I am 
not really qualified to say. I hope that they have been, but I've read of 
several notable exceptions. Perhaps our legislators do not regret having passed 
such supportive legislation, even though ESOPs and other SOPs would work much 
better with Kelso's proposed changes to the way the Federal Reserve manages the 
money supply and the cost of credit.

Despite my lack of expertise in any area of activism (promoting political 
change), I will attempt to respond thoughtfully to the issues you raise, 
interspersed within your letter below.

On 5/17/01 at 7:16 PM -1000, Thomas Brandt wrote:
>Mr. Stutsman,
>
>Since the email from Alan Zundel you reply to below is similar to an email
>I sent you (which you didn't respond to), the following is based on your
>reply to Alan.
>
>First of all, let me state that I think a binary economy would be superior
>to any other system past or present.   And I, too, would prefer sweeping
>change to piecemeal reform.   I also tend to sympathize with those who
>think an economic crisis similar to the Great Depression is not only
>possible, but likely, and I realize that many think the crisis is already
>here.   Moreover, the very dismantling of the Keynesian welfare state and
>organized labor we are witnessing to varying degrees in the major
>post-industrial democracies may--for better or worse--increase the
>likelihood of such a crisis and the possibility of comprehensive binarian
>reforms.

My thoughts, exactly.

>But short of a major crisis (like the Great Depression), I think sweeping
>change is unlikely.    Furthermore, I don't think the majority of the
>world's populations--at least in the First World--perceive such a crisis at
>present.   And even though I agree with your eloquent summary of the
>multi-faceted global "problematique" we face (which you described in a
>recent email) and what binary economics might do about it, I think the
>lesser--informed perceptions of the bulk of humanity are greater than the
>"reality" you describe.   I think most people are pre-occupied with their
>own immediate well-being, and to the extent they think and act beyond this,
>it is primarily for the purpose of improving their own personal future
>well-being and that of their children.

Buckminster Fuller wrote in UTOPIA OR OBLIVION that he hoped mankind would soon 
stop relying on crisis management and acquire the ability to actually predict 
and forestall major crises before a crisis of such magnitude occurred which 
might doom us to oblivion. I think he hoped that we would have achieved that 
ability by now (with the help of mainframe supercomputers). That we have not, 
raises my concern.

The evidence that we have far to go in becoming self-directing as a society 
includes the complete failure of economists, think tanks, and policy makers to 
predict the recent technological boom, followed by their complete failure to 
predict its even more recent (and still occurring) bust. The Federal Reserve 
Board, which no doubt has access to the most sophisticated models and 
intelligence regarding this country's and the world's economies was still 
raising interest rates as the bubble was bursting and now can't seem to decide 
by how much to reduce the cost of credit in its attempt to reverse the slide.

Nor do economists appear to have a handle on the reasons why stock prices went 
through the roof and why these prices have been based more on their anticipated 
future prices than on each company's actual ability, present or future, to pay 
dividends.

And if the economic boom was actually financed by this speculative stock price 
bubble, then that needs to be acknowledged and addressed. A great deal of 
wealth was created (even after much of it has been lost) by mere optimism, it 
would seem. Does current economic thinking take all this into account?

And now we have a President who is so poorly educated that he cannot contribute 
a single original idea to his administration's policy proposals. He is totally 
dependent on his cabinet and vice president, who in turn have close ties to 
mega-corporations whose interests are often quite contrary to those of a 
democratic society interested in sound environmental management. Like President 
Reagan was, Dubya (George W.) is a script reader. But Dubya can't read! :-/

I share your perception that most people are interested only in their own 
welfare and that of their children. They have little interest in the current or 
future welfare of our society. I think we really need to get a handle on the 
causes of this extreme selfishness and obliviousness, which seem to predominate 
during times of political corruption and disenfranchisement. Why are so few 
people today (at least in the U.S.) interested in perfecting our society and 
its institutions, as opposed to cynically accepting the status quo while 
burying head in sand about the future?

Regarding people's complacency, I noticed that when the Berlin Wall fell and 
the Soviet Union was collapsing, the citizens of those countries were quite 
politically active and spent much time and energy discussing amongst themselves 
how their new governments should be set up. Likewise, after the U.S.-supported 
tyrants in Haiti and Nicaragua were overthrown, electoral participation was 
quite high.

I believe that the reason most U.S. citizens seem so apathetic about politics 
and about government policy is because they sense (though most cannot quite put 
their fingers on the problem) that they truly have no voice in government. By 
the time they get to the polling place (if they even bother to vote), the 
intelligent candidates who could have spoken for their interests in government 
have already been weeded out by the pro-corporate filter we call "the media" 
and by the two major political party machines.

Until we get campaign finance reform (which itself would have to pass corporate 
muster, these days) I believe we have little hope of getting people to be 
interested in thinking about which government policies would be better for 
their grandchildren's future. With the entertainment news media's help we find 
ourselves more interested in the lives of our favorite sports heros, soap opera 
stars, suspected criminals, and real people in fake situations ("reality TV"), 
than we do our own lives or the lives of the next generation in the real world.

Noam Chomsky was asked in an interview by James Peck (CHOMSKY READER, Pantheon 
Books, 1987, p. 33), "If you are not able to participate in the political 
system in meaningful ways, if you are reduced to the role of a passive 
spectator, then what kind of knowledge do you have? How can common sense emerge 
in this context?" Here was part of Noam's reply.

"Well, let me give an example. When I'm driving, I sometimes turn on the radio 
and I find very often that what I'm listening to is a discussion of sports. 
These are telephone conversations. People call in and have long and intricate 
discussions, and it's plain that quite a high degree of thought and analysis is 
going into that. People know a tremendous amount. They know all sorts of 
complicated details and enter into far-reaching discussion about whether the 
coach made the right decision yesterday and so on. These are ordinary people, 
not professionals, who are applying their intelligence and analytic skills in 
these areas and accumulating quite a lot of knowledge and, for all I know, 
understanding. On the other hand, when I hear people talk about, say, 
international affairs or domestic problems, it's at a level of superficiality 
which is beyond belief. ...

"The way the system is set up, there is virtually nothing people can do anyway, 
without a degree of organization that's far beyond anything that exists now, to 
influence the real world. They might as well live in a fantasy world, and 
that's in fact what they do. I'm sure they are using their common sense and 
intellectual skills, but in an area which has no meaning and probably thrives 
because it has no meaning, as a displacement from the serious problems which 
one cannot influence and affect because the power happens to lie elsewhere.

"Now it seems to me that the same intellectual skill and capacity for 
understanding and for accumulating evidence and gaining information and 
thinking through problems could be used - would be used - under different 
systems of governance which involve popular participation in important 
decision-making, in areas that really matter to human life."

Note: My venom directed at "corporations" is really directed at their 
billionaire owners and the system which foments such concentrations of 
ownership. Unfortunately, I fear that the "system" - Robert Heilbroner's 
"capitalist regime" - may be quite resistant to major change in its 
machinations with regard to concentrated capital ownership.

Noam Chomsky has well documented how our country's intellectuals mostly serve 
to preserve the status quo and their own important status as advisors and 
managers of the welfare state. In my opinion Chomsky and Fuller are two of the 
few "intellectuals" whose early education was devoid of the usual cultural and 
"patriotic" indoctrination and regimentation and are therefore capable of 
seeing what the rest of us have difficulty seeing - that the emperor is wearing 
no clothes.

>I realize that binary economics can be presented to appeal directly to the
>self-interest of individuals and their families I described above, as well
>as a solution to the problems of humanity at large.    In fact, I've done
>the former in my own writing on this subject (including a very recent
>letter to the editor of my local paper about COG alternatives to the
>British "baby bond" proposal).   But my question to you is similar to one I
>recently posted to the COG: Ownership group, i.e. what political strategy
>for broadening capital ownership do you think binarians and non-binarians
>can agree upon, bearing in mind piecemeal reform may be the only
>politically feasible option short of such a crisis?

I'm the wrong person to ask, especially in light of the debacle here on COG, 
for which I am at least marginally responsible. In our attempts to learn why 
bona fide economists, think tanks, and policy makers are turned off by or - 
resistant to - binary economics we managed to alienate two of the economists on 
the forum even further. But let me offer my two cents, anyhow.

I think Kelso's and Shakespeare and Ashford's books have been a great stimulus 
for reform, but too few people have or will read them, for reasons discussed 
above.

When I was a Noam Chomsky devotee (just prior to my discovery of binary 
economics) the same question was often posed to Noam: What can WE do to bring 
about social, economic, and political reform which would address and redress 
the issues of maldistribution of wealth and political corruption by corporate 
interests? (It has never occurred to Chomsky that distributed capital ownership 
via capital finance reform might be a viable and workable alternative to the 
anarcho-syndicalism and "libertarian socialism" that he endorses.) His answer 
was always so vague that I can't even remember what it was, exactly. It 
involved doing what he was doing - exposing the realities of our system to 
public scrutiny - while recognizing that such efforts will be effectively 
marginalized by the "capitalist regime" (my words per Heilbroner, not 
Chomsky's). He seems very fatalistic about our future.

Here are Chomsky's words regarding the social sciences in this country (from an 
interview by James Peck in THE CHOMSKY READER, p. 30).

"The professional guild structure in the social sciences, I think, has often 
served as a marvelous device for protecting them from insight and 
understanding, for filtering out people who raise unacceptable questions, for 
limiting research - not by force, but by all sorts of more subtle means - to 
questions that are not threatening. Take a look at any society, I'm convinced, 
and you'll find that where there is a more or less professionalized guild of 
people who inquire into the social process, there will be certain topics that 
they will be very reluctant to investigate. There will be striking taboos on 
what they will study. In particular, one of the things that they are very 
unlikely to study is the way power is actually exercised in their own society, 
or their own relationship to that power. These are topics that won't be 
understood, won't be studied."

>More specifically, I'd like to know what you think Norm and Shann's army of
>10,000 (if it ever materializes) can and should do other than to continue
>to debate their differences?  Based on the amount of thought I've put into
>it so far, I don't think 10,000 advocates could do much more than write
>letters to their political representatives and newspaper editors,
>participate in Internet chat groups, and speak to their fellow citizens in
>any forum possible.  While I don't think that would be insignificant, I
>think such a group would still lack the votes and financial clout necessary
>to lobby for major policy changes.  Even if binarians could get another
>Russell Long elected to the U.S. Congress, or another Abraham Lincoln
>elected president, could he or she single-handedly convince the nation to
>make all the changes seen as essential by binarians?  Maybe, but short of
>a crisis, I wouldn't bet on it.

I was going to say "I have no ideas on how to effectively 'evangelize' binary 
economics to the people that matter." But as I was about to write that, I had 
an inspiration.

Have you ever received one of those chain e-mails that contain insightful or 
thoughtful gems and which asks you to pass it on? I've received several - 
perhaps a dozen - in the 7 years I've been "on the Internet". I'm not talking 
about the randomly addressed spam (junk e-mail), but letters which were passed 
on to you by a friend or acquaintance. The successful ones appear to make the 
rounds to nearly everybody in the country (and possibly in the English-speaking 
world) who has an e-mail account. Some of these letters have acquired the 
status of "e-mail virus", because they have made the rounds multiple times, 
such as the one about the chocolate chip recipe for a well-known department 
store chain. (The store wanted hundreds of dollars to provide a customer with 
the recipe, and the customer purchased it and was using his e-mail message to 
get even with the store by publicizing the recipe. The story turned out to be 
quite false, and it now has the status of an urban myth, but it was compelling 
and continues to make the rounds.)

What if one of us (or a group of us) were to compose a cute letter promoting 
binary economics, or more generally, distributed capital ownership, which was 
written in such a way as to be very readable and interest-provoking. It would 
have to be written to "make you think" about possibilities you may never have 
had reasons to entertain with regard to capital ownership, such as the fact 
that nobody seems to think it's very important, and then explain how important 
it might actually be (blah, blah, blah). If the letter were compelling, it 
would get passed around. If it succeeds, as many such letters have, it might be 
read by as many as 50 million people. Now that would raise the awareness of the 
importance of capital ownership like nothing else could! Then our fearless 
political leaders and the various think tanks would have to take notice. And if 
the letter contained a URL to a supportive site with articles and suggested 
reading, Rodney and Robert's book might become a best seller!

Whew!

>For all of these reasons, this is why I've suggested in the past that Norm
>try to get the attention of organzations that have more clout and which
>might see binary economics in their own best interests, e.g. the American
>Association of Retired Persons, because I think the need for Social
>Security reform is the closest thing perceived as such a crisis at present
>in the U.S. (but also in other post-industrial democracies, all of which
>have aging populations putting more pressure on their versions of Soc Sec).
>Other than that, I think the best thing binarians might do on the national
>level is to lobby for campaign finance reform first, because short of
>another Great Depression, I don't see any way to cobble together the kind
>of coalition necessary to enact binary changes as a package (unless, for
>example, binarians can form alliances not only with groups opposed to
>privatizing Social Security, but with flat tax and fixed interest rate
>advocates as well) which could overcome the power of those with a vested
>interest in the status-quo.   (Binarian advocacy of more progressive
>inheritance taxes would also be an uphill battle at present.)

I believe the AARP used to be quite militant. Weren't they the original "Gray 
Panthers"? Now they are quite tame. In any case, it would be nice if a good 
article about binary economics were to appear in their monthly periodical 
(which I receive in the mail regularly but never read). That could be a step in 
the door toward active lobbying for binary legislation by that organization.

You've already read my views on campaign finance reform. It might take wider 
distribution of books like Jeff Gates' DEMOCRACY AT RISK and THE OWNERSHIP 
SOLUTION (and some of Ralph Nader's publications) to get that point across. 
Once the vast majority of voters understand what's at stake (their children's 
future, not to mention their own retirement), perhaps the pundits, spinners, 
and party hacks will just have to do it right. Maybe another chain e-mail 
letter would be in order! :-)

>As a result, I have to agree with those who think that piecemeal reform on
>the international, national, and subnational levels is not only more
>feasible at present, but not nearly as useless as you feel.   For example,
>I agree with those in COG who feel that much could be done in each state to
>increase and improve the number of ESOPs and OTCs, and then--if and when a
>critical mass is achieved--to form intra- and/or inter-state Mondragon or
>labor union-type mutual support organizations, which could include their
>own banks and the creation of mutual funds to pool employee-owned (and
>other local stakeholder-owned) stock to spread risk.

I'll have to think about that. I too have read a bit about the Mondragon 
cooperatives, but I'm not certain how compatible that paradigm is with binary 
economics. Also, I suspect that it requires a certain cultural mindset 
(anarchist) which is far more prevalent in the Basque region of Spain than in 
the U.S. or most other countries.

>However, if you feel more can be done to promote binary reforms as a
>package on the national level, I would like to be persuaded.   So please
>let me know if and how you disagree if you see fit.  I also welcome the
>comments and criticisms of anyone else who is motivated to respond.

Certainly I agree with the idea of promoting local and state-wide legislation 
which might serve as positive models of what might be possible nationally. 
Again, this is not my area of expertise. My opinion is no more informed than 
that of potentially millions of informed laymen. Perhaps a study of how past 
reform movements of various kinds succeeded is in order.

Mahalo!


>                    Richard 
>Stutsman                                                 
>                    <rstutsman@worldwo        To:     
>ownership@cog.kent.edu         
>                    rks.org>                  cc:     
>ownership@cog.kent.edu         
>                    Sent by:                  Subject:     Re: OWNERSHIP: 
>Utopia or  
>                    owner-ownership@co        Oblivion? Binary or 
>Malthusian         
>                    g.kent.edu                
>Economics?                             
> 
>                                                                                    
> 
>                                                                                    
>                    05/16/01 03:44 
>AM                                                
>                    Please respond 
>to                                                
>                    
>ownership                                                        
> 
>                                                                                    
> 
>                                                                                    
>
>
>
>
>On 5/15/01 at 9:09 PM -0400, IPGmail@aol.com wrote:
>>In a message dated 5/15/01 rstutsman@worldworks.org writes:
>>
>>> As for Alan Zundel, if you think you can mix Keynesian economics with
>binary
>>> economics, I urge you to think again. The two are mutually incompatible,
>and
>>> the implementation of either set of prescriptions would undermine those
>of
>>> the other. You either distribute capital according to libertarian
>principles
>>> (free market with a level playing field), or you confiscate some
>people's
>>> wealth and give it to others while pretending that labor "earns" 70
>percent
>>> of the total output.
>>
>>Real markets combine free market principles with some degree of
>>redistribution, so obviously it is not impossible.
>
>I assume you are implying that our "mixed economy" is working
>satisfactorily? I would disagree. We may be complacent about the status quo
>only by ignoring (or being ignorant of) the much better possibilities.
>
>>Leveraged ESOPs currently
>>use credit to broaden ownership, and the presence of non-binarian policies
>>doesn't stop them.
>
>The presence of non-binarian policies does stop ESOPs from effectively
>broadening ownership, doesn't it? Ownership is most often broadened only
>temporarily, and often at the expense of diluting existing shares, as
>others have pointed out. Until we get interest-free or low-interest
>financing of binary capital expansion on a grand scale with the cooperation
>of the Federal Reserve (or some alternative money system), we will not see
>any significant broadening of capital ownership, and we will have little
>hope of being able to abandon social security and redistributive policies
>which many, of not most, people see has "unfree" and coercive, and as
>undermining the institution of property rights.
>
>>If you would give some reasons for your assertion, I
>>would think about them.  Otherwise, you haven't given me much to think
>about.
>
>In addition to the effect of redistribution on undermining the property
>rights that would be essential in assuring the possibility that the income
>from broad capital ownership could sustain retirees and free most people up
>from a life of drudgery (working too hard and for too long producing
>surplus goods and wasteful military hardware), limiting most companies
>methods of financing growth to borrowing from banks or reinvesting profits
>would further reduce the rate of transition to wide ownership as well as
>the amount income such capital could provide to its owners.
>
>That's why I believe that binary economics must be considered as a package
>deal. The implementation of any one binary prescription would be
>ineffective and counterproductive without all the others.
>
>Remember that the New Deal was also pretty much a package deal. Most of it
>was implemented by a single Presidential administration. I believe the
>minimum wage laws came later.
>
>I have concurred with Karl Popper that "piecemeal social engineering" is
>safer and more likely to "work" than utopian revolution (as happened in the
>Soviet Union under Stalin and Lenin and in China under Mao Tse Tung). Yet
>in this case I can see where piecemeal implementation of binary
>prescriptions, as begun in the 1970s with ESOPs, has not been a success and
>has undermined the impetus for implementing the rest of the program. It has
>not been a success for the reasons I outlined above. ESOP legislation has
>been used and abused for purposes other than distribution wider permanent
>ownership as often as not, and without the implementation of a two-tiered
>interest rate (the lower rate for binary capital expansion), the ESOP
>demonstration has not been a success.
>
><<Richard>>
>--
>Richard A. Stutsman, Director
>WorldWorks Symposium: An inquiry into how the world works
>URL <http://www.worldworks.org>

-- 
Richard A. Stutsman, Director
WorldWorks Symposium: An inquiry into how the world works
URL <http://www.worldworks.org>