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Peoples’ Capitalism A Plan for Prosperity and Economic Justice

Peoples’ Capitalism A Plan for Prosperity and Economic Justice. James S. Albus, Ph. D. http://www.JamesAlbus.org. A Fundamental Question. Why does poverty exist in a world of plenty?. Modern technology has the capacity to produce enough

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Peoples’ Capitalism A Plan for Prosperity and Economic Justice

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  1. Peoples’ Capitalism A Plan for Prosperity and Economic Justice James S. Albus, Ph. D. http://www.JamesAlbus.org

  2. A Fundamental Question Why does poverty exist in a world of plenty? Modern technology has the capacity to produce enough goods and services for everyone to have a healthy diet, a decent place to live, good medical care, and a good education Walk into any mall or supermarket, the shelves are stuffed with products in attractive packages Manufacturers would gladly produce more -- if only there were more customers

  3. What is the Problem? For business, the problem is NOT in producing goods & services -- but in attracting customers For consumers, the problem is NOT that they are without need -- the world is filled with people that need more food, better housing, better medical care, better education 2,800,000,000 people live on less than $2 per day This is a vast untapped market These are potential customers! The problem lies in the distribution of income

  4. Causes of the Problem Are: • For most people, income is derived from sale • of labor and intellectual skills • Wages and salaries are costs to be minimized • Globalization produces a race to the bottom • Modern technology reduces need for labor • Economic growth is far below its potential • Monetary policy is the wrong tool for • fighting inflation • Monetary restraint limits investment & growth • 3% growth is maximum considered sustainable

  5. What is a Solution? • Make everyone a capitalist. • Provide credit for capital investment to all. • Increase the investment rate by 100% • Generate > 6% GDP growth rate • Invent a new tool for controlling inflation • Based on saving withholdings

  6. PEOPLES’ CAPITALISM The Economics of the Robot Revolution James S. Albus 1976 New World Books • What -- Issue credit to everyone for investingin productive enterprises • How much -- Double rate of capital investment • --About $6000 per capita indexed to GDP • -- Double investment in R&D • New tool – Savings accounts replace monetary restraint • for controlling inflation • Result – GDP grows at > 6% per year without inflation • --Per capita income floor risesto $1600 in 10 years • -- to $29,000 in 40 years • -- to $58,000 in 50 years For details, see“A Plan to Eliminate Poverty”at

  7. Per Capita Income Floor $60,000 Double investment 6% growth rate $50,000 50% increased investment 4.6% growth rate $40,000 50% increased investment 3% growth rate $30,000 $20,000 Assumptions: Borrow at 3% ROI = 8% Payback period = 30 years $10,000 0 10 20 30 40 50 years

  8. Financing Mechanism Federal Reserve would open discount window & issue credit to member banks who would make loans to individuals for investment in approved list of enterprises Details of how this might work can be found in -- CAPITAL HOMESTEADING For Every Citizen Norman Kurland, Dawn Brohawn, Michael Greaney 2004 Economic Justice Media See also: BINARY ECONOMICS The New Paradigm Rodney Shakespeare and Robert Ashford 1999 University Press of America

  9. Savings Accounts Purpose: To replace monetary restraint as a mechanism for controlling inflation Rational: Enables Federal Reserve to increase investment rate without fear of inflation Effect: Saving withholding rate indexed to inflation -- If inflation low, savings withholdings = 0 -- Provides powerful fast-acting feedback to stabilize prices

  10. Summary • Make everyone a capitalist. Provide • credit for capital investment to all. 2. Increase the investment rate by 100% • Use savings accounts to control inflation • Achieve sustainable economic growth > 6%

  11. Benefits • Income floor rises to $29,000 in 40 years • Poverty ceases to exist • No income ceiling • Everyone benefits from productivity gains • Jobs are plentiful • Profits are high • Welfare is unnecessary • Retirement is secure for everyone • Medical and elder care are available to all • Environmental solutions are affordable

  12. So What’s the Problem? Why don’t people see the beauty of this? Why hasn’t it been adopted? -- or introduced as legislation? -- or debated in the public forum? Good Questions If you would like to offer suggestions or join the debate E-mail me at JSAlbus@aol.com

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