Re: Kurland v. Turnbull

[OWNCO@aol.com]

Dear Tom,

Thank you for your kind comments on the debate I'm having with Shann.  I'm 
glad that he's finally admitting after 25 years that he doesn't agree with 
binary economics, the heart of the Kelso paradigm.  Now I'm trying to get 
Shann to debate me openly on the Kelso paradigm so that he can say precisely 
why Kelso is wrong and then articulate clearly what paradign he thinks is 
superior to that of Kelso for democratizing capital and economically 
empowering the people.  Would you be interested in joining a new COG 
discussion group on A New Paradigm for the New Milleniu?  Several other 
people have indicated an interest in that subject, a subject which affects 
all the other discussion groups.

Regarding your question of what a state government can do to encourage the 
democratization of capital and economic empowerment of the people, let me 
make a few suggestions:

1.  Fund a few independent broadly-representative citizen task forces and an 
interdisciplinary study group at the University of Hawaii to study and 
critique the book, "Binary Economics: The New Paradigm" by Robert Ashford and 
Rodney Shakespeare.  (Click on  <A 
HREF="http://www.cesj.org/binary_economics/binary_econ_review-nk.html";>Review 
of Binary Economics</A> )

2.  Following that or concurrently with that encourage these groups to visit 
the CESJ web site to read a number of key papers on Third Way policy, 
starting with  <A 
HREF="http://www.cesj.org/history/economicjustice-defined.html";>Defining 
Economic and Social Justice</A> , and proceeding to   <A 
HREF="http://www.cesj.org/homestead/cha-summary.htm";>Capital Homestead Act 
Summary of Reforms</A>  and <A 
HREF="http://www.cesj.org/07-taxjustice.html";>Beyond ESOP: Tax Justice</A> , 
then to  <A HREF="http://www.cesj.org/homestead/cha-dcinitiative.htm";>DC 
Capital Homestead Initiative</A>  and  <A 
HREF="http://www.cesj.org/homestead/cha-newbirth.htm";>DC New Birth Prison 
Project</A> .

3.  The state can adopt a policy favoring expanded capital ownership as a 
twin pillar of state economic development policy, alongside full employment 
(or preferably "full production.")  In the early 1980s we were hired as 
consultants by the State of Maryland and the State of Delaware on developing 
such a state policy (aiming at ownership by workers and consumers) and then 
Delaware Governor Pete duPont signed it into law. 

5.  In 1972 when I worked with Kelso we testified before a State Commission 
trying to address problems relating to the conversion of defense industries 
into competitive private sector entities.  Our work on privatization could 
assist a task force trying to figure out how to democratize state-owned 
utilities and service entities so that they become owned by their 
stakeholders, generally workers and regular customers.

6.  In all contracts entered into by government, the state should give 
preferential treatment for "equal ownership opportunity" companies, i.e., 
affirmative action all non-owners.  Such affirmative action can be required 
for all tax and other subsidies to the private sector.  These are good 
expedients to make a point, but they should always be implemented together 
with structural reforms that conform to the tax system advocated in  <A 
HREF="http://www.cesj.org/07-taxjustice.html";>Beyond ESOP: Tax Justice</A> .

7.  The most powerful action that the state can take is to adopt a policy in 
support of the democratization of capital credit as advocated in my paper, 
"The Federal Reserve Discount Window", which you can get from the Winter 1998 
issue of the NCEO's Journal on Employee Ownership Law and Finance or from the 
CESJ web site through  <A HREF="http://www.cesj.org/cesjsitemap.html";>CESJ 
Web Site Map</A>  (I haven't yet hyperlinked it directly.)  

8.  The state can pass a resolution addressed to the Congress, the President 
and the Board of Governors of the Federal Reserve System advocating the 
passage of a Capital Homestead Act along the lines described in  <A 
HREF="http://www.cesj.org/homestead/cha-summary.htm";>Capital Homestead Act 
Summary of Reforms</A> 

9.  The state can create a reserve fund (i.e., invest state funds or pension 
funds) for the establishment of a capital reinsurance credit corporation, 
preferably an employee-owned company, and one or more prototype 
employee-owned commercial capital credit insurance companies to insure bank 
loans to ESOPs, CSOPs, CICs, and producer and marketing coops and other 
Capital Homesteading vehicles.  

10.  Perhaps the most dramatic and politically appealing act that the state 
can undertake is to adopt legislation that would gradually transfer land 
ownership and land use policy from a tiny land-owning class and their trusts, 
or in the hands of government at any level, directly to the hands of the 
people through Community Investment Corporations (CICs) as described in 
several CESJ writings, including  <A 
HREF="http://www.cesj.org/homestead/cha-dcinitiative.htm";>DC Capital 
Homestead Initiative</A> .  (Chapter 18 of Bill Greider's book, "One World, 
Ready or Not" tells how we were going about in the District of Columbia to 
turn control over land back to the people.)  It would make every citizen into 
a shareholder of a for-profit land development corporation, staffed with 
competent professionals accountable to a democratically elected board of 
directors.  This would spread the profits and appreciated land values from 
future development to all the people to lift every worker and family out of 
the feudalistic wage system they are now in.

Well, Tom, those are some initial thoughts.  I hope you won't mind my sending 
this also out to other discussion groups, all of whom are addressing issues 
that could be helped by considering these thoughts.

All the best,

Norm Kurland
Center for Economic and Social Justice
P.O. Box 40711
Washington, D.C. 20016
Phone: 703-243-5155
Fax: 703-243-5935
E-Mail: thirdway@cesj.org
Web Site:  <A HREF="http://www.cesj.org";>CESJ Home Page</A>