Discussion in the Economics of Ownership group has so far focused on the
opening issue raised by David Ellerman—that the Kelso critique of
economics incorporates a strange and inaccurate conception of how economists
conceive and measure productivity, and especially that they underestimate the
contribution of capital. Without wishing in the slightest to divert attention
from that important and as yet unresolved question, I would like to invite some
attention, perhaps from a new group of participants, to some other issues that
come up inevitably with the suggestion that capital ownership be democratized.
In many ears this is just a euphemism for "socialized"—which has
become unfashionable to the point of turning back social programs that were won,
after decades of campaigning, in the first half of this century.
A frequent objection to providing sources of income other than wages for work
is that such programs would remove the incentive for people to be responsible
members of society—to either do productive work or to even husband
carefully the resources made available to them. In other words, extending
capital ownership rights democratically would create a society of drones. Many
economists, I suspect, would be inclined to dismiss this objection as
inconsistent with the assumption that utility maximizers are generally
interested in maximizing the means for expressing their consumptive desires. It
is therefore a question to be addressed by those with special interests in
psycho-social aspects of economizing behavior. Closely related questions are
appropriately addressed to other of the COG discussion groups. I have in mind
the Industrial Homestead and Privatization groups in particular.
What were the arguments used to justify various Homestead Acts in the
19th century? How do they apply to the industrial homesteads program
today? Any significant differences, or are they completely parallel?
Arguments for privatization in recent years have extended to social security
programs. Proponents complain that social security premiums (taxes) are invested
ineffectively (wastefully) by governments, and that if peoples’ savings
were entrusted to the financial investments industry there would be greater
economic growth of a better kind, and the average worker would get a better
return on his/her savings. What are the implications for the capital ownership
campaign?