Re: OWNERSHIP: Alaska dividend model for Iraq

["Norman G. Kurland" <thirdway@cesj.org>]

I thought this is a discussion group on ownership, not trickle-down profit
sharing, as in the politically corrupt Alaskan model.  The issue of how to
achieve widespread citizen participation in Iraqi oil profits is ultimately
a moral issue and an issue or whether economic power should be in the hands
of the mullahs, foreign owners, the state and its bureaucrats, or
democratically spread out as a right of private property in the hands
individually of every citizen.  Profit sharing that does not flow from the
ownership of capital leaves the recipients in a permanent state of economic
dependency on the whim of those in power.  That is the approach of Karl
Marx.  That's not democracy.  Here is a proposal that is based on
widespread ownership sharing that I thought everyone in this group is
implicitly in favor of.

Norm Kurland
Center for Economic and Social Justice
CESJ web site: http://www.cesj.org
Global Justice Movement web site: http://www.globaljusticemovement.org

A NEW MODEL OF NATION-BUILDING
FOR CITIZENS OF IRAQ

Executive Summary

(Center for Economic and Social Justice, updated April 11, 2003)

· The Abraham Federation is a major innovation in democratic
nation-building, offering an inclusive, comprehensive plan of economic
development called “Capital Homesteading.”  In contrast with capitalist and
socialist models of development being rejected by Third World countries, it
starts from a radically new perspective based on universalized citizen
access to viable capital ownership and structured democratization of
economic power as the basis for political democracy.

· The Abraham Federation strategy was first developed in 1978 to create a
new democratic nation state for the Holy Land.  Freedom of religion and
conscience would be secured by a government that systematically diffuses
economic power into the hands of every citizen.  This strategy proposed
starting with lands now controlled by the Israeli military on the West Bank
and Gaza Strip, and offering citizenship to Palestinians and to all
Muslims, Jews, Christians and others wishing to settle on this land. Today
it also offers a viable and politically unifying framework for rebuilding
post-Saddam Hussein Iraq.

· The new model addresses a “fatal omission” in conventional approaches to
nation-building that result in a growing exclusionary gap between the rich
and poor, concentration of power and ownership within a small elite,
corruption and abuses of power at all levels, and instability within
society.

· The leading edge of this strategic framework is an economic component
that attacks directly the root causes of terrorism and the basis of its
support among the populace.  It will answer the demands for justice and an
end to poverty and oppression of all Iraqi citizens.  It will create a
unique nation of owners.

· It systematically promotes the growing economic sovereignty (i.e.,
empowerment) of each citizen — as a worker, as a consumer and as a capital
owner.  Economic governance and accountability would be diffused through
the structured spreading of productive capital assets throughout society.
This would enhance the economic well-being and self-determination of the
people, and reduce the likelihood of corruption and abuses of power
associated with any form of monopoly power.

· It sets up the legal and constitutional framework for moving quickly to a
high-growth, free market system.  It is based on the 4 pillars of a just
market economy: (1) expanded capital ownership, (2) limited economic power
of the state, (3) restoration of free trade and open markets for
determining just prices, just wages and just profits, and (4) restoration
of private property in all means of production.

· Because of its emphasis on infrastructural re-engineering, particularly
with respect to central banking and capital credit, this framework would
radically reduce the cost of reconstruction of Iraq, allowing for low-cost
internal means of financing the reconstruction.  This would reduce the cost
to the U.S. taxpayer, the UN and those countries supporting the effort in
Iraq.

· It would help Iraq become economically self-sufficient as soon as
possible, providing the basis for a stable, independent, and democratic
government that would serve as a model for other nations in the Middle East
and around the world.

Phases for Applying the Abraham Federation Model in Iraq

PHASE I: Denationalize the oil fields of Iraq, as a catalyst for building a
new “Just Third Way” economy. Convert the Iraqi National Oil Company into a
professionally managed limited liability corporation. Issue initial shares
at no cost to every oil worker and Iraqi citizen and guarantee them
first-class shareholder rights to the profits and voting control of the
company.  Encourage preferential oil production leases to competitive
operating companies that are broadly owned.  To lay the foundations for
Iraq’s future economy, launch projects to be owned by Iraqi citizens, using
advanced U.S. technologies that produce power and water from sea water and
waste. Future government revenues would then come from increased citizen
incomes, reducing non-accountable political control by a military or
political elite, or by foreign oil interests.

Set up individual share accounts (like IRAs) within local banks for each
worker and every citizen of Iraq, including those now in exile who return
to Iraq.  Free, full-dividend payout shares would be distributed equally to
these individual accounts, representing the current assets of the
denationalized Iraq National Oil Company.  These tax-sheltered accounts
would be given the power to borrow interest-free, non-recourse productive
credit on behalf of the shareholders for future share issuances to meet the
expansion and modernization needs of the former state-owned oil company, as
well as new enterprises, with the debt secured and repaid by the projected
dividends on the newly issued shares.

One cautionary note: Experience with employee stock ownership plans has
shown that it is not sufficient merely to give people ownership and expect
any significant change in their behavior and value systems.  It is
essential that management systems be introduced during the planning and
implementation phases of Capital Homesteading to offer a new servant
leadership philosophy and structures and processes for diffusing economic
power and ownership. One such system called “Justice-Based Management”
systematically builds internal ownership cultures necessary to educate all
members and maintain the continued deconcentration of power and
accountability of managers to the worker- and citizen-shareholders.

PHASE 2:  Help the Iraqis to establish a written constitution that reflects
all the rights contained in the UN Declaration of Human Rights,
strengthening Article 17 (acknowledging every person’s right to own
property individually or in association with others). The new Iraqi
constitution would include the provision that as a fundamental right of
citizenship every citizen is guaranteed access to the social means (i.e.,
money and interest-free productive credit) of access for acquiring and
possessing income-producing property.  All tax, credit, property,
corporation, insurance, inheritance and related laws should, if necessary,
be reconstituted to conform to the constitution and to establish
institutions supporting economic democracy and universalization of the
right to private property and protection of the rights of property.

PHASE 3:  Restructure the discount power of the central bank in Iraq to
create interest-free money for facilitating private-sector growth without
inflation, linked to providing more widespread access to capital credit and
allocated through local banks and institutions.

PHASE 4:  Have the U.S. introduce a resolution into the UN General Assembly
to treat Iraq as a “global free trade zone” whose imports and exports would
be exempt from all trade barriers and tariffs of other countries.  In this
way the international community could provide a major catalyst for “Peace
Through Justice” in Iraq and throughout the Middle East.
______________________________
For more information, visit www.cesj.org or www.globaljusticemovement.org,
or e-mail thirdway@cesj.org. “Extending the Abraham Federation Model: A
Just Third Way for Bringing Democracy to the Iraqi People” is available at
http://www.cesj.org/homestead/strategies/regional-global/abrahamfederation-nk.html.
A detailed report on Capital Homesteading, entitled “Capital Homesteading
for Every Citizen,” is available at
http://www.cesj.org/homestead/donnersocialsecurity.pdf.


EJDodson wrote:

> Ed Dodson responding...
> William Ryan wrote:
>
> > Secretary Powell this morning, in Congressional
> > testimony, specifically mentioned the Alaska dividend
> > model for Iraq.  Senator Allen concurred.
> >
> I am a new member to this list and so would normally be inclined to
> listen in for awhile before posting comments. However, I believe this
> is an extremely important step in the direction of setting up a
> reasonably just sharing of the rent fund associated with oil located
> within Iraq's borders. A "citizens dividend" is certainly far less
> arbitrary and more purposeful than, for example, the Saudi system,
> where all revenues belong to the royal family, who claim an enormous
> portion of the revenue for themselves before providing for public
> goods and services.
>
> It is unfortunate that the rental value all natural resource-laden
> lands is not treated as public revenue -- in all nations. Instead,
> "rent funds" are largely appropriated by private interests while
> earned income and produced assets are heavily burdened by taxation.
>
> Edward J. Dodson, Director
> School of Cooperative Individualism
> www.cooperativeindividualism.org
>
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