Democratizing Capital

“Why are the rich getting richer and the poor getting poorer?” This is a perennial and persistent question on economics. The answer, simply put, is because ownership of productive capital is skewed towards the very wealthy. The top 1% of households have 38.3% of all privately held stock, 60.6% of financial securities, and 62.4% of business assets, while the richest 10 percent of families own about 85 percent of all outstanding stocks, about 85 percent of all financial securities and 90 percent of all business assets. The multinational corporations controlled by this concentration of capital control the world’s Capitals. By the use of heavy lobbying, along with other efforts like political contributions, government policies are implemented that favor the corporations over the citizens. By this means, a cabal of private interest represented largely by the top 1% maintains dominance and influence over the economies of the earth, often having more power than governments.

Capitalism is contrived to reward productive capital, while it usurps the fruits of human capital with economic force; the resultant imbalance and concentration of capital is driving a modern feudalism. The vast majority of the population is enslaved by capital’s demands; we are indentured servants by design and choice (though it’s more of a Hobson’s choice). For the most part we in the 99% are vested in capitalism through debt, as a result we posses very little power in economic decision making. Servicing our personal debt erodes our economic capital; consequently our options and potential for change are heavily restricted.

Given the facts concerning the concentration of capital, it is clear the recent bailout of Wall Street was about bailing out the wealthy; this at the expense of the working poor and middleclass who make up the vast majority of the 99%. The good news is the recent failure of the capital market has handed us a great opportunity to re-imagine and re-invent our economic system in a way that will serve all society and not just transfer money to the wealthy 1%. It is not society’s duty to serve the economy of the wealthy; the economy should be structured to serve society.

With the near collapse of the capital market we have the lucky opportunity to reinvent an economic system that is based on innovation and collaboration that can provide for both our physical and metaphysical needs, while leading toward individual fulfillment.  We must pursue a grassroots effort to divert economic resources away from those few who are engaged in crony capitalism perpetuating a paradigm that is unsustainable and to reroute those resources towards a free-enterprise system that empowers all individuals and families through direct and effective ownership of the means of production.  

There is a great amount of underutilized human capital available that can be engaged productively.  We possess in abundance all of the essential elements of economic growth, time, energy, needs and skills which makes up our human capital.  Our human capital also comprises our healthy physical capacity to produce for the future, in concert with our acquired knowledge, skills and experience.  The challenge ahead is to take our human capital and put it to work in our communities to operate as a wealth generator to satisfy our personal and societal needs, while at the same time accumulating productive capital towards a sustainable economy.  

Let’s be real, many of the jobs lost in the present depression will never come back, any recovery must come from the growth of new enterprises.  Human capital provides the engine that propels the economy; this engine can be retooled to run efficiently on alternative economic energy in the same way our cars must be retooled to run on alternative energy.  It is in our self interest to band together to cooperate, collaborate and engage in what might be considered altruistic activities to attain economic rewards. 

Our communities need to be creative in finding alternative solutions for nurturing healthier homegrown local economies, providing for bottom up growth.  There are numerous potential strategies, some of them well proven, that can be applied to produce local wealth such as cooperatives, employee owned companies, companies offering ESOPs (Employee Stock Ownership Plans), complementary currencies, community land trusts, local barter-clubs, time banking, people-to-people lending and micro-lending to name just a few. 

The use of local complementary currencies enables communities to more fully employ its available productive resources; particularly the residual unemployed labor from the present depression.  Through associations of small local banks and/or credit unions, along with businesses, we can provide a capital support network to facilitate emerging economic activities.  Further, a local complementary currency will circulate more consistently within the community than the national currency, having a greater multiplier effect on the local economy.  Local currency usage encourages the trade of available goods and services that are produced locally.

I call upon the nouveau riche to take an initiative in this endeavor, by taking a leadership role in a grass roots effort to bestow the benefits of “capitalism” to the population in general by which society can evolve into a more vibrant and collaborative body, making productive capital broadly owned so as to have the effect of vesting ownership and profit potential in society at large.  We can begin by envisioning local solutions to local problems; solutions managed by local communities empowering the thousand points of light and rewarding individual initiatives to solve problems and produce results.

There is an enormous array of experimental and proven strategies for community development that can be employed to reinvent and reinvigorate the local economy, as well as to help build productive capital for expanding local opportunities.  The list below delineates some of the strategies and democratic capital structures being offered in the virtual marketplace, this list provides an idea of the breath of the movement towards strengthening our local economies at the grass roots level.  Take some time to explore these economic options by researching them on the internet, become familiar with what’s out there and share it with those close to you. 

As you feel comfortable with your understanding of the value of one or more of these initiatives for your life and community, begin implementing them with your neighbors.  I suggest each one of us identify the circle or circles of affinity that inform and nurture our lives and look to these alliances as a nexus for implementing change towards democratizing capitalism. 

Many will find their church offers a communion of like minded cohorts that will provide the support of service for reconstructing the community at large.   Other’s may turn to the virtual community of social networking as an extension of their local community, to strategize and share what works and does not work as an immediate and vital link to an expanding consciousness leading to an economic self-sufficiency revolution.  

Ø Worker Co-Operatives
Ø Consumer/Retail Co-Operatives
Ø Housing Co-Operatives
Ø Agricultural Co-Operatives
Ø Health Care Co-Operatives
Ø Employee-Owned Business
Ø Development Trusts
Ø Community Foundations
Ø Social Firms
Ø Intermediate Labor Market Projects
Ø Credit Unions
Ø Community Loan Funds
Ø Friendly Societies
Ø Mutual Insurers
Ø Building Societies
Ø Charitable Trading Arms
Ø Let Schemes - Local Exchange Trading Systems
Ø Community Currency
Ø Community Sponsored Agricultural
Ø Consumer Stock Ownership Plans (CSOP); stock ownership plans for utility users and regular customers of enterprises.
Ø Community Investment Corporation (CIC) sharing profits from local land planning and development including structural developments such as highways, railways, bridges, utility companies, harbors, tunnels, etc
Ø Employee Stock Ownership Plan (ESOP), which has a proven track record in the United States with 1,500 corporations 100% employee-owned.
Ø The Homestead Act

You can find links to websites devoted to these community actions at my website www.vera-city.net, including a proposal for a hybrid global digital complementary currency called the Vera.

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