Non-Profits: Letter to Barack #8

Dear President-elect Obama,

 

          Let me start my letter on working for nonprofits (the fourth of the five sectors in which we are creating jobs here in our town in Chile ) by defining two pure types: for-profit business and non-profit business.  I provisionally omit the businesses that do not fit neatly into one or the other of these two categories.

 

          The purpose of a for-profit business is profit.  (Academics will notice that I am not distinguishing profit properly so-called from return on capital; I do not think this distinction is needed here.)   The financial economy drives the real economy.  Investment decisions are made by calculating probable yields taking risks into account.  

 

          Question:  What goods and services will be provided?

          Answer:  Those that can profitably be sold.

 

          Question:  What determines whether the economy will go or stop?

          Answer: Confidence.

 

          Question: Confidence in what?

          Answer:  Confidence that consumers will spend, confidence that credit will be available; and in the end, in sum, in short, confidence that profits will be made.

 

          You have now chosen an economic team (Paul Volcker, Tim Geithner, Lawrence Summers, Christina Romer and others) and a security team (Hillary Clinton, General Jim Jones, Robert Gates, Admiral Mike Mullen, Susan Rice, and others) whose overall objective is to restore confidence.   I am suggesting that at least a major part of the nation’s military objective is the same as its economic objective.   Confidence.   In practice and in official declarations the military and its civilian chiefs seek a world in which business people will have confidence in the safety of  their investments, in access to markets, in access to energy and other inputs, and in being able to count on the normal working of the international economy. (See  www.dtic.mil. searching under “national interest”)

 

            I would suggest that if your advisors were to give nonprofits due weight in their deliberations they might well improve the quality of their advice.   Nonprofit business is the conceptual twin of for-profit business.  The cart becomes the horse.   The horse becomes the cart.  First the social entrepreneurs (people who organize nonprofits) are motivated by perceiving a need.   Then they raise funds to meet the need.   The real economy drives the financial economy.  

 

          Coraggio and his colleagues at General Sarmiento University have studied nonprofits in Argentina using a concept of “hybrid financing” developed by Brazilian socioeconomists.   The “club” is an emblematic Argentine nonprofit.  “Clubs” began as mutual aid societies bringing together people of one or another common ethnic origin who immigrated to Argentina during the 19^th century.   Clubs have proliferated, evolved, and metamorphosed so that today they do many things, but one thing virtually all of them do is play soccer.   Diego Maradona got his start in a neighborhood club.

 

          Coraggio studied how Argentine nonprofits piece together their budgets drawing on hybrid sources.    Members pay dues.   Fans pay for admission to games.  Local governments provide subsidies.   Tenants pay rent on buildings the nonprofit owns.   For-profit businesses donate uniforms for the players.   The club runs a restaurant open to the public.   It runs a fundraising dinner dance.    It auctions off prizes at a silent auction, or conducts a raffle.    Decedents leave bequests to the nonprofit in their wills.   Much of the work of the nonprofit is done by volunteers who do not need to be paid.   Etc.

 

          In Argentina and elsewhere nonprofits have shown themselves capable of doing everything for-profits do.   They run schools and hospitals.  They run banks and insurance companies.  (e.g. the Caisses Desjardins of Quebec )   They farm.  (e.g. the farms of the Mormons)  They manufacture refrigerators.  (e.g. Mondragon in Spain )  They build houses.  (e.g. Habitat for Humanity)

 

          Could we then have an economy with no for-profit business at all?  Conceivably such an economy could come into existence if there were social entrepreneurs organizing nonprofits to meet every need.   Our plan here in Chile is not so drastic.   We think in terms of layered job creation.  We support the creation of as many jobs as possible in the for-profit sector.   We go on to support another layer of job creation in the people’s economy.   A third layer of jobs is contributed by government work.    A fourth layer by working for non-profits.   Anyone who still wants and needs a job can participate in a fifth layer, community service.

 

          (Correction:  We do not precisely maximize the number of jobs in the for-profit sector because we insist on decent wages.   Since firms unable to comply with labor legislation must cease to exist, employment in for-profit business falls short of its theoretical maximum.  The other four sectors pick up the slack.)

 

          I would like to suggest that the members of your economic team consider thinking in terms of layered job creation.    At present they seem mainly to think in terms of stimulus packages trying to promote consumer spending, making the government the spender of last resort, loosening credit, and making the government the creditor of last resort.    All of this aims to restore confidence in one sector of the economy, the for-profit sector; it aims to persuade investors and business people to advance funds and hire workers in the expectation that there are profits to be made.  It may well be the case, as the historical studies of one of your advisors (Ms. Romer) show, that increasing the money supply (especially due to the inflow of gold from politically turbulent Europe) helped to restart the U.S. economy during the Great Depression even before World War II.   Nevertheless, no monetary expansion policy is a substitute for a systematic effort to create jobs for everybody, while every monetary expansion policy brings with it the risk of inflation.

 

          I would also suggest to your security team that the currently dominant economic paradigm is not a perfect paradigm.   It assigns to the military the mission of protecting stability and order worldwide for the sake of establishing the confidence required by normal business as defined by the paradigm.      But the paradigm which defines and limits current mainstream thinking may not –I would indeed say it clearly does not— frame a normal science capable of providing  all the needed answers.   It may have something civil to learn from the radicals who at this point in time have been designated as military enemies.  (See www.dtic.mil searching under “radicalism.”)

 

Peace and all good,

 

Howard R.

Community Service: Letter to Barack #9

Dear President-elect Obama,

 

            Since I started writing you letters about how we can all work together to solve our problems, the economic collapse of the United States has become more complete.   Opinions differ concerning its causes and concerning whether it is permanent or temporary.

 

            Meanwhile, in our town here in Chile we continue to practice a philosophy of social integration.  The aim is for everyone to be included in constructive and affectionate (cariñosas) relationships whether employed in “the economy” or not.   We are going about accomplishing this aim rather quietly, in order to avoid immigration to our town from elsewhere.  We know that without a bounded territory achieving our aim will be impossible.

 

            For us community service is not a government program.  It does not rely on public funds.   To some extent it does not rely on funds at all.   We organize our neighborhood somewhat as you organized neighborhoods in Chicago , finding out who has a problem and then looking for ways to solve it with whatever resources can be found or shared. 

 

            You may remember that Martin Luther King Jr. believed that quite apart from business confidence that profits can be made by hiring employees; at a human level there is no shortage of demand for labor.  Any number of workers can be useful in the field of human services, in caring for the young, the old, and the infirm.  Mother Teresa in her writings expresses the complementary insight that to a considerable extent the young, the old, and the infirm yearn not so much for specialized services as for a human being to be there with them.

 

  At most places in the world if one just looks around and sees what is before one’s eyes, one sees that there is no shortage of basic goods either.   There is plenty of food, housing, clothes, etc.  The challenge is to put labor and livelihood together.  It is to create opportunities to serve others that are simultaneously ways to make a living.  It is to include everybody in a supportive community that will assure that its members are cared for.  It is to replace basic stress with what Erik Erikson called basic trust.  

 

Whatever one’s opinion may be regarding the causes of the collapse, it is fair to say that nobody knows how long a cure will take.    Some of us believe that the system cannot be cured at all.   That is to say, it cannot be cured in the sense of being made to work once again as it used to work (although badly) prior to its collapse.

 

In our town we think of layered job creation; (1) for-profit business, (2) the people’s economy, (3) government work, (4) non-profits, (5) community service.   Neighborhood and family self-reliance in the form of community service is the last of five layers.   It is the guarantee that nobody will be forgotten or abandoned.

 

There are many ways to accomplish what we are accomplishing.  History and anthropology show that.  See www.gift-economy. com   I will try to attach some eyewitness accounts of the ways some Argentines accomplished meeting basic needs during their crash in 2001.  If the attachment does not go through, readers who want it can ask me for it and I will send it to them directly.

 

As the collapse of the American economy continues, it becomes increasingly clear that in the foreseeable future for-profit business will employ only a fraction of the work force.   Consequently, the social integration of the rest must be accomplished in other ways.

 

Peace and all good,

 

                              Howard R.

The Needed Paradigm Shift: Letter to Barack #10

Dear President-elect Obama,

 

           The shift from an economics paradigm to an anthropology (or anthropology/ecology, or transdisciplinary) paradigm is not complicated or hard to understand.  It is a matter of enlarging the field of human practices studied. 
When designing policies it is a matter of considering more possibilities, more options.  And more actors.

 

          At the present time efforts to revive the American economy concentrate on creating conditions under which producers can sell their products at cost-covering prices.   For the most part the efforts are even narrower than that:   They concentrate on stimulating demand and cheapening credit in order to make it profitable for employers to hire employees.   The fact that human beings lived on this planet for two hundred thousand years without capitalism is ignored.   As is the fact that millions still do.

 

          The needed shift consists of taking a broader viewpoint; it consists of doing socioeconomics as Jose Luis Coraggio,  Amartya Sen, and others recommend; and even in going beyond their recommendations to study basic cultural structures and to develop methodologies for social transformation grounded in such studies.   (As I have explained elsewhere, my recommended broader viewpoint is a “paradigm shift” with respect to some of the ways Kuhn employs the concept of “paradigm” although not with respect to all of them.)

 

          Thomas Kuhn’s studies in the history of science tend to show that paradigms are not abandoned because facts demonstrate their inadequacies.  There are ways to adjust theory to data to save the paradigm even when an accumulation of anomalies strongly suggests that the paradigm is out of touch with reality.   For example:  when the economy of Indonesia unexpectedly collapsed in 1998, mainstream economists did not question economics.  Experts at Harvard, at Oxford, and at the World Bank had been praising Indonesia as an example of correct macroeconomic policy.  When reality flatly contradicted what they had been saying, instead of admitting that their science is one that is incapable of accurately predicting future phenomena, and incapable of providing policy advice that works, they attributed the anomaly to “crony capitalism.”   Instead of questioning the basic ethics and dynamics of capitalism they employed the adjective “crony” to explain after-the-fact why the collapse observed in Indonesia differed from the stable growth that before-the-fact they had anticipated.   As you will remember from your debates with him, John McCain somewhat similarly used “greed” as an explanation of the debacle that was unfolding as he spoke.    Thus an imaginary ideal survives by attributing its real world failures to flukes.    These examples came too late to be included in Kuhn’s books, but he could have cited them if they had happened earlier and if he had undertaken to include the history of economic thought within the scope of his studies. 

 

          Although Kuhn’s findings tend toward the conclusion that a paradigm is never refuted by a crucial experiment, it appears that we have a paradigm-testing crucial experiment, or something very like one, underway at the present time.

 

          You have selected a highly competent economics team, backed up by colleagues in the profession who will feed your team even more expertise than they themselves already have.   Nobody knows the details of past recessions and the details of past Federal Reserve and government policies as well as your advisors.   I think it is fair to say that if they cannot give you good advice, then mainstream economics cannot give you good advice.

 

          You are approaching the inauguration with nearly a 75% approval rating.   You have Democratic majorities in the House and Senate.   You have solid friends on Wall Street and in organized labor.   If ever there were a United States President positioned to get good expert advice and to implement it, you are he.

 

          If December 2009 finds the United States economy worse instead of better, then we should be able to rule out professional incompetence and political impotence as causes of the phenomena observed.   After a year (or perhaps less than a year, or perhaps more than a year) of floundering and sinking in spite of well-advised and capable leadership, the country may be ready to consider the dominant paradigm tested and refuted.    More people may come to agree with Anthony Quinn (author of Ishmael) that what we need are not new policies but new paradigms.

 

          If, on the other hand, December of 2009 finds the American economy humming along nicely, producing appropriate goods and services and distributing them equitably, then we should be able to conclude that the paradigm we already have is in synch with reality.   We should be prepared to acknowledge the validity of the worldviews of the Paul Samuelsons and the Paul Krugmans and the Joseph Stiglitzes who find the centrist economics of the bulk of the profession to be sound, and attribute the downfall of the economy to the bizarre ideologies of the likes of George W. Bush and his radical conservative clique.    Normal science will be vindicated.    Professional economists will have been shown to be not only well read in their chosen field of study, but also (because their research paradigms tap the causal powers that produce the phenomena observed) experts on how the world works.

 

          Meanwhile, even before the rest of the country is ready to see beyond the dominant paradigm, those of us who are already convinced that trying to make for-profit business profitable again is too narrow a focus will continue to support the people’s economy, public sector employment, non-profits, community service, and usable parts of the many other alternative forms of livelihood practiced throughout history and around the globe.  We will support the Rotarians and the American Friends Service Committee, the Salvation Army and Catholic Charities, and whomever organizes emergency relief; expecting that as it gradually dawns on people that the emergency is permanent, the relief will become permanent.   “Relief” here is a word that refers not just to keeping the food pantries restocked.   It refers to social integration--to dignity, discipline, meaning, and useful employment.    At an academic level, we will continue to dissolve economics into transdisciplinary social and natural science.

 

Peace and all good,

 

Howard R.

Michelle Obama's Christmas Letter: Letter to Barack #11

Dear President-elect Obama,

 

It is a tradition among many peoples at the time of the winter solstice to remind themselves that they ought to be acting as responsible members of a cohesive community.   Yes, we could be good.    Sisterhood and brotherhood are possible.

 

In the depths of wintertime we want the sun to return, to bring warmth, growth, and harvests.   Our ancestors perhaps doubted more than we do the regularity of the seasons, and feared more than we do that the sun might die or disappear altogether, leaving us permanently cold, hungry, and ultimately lifeless.   Midwinter was a time to plead with the gods for mercy and to make promises to them.   We promise, if the sun comes back, to be obedient and grateful.   If our tradition happens to be Judeo-Christian promising to be obedient means promising to love our neighbors as ourselves. 

 

Nothing is less outdated or more timely than the ancient wisdom of Christmastime.  Indeed, if we would but cooperate and share throughout the year, we could solve all our social problems.

 

The first-lady elect made us a very timely and practical request in her Christmas Letter:  she asked us to donate food to our local Food Pantry.   Please let her know that I did what she asked me to do.   I gave twelve one-pound packages of noodles,  ten packets of dried soup, ten cans of tuna fish, twelve packages of rice and twelve of sugar each weighing two pounds each, a case containing twelve bottles of cooking oil, and a one hundred pound sack of flour.

 

Many of our institutions are ambiguous because it is not clear whether the spirit of Christmas or the every day spirit of possessive individualism is supposed to govern them.    During your campaign for the presidency you resolved in your speeches an important ambiguity regarding our free market economy.    For several centuries the free market economy has been a set of institutions with an unstable image, now a duck now a rabbit depending on how you look at it.   The duck is Christmas.   As a duck the market is a remarkable human invention which we have constructed to meet our needs. The rabbit is every day life.    As a rabbit the market is simply natural reality which we have to adjust to whether we like it or not.

 

You resolved the ambiguity in favor of the duck by reframing our history.    According to your interpretation the American economy has always been designed to serve a higher purpose.   It has been re-designed from time to time to make it serve its higher purpose better.

 

The higher purpose is  --if I may borrow a phrase from Martin Luther King Jr. to express a communitarian and pragmatic concept embedded in your speeches and in Michelle’s Christmas Letter-- the building of a “beloved community.”     In simpler terms:  we share the noodles.  If there are too few noodles, or if some people are left out and do not get any, then we change the rules to fix the problem.     You did not ask the voters for a mandate to change the system.   You offered them an ethical interpretation of what the system has always been.

 

As you probably already know, there are many good ideas for building a beloved community in Martin Luther King Jr.’s book Where do we go from here: chaos or community?   There are more in Riane Eisler’s recent book The real wealth of nations.

Let me mention a few from our local Food Pantry.   We do not give any food away.   People in our neighborhood do not apply for food stamps.   They do not apply for relief.   Nor have we fallen into the “workfare” trap that Bill Clinton fell into:  we do not try to wedge masses of unemployed poor people into the tiny supply of existing jobs.   Here people apply for community service.    We create the jobs, finding useful things for them to do (for more on how to find useful thing for people to do see the books by King and Eisler).   In our neighborhood unemployment does not exist.  Or, to the put the matter another way, even the unemployed are working.

 

Concerning your more recent speeches, let me congratulate you on your plans for creating more government jobs, especially the ones that get things done that the free market economy does not get done enough (like reforesting the hillsides).  

 

But let me dissent from the “stimulus” packages.   Here the rabbit has blinded the majority of Americans so that they cannot see the duck.

 

America’s situation is one that gives new meaning to the word “absurd.”   There is plenty of food.   There is plenty of housing.   There is plenty of clothing.   There is plenty of almost everything and too much of many things.

 

The economic problems that frustrate America are entirely about legal fictions.  We are frustrated because people do not have money.   Because people are in debt.   Because the values of homes and stock market investments have fallen.   Because people do not have employment.    Because they do not have incomes or because the incomes they have are insufficient to enable them to buy what they need.

 

When physically we have no problems at all, we nevertheless tie ourselves in knots because the economy has ceased generating legal entitlements to participate in the stock of physical goods that is already in existence.

 

We are so blinded by our own ideology that we think the only desirable way to get money to the poor is for them to find jobs, and the only way to create jobs is to make it profitable for employers to hire, and the only way to make it profitable for employers to hire is for employers to find more paying customers.    So we grant huge tax breaks to millions of people whom we fondly hope will be customers of American firms, while borrowing money from China to pay the government’s bills.

 

Time will show, I am sure, that we would have been better off with more imagination, more ancient wisdom,  more listening to women, more character education and moral education,  more neighborhood cooperation, and more private sector charity; we would be better off with an anthropological paradigm instead of an economic paradigm.

 

I do not mean to imply in these letters that big business and the profit motive are irrelevant.    I plan to discuss them later.

 

Meanwhile, I want to congratulate Michelle for her fine Christmas letter and you for your fine reframing of American history.     They are the duck-stuff of which beloved community is made.  

 

Howard R.

Cause and Effect: Letter to Barack #12

Dear President-elect Obama,

 

            I was not disappointed when you said that your foreign policy would be similar to that of previous administrations.   Although I was unhappy, I was not disappointed because what you said was what I expected.    I do not believe you can make big changes in foreign policy.

 

            But when I (no doubt along with three million others) received from you a personal invitation to participate in turning our campaign organization into a social movement I was really happy.   We are going to join you in organizing for change in every corner of America. 

 

 Domestic change might work, and if it does work, we might make it possible to move the reality of foreign policy closer into line with the democratic and progressive ideals Franklin Roosevelt expressed, and which all presidents have expressed to some extent.

 

            Deepak Chopra is another volunteer advisor who has been giving you free advice lately.   In a recent letter to you he pointed out that for over half a century the USA has been functioning as a military economy.   Being a specialist in mind/body relationships he has observed that although at the level of mind American foreign policy is about peace, democracy, and rights; at the level of body it is about how the global economy works, how the USA fits into it, and how the sub-sector of the global economy known as the US economy works.

 

            America has to change before the main features of its relationships to the rest of the world will change.

 

            Cause and effect.   The main cause of what America does is what America is.   Deepak Chopra was quite right to base his letter to you on the premise that our role in the world will not substantially change until we cease to be dependent on the military-industrial complex for our daily bread.

 

            It just might happen.   The collapse of our war economy is an opportunity to create a peace economy.   I do not believe you yet realize how serious the “economic” problem is, nor do you yet realize that it is not in the last analysis an “economic” problem at all but a paradigm problem.  Nevertheless, you are on the right track in moving in the direction of converting big business into public-private partnerships planned for ecological and social responsibility.  

 

            You are also on the right track in repeating frequently that government alone cannot solve our problems.    The real power to change America is in civil society, not in government.

 

            You were on the right track in running your campaign as a grassroots citizens movement, and on the right track in proposing to keep the momentum of that movement going to organize for change.

 

            Cause and effect.   If we want to rewrite America ’s script in the global tragic farce that Noam Chomsky, Stephen Zunes and others have documented in great detail, we need to begin where you began as a young community organizer in Chicago.   We need to begin with the ethical reconstruction of neighborhoods.

 

Peace and all good,

 

Howard R.

 

p.s. I have posted a document whose relevance the wise will immediately see.  It is located on my main website, http://www.howardrichards.org  It is an account of how ordinary citizens in Argentina worked together to meet each other’s basic needs when the Argentine economy collapsed in 2001.

A Comment on Your Inauguration Speech: Letter to Barack #13

Dear President Obama,

          The main problem with the economy can be simply stated:  We depend too much on selling.  We depend too much for our daily of bread on selling something or other to get money to pay for it.     Since there is nearly always a shortage of buyers, it is nearly always hard to sell.   It is nearly always hard to sell ourselves; that is to say, it is hard to get a job.  In other words, as John Maynard Keynes pointed out, if the market is left ungoverned full employment will occur rarely and when it does occur it will be temporary.    As the same John Maynard Keynes eloquently explained, the market system depends on people having confidence that at some point their investments will pay off in cash.   As we know from recent experience, very strange and convoluted behavior sometimes results from efforts to produce in investors confidence that what they are being asked to buy will sell for more than they paid for it. 

 

          For many reasons we need to become less dependent on the sales way of life  --even though for many reasons we should not abandon the sales way of life altogether. 

 

          Simple as it is, our political leaders, our economists, and the public in general seem not to understand the problem of excessive dependence on sales.     They continue to think that the solution to a slow economy is to create more buyers.   They think in terms of stimulus and confidence-building, trying to crank up a system in which employment depends on sales and sales depend on customers.  

 

           Solving the main problem requires a different approach.   It requires reducing our dependence on selling.

 

          Some of the measures you are proposing are right on right track.   As you said in your inaugural speech, the question is not whether government is too big or too small; it is whether the government works.    Most people are now on board with you in acknowledging that there is no way to make the economy work without an expanded public role.   This goes part way toward solving the simple problem I have defined as the main problem.    Insofar as public services do not require market demand, the chronic shortage of buyers is not a barrier limiting either production or employment.

 

          Further, as the experiences of sensible social democracies have shown, a strong public sector properly managed produces a strong private sector.    Insofar as the private for-profit sector can accomplish the goal of creating jobs for all, it can do so much better when it partners with a strong public sector.   

 

          But still more is needed.   The still more that is needed was the unifying theme of your inauguration speech.   We need a positive attitude toward contributing to the common good; we need good will, responsibility, willingness to sacrifice for the benefit of others, a spirit of service, unity, patriotism in a constructive sense of the word, and all the wonderful communitarian values you talk about in most of your speeches.   In their pastoral letters on economic and social issues the Catholic Bishops of the United States have rightly said that overcoming poverty requires not two sectors but three:  the private sector, the public sector, and the voluntary sector.   The voluntary sector is not a matter of selling things.   It is a matter of giving. 

 

          On Wednesday the 21st when you meet with your economic advisors, I hope you remember what you said on Tuesday the 20^th.  I hope you will not fall back into the paradigm that is currently in meltdown, the one that treats profit-making as if it were the central and perhaps even sole human motivation.     That is not what history shows, nor what anthropology shows, nor what psychology shows, nor what neuroscience shows, as you have learned by now if you have followed my advice and read Riane Eisler’s   The Real Wealth of Nations, and as you probably knew already even before reading her book.

 

Peace and all good,

 

Howard R.

 

In Place of Folly: Letter to Barack #14

Dear President Obama,

 

            You know that I do not expect any substantial improvements in foreign policy until there are substantial and constructive changes in the structure of the economy.  Here  --with breathtaking simplification—is a nine point outline of a plan for achieving substantial and constructive changes in the economy.

 

First,  let the for-profit private sector shrink.   Rely on the standard rational responses to the signals the market is sending when it determines that a business is no longer profitable:  bankruptcy, downsizing, layoffs.

 

2.  Rewrite the reorganization chapters of the Bankruptcy Code to make it easier to downsize without going out of business completely.   Repeal the dogmatic requirements for prompt and full payment of administrative, secured and priority creditors.  They too frequently make reorganization impossible.  

 

3.  A general (“Scandinavian”) principle:   No flesh-and-blood human being should suffer from the demise of a legal fiction.   The sunset business entity (the legal fiction) ceases to exist after it shuts down operations and files its last tax return.   But the flesh-and-blood people who worked for it should still be regarded as members of what Martin Luther King Jr. (following Josiah Royce) called “the beloved community.”    They should be, for example,  funded to go back to school while they are between jobs.  (Lifelong learning.)

 

4.  Compensate as much as possible for the loss of jobs in the for-profit private sector by increasing employment in the public sector and in the “third” sectors (variously defined).  Job creation to compensate for job loss includes the greening programs you are already proposing, the human services programs Martin Luther King Jr. regarded as an inexhaustible source of employment opportunity,  self-employment, micro-credit, nonprofits including schools and hospitals,  thrift shops, recycling centers,  community supported agriculture, cooperatives, employee-owned businesses….and others.

 

5.  Build inclusive local communities that provide basic security for their members while depending less on sales, less on money-based ties, less on market relationships.    See www. gift-economy.com.   This category includes many kinds of self-help, do-it-yourself projects, and do-it-with-friends projects; it includes faith-based cooperation,  and neighborhood (territory-based) cooperation, e.g. in housing, in growing and distributing food, in child care, in care of the elderly.    You learned all about this in your early Chicago years before you went to law school.

 

6.  Nationalize the Federal Reserve Bank and the biggest private banks.

 

7. Define corporations as social institutions with social responsibilities, whose incomes should be used for socially legitimate purposes (cf. Keynes´  “euthanasia of the rentier class”)   The corporate mission statement should define creating employment as achieving a corporate goal,  not only as a cost. 

 

8. Fund government (and charitable foundations) with rents from natural resources and other rent-yielding assets,  collected as severance taxes, as other taxes, as royalties, or as revenue from outright ownership.     Income from taxes on wages and profits is declining; printing money is inflationary; borrowing cannot go on forever; therefore the public purse must be filled to an increasing extent with income from rents.

          

9.  Dissolve the World Trade Organization.   In general reclaim American sovereignty and help other nations to reclaim their sovereignties,  so that people can decide how they want to live instead of being compelled to live as the global economy dictates.    

 

           Compared to the currently prevailing mad rush to make ailing private for-profit businesses profitable at any cost, the nine point plan briefly outlined above has the following six advantages:

1.  It will work.

 

2. It will lead toward a mixed economy, which is where we should be going in any case.

 

3.  It will tend to make democracy real by moving toward liberating the governance process from the overwhelming systemic imperatives to establish a regime of profit accumulation and to compete in the global economy at all costs.

 

4.  It will tend to make a peace economy possible by making the military-industrial complex and the global projection of military power unnecessary.

 

5.  From an academic point of view, it relies on an intellectually defensible transdisciplinary social science, wider in scope than the prevailing mainstream economics that has been for many years discredited by the critiques of logicians and philosophers of science.

 

6. Parts of it can be implemented by civil society and local governments without waiting for the federal executive and congress to see the light.

 

 

One more point:  in your daily conversations about the economy with Larry Summers please talk to him as well as listening to him.   Repeat what you said when you spoke to Warren Buffet and his Wall Street friends.    Tell him about the higher purpose.   Tell him about revising the rules of the game from time to time to make them better serve the higher purpose.   Tell him about your experiences with Asset Based Community Development  when you were a community organizer in Chicago.

 

 

peace and all good,

 

Howard R.