Capital Credit: A New Right of Citizenship
Most people live from paycheck to paycheck . . . or from hand to mouth. The answer to how citizens without adequate savings can acquire an income-producing property stake lies in the intelligent use of credit-specifically, productive credit.
Credit is a social creation. It can only exist in a society organized to protect contracts and property rights. A central premise of the Real or Just Third Way is that productive or capital credit is a “common good.” Equal access to this good is a fundamental human right and the social key for enabling have-nots to become haves.
One powerful ownership-expanding technique in the U.S. is known as the employee stock ownership plan (ESOP). The ESOP provides widespread and systematic access to capital credit to each employee in a participating company. An “empowerment ESOP” can be designed so that employees gain both a voice in corporate governance and a source of financing which does not reduce their paychecks or savings.
Traditional sources of capital funding treat loans to ESOPs the same as other corporate loans. An ESOP loan is based on the company’s credit, with repayment expected wholly out of future profits of the company.
Beyond the ESOP are other credit-diffusing tools which would open up ownership and profit sharing opportunities for consumers of public utilities, residents of new or redeveloped communities, teachers and other public servants, farm families, homemakers, the disabled, professionals, frustrated entrepreneurs, and citizens generally.
Transforming the Corporation through Justice-Based Management
Under the expanded capital ownership paradigm espoused under the Just Third Way, the business corporation (whether a small local business or a giant multinational) can become a vehicle for transforming the world into a more free and just marketplace. This Global Justice Movement web site places a very high focus on helping corporate managers to see that they can do their job more effectively by incorporating economic justice in the way they do business.
Through ESOPs and similar means for empowering corporate workers and customers, more people could legitimately acquire ownership of the growth of capital without taking from those who own existing assets. These new owners would be able to get income from capital as a supplement to their wage incomes.
Under “Justice-Based Management,” employees would supplement their fixed wages or salaries with monthly and annual bonuses, stock and dividends–all generated out of profits. Each employee could automatically earn and accumulate property while working in a participatory corporate culture, thus gaining a direct, personal interest in the success and profitability of his or her employer company.
International, National and Regional Economic Policies
Life-enhancing actions at the personal, family, enterprise or community level–no matter how well-intentioned–can easily be suppressed or nullified by a hostile or unjust external environment at the national or global level.
Moving from the microeconomic to the macro-economic level, proponents of the Just Third Way have developed strategies for reshaping basic social institutions, such as tax and monetary systems, which have become barriers to human development.
The Just Third Way is based on four interdependent pillars of economic justice:
– Expanded capital ownership
– Limited economic power of government
– Restoration of free and open markets for determining just prices, just wages and just profits
– Restoration of private property in the means of production