Toward a New World

by James S. Albus

Enough to eatA world where everyone has:

A decent place to liveA steady livable incomeGood medical careA good educationA safe neighborhood

A secure retirementA clean environment

A world where no one is poor

andopportunities to

grow rich are abundant!

Why isn’t the world like that already?

We have the technology to create the wealth required

We have the productive capacity to satisfy market demand

Walk into any mall or supermarket,the shelves are stuffed with products

Manufacturers would gladly produce more-- if only there were more customers

Capitalism can expand productive capacitywhenever there is a market with buyers

For business, the problem is NOT in production-- but in attracting customers

The Problems Lies in the Distribution of Income

2,800,000,000 humans live on less than $2 per day37,000,000 Americans live in poverty

On the other handsome people have income greater than $100,000 per day

This is far from the utilitarian ideal of

“greatest benefit for the greatest number”

People in need don’t have money to buy

The current system of income distribution guarantees poverty

The poor are vulnerable to:• Personal violence• Discrimination & humiliation• Depression and desperation• False promises by religious & political opportunists• Enlistment in radical groups, gangs, and armies

And poverty breeds poverty

• Healthy food• Clean water• Decent housing• Good sanitation• Adequate medical care• Modern education

The poor don’t have enough income forthe things necessary for success – e.g.:

2. Bank lending policies prevent most people from acquiring ownership of productive assets

1. Most income is based on the economic value of human labor

What is wrong?

How? Provide broad access to ownership of capital

so that all citizens receive income from capital investments

Q: What is the solution?

A: Shift income from wages and salaries to income from ownership of capital assets

Modern automation technology then produces wealth that generates income for humans

That way, everyone benefits from a growing economy

-- and poverty ceases to exist

What is the Plan?

1. Federal Reserve issues credit to member banks

3. Savings replace interest rates as a mechanism for controlling inflation (deposited in personal accounts – CDs, IRAs, 401Ks)

2. Banks issue 30 year loans to individuals for investment in approved investment funds ( loans secured by shares in the funds)

For more information go tohttp://www.PeoplesCapitalism.org

This is

Peoples’ CapitalismA Plan for Prosperity and Economic Justice

Expected Results of Peoples’ Capitalism plan

1. Investment rate doubles, stock market soars, economy grows more than 6% per year

3. Every citizen becomes a capitalist with a portfolio that that grows by at least $6000 per year in new capital

4. Per capita income floor from capital ownership grows to: $1,600 per year in 10 years $5,000 per year in 20 years $29,000 per year in 40 years $58,000 per year in 50 years

2. Inflation is held below 2% by withholding savings

Tell your friends about thisPeople have no idea that this New World is possible

Tell your parents They will have never heard of it

This New World is Possible in Your Lifetime!You can help make it happen

Tell your local candidate for office

Tell your local newspaper reporters and editorial writers

Ask your economics professor why this ideais not in your Economics text books.

Tell your classmates

Tell your teacher

You can help make it happen

Learn more about Peoples’ Capitalism

Learn about the person behind itJames S. Albus

seehttp://www.James-Albus.org

This is a serious proposalto achieve prosperity and economic justice

through market capitalismwith widespread ownership of capital assets

see

http://www.PeoplesCapitalism.org

If you want to do something really big,start a Peoples’ Capitalism Party

and run for elective office

Start a Peoples’ Capitalismclub or discussion group in your school

At the very least

Think about it

After all, it’s your life

Wouldn’t you prefer to live it in

A New World where there is

Prosperity and Economic Justice for All

FAQ & Answers

Q: How does Peoples’ Capitalism work?

Part 1: Invest

Federal Reserve issues credits to member banks for loans to average citizens (e.g. $6000 per year) for investment in approved capital investment funds

This guarantees everyone a growing portfolio of productive capital assets

Loans are secured by shares of the investment funds

. . . and provides an income floor from capital gains

A: Invest and Save

Part 2: Save Use savings withholdings instead of interest rates as a means for controlling inflation

More effective than interest rates in controlling inflation

INVEST and SAVE produces rapid economic growth

with low inflation

Savings put into personal accounts – e.g. CD, IRA, 401K

Savings withholding rate is indexed to inflation

Q: How does Peoples’ Capitalism work?

Q: Why replace interest rates with savings as a tool for controlling inflation?

Raising interest rates to control inflation inhibits investment, restrains productivity growth,

and slows economic growth.

In contrast,using savings to control inflation

encourages investment, stimulates productivity growth, and accelerates economic growth

A: The value of labor is going down

Q: So what if income is based on the value of labor Why is this a problem?

Globalization is causing a race to the bottomfor wages

Modern automation technology is reducing the need for human labor

Labor is loosing value It is being replaced by capital as a source of wealth

Q: So what if bank lending policies prevent people from acquiring ownership of productive assets Why is this a problem?

A: Wealth created by modern industry flows increasingly to the owners

Which causes slow growth in profits and wages

The rich get richer, and the poor get left behind

Worker’s share of economic growth declines

This leads to slow growth in consumer demand

Which translated into slow economic growth

Q: How do bank lending policies prevent peoplefrom acquiring ownership of productive assets?

A: Banks only lend money for investment to those who already have tangible assets

Ergo, the poor can’t borrow to invest

So the rich make money from investments, while the poor get deeper in debt.

Banks lend money to the poor forconsumption but not investment

So what - if monetary policies prevent rapid economic growth

A: Without rapid economic growth, everyone looses.

Q: Why is this a problem?

Rapid economic growth is crucial to achieving

A New World of Prosperity and Economic Justice

The rich get slow return on investment

The poor remain mired in poverty

The middle class get stagnant wages

Q: Isn’t Peoples CapitalismThe same as Communism? or Socialism?

A: No and no.

In communism, everything is owned by the state.In PC, ownership is widely distributed to individuals

In Socialism, benefits are distributed through taxation.In PC, benefits are distributed through ownership

In Peoples’ Capitalism capitalism is the engine of production

and wealth is distributed through ownership of capital assets

Q: Wouldn’t this create an enormous new government bureaucracy?

A: Not at all.

• Government role would be limited to prosecution of criminal activity.

• Investments would be handled through established investment banking and mutual fund industry.

• Bank loans to individuals would be no more complicated than opening a new savings account.

• Credit to member banks could easily be handled through current mechanisms of the Federal Reserve system.

• No tax money or new agencies would be involved

• Savings withholdings would be implemented through existing payroll withholding systems.

For the latest paper “Peoples’ Capitalism:

A Plan for Prosperity and Economic Justice” http://www.PeoplesCapitalism.org/paper

For the original 1976 book,

Peoples’ Capitalism: The Economics of the Robot Revolution

http://www.PeoplesCapitalism.org/book

Home Pagehttp://www.PeoplesCapitalism.org