Having established the principle that if we are to have a fair and just society we must end the two traditions of being able to grow your money and inheritance, which together underpin the entire enterprise of the ownership class, we are faced with the implementation problem. We are proposing to do away with the ownership class, and it would be naïve to suppose that this class will go willingly. The old revolutionary approach to the problem, involving sharp blades separating heads from bodies, or firing squads or ropes and lampposts are simply not going to happen in present day America, and should not.
There is a better approach, which is to take a lesson from the British in India. They were faced with the problem of a similar class of owners, the Maharajas. They could have deposed and impoverished them, but instead they allowed them to retain their position and wealth, but deprived them of power. I believe a similar strategy is needed today.
The plan has four steps. First, limits must be placed on what personal money can be spent on. The new rule is that you can spend your money on whatever luxuries and services you choose. You can buy cars, yachts, houses, whatever you want to make your life more comfortable or interesting. You can give money to other people, but only as a gift. What you cannot do with your money is to make more money with it. In return for giving up the ability to grow your money, you are guaranteed that it will not shrink either. It will always be there for you to use whenever you choose. We have seen that this situation would benefit the vast majority of people, so if it is properly presented it should command support. The concept of limiting what money can be used for is well established. This is an extension of that principle.
This will eliminate at a stroke the entire financial services industry. Here is where a great deal of opposition will come, both from those who make a very handsome living in this industry, and from those who fear large scale change. The question to focus attention on and insist on a detailed response to is what value does this industry add to the economic system as a whole in return for all of the money they are sucking out of it? I do not believe an adequate answer can be offered.
For those who believe that eliminating such a large industry would cause great social disruption, and be unfair on those thrown out of work, I would point out that such considerations have never gotten in the way of corporate consolidation or workplace automation; somehow when it is mere workers that are affected it does not seem to matter as much.
The second step is to recognize that money is simply a scoring system, and establish a single mechanism for keeping score. We do not even have to call it a bank. Everyone would have a free account, and the balance would show the difference between what they had contributed to the pool of resources and what they had taken from it. This would function exactly like money. You could withdraw it in cash form. The difference from our present system is that money would no longer be a commodity to be traded, but simply a means of facilitating exchange of resources without an actual value of its own.
The third step is to buy out the ownership class at present value. We add up the value of all of their assets, and credit their accounts with the resulting amount of money. The community then takes possession of the assets. The exception would be owner-run businesses, where the owner would continue to own his business, but any purely financial partners would be bought out. It is misleading even to say that the community takes possession, because what is really happening is that ownership ceases to exist. Instead control of organizations is divided between those who make an ongoing contribution to the operation of the business or have an interest in its continued operation. The workers, the managers, the customers, the suppliers, the community at large will all have voices in management. All of the profits will be shared in some measure by all of these interests, some directly, others (like the surrounding merchants) indirectly. The natural format to build on is the worker owned cooperative.
The fourth step is to redefine property rights with regard to land and primary residential housing. It is necessary for the functioning of an orderly society that people be secure in their property, and this will not change. Ownership will still allow you the right to use your property with no greater restrictions than now. However certain rights are removed from the bundle. The most important is that you only own the use and care of the land, not the underlying value. If the value of the land increases because of the actions of society, it is society that should reap the benefit of the added value. The owner will be compensated only for value he has added to the property. You can only own land that you can actually use. If you have no use for land it can be assigned to someone else to use. You do not have the right to make a profit renting the land out to someone. Use of land might include the concept of a privacy zone; even if you do not actually work the land you would be entitled to maintain control of a certain area around your house.
The same concept would apply to housing. As long as everyone in the community has an adequate dwelling, there is no problem with some having multiple houses, but only for their own use or that of their friends, or as vacation rentals (a legitimate business). They are not allowed to rent out primary residential accommodation for profit. These are not restrictions of natural rights, but redefinition of allowable economic activities. Nobody has a right to make money in any particular way; every occupation is subject to rules, and we are simply redefining the rules in the interests of social benefit.
The end result of this is that nobody’s primary residence is owned by someone else who has the power to turn them out for no particular reason, or raise their rent at will, or any of the other activities that make tenants hate landlords.
In this way we dispossess the ownership class of their income producing assets, while compensating them fairly for them. They still have the money to live their lives in comfort and security, but the social harm they can do with their money is eliminated.