E It Is 1% Capitalism That Is The Problem

The fourth set of literature can be found in and about some of the books of Louis O. Kelso, especially his delightful, extremely important essay titled “Karl Marx: The Almost Capitalist.”

What will economists, moralists, and the literati find in this short literature?

They will find the four horses of inequality, namely:

  1.       Low taxes on land and natural resources foster vast land holdings;
  2.       (Legal) appropriation of capital appreciation that ought to belong to the creators of wealth grows into vast accumulations of real and financial wealth in the hands of the few;
  3.       The concentration of national credit in the hands of prime dealers, rather than its judicious dispersal among the people who are the ultimate creators of the value of our national credit, generates an imbalance whereby, beyond the satisfaction of needs for real wealth, the few accumulate financial multiples of zeros, while the many starve; and
  4.       The practices of the Pac Man Economy give rise, not to internal harmonious growth, but to zombie corporations that are “too big to fail.” These ventures must be allowed to fail—if they fail.

How to tame these horses? Well, the solutions roll out of this list by themselves:

       A.    Raise taxes on land and natural resources;

       B.    Use equity sharing programs;

       C.    Create money (i) only to fund the production of new real wealth, not financial assets; (ii) issue loans to qualified people and corporation with ESOPs, cooperatives, and public entities with power of taxation so to assure the repayment of the loan received; (iii) issue loans at cost;

       D.    Let corporations be free to grow internally as large as they are able to, but sternly prohibit the PacMan Economy: growth by purchase; external growth by mergers and acquisitions.

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Disclosure: Carmine Gorga is president of The Somist Institute and a former Fulbright Scholar.

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Gary Anderson 2 years ago Contributor's comment

Great article, and thoughtful. Certainly we are failing where China is succeeding. That communists can run capitalism better than the capitalists is certainly disconcerting. But it shows the weakness of letting the 1 percent write all the laws. Belt and Road is proof of what I say: talkmarkets.com/.../belt-and-road-the-sri-lanka-china-port

Doug Morris 2 years ago Member's comment

Couldn't have said it better.