Toward a New World

1. Toward a New World by James S. Albus

2. A world where everyone has: Enough to eat A decent place to live A steady livable income Good medical care A good education A safe neighborhood A clean environment A secure retirement

3. A world where no one is poor and opportunities to grow richare abundant!

4. Why isn’t the world like that already? We have the technology to create the wealth required For business, the problem is NOT in production -- but in attracting customers Walk into any mall or supermarket, the shelves are stuffed with products Manufacturers would gladly produce more -- if only there were more customers We have the productive capacity to satisfy market demand Capitalism can expand productive capacity whenever there is a market with buyers

5. The Problems Lies in the Distribution of Income People in need don’t have money to buy 2,800,000,000 humans live on less than $2 per day 37,000,000 Americans live in poverty On the other hand some people have income greater than $100,000 per day This is far from the utilitarian ideal of “greatest benefit for the greatest number”

6. The poor don’t have enough income for the things necessary for success – e.g.: • Healthy food • Clean water • Decent housing • Good sanitation • Adequate medical care • Modern education 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 The current system of income distribution guarantees poverty And poverty breeds poverty

7. What is wrong? • Most income is based on the • economic value of human labor • Bank lending policies prevent • most people from acquiring • ownership of productive assets

8. Q: What is the solution? A:Shift income from wages and salaries to income from ownership of capital assets How? Provide broad access to ownership of capital so that all citizens receive income from capital investments Modern automation technology then produces wealth that generates income for humans That way, everyone benefits from a growing economy -- and poverty ceases to exist

9. What is the Plan? • Federal Reserve issues credit to member banks 2. Banks issue 30 year loans to individuals for investment in approved investment funds ( loans secured by shares in the funds) • Savings replace interest rates as a • mechanism for controlling inflation • (deposited in personal accounts – CDs, IRAs, 401Ks) This is Peoples’ Capitalism A Plan for Prosperity and Economic Justice For more information go to http://www.PeoplesCapitalism.org

10. Expected Results of Peoples’ Capitalism plan • Investment rate doubles, stock market soars, • economy grows more than 6% per year 2. Inflation is held below 2% by withholding savings 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

11. This New World is Possible in Your Lifetime! You can help make it happen Tell your friends about this People have no idea that this New World is possible Tell your parents They will have never heard of it

12. You can help make it happen Tell your classmates Tell your teacher Ask your economics professor why this idea is not in your Economics text books. Tell your local newspaper reporters and editorial writers Tell your local candidate for office

13. Learn more about Peoples’ Capitalism This is a serious proposal to achieve prosperity and economic justice through market capitalism with widespread ownership of capital assets see http://www.PeoplesCapitalism.org Learn about the person behind it James S. Albus see http://www.James-Albus.org

14. Start a Peoples’ Capitalism club or discussion group in your school If you want to do something really big, start a Peoples’ Capitalism Party and run for elective office

15. 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

16. FAQ & Answers

17. Q: How does Peoples’ Capitalism work? A: Invest and Save 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 Loans are secured by shares of the investment funds This guarantees everyone a growing portfolio of productive capital assets . . . and provides an income floor from capital gains

18. Q: How does Peoples’ Capitalism work? Part 2: Save Use savings withholdings instead of interest rates as a means for controlling inflation Savings withholding rate is indexed to inflation Savings put into personal accounts – e.g. CD, IRA, 401K More effective than interest rates in controlling inflation INVEST and SAVE produces rapid economic growth with low inflation

19. 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

20. Q: So what if income is based on the value of labor Why is this a problem? A: The value of labor is going down Modern automation technology is reducing the need for human labor Globalization is causing a race to the bottom for wages Labor is loosing value It is being replaced by capital as a source of wealth

21. 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 Worker’s share of economic growth declines The rich get richer, and the poor get left behind This leads to slow growth in consumer demand Which causes slow growth in profits and wages Which translated into slow economic growth

22. Q: How do bank lending policies prevent people from 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 Banks lend money to the poor for consumption but not investment So the rich make money from investments, while the poor get deeper in debt.

23. So what - if monetary policies prevent rapid economic growth Q: Why is this a problem? A: Without rapid economic growth, everyone looses. The rich get slow return on investment The middle class get stagnant wages The poor remain mired in poverty Rapid economic growth is crucial to achieving A New World of Prosperity and Economic Justice

24. Q: Isn’t Peoples Capitalism The 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

25. Q: Wouldn’t this create an enormous new government bureaucracy? A: Not at all. • No tax money or new agencies would be involved • Credit to member banks could easily be handled through • current mechanisms of the Federal Reserve system. • Bank loans to individuals would be no more complicated • than opening a new savings account. • Investments would be handled through established • investment banking and mutual fund industry. • Savings withholdings would be implemented through • existing payroll withholding systems. • Government role would be limited to prosecution of • criminal activity.

26. 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 Page http://www.PeoplesCapitalism.org