The following article is contributed by Rodney Shakespeare, Co-author (with Robert Ashford) of Binary Economics: The New Paradigm. Binary economics is most famous for its advocacy of ESOPs (Employee Stock Ownership Plans), but it has other aspects as well. This is the second in our occasionally series on alternative approaches which embody distributive principles.
Binary economics is a school of economics expressing a new universal paradigm which challenges the fundamental assumptions of conventional economics. It states that it is a private property, market economics which ensures that, over time, all individuals come to ownership of an independent capital estate providing an income.
A summary of binary economics might be – a justice which creates efficiency and an efficiency which creates justice. A more detailed summary could be – the use of central bank-issued interest-free loans, administered by the banking system, for the development and spreading of various forms of productive capacity (and the associated consuming capacity) thereby creating a balance of supply and demand and forwarding social and economic justice.
Some quick illustrations of the binary proposal to use central bank-issued interest-free loans are:−
- a halving or more of the usual cost of a bridge, sewage works or hospital
- a halving or more of the usual cost of micro-credit for poor people to start a business
- the enabling of any individual in the population (from a baby to a retiree) to become a shareholder in one of the great corporations. There are also binary plans for pensions and universal health care.
But − wait a minute − isn’t that Distributism as well? And isn’t that the sort of thing which is in, or should be in, a modern Christian economics? And what, for that matter, is in, or should be in, a modern Islamic economics?
The answer is that any truly modern form of economics includes the following characteristics:–
- markets which, in a fair and efficient way, really do work for everybody
- private property which extends to all individuals in the population
- a proper balance of supply and demand
- capital ownership which extends to everybody
- some form of independent income for everybody
- no inflation
- an ethic concerned with social and economic justice
- an interest-free money supply which is totally directed at the real economy and so at the development and spreading of productive (and the associated consuming) capacity
Or rather, it could be Distributism IF Distributism really did have the mechanisms to achieve its aims. And IF – and this is of fundamental importance – Distributism had paradigm-altering concepts capable of challenging conventional economics so that the new ideas and policies are seen as being more realistic, more true, more just and more practical than conventional economics. It has to have these concepts because the big underlying issue is whether there is anything which can successfully challenge conventional economics, its nostrums, contradictions, injustices and inefficiencies. And not just that but it must also be something which can produce a stable economics (at a time when a global financial collapse is looking increasingly likely) and which can address the big environmental problems (and an environmental collapse is looking increasingly likely as well).
Now these are big matters and none of them can be properly addressed in an article such as this. But you might like to reflect on some of the issues in particular asking yourself what you have in common with other modern people of faith and of good faith. If you think you do have something in common then go to Wikipedia and have a look at the article on binary economics and, if you go to www.binaryeconomics.net you can buy The Modern Universal Paradigm which deals with all these matters and more.