Economic Democracy and the Just Third Way

Justice University Session 5

• The session covers practical applications of the Just Third Way, particularly mechanisms for economic democracy.
• The Employee Stock Ownership Plan (ESOP) is an existing mechanism in the law, but the Capital Ownership Account is more important for the Just Third Way.
• Other mechanisms include the Citizens Land Development Cooperative, Customer Stock Ownership Plan, and Homeowners Equity Corporation.

Theoretical Basis of the Just Third Way

• The moral basis of the system is the human person, with dignity and empowerment from birth to death.
• Key concepts include:
• The person as a unique individual with inalienable rights and a social being.
• Development of each person within a social context.
• Power as essential for freedom and growth, but concentrated power leads to corruption.
• Property rights and powers related to labor and capital.
• Distributive justice and the importance of money and credit.

Economic Democratization Vehicles

• The primary vehicle is the Capital Ownership Account, connecting each person to economic growth.
• Other vehicles include:
• Employee Stock Ownership Plans (ESOPs) for corporate employees.
• Citizens Land Development Cooperative (CLDC) for equal ownership opportunities.
• Customer Stock Ownership Plan (CSOP) for utility customers.
• Homeowners Equity Corporation for acquiring homes.

Designing Economic Democratization Vehicles

• Key points to consider:
  • Feasibility: projects should be able to pay for themselves through future profits.
  • Equality of ownership opportunity: uses future savings money to avoid skewing ownership to those with past savings.
  • Private property rights: owners should have full stream of profits and control over what they own.

Employee Stock Ownership Plan (ESOP)

• An expanded ownership vehicle qualified under US retirement law.
• Allows workers to acquire equity shares in the sponsoring employer company.
• Loans are repayable with pre-tax profits or dividends.
• Does not require workers to put up their own money.
• Meets certain conditions to qualify, with repayment through pre-tax profits or dividends.### Limitations of ESOPs
• ESOPs only benefit corporate employees, excluding people in the public sector, teachers, unemployed, retired, children, disabled, and non-corporate workers.
• Current ESOPs are based on individual labor earnings and retirement plans.

Capital Ownership Accounts (COA)

• A COA is a trust for each individual, enabling them to borrow and purchase shares without risking personal assets.
• COA pays off loans from share profits, insulating individual property from seizure.
• COA doesn't require individuals to be investment experts; financial advisors can assist in choosing qualified shares.
• Capital Credit Insurance is a key aspect of COA.

Benefits of COA

• COA creates ownership income for individuals from birth to death, rather than just for retirement.
• Annual Capital Credit allocation allows for new share purchases and income generation.
• Tax advantages exist for selling shares created through COA.

Citizens Land Development Cooperative (CLDC)

• CLDC is a joint private ownership model, where residents of a specific area have equal ownership of land and infrastructure.
• CLDC generates income through leasing land to companies, with residual income distributed to residents as dividends.
• Each resident has a single, non-transferable voting share, cancelled if they leave the area.

Other Mechanisms

• Consumer Stock Ownership Plans (CSOPs) use borrowing to finance utility company needs, creating ownership for customers.
• Homeowners Equity Corporation (HEC) enables people to acquire homes through shares, with flexibility and tax advantages.
• HEC also addresses the foreclosure problem by buying homes at fair market value, allowing former residents to reacquire them at lower costs.

Guiding Principles

• The objective is to turn every citizen into an owner, promoting universal ownership and economic empowerment.
• These mechanisms aim to function in a free market system with market valuations, without government interference or artificial pricing.

Justice University Session 5

• The session covers practical applications of the Just Third Way, focusing on economic democracy mechanisms.

Theoretical Basis of the Just Third Way

• The moral basis of the system is the human person, with dignity and empowerment from birth to death.
• Key concepts include:
  • The person as a unique individual with inalienable rights and a social being.
  • Development of each person within a social context.
  • Power as essential for freedom and growth, but concentrated power leads to corruption.
  • Property rights and powers related to labor and capital.
  • Distributive justice and the importance of money and credit.

Economic Democratization Vehicles

• The primary vehicle is the Capital Ownership Account, connecting each person to economic growth.
• Other vehicles include:
  • Employee Stock Ownership Plans (ESOPs) for corporate employees.
  • Citizens Land Development Cooperative (CLDC) for equal ownership opportunities.
  • Customer Stock Ownership Plan (CSOP) for utility customers.
  • Homeowners Equity Corporation for acquiring homes.

Designing Economic Democratization Vehicles

• Key points to consider:
  • Feasibility: projects should be able to pay for themselves through future profits.
  • Equality of ownership opportunity: uses future savings money to avoid skewing ownership to those with past savings.
  • Private property rights: owners should have full stream of profits and control over what they own.

Employee Stock Ownership Plan (ESOP)

• An expanded ownership vehicle qualified under US retirement law.
• Allows workers to acquire equity shares in the sponsoring employer company.
• Loans are repayable with pre-tax profits or dividends.
• Does not require workers to put up their own money.

Limitations of ESOPs

• ESOPs only benefit corporate employees, excluding people in the public sector, teachers, unemployed, retired, children, disabled, and non-corporate workers.
• Current ESOPs are based on individual labor earnings and retirement plans.

Capital Ownership Accounts (COA)

• A COA is a trust for each individual, enabling them to borrow and purchase shares without risking personal assets.
• COA pays off loans from share profits, insulating individual property from seizure.
• COA doesn't require individuals to be investment experts; financial advisors can assist in choosing qualified shares.
• Capital Credit Insurance is a key aspect of COA.

Benefits of COA

• COA creates ownership income for individuals from birth to death, rather than just for retirement.
• Annual Capital Credit allocation allows for new share purchases and income generation.
• Tax advantages exist for selling shares created through COA.

Citizens Land Development Cooperative (CLDC)

• CLDC is a joint private ownership model, where residents of a specific area have equal ownership of land and infrastructure.
• CLDC generates income through leasing land to companies, with residual income distributed to residents as dividends.
• Each resident has a single, non-transferable voting share, cancelled if they leave the area.

Other Mechanisms

• Consumer Stock Ownership Plans (CSOPs) use borrowing to finance utility company needs, creating ownership for customers.
• Homeowners Equity Corporation (HEC) enables people to acquire homes through shares, with flexibility and tax advantages.
• HEC also addresses the foreclosure problem by buying homes at fair market value, allowing former residents to reacquire them at lower costs.

Guiding Principles

• The objective is to turn every citizen into an owner, promoting universal ownership and economic empowerment.
• These mechanisms aim to function in a free market system with market valuations, without government interference or artificial pricing.