Expanding capital ownership is the most urgent task faced by Western governments today.
The downfall of all the great civilizations has often been credited to external forces, such as the barbarian tribes that overran the western half of the Roman Empire in the fifth century. In fact, such external forces are always facilitated and preceded by internal social, political, and economic rot.
There can be no doubt that Western Civilization is currently threatened by external forces, including but not limited to Islamic extremism. But following historical precedent, such threats would be of limited significance or even non-existent, barring the precipitous decline in its major centers in Europe and the Western Hemisphere of civil discourse, classical education, the traditional family, and political moderation, leading to populist movements of the left and the right, the most recent of which is currently raging in France (the “gilets jaunes”).
I would argue, however, that the single most significant manifestation of this phenomenon is the obscene concentration of wealth in the West (“wealth” defined as income-producing assets). A report for the recent gathering of the rich and powerful in Davos, Switzerland makes the startling statement (quoting an Oxfam study) that the combined wealth of the richest 26 individuals in the world has reached $1.4 trillion. This means that those 26 individuals control the same amount of wealth as the world’s 3.8 billion poorest people!
A well-known American economist once made the statement that if something is not sustainable, it will not be sustained. That is certainly the case here. There is nothing more urgent than for the governments of the West to take immediate and effective measures to expand capital ownership among their populations. I was appointed by President Reagan to Task Force on Expanded Capital Ownership. the Task Force’s final report recommended the passage of a “Capital Homesteading Act,” mimicking the Homestead Act passed during the 1860’s which opened up the American west to the landless and thus wealth-deficient masses of the east coast, an immensely popular and highly successful measure. Unfortunately, nothing was done to implement the recommendation.
There are many ways ownership of wealth can be expanded, such as cooperatives, employee stock ownership plans, community investment trusts, and others. Israel is not immune to the phenomenon of wealth concentration, although the structure of the Israeli economy is such that elements of the solution are in place, such as many cooperatives and employee ownership plans. Community investment trusts should also be promoted, based on ethnic groupings or geographic locations (cities or regions).
The task is urgent and the time is now!
This article was originally published by Globes.