Book Cover

Capitalism,  The Way to a World of Peace and Plenty
by Ray Carey

Hard/Softcover/Kindle - 5 May, 2004, Available on

Ray Carey presents the theory and practice of democratic capitalism by coupling his experience with a synthesis of the thought of Adam Smith, Karl Marx, and John Stuart Mill.  The empirical evidence is clear: democratic capitalistic companies produce superior results, and nations that support economic freedom and keep money neutral improve the lives of their people.

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Give the Federal Reserve the Needed Tools

Updated on May 21, 2014

The continuing media impression is that the Federal Reserve Board manages the American economy. They do not. Their monetary tools include the amount and cost of money, not included are the fiscal tools of taxes and spending. Proper management of the economy requires coordinated use of both monetary and fiscal tools.

The Fed pumped trillions of dollars into the economic system most of which stayed in the banks. They took the interest rate to about zero with limited effect on economic growth and unemployment. The only sure effect was to minimize the pensioners' retirement income from bond investment and low-cost money for speculative leverage.

The recently retired Chairman of the Fed, Ben Bernanke, explained in his book that the reason that they did not do a better job adding economic growth and reducing unemployment was the lack of these necessary tools. His advice can be found on web site, online education Essay section # 4: "Give the Federal Reserve the Needed Tools."

Inequality of wealth

Updated on May 13, 2014

Inequality of wealth is getting great attention with the publication of Thomas Piketty's Capital. The book includes lengthy Jane Austen quotes but no examination of Adam Smith, particularly his warning to beware of the speculators, Prodigals and Projectors as he called them, who would deflect capital away from the job-growth economy. The deflection is almost total with Wall Street trading 99% and investment in economic growth 1%.

The following are quotes from wise people over the years on the subject of inequality:

In my studies, I learned that society has been warned throughout history about the harm to economic growth and social cohesion from concentrated wealth. Confucius understood the necessity for diffused economic power two and one-half millennia ago:

The centralization of wealth is the way to scatter the people, and letting it be scattered among them is the way to collect the people. They produce wealth, but do not keep it for their own gratification. Disliking idleness, they labor but not alone with a view to their own advantage. In this way, selfish schemes are repressed and find no way to arise; robbers, filchers, and rebellious traitors do not exist.

The 18th-century European Enlightenment added their wisdom to that of Confucius. Claude Adrien Helvétius (1715-1771), a wealthy man, wrote with special authority on the persistent impediment of concentrated wealth and its negative effect on social cohesion:

The almost universal unhappiness of men and nations arises from the imperfections of their laws, and the too unequal partition of their riches. There are in most kingdoms only two classes of citizens, one of which wants necessaries, while the other riots in superfluities. If the corruption of the people in power is never more manifest than in the ages of the greatest luxury, it is because in those ages the riches of a nation are collected into the smallest number of hands.

Benjamin Franklin (1706-1790), that Enlightenment man of America, actually proposed legal limits to concentrated wealth:

That an enormous Proportion of Property vested in a few Individuals is dangerous to the Rights, and destructive of the Common Happiness, of Mankind; and therefore every free State hath a Right by its Laws to discourage the Possession of such Property.

Condorcet denounced special privileges from the government to the few as the root cause of the concentration of wealth:

Wealth has a natural tendency to equality if the administration of the country did not afford some men ways of making their fortune that were closed to other citizens. We shall reveal other methods of ensuring equality, either by seeing that credit is no longer the exclusive privilege of great wealth or by making industrial progress and commercial activity more independent of the existence of great capitalists.

Condorcet correctly identified non-democratic privileges lobbied by, and given to, the few as the source of concentrated wealth, but his vision of broad wealth distribution was only a utopian ideal in the eighteenth century. The U.S. economy at the beginning of the twenty-first century, however, had begun to fulfill Condorcet’s prophecy: Wage earners had supplanted the “great capitalists” as a source of investment money. Unfortunately, this watershed event has yet to change the pattern of government privileges for the few to make more money on money. While the source of capital has been democratized, the rewards from capitalism have not yet been democratized.

NY Times Article with Charlie Munger and Warren Buffett

Updated on May 10, 2014

A recent NYT article (May 5th, 2014) featured Warren Buffett's 90 year old long-time partner, Charlie Munger. He was talking about the critical importance of trust at their famous annual meeting that attracts thousands.

Charlie wrote me ten years ago after receiving my book Democratic Capitalism, The Way to a World of Peace and Plenty. To my great surprise he wrote that he had stayed up all night to finish the book. Apparently the book's message about trust and cooperation in the right capitalism registered with him as it still does.

The book is now available on Kindle for less than a dollar. For those who say "nobody saw the economic crisis coming" read the book on the "Rise of Ultra-Capitalism." More importantly, the book provides action plans to counter the domination by finance capitalism but this real reform is still in the future.

An Agenda to Reform Capitalism

Updated on May 2, 2014

Economic recovery requires capital invested in the job-growth economy and kept away from the speculators. Impediments must be eliminated allowing democratic capitalism to spread on its economic and social logic. These proposed reforms are summarized below and examined in more detail in a series of articles under “Introduction,” in video interviews, and in the book, Democratic Capitalism: The Way to a World of Peace and Plenty..

• Tax-free dividends for wage earners will expand profit-sharing and ownership plans, rebuild retirement accounts, generate a “capital wage” to be spent or saved, and turn employees into active capitalists.

• Hundreds of billions of dollars of corporate surplus will be moved into the economy through both reinvestment in growth and distribution in dividends. Stock buy backs will be taxed.

• Wage earners will instruct their money managers to move retirement money out of “too big to fail” banks into small banks, credit unions, or direct investment.

• Congress will design a “Repair America Bond” that will redirect some of the $2.3 trillion of 401(k) money into $2 trillion for infrastructure repair.

• Wage earners will instruct their money managers to measure corporate performance not on quarterly earnings but rather on a three-year running average of sales, profits, and cash flow against managements’ predictions.

• Government must prevent recessions by fighting asset inflation with the same determination with which they fight price inflation. One agency should “control currency and credit for the general welfare,” not for the benefit of speculators. Tools include interest, reserve requirements, and various taxes.

Goal of this website

Updated on May 2, 2014

There are two goals of this web site. First to present Democratic Capitalism as the economic system that will provide each wage earner with the opportunity for full development in an environment of trust and cooperation. The function of managers is to harmonize the two in order to produce more broadly distributed wealth.

The second goal is to remove the impediments from a quarter-century of dominance by finance capitalism by neutralizing the lobby power of Wall Street in order to switch government support to democratic capitalism.





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