Book Cover

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

Hard/Softcover/Kindle - 5 May, 2004, Available on Amazon.com

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.


Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player


 

CCDC Blog

Jobs for everyone when these dots are connected

Updated on July 28, 2014

Jobs for everyone when these dots are connected

• 24 million working-age Americans jobless.
• Idle cash in corporate surplus over $ 2 trillion.
• Overdue infrastructure repair over $ 2 trillion.

Most of the 24 million would have jobs if corporate surplus cash were to be invested in growth and infrastructure repair.

The Administration brags that 288,000 jobs were created in June but full- time jobs declined 523,000. Economic growth dropped 2.9% in the first quarter of 2014. We are in the slowest recovery on record.

The recession was caused when the trader-speculators kept raising their bets by borrowing more money until the bubble--inevitably--popped. The market then switched from greed to fear from buying to selling.

For a quarter-century, shareholder capitalism “downsized” (read “fired”) to raise short-term profits, share price, and the value of options. Instead of investment in growth over two trillion dollars in cash ended up sitting idle in corporations. Some of it was wasted on stock buy backs to hype the stock price and value of options.

At one time, America led the world in the quality of roads, bridges and schools. Now bridges are falling down, the roads are full of holes, and school buildings badly need repair. Besides investment in job growth a massive repair effort would put people to work. Both growth investment and repairs would pay for themselves in time.

During the 1930’s depression, John Maynard Keynes argued that economic recovery required adding taxes to increase consumer spending. Recently the same argument grid-locked Congress. Adding taxes is not necessary if spare corporate cash is used. Taxes would actually be reduced by lower unemployment benefits and through additional income from more people working.

In 1776, Adam Smith proposed that free-market capitalism needs little from government except control of the speculators, “prodigals and projectors,” as he called them, from deflecting capital away from the job-growth economy.

In 1998, famous speculator George Soros warned that instabilities inherent in finance capitalism posed a great threat to society and required regulation. The Clinton administration ignored both warnings, deregulated finance capitalism, and caused the greatest deflection of capital away from job-growth in history.

The solution is simple—connect the dots!

Capitalist Alternatives

Updated on July 8, 2014

Thomas Piketty proposed in Capital that because the rate of return on capital exceeds the rate of economic growth, capitalism automatically generates inequalities which, in turn, undermine the values of democratic society. Piketty later argues that inequalities are not automatic in capitalism, but rather subject to economic and political changes.

Such study would identify two forms of capitalism competing for domination in the twenty-first century: “Stakeholder or democratic capitalism” is responsible to workers, owners, customers, suppliers and community. “Shareholder Capitalism” has responsibilities only to shareholders measured by the short-term price of the stock. This deflects capital away from the job-growth economy towards speculation and is almost total. Trading is now 99% of Wall Street activity, but capital investment in economic growth is less than 1%!

ERISA (Employee’s Retirement Insurance Security Act) was the law that made workers capitalists with trillions of dollars of pension funding. Owner motivation should have increased profits and spread wealth broadly. The political process, however, was dominated by Wall Street. Bob Rubin, Secretary of Treasury, and Alan Greenspan, Chair of the Federal Reserve, in the Clinton administration successfully led in deregulation of finance capitalism and prevented regulation of derivatives.

Excessive liquidity from the workers’ capital helped Wall Street over-leverage their bets with the risk going up until the housing/credit bubble popped. The political process that Piketty refers to, has not yet designed the government support necessary for democratic capitalism; instead, it has concentrated on putting Wall Street’s “Shareholder Capitalism” back together.

Wall Street dominates the economic process and uses the money to dominate the political process. This cycle has persisted from the beginning of the republic, but never before had it used trillions of dollars of workers’ capital. This obscene contradiction requires real reform. Will the citizens finally express their “will and wisdom,” as they must in a democratic society, or will the Wall Street lobby continue to dominate the political process?

 

 

 

 

Recent Posts

 

Archives