Defining an Ownership Society

An ownership society values responsibility, liberty, and property. Individuals are empowered by freeing them from dependence on government handouts and making them owners instead, in control of their own lives and destinies. In the ownership society, patients control their own health care, parents control their own children's education, and workers control their retirement savings.

President Bush says he wants America to be an “ownership society.” What does that mean?

People have known for a long time that individuals take better care of things they own. Aristotle wrote, "What belongs in common to the most people is accorded the least care: they take thought for their own things above all, and less about things common, or only so much as falls to each individually." And we all observe that homeowners take better care of their houses than renters do. That’s not because renters are bad people; it’s just that you’re more attentive to details when you stand to profit from your house’s rising value or to suffer if it deteriorates.

Just as homeownership creates responsible homeowners, widespread ownership of other assets creates responsible citizens. People who are owners feel more dignity, more pride, and more confidence. They have a stronger stake, not just in their own property, but in their community and their society. Geoff Mulgan, a top aide to British prime minister Tony Blair, explains, “The left always tended to underestimate the importance of ownership, and how hard it is for a democracy that does not have widespread ownership of assets to be truly democratic. …To escape from poverty you need assets—assets which you can put to work. There is a good deal of historical evidence…as well as abundant contemporary evidence, that ownership tends to encourage self-esteem and healthy habits of behaviour, such as acting more for the long term, or taking education more seriously."

Former prime minister Margaret Thatcher had that goal in mind when she set out to privatize Great Britain’s public housing. Her administration sold 1.5 million housing units to their occupants, transforming 1.5 million British families from tenants in public housing to proud homeowners. She thought the housing would be better maintained, but more importantly she thought that homeowners would become more responsible citizens and see themselves as having a real stake in the future and in the quality of life in their communities. And yes, she thought that homeowners would be more likely to vote for lower taxes and less regulation—policies that would tend to improve the country’s economic performance—and thus for the Conservative Party, or for Labour Party candidates only when they renounced their traditional socialism.

Margaret Thatcher saw that private ownership allows people to profit from improving their property by building on it or otherwise making it more valuable. People can also profit by improving themselves, of course, through education and the development of good habits, as long as they are allowed to reap the profits that come from such improvement. There's not much point in improving your skills, for instance, if regulations will keep you from entering your chosen occupation or high taxes will take most of your higher income.

The United States today has the most widespread property ownership in history. This year an all-time high of 68.6 percent of American households own their own homes. Even more significantly, increasing numbers of Americans are becoming capitalists—people who own a share of productive businesses through stocks or mutual funds. About half of American households qualify as stockholding in some form. That's up from 32 percent in 1989 and only 19 percent in 1983, a remarkable change in just 20 years. That means almost half of Americans directly benefited from the enormous market appreciation between 1982 and 2000 and are prepared to see their wealth increase again when the current stock market slump ends.

But it also means that about half of Americans are not benefiting as owners from the growth of the American economy (though of course they still benefit as wage-earners and consumers). In general, those are the Americans below the average income. The best thing we could do to create an ownership society in America is to give more Americans an opportunity to invest in stocks, bonds, and mutual funds so that they too can become capitalists. And the way to do that is obvious.

Right now, every working American is required to send the government 12.4 percent of his or her income (up to about $88,000) via payroll taxes. That’s $4,960 on a salary of $40,000 a year. But that money is not invested in real assets, and it doesn’t belong to the wage-earner who paid it. It goes into the Social Security system, where it’s used to pay benefits to current retirees. If we want to make every working American an investor—an owner of real assets, with control of his own retirement funds and a stake in the growth of the American economy—then we should let workers put their Social Security taxes into private retirement accounts, like IRAs or 401(k)s. Then, instead of hoping someday to receive a meager retirement income from a Social Security system that is headed for bankruptcy, American workers would own their own assets in accounts that couldn’t be reduced by Congress.

President Bush has talked about such a reform since his first campaign, and his President’s Commission to Strengthen Social Security proposed three ways to achieve this goal. If he chooses to make Social Security reform part of his reelection campaign, then we may see congressional action in 2005. Sen. John F. Kerry has pledged never to “privatize Social Security.” He should be asked why he thinks working-class Americans should not be allowed to invest their savings in stocks and bonds, as his family has done so successfully.

Other reforms that could enhance the ownership society include school choice—which would give parents the power to choose the schools their children attend—and wider use of Health Savings Accounts, which transfer control over health care decisions from employers, insurance companies, and HMO gatekeepers to individual patients.

Advancing an ownership society can also improve environmental quality. People take care of things they own, and they’re more likely to waste or damage things that are owned by no one in particular. That’s why timber companies don’t cut all the trees on their land and instead plant new trees to replace the ones they do cut down. They may be moved by a concern for the environment, but the future income from the property is also a powerful incentive. In the socialist countries of Eastern Europe, where the government controlled all property, there was no real owner to worry about the future value of property; consequently, pollution and environmental destruction were far worse than in the West. Vacláv Klaus, prime minister of the Czech Republic, said in 1995, “The worst environmental damage occurs in countries without private property, markets, or prices.”

Another benefit of private property ownership, not so clearly economic, is that it diffuses power. When the government owns all property, individuals have little protection from the whims of politicians. The institution of private property gives many individuals a place to call their own, a place where they are safe from depredation by others and by the state. This aspect of private property is captured in the axiom, "A man's home is his castle." Private property is essential for privacy and for freedom of the press. Try to imagine "freedom of the press" in a country where the government owns all the presses and all the paper.

The many benefits of an ownership society are not always intuitively obvious. The famous Harvard economist John Kenneth Galbraith wrote a bestselling book in 1958 called The Affluent Society, in which he discussed the phenomenon of “private opulence and public squalor”—that is, a society in which privately owned resources were generally clean, efficient, well-maintained, and improving in quality while public spaces were dirty, overcrowded, and unsafe—and concluded, oddly enough, that we ought to move more resources into the public sector. Thousands of college students were assigned to read The Affluent Society, and Galbraith’s ideas played a major role in the vast expansion of government during the 1960s and 1970s.

But Galbraith and American politicians missed the real point of his observation. The more logical answer is that if privately owned resources are better maintained, then we should seek to expand private ownership.

Widespread ownership of capital assets has many benefits for society: It means that property is better maintained and long-term values are higher, including environmental quality. It means that people have a greater stake in their community and thus become better citizens. It protects people from the arbitrary power of government and gives them more freedom and more confidence as citizens. It produces prosperity because markets can’t work without private property. Private retirement accounts and reduced taxes on investment would encourage more ownership for all Americans.

http://www.neoperspectives.com/foundingoftheunitedstates.htm

Before the United States came into being the laws of Europe were codified around what was known as ‘the Divine Rights of Kings’. That is, it was thought that the King of any given country received guidance from God and thus his word was law. The King could take anyone’s life or property by snapping his fingers because he was the law. King Henry the 8th of England killed how many of his wives? The circular argument was that God wouldn’t have put this person in charge of the country if he wasn’t meant to be there by God’s Will. Therefore the Kings used religion, often with the help of ministers, priests, and bishops, to brainwash their subjects and retain complete control of power. The pope complicated things a bit for these Tyrants, as he had an enormous amount of political power over Catholic nations – one of the reasons that led to the rise of Protestantism. German princes, and eventually, the Dutch and English, were eager to be free from the moderating tentacles of Rome in order to gain more power for themselves.

There was no freedom of religion in most of Europe. You were often heavily taxed, excluded from social circles, and sometimes persecuted and killed if you didn’t conform to the state religion. Religious authorities were appointed and monitored by the King and dismissed, imprisoned, or killed if they became too outspoken. Thomas Paine later rightly said, "All national institutions of churches, whether Jewish, Christian, or Turkish, appear to me no other than human inventions, set up to terrify and enslave mankind, and monopolize power and profit." (29)

Political opponents had their property seized, confiscatory taxes financed the constant wars of the Kings, which kept the people in a state of fear of foreign powers (preventing rebellion), and the top down socialistic economies of the King (or his Vassals) were the rule, as it enhanced the power of the King. A hierarchical society dominated by titles, ranks, and nobilities bestowed by the King gave the King further power through the resulting loyalty of his Vassals. If someone started to become wealthier than the King, the King just took his money! The King was always the wealthiest person in his country. Needless to say, all this didn’t go over too well with quite a few people and, upon hearing of cheap land and political/religious freedom in the colonies, they left for America.

The many groups that came here may have been quite different in language, ethnicity and religion, but shared the common bond of fleeing Tyranny, and so set up a radically different form of government then had ever been done before in human history. They established the first codified separation of Church and State. They knew, as Justice Roy Black said, that "..a union of government and religion tends to destroy government and to degrade religion..."(29) They believed all men were equal under God and despised the Vassals that were made more equal then the common man under the Kings and so wrote in article I section IX of the Constitution: “No title of nobility shall be granted by the United States: and no person holding any office of profit or trust under them, shall, without the consent of the Congress, accept of any present, emolument, office, or title, of any kind whatever, from any king, prince, or foreign state.” (74) Finally, they wrote laws that removed the King and eliminated the artificial Middle-Man between the common man and God. Each man was the King of his own private property, including his physical body, and thereby only answerable to God, not government. What took place was a massive decentralization of power to the individual. There was no longer any King who owned and lorded over all the land; the people owned and lorded over their own land. The people were free.

Pennsylvanian William Pitt gave a famous speech to the British Parliament describing a basic American principle, every man a King, that would become ingrained in our Constitution:

”The poorest man may in his cottage bid defiance to all the forces of the Crown. It may be frail, its roof may shake; the wind may blow through it; the storm may enter, the rain may enter -- but the King of England cannot enter; all his force dares not cross the threshold of the ruined tenement!” (29)

This idea of ‘ownership’ and ‘property rights’ consistent with the rule of law is the only reason why the United States became the most powerful nation on earth. In retrospect this might seem rather obvious. If you own property you will develop, improve, and maintain it and attempt to produce wealth with it. Any profit you make from your property might be channeled back into further improving your property, or spent in voluntary exchange to purchase another person's property, or perhaps saved and/or given to charity. Since wealth = money and money is backed up by things of values, then it is clearer how the United States became a super power: by the enormous amount of wealth created by the industriousness of individual American citizens. This unique opportunity to produce wealth without being harassed by government and with all property owners equal in the eyes of the law, attracted an huge influx of immigration that continues to this day.

These property laws and the amazing economic growth they produce can only be enforced and codified by a Republic. A Republic is different from a Democracy in that there are core laws that cannot be voted on (without changing the Constitution) and decentralization is further increased. For example, in theory, all of the citizens cannot vote to take the property of the richest citizen because that rich citizen is King of his own property under the Constitution. In theory, the people of a state and in turn a county can live how they wish provided they respect the basic principles of the Constitution.

Notice the use of the phrase 'in theory'. Indeed, we have drifted far from the principles that brought us such prosperity. If you fear you will loose your property, or that you will receive only a small portion of the total revenue you generate from it, are you not discouraged from improving it? If you pay property tax on your property do you own it or do you rent it? If your land can be seized by ‘eminent domain’ for the ‘public good’ do you really own it? If you own a business and 1/3rd of all your money goes to the Federal government then doesn’t the Federal government own a third of the business? When the people of a state only own 10% of the total land of their state (Nevada) then do the people of that state own their state or does the Federal Government (30)? What was the point of even getting rid of the King?!? In our ignorance we have created a new King, another middle man between the common man and God, except now it has a different name: the Federal Government of the United States.

If we want to make every working American an investor-an owner of real assets, with control of his own retirement funds and a stake in the growth of the American economy-then we should let workers put their Social Security taxes into private retirement accounts, like IRAs or 401(k)s.

Ah, David Boaz has come a long way since joining CATO. And so has CATO. Once a leading Libertarian think tank, now a tool maker for the fascist elites, who will get the republicans to enact that which the democrats will use, to take further control and responsibility away from the American people.

Do any of these Social Security privatization advocates honestly believe for even one moment that the American people won't successfully demand a bail out when an economic down turn significantly reduces the value of their retirement accounts? And to prevent future down turns after that, do the people at CATO think their will be enough political clout to prevent protectionistic legislation designed to stifle innovations that will reduce the values of the favored industries that carry large amounts of Social Security private investments? Of course not on both counts. David Boaz's words rang out quite clear when he says "if we want to make every working American..." This kind of talk disqualifies Mr. Boaz from even qualifying to be among the neo-libertarians. Its one thing to argue for an ownership society, its quite another to call for government to make it happen. And even worse, to call for anything that will "make every working American..."

If an ownership society were the true intentions of these once great, now fake, Libertarians, they would have at least demanded that investment in a home be included with retirement accounts. Heck, they have not even proposed that it be included. It seems that their are not many steps needed to go from Libertarian to Fascist. And even fewer steps from Republican to Democrat.

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