RETURNING TO 'CLASSICAL CAPITALISM'
The following money market reforms that would allow the re-emergence of classical capitalism are to be found in Against Our Night - down loadable from this site.
Prior to being phased out the derivative, currency, futures and other similar financial markets will be subject in the first instance to strict regulation and taxation. Limits will also be placed on the trade-ability of stocks and shares to limit trading for speculative purposes. Asset stripping and using the share market to take over businesses will be made illegal.
Until the money markets are phased out they will be subject to strict regulation and profits made from their operation heavily taxed.
If, under the reforms in Group 5, a central bank of last resort is retained credit it issues cannot be used for speculation or any other use within money markets before they are phased out.
Stocks, or shares, will have an unlimited life until it is sold by the first owner. After that it will be cancelled out of existence after 50 years (Keen, 2011), or after it has changed hands more than 10 times (whichever comes first).
The chain of effect costs to society and the environment occasioned by business and corporate activity (negative externalities) must be anticipated and avoided. If that step fails the local communities affected may bring the company to arbitration in a people’s court, or impose its will locally or nationally on the company by referendum. The company must then put right any damage it has done, or face involuntary liquidation, or independent statutory management, until all damage has been made good.
Opportunities for families to access property and small businesses ownership will be maximised.
No single corporation, unless mandated by a people’s referendum, will be permitted to have more than a 10% share of any one national market. All profits from activities exceeding the 10% market cap will be forfeited and the company broken up into smaller, independently owned units to which the workplace democracy reform will be applied.
All corporations or companies will hold national, local community interests and environmental protections in balance with the interests of their principals and shareholders – this must be built into their constitutions, or ‘articles of incorporation’.
Foreign corporations shall hold no more than a 40% interest in any indigenous business. When in-country investment is available it must be preferred over foreign investment. Measures must be introduced to ensure low margins, less regulation and low labour costs are not leveraged by foreign multinational companies to undercut domestic investment and production.
Legislation, or common law rights of personhood and any right granted to corporations to take legal action against a government to protect its interests, must be tested by referendum and eliminated if the people disapprove.
Free trade and other aspects of what is called neo-liberalism will be abandoned where employment and business opportunities, established business activities and the nation’s culture, economy and environment are proven to be adversely affected by trans-national corporations, other foreign operations, or off-shore practices that work against the level playing field principle. Foreign corporate or private interests will not (collectively) be permitted to own more than 1% of the nation’s territory, but may lease land. Trade and other practices formerly identified with colonialism and considered harmful to host states will be identified and ended.
Level international trading fields will be maintained using a system of import tariffs to ensure local industry does not face unfair foreign competition, where that competition relies on low wage rates, few controls, unnaturally low profit margins and the support of undemocratic and corrupt central and local foreign governments.
Corporations will return to being distinct legal entities, formed for a specific, time bound purpose. Over time existing corporations will lose their corporate status. Separate businesses, on a registered company basis, will form around the various activities conducted by the original corporation.
Excessive business profit-taking, as determined nationally, or by local communities, may be ‘re-allocated to business development, higher wages or other public investment, through a suitably framed local or national referendum, or by a people’s court order where the sum involved is not more than ten million dollars. The same process may also be applied to large salaries paid within elite professional sports.
Something resembling the old 'gold standard' to maintain the value of the currency should be investigated.