This is not a utopian concept….The prospects for unleashing economic development and eliminating “give away” under the technique of [Louis Kelso’s] Second-Income Plan has enormous possibility for developing countries. [ A New Focus on Economic Development , El Universo, Guayaquil, Ecuador, April 1, 1969.]
It is indeed gratifying to see the light of day after struggling in darkness so long. The Second Income Plan has so stimulated our community that we can hardly wait for its implementation. [Letter to Norman G. Kurland, March 7, 1969.]
“In the shadow of the old order, a small, spirited group of Americans campaigned audaciously to construct a new order — the U.S. economy reorganized around Louis Kelso’s revolutionary principle of universal capital ownership. The revolution, these ambitious activists decided, ought to begin right in the nation’s capital — Washington, D.C. — a city mired in financial insolvency, with accelerating social and economic deterioration, with extremes of wealth and poverty as stark as any found in America. Under congressional oversight, the District of Columbia could become the laboratory, they thought, the place where Kelso’s ideas were actually applied. If the concept worked for D.C., every city and region in America would want to emulate it…. The power of Louis Kelso’s vision… has attracted an odd assortment of converts-idealists from right and left and from across the usual racial and religious divides, people who believed Kelso’s thinking held the key for renewing American society. Some of them joined with [Norman] Kurland in his Center for Economic and Social Justice to promote a daring experiment: Congress should designate the District of Columbia a “super empowerment zone” that would launch new enterprises and industries (and privatize some governmental functions) through Kelso’s mechanism of citizen and worker ownership trusts. new economic development would be attracted to D.C., not by tax subsidies or relaxed laws, but because low-interest capital credit would be available to the community trusts-cheap credit provided through the Federal Reserve’s discount lending. [ One World, Ready or Not: The Manic Logic of Global Capitalism , Chapter 18, pp. 432-433.]
[T]here is another method of obtaining money.… [It] does not presuppose the existence of accumulated results of previous development, and hence may be considered as the only one which is available in strict logic. This method of obtaining money is the creation of purchasing power by banks. The form it takes is immaterial. The issue of banknotes not fully covered by specie withdrawn from circulation is an obvious instance, but methods of deposit banking render the same service, where they increase the sum total of possible expenditure. Or we may think of bank acceptances in so far as they serve as money to make payments in wholesale trade. It is always a question, not of transforming purchasing power which already exists in someone’s possession, but of the creation of new purchasing power out of nothing — out of nothing even if the credit contract by which the new purchasing power is created is supported by securities which are not themselves circulating media — which is added to the existing circulation. And this is the source from which new combinations are often financed, and from which they would have to be financed always, if results of previous development did not actually exist at any moment. These credit means of payment, that is means of payment which are created for the purpose and by the act of giving credit, serve just as ready money in trade, partly directly, partly because they can be converted immediately into ready money for small payments or payments to the non-banking classes — in particular to wage-earners. With their help, those who carry out new combinations can gain access to the existing stocks of productive means, or, as the case may be, enable those from whom they buy productive services to gain immediate access to the market for consumption goods. There is never, in this nexus, granting of credit in the sense that someone must wait for the equivalent of his service in goods, and content himself with a claim, thereby fulfilling a special function; not even in the sense that someone has to accumulate means of maintenance for laborers or landowners, or produced means of production, all of which would only be paid for out of the final results of production. Economically, it is true, there is an essential difference between these means of payment, if they are created for new ends, and money or other means of payment of the circular flow. The latter may be conceived on the one hand as a kind of certificate for completed production and the increase in the social product effected through it, and on the other hand as a kind of order upon, or claim to, part of this social product. The former have not the first of these two characteristics. They too are orders, for which one can immediately procure consumption goods, but not certificates for previous production. Access to the national dividend is usually to be had only on condition of some productive service previously rendered or of some product previously sold. This condition is, in this case, not yet fulfilled. It will be fulfilled only after the successful completion of the new combinations. Hence this credit will in the meantime affect the price level. The banker, therefore, is not so much primarily a middleman in the commodity “purchasing power” as a producer of this commodity. However, since all reserve funds and savings today usually flow to him, and the total demand for free purchasing power, whether existing or to be created, concentrates on him, he has either replaced private capitalists or become their agent; he has himself become the capitalist par excellence. He stands between those who wish to form new combinations and the possessors of productive means. He is essentially a phenomenon of development, though only when no central authority directs the social process. He makes possible the carrying out of new combinations, authorizes people, in the name of society as it were, to form them. He is the ephor of the exchange economy…. [Chapter II: “The Fundamental Phenomenon of Economic Development,” The Theory of Economic Development , New Brunswick: Transaction Publishers, 1993, pp. 72-74.]
His (Adam Smith’s) was a real universalism in intent. Laissez Faire was intended to establish a world community as well as a natural harmony of interests within each nation…. But the “children of darkness” were able to make good use of his creed. A dogma which was intended to guarantee the economic freedom of the individual became the “ideology” of vast corporate structures of a later period of capitalism, used by them, and still used, to prevent a proper political control of their power…. Marxism was the social creed and the social cry of those classes who knew by their miseries that the creed of the liberal optimists was s snare and a delusion…. Liberalism and Marxism share a common illusion of the “children of light.” Neither understands property as a form of power which can be used in either its individual or its social form as an instrument of particular interest against the general interest. Liberalism makes this mistake in regard to private property and Marxism makes it in regard to socialized property…. The Marxist illusion is partly derived from a romantic conception of human nature…. It assumes that the socialization of property will eliminate human egotism…. The development of a managerial class in Russia, combing economic with political power, is an historic refutation of the Marxist theory. [ The Children of Light and the Children of Darkness , 1944.]
The best lesson that any people can learn is that there is no patent cure-all which will make the body politic perfect, and that any man who is able glibly to answer every question as to how to deal with the evils of the body politic is at best a foolish visionary and at worst an evil-minded quack. Neither doctrinaire socialism nor unrestricted individualism nor any other ism will bring about the millennium. Collectivism and individualism must be used as supplementary, not as antagonistic, philosophies. In the last analysis the welfare of a nation depends on its having throughout a healthy development. A healthy social system must of necessity represent the sum of very many moral, intellectual, and economic forces, and each such force must depend in its turn partly upon the whole system; and all these many forces are needed to develop a high grade of character in the individual men and women who make up the nation. Much of the discussion about socialism and individualism is entirely pointless, because of failure to agree on terminology. The very reason why we object to state ownership, that it puts a stop to individual initiative and to the healthy development of personal responsibility, is the reason why we object to an unsupervised, unchecked monopolistic control in private hands. We urge control and supervision by the nation as an antidote to the movement for state socialism. Those who advocate total lack of regulation, those who advocate lawlessness in the business world, themselves give the strongest impulse to what I believe would be the deadening movement toward unadulterated state socialism. [“The Thralldom of Names,” History as Literature .]
A Living Wage: Its Ethical and Economic Aspects . New York: Grosset & Dunlap, Publishers, 1906, 67-68.) The source of natural rights is the dignity of the human person, while their scope is determined by the person’s essential needs. A man’s natural rights are as many and as extensive as are the liberties, opportunities and possessions that are required for the reasonable maintenance and development of his personality. They may all be reduced to the right to a reasonable amount of external liberty of action. Some of them, for instance, the right to live and the right to marry, are original and primary, inhering in all persons of whatever condition; others are derived and secondary, occasioned and determined by the particular circumstances of particular persons. To the latter class belongs the right to a Living Wage. It is not an original and universal right; for the receiving of wages supposes that form of industrial organization known as the wage system, which has not always existed and is not essential to human welfare. Even to-day there are millions of men who get their living otherwise than by wages, and who, therefore, have no juridical title to wages of any kind or amount. The right to a Living Wage is evidently a derived right which is measured and determined by existing social and industrial institutions.
Freedom is the very essence of life, the impelling force in all intellectual and social development, the creator of every new outlook for the future of mankind. The liberation of man from economic exploitation and from intellectual and political oppression, which finds its finest expression in the world-philosophy of Anarchism, is the first prerequisite for the evolution of a higher social culture and a new humanity.
In order to stop inflation, and to promote domestic economic growth, the following three-fold program, I believe, is imperative: 1) Controls on the money supply through continuing fiscal and monetary measures. 2) A massive educational and action program designed to enlist government, labor, and management collaboration to increase productivity at both the micro- and macro-economic levels. 3) Development of “noninflationary flexible reward mechanisms” for sharing the productivity gains and profit gains with all factors of production/distribution. Well designed and communicated profit sharing programs can play a unique role in helping the United States in its present battle against inflation both as an “organizational” incentive capable of motivating everyone in the company to increase productivity and reduce costs: and as a “flexible reward mechanism” to give all factors of production/distribution the opportunity to earn “more” on a non-inflationary, as-earned, basis directly related to the enterprise’s ability-to-pay.
The policy of the British government was not favourable to the economic development of the newly-acquired country, since it was feared that its prosperity might react against the trade and industry of Great Britain. But in 1769 and the succeeding years of English control, this policy was relaxed, and immigration from the seaboard colonies, especially from Virginia, began. In 1771 the people of the Illinois country, through a meeting at Kaskaskia, demanded a form of self-government similar to that of Connecticut. The petition was rejected by General Thomas Gage; and Thomas Legge, earl of Dartmouth (1731-1801), Secretary of State for Plantations and President of the Board of Trade, drew up a plan of government for Illinois in which all officials were appointed by the crown. This, however, was never operative, for in 1774, by the famous Quebec Act, the Illinois country was annexed to the province of Quebec, and at the same time the jurisdiction of the French civil law was recognized. These facts explain the considerable sympathy in Illinois for the colonial cause in the War of Independence. Most of the inhabitants, however, were French, and these were Loyalists. Consequently, the British government withdrew their troops from the Illinois country. The English authorities instigated the Indians to make attacks upon the frontiers of the American colonies, and this led to one of the most important events in the history of the Illinois country, the capture of the British posts of Cahokia and Kaskaskia in 1778, and in the following year of Vincennes (Indiana), by George Rogers Clark (q.v.), who acted under orders of Patrick Henry, Governor of Virginia. These conquests had much to do with the securing by the United States of the country W. of the Alleghanies and N. of the Ohio in the treaty of Paris, 1783. Entry: ILLINOIS
_Communications._--Transportation facilities have been an important factor in the economic development of Illinois. The first European settlers, who were French, came by way of the Great Lakes, and established intimate relations with New Orleans by the Mississippi river. The American settlers came by way of the Ohio river, and the immigrants from the New England and Eastern states found their way to Illinois over the Erie Canal and the Great Lakes. The first transportation problem was to connect Lake Michigan and the Mississippi river; this was accomplished by building the Illinois & Michigan canal to La Salle, at the head of the navigation on the Illinois river, a work which was begun in 1836 and completed in 1848 under the auspices of the state. In 1890 the Sanitary District of Chicago undertook the construction of a canal from Chicago to Joliet, where the new canal joins the Illinois & Michigan canal; this canal is 24 ft. deep and 160 ft. wide. The Federal government completed in October 1907 the construction of a new canal, the Illinois & Mississippi, popularly known as the Hennepin, from Hennepin to Rock river (just above the mouth of Green river), 7 ft. deep, 52 ft. wide (at bottom), and 80 ft. wide at the water-line. This canal provides, with the Illinois & Michigan canal and the Illinois river, an improved waterway from Chicago to the Mississippi river, and greatly increases the commercial and industrial importance of the "twin cities" of Sterling and Rock Falls, where the Rock river is dammed by a dam nearly 1500 ft. long, making the main feeder for the canal. This feeder, formally opened in 1907, runs nearly due S. to a point on the canal N.W. of Sheffield and N.E. of Mineral; there are important locks on either side of this junction. At the general election in November 1908 the people of Illinois authorized the issue of bonds to the amount of $20,000,000 to provide for the canalizing of the Desplaines and Illinois rivers as far as the city of Utica, on the latter river, and connecting with the channel of the Chicago Sanitary District at Joliet. The situation of Illinois between the Great Lakes and the Appalachian Mountains has made it a natural gateway for railroads connecting the North Atlantic and the far Western states. The first railway constructed in the West was the Northern-Cross railroad from Meredosia on the Illinois river to Springfield, completed in 1842; during the last thirty years of the 19th century Illinois had a larger railway mileage than any of the American states, her mileage in January 1909 amounting to 12,215.63 m., second only to that of Texas. A Railway and Warehouse Commission has authority to fix freight and passenger rates for each road. It is the oldest commission with such power in the United States, and the litigation with railways which followed its establishment in 1871 fully demonstrated the public character of the railway business and was the precedent for the policy of state control elsewhere.[3] Entry: ILLINOIS
The outcome of these years was the Constitution of 1879, already described, and the exclusion of Chinese by national law. In 1879 California voted against further immigration of Chinese by 154,638 to 883. Congress re-enacted exclusion legislation in 1902. All authorities agree that the Chinese in early years were often abused in the mining country and their rights most unjustly neglected by the law and its officers. Men among the most respected in California (Joaquin Miller, H.H. Bancroft and others) have said most in praise and defence of the Chinaman. From railroad making to cooking he has proved his abilities and trustworthiness. He is found to-day in the mines and fisheries, in various lines of manufacture, in small farming, and in all branches of domestic service. The question of the economic development of the state, and of trade to the Orient, the views of the mercenary labour-contractor and of the philanthropist, the factor of "upper-race" repugnance, the "economic-leech" argument, the "rat-rice-filth-and-opium" argument, have all entered into the problem. Certain it is that though the unprejudiced must admit that exclusion has not been at all an unmixed blessing, yet the consensus of opinion is that a large population, non-citizen and non-assimilable, sending--it is said--most of their earnings to China, living in the main meanly at best, and practically without wives, children or homes, is socially and economically a menace outweighing the undoubted convenience of cheaper (and frequently more trustworthy) menial labour than the other population affords. The exclusion had much to do with making the huge single crop ranches unprofitable and in leading to their replacement by small farms and varied crops. Many of the Chinese now in the state are wealthy. Race feeling against them has become much less marked. Entry: A
FERDINAND II. (1810-1859), king of the Two Sicilies, son of Francis I, was born at Palermo on the 12th of January 1810. In his early years he was credited with Liberal ideas and he was fairly popular, his free and easy manners having endeared him to the _lazzaroni_. On succeeding his father in 1830, he published an edict in which he promised to "give his most anxious attention to the impartial administration of justice," to reform the finances, and to "use every effort to heal the wounds which had afflicted the kingdom for so many years"; but these promises seem to have been meant only to lull discontent to sleep, for although he did something for the economic development of the kingdom, the existing burden of taxation was only slightly lightened, corruption continued to flourish in all departments of the administration, and an absolutism was finally established harsher than that of all his predecessors, and supported by even more extensive and arbitrary arrests. Ferdinand was naturally shrewd, but badly educated, grossly superstitious and possessed of inordinate self-esteem. Though he kept the machinery of his kingdom fairly efficient, and was a patriot to the extent of brooking no foreign interference, he made little account of the wishes or welfare of his subjects. In 1832 he married Cristina, daughter of Victor Emmanuel I., king of Sardinia, and shortly after her death in 1836 he took for a second wife Maria Theresa, daughter of archduke Charles of Austria. After his Austrian alliance the bonds of despotism were more closely tightened, and the increasing discontent of his subjects was manifested by various abortive attempts at insurrection; in 1837 there was a rising in Sicily in consequence of the outbreak of cholera, and in 1843 the Young Italy Society tried to organize a general rising, which, however, only manifested itself in a series of isolated outbreaks. The expedition of the Bandiera brothers (q.v.) in 1844, although it had no practical result, aroused great ill-feeling owing to the cruel sentences passed on the rebels. In January 1848 a rising in Sicily was the signal for revolutions all over Italy and Europe; it was followed by a movement in Naples, and the king granted a constitution which he swore to observe. A dispute, however, arose as to the nature of the oath which should be taken by the members of the chamber of deputies, and as neither the king nor the deputies would yield, serious disturbances broke out in the streets of Naples on the 15th of May; so the king, making these an excuse for withdrawing his promise, dissolved the national parliament on the 13th of March 1849. He retired to Gaeta to confer with various deposed despots, and when the news of the Austrian victory at Novara (March 1849) reached him, he determined to return to a reactionary policy. Sicily, whence the Royalists had been expelled, was subjugated by General Filangieri (q.v.), and the chief cities were bombarded, an expedient which won for Ferdinand the epithet of "King Bomba." During the last years of his reign espionage and arbitrary arrests prevented all serious manifestations of discontent among his subjects. In 1851 the political prisoners of Naples were calculated by Mr Gladstone in his letters to Lord Aberdeen (1851) to number 15,000 (probably the real figure was nearer 40,000), and so great was the scandal created by the prevailing reign of terror, and the abominable treatment to which the prisoners were subjected, that in 1856 France and England made diplomatic representations to induce the king to mitigate his rigour and proclaim a general amnesty, but without success. An attempt was made by a soldier to assassinate Ferdinand in 1856. He died on the 22nd of May 1856, just after the declaration of war by France and Piedmont against Austria, which was to result in the collapse of his kingdom and his dynasty. He was bigoted, cruel, mean, treacherous, though not without a certain bonhomie; the only excuse that can be made for him is that with his heredity and education a different result could scarcely be expected. Entry: FERDINAND
It is scarcely possible within this article to deal with so widely varied a subject as that of the productions and industry of the [Sidenote: The imperial factor in industry and trade.] empire. For the purposes of a general statement, it is interesting to observe that concurrently with the acquisition of the vast continental areas during the 19th century, the progress of industrial science in application to means of transport and communication brought about a revolution of the most radical character in the accepted laws of economic development. Railways did away with the old law that the spread of civilization is necessarily governed by facilities for water carriage and is consequently confined to river valleys and sea-shores. Steam and electricity opened to industry the interior of continents previously regarded as unapproachable. The resources of these vast inland spaces which have lain untouched since history began became available to individual enterprise, and over a great portion of the earth's surface were brought within the possessions of the British empire. The production of raw material within the empire increased at a rate which can only be appreciated by a careful study of figures, and by a comparison of the total of these figures with the total figures of the world. The tropical and temperate possessions of the empire include every field of production which can be required for the use of man. There is no main staple of human food which is not grown; there is no material of textile industry which is not produced. The British empire gives occupation to more than one-third of the persons employed in mining and quarrying in the world. It may be interesting, as an indication of the relative position in this respect of the British empire to the world, to state that at present it produces one-third of the coal supply of the world, one-sixth of the wheat supply, and very nearly two-thirds of the gold supply. But while these figures may be taken as in themselves satisfactory, it is far more important to remember that as yet the potential resources of the new lands opened to enterprise have been barely conceived, and their wealth has been little more than scratched. Population as yet has been only very sparsely sprinkled over the surface of many of the areas most suitable for white settlement. In the wheat lands of Canada, the pastoral country of Australasia, and the mineral fields of South Africa and western Canada alone, the undeveloped resources are such as to ensure employment to the labour and satisfaction to the needs of at least as many millions as they now contain thousands of the British race. In respect of this promise of the future the position of the British empire is unique. Entry: 10