Capital Homesteading for Every Citizen, and other books and papers by Norman G. Kurland

Norman Kurland worked for Lou Kelso from 1965 through 1976, as Washington counsel and political strategist.  He had previously been director of planning for the Citizens Crusade Against Poverty and a federal government lawyer working on President Johnson’s War on Poverty.  Mr. Kurland has continued as an ESOP consultant, author and president of the nonprofit Center for Economic and Social Justice.  Four of Mr. Kurland’s papers are included in the book Curing World Poverty:  The New Role of Property, John H. Miller, editor, Social Justice Review, 1994.  Other papers and information are at www.cesj.org.  

Most of Mr. Kurland’s writings present economic, historical and moral arguments for broadening the ownership of business.  He is able to describe the shortcomings of ESOPs and suggest new government actions to overcome them.   A comprehensive program of legislation is in his book, Capital Homesteading for Every Citizen:  A Just Free Market Solution for Saving Social Security, Economic Justice Media, 2004, with co-authors Dawn K. Brohawn and Michael D. Greaney.

The “Capital Homesteading” term builds upon the successful experience under the United States Homestead Act of 1862.  Signed into law by Abraham Lincoln, it transferred sustainable plots of government land on the country’s frontier to families who devoted at least five years to developing a farm.  The book includes a quote from Ronald Reagan, who called for an “Industrial Homestead Act” in 1974, before he was president, saying “it is time to accelerate economic growth and broaden the ownership of productive capital.  The American dream has always been to have a piece of the action.”

The book’s 17 separate “Policy Objectives of Capital Homesteading” include many legislative goals that are not directly related to broadening the ownership of capital.  For instance, balanced federal budgets, zero inflation rate, new global monetary system, tax simplification and “teaching at all levels of education of universal principles of personal morality and social morality, that are based on the inherent dignity and sovereignty of every human person under the higher sovereignty of the Creator.”

The objective that relates specifically to the book’s title and subtitle is the creation of “Capital Homestead Accounts (CHAs)” for each U.S. citizen.   These accounts would borrow from banks to pay for “full voting, full dividend-payout shares issued by ‘qualified’ private sector enterprises in need of capital for expansion, modernization or for purchasing outstanding shares from present shareowners.”  The bank loans would be insured by a Federal Capital Credit Corporation and then discounted at the Federal Reserve Banks.  Dividends from the shares purchased by the CHA would pay interest and principal on the loans and then provide income to the citizen.

The book deals with most of the questions that come to mind from the basic proposal, including the major change in the function of the Federal Reserve System and Social Security.  A citizen could rollover other retirement plans, and even inheritances and gifts, into the CHA and have it accumulate income tax free, up to a maximum that would be set by law, based upon current living costs and other factors. 

Reading Capital Homesteading was a bit like my reading, 50 years ago, Looking Backward by Edward Bellamy.  Published in 1888, its fictional narrator had slept until 2000 and is comparing the socialist utopia of his awakening with the inequities when he fell asleep.  With Bellamy, I couldn’t believe that the socialist society would work, or that it would even be a very desirable way of life.  With Kurland, I just can’t believe that the program is politically possible.  If one made a list of who stands to lose from his legislative proposals, and then compared that to the list of who spends the most on political contributions and lobbyists, the two lists would be a match. 

At least for the time being, it makes more sense to me to make some progress through direct offerings, accepting the legal and political structure as it is today.   Changing expectations and attitudes may be the best work we can do today toward making the legal system more compatible with broadening the ownership of business.