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Norman Kurland: Just Economy for Harmonious Civilization

Dr. Norman Kurland





Center for Economic and Social Justice

Post Office Box 40711

Washington, D.C. 20016-0711





Center for Economic and Social Justice (CESJ): www.cesj.org/


The Center for Economic and Social Justice, established in 1984, promotes a free enterprise approach to global economic justice through expanded capital ownership. CESJ is a non-profit, non-partisan, ecumenical, all-volunteer organization with an educational and research mission.


CESJ's global membership shares a common set of moral values and works together toward a common purpose, transforming good ideas into effective action.


Norman G. Kurland, CESJ President


Mr. Kurland is a lawyer-economist, pioneer of employee stock ownership plans (ESOPs) and a leading global advocate for the Just Third Way, a post-scarcity development model that transcends both capitalism and socialism by combining free markets with the democratization of economic power and capital ownership. He serves as President of the all-volunteer Center for Economic and Social Justice (CESJ), a non-profit think tank headquartered in Arlington, Virginia that he co-founded with Fr. William Ferree and other economic and social justice advocates in 1984. Mr. Kurland also founded and heads Equity Expansion International, Inc., an investment banking firm for the have-nots, which implements Just Third Way strategies around the world to turn non-owners into owners. He is a co-founder of Global Justice Movement.org (based in Canada) and the American Revolutionary Party(.US) launched in April 2005. He has taught binary economics and binary policy reforms in privatization seminars at the International Law Institute in Washington, D.C. In 1985, President Reagan appointed Mr. Kurland as deputy chairman of the bipartisan Presidential Task Force o­n Project Economic Justice, to promote economic democratization through ESOP reforms in Central America and the Caribbean.


He was a close colleague for eleven years of Louis O. Kelso, author of binary economics and inventor of the ESOP. With Kelso, Kurland co-founded the Institute for the Study of Economic Systems. He later became Washington Counsel for Kelsos investment banking firm. Collaborating with Kelso, Kurland authored and lobbied the first and subsequent ESOP legislative initiatives in the U.S. Congress. He is the principal architect of several model ESOPs and legal systems for expanding ownership, as well as: the first ESOP and worker shareholders association in the developing world at the Alexandria Tire Company in Egypt; the Capital Homestead Act (a comprehensive package of national monetary and tax reforms); the Community Investment Corporation (a vehicle enabling community residents to share land ownership and profits); and Justice-Based Management (a system for applying principles of economic justice and building participatory ownership cultures within business corporations).


Business Week described Kurland as the resident philosopher of ESOP in the capital. He was the recipient of CESJs first Kelso-Ferree Lifetime Achievement Award, an honor he shares with Senator Russell Long, the legendary champion of ESOP o­n Capitol Hill. Mr. Kurland has authored numerous articles o­n the Just Third Way, binary economics, capital homesteading and related concepts for universalizing access to capital ownership. He was a contributing author to the 1994 compendium Curing World Poverty: The New Role of Property (John H. Miller, ed., Social Justice Review), and was the principal author of CESJs comprehensive economic reform agenda, Capital Homesteading for Every Citizen: A Just Free Market Solution for Saving Social Security (Economic Justice Media, 2004).


Before joining Kelso, Mr. Kurland was director of planning of the Citizens Crusade Against Poverty, a national coalition headed by the labor statesman Walter Reuther. Before that Mr. Kurland, as a Federal government lawyer, became deeply involved as a civil rights investigator in the Mississippi one-person, o­ne-vote movement and later with the core group shaping economic empowerment initiatives in President Johnsons War o­n Poverty. He came to Washington in December 1959 after receiving a Doctor of Laws degree from the University of Chicago, where he studied law and economics, following five years as an officer o­n flying status in the U.S. Air Force.




For Every Citizen


A Just Free Market Solution

for Saving Social Security



Norman G. Kurland Dawn K. Brohawn Michael D. Greaney


2004 Center for Economic and Social Justice (CESJ)

Published by Economic Justice Media




The proposed Capital Homestead program would offer a private

property and free market oriented alternative for saving the Social

Security System as a national retirement income maintenance

plan, while introducing a new national policy to foster capital

self-sufficiency as a means to achieve true economic independence

for all Americans.

Following the precedent of Abraham Lincolns Homestead Act of

1862 that democratized the ownership of frontier land, this economic

policy would universalize access to capital credit the 21st century

equivalent of the 160 acres of land to every citizen. This would

provide access to the means for every citizen to accumulate over his

or her lifetime an independent income-producing capital homestead

in the ever-expanding technological frontier.

Based o­n four pillars of a free and just market economy (1)

expanded capital ownership, (2) limited economic power of the

state, (3) restoration of free and open markets, and (4) restoration

of the rights of private property the Capital Homestead

program would strengthen the political constituency for linking

supply-side with demand-side economic policies. It would add

social justice and compassion to conservative principles. It would

also reduce the political pressures for redistributive, anti-growth

and protectionist policies.

Capital Homesteading would introduce basic reforms in the monetary

and tax systems, geared toward maximizing private sector

growth without inflation, shifting from a debt-backed to an assetbacked

currency, while systematically building a nation of owners.

Capital Homesteading would reduce pressures o­n the present payas-

you-go Social Security and Medicare systems, while leaving in

place a social safety net for those individuals whose capital home-

stead accumulations were insufficient to generate an income to

meet their basic needs.

The Federal Reserve would revive its existing money-creating powers

under Section 13 of the Federal Reserve Act, opening its discount

window to provide sufficient money and capital credit to

finance the estimated $2 trillion needed annually for new plant

and equipment, new technology, new rentable space, and new infrastructure.

Channeled through each citizens Capital Homestead

Account (CHA), Fed-monetized credit would be allocated by the

competitive banking system to financially sound investments and

irrigated through mechanisms that systematically create new owners

of the new wealth, without taking old wealth from existing


Five central banking innovations would be introduced: (1) a twotiered

Federal Reserve credit policy that favors broadly owned private

sector growth over nonproductive government and consumer

borrowing; (2) a shift to the Federal Reserves discount mechanism

from its Open Market Committee for controlling the money

supply, thus freeing growth from its current dependency o­n past

savings; (3) 100% reserves (the Chicago Plan) to replace fractional

reserve banking; (4) the Federal Capital Credit Corporation

(FCCC),1 a Fannie-Mae-type bundling operation to facilitate

Capital Homesteading loans and establish national standards

for lenders; and (5) the Federal Capital Insurance Corporation

(FCIC),2 to provide an alternative to traditional forms of collateral,

thereby eliminating a major barrier to widespread citizen

participation in significant capital ownership.

Capital Homesteading would offer an economic growth model

based o­n access to private property as a fundamental human right,

encouraging other countries to emulate America by lifting themselves

into economic prosperity, thus building a more free, just

and unified global market, the economic foundation for enduring

political democracy and peace around the world.



Social Security is a system built to collapse. While the horrific events

of September 11, 2001 wrenched the nations attention away momentarily

from retirement security to national security, the economic costs

of this o­ne terrorist assault o­n America, coupled with an already ailing

economy and the bursting of the bubble of publicly-traded securities,

placed an even greater burden o­n Americas public retirement

system, hastening its day of bankruptcy.

Prior to the September 11 attacks, according to the Washington Post,

congressional estimates projected that the government would drain

almost all the Social Security surplus to operate at current levels through

2011, imperiling the retirements of the baby-boom generation.3 In

the face of massive layoffs and economic displacement caused by the

attacks, Congress must now consider in its budget debates the billions

needed to cover the replacement of destroyed property, insurance

losses, homeland security, rebuilding postwar Iraq and Afghanistan,

and other related costs. In the long-term, Federal Reserve Chairman

Alan Greenspan warned that the demand for added security will force

firms to cut back o­n employment and productive activities such as

research and capital investment.4

The bipartisan Presidential Commission o­n Social Security issued

its final report, Strengthening Social Security and Creating Personal

Wealth for All Americans, o­n December 11, 2001. The report concluded:

Social Security is in need of an overhaul. The system is not sustainable

as currently structured. (p.7) While the commission members

agreed o­n the use of Private Savings Accounts (PSAs) to allow Americans

to invest in the stock market a portion of their Social Security funds,

they were unable to offer a unified set of recommendations. There was

no consensus o­n what percentage of Social Security assets should be

put into publicly traded securities. It was also assumed that there was

no better way for workers to invest than to place their wages and savings

in the stock market (mainly via mutual funds). Even more important,

as many commentators observed, the commission failed to recommend

any significant structural reforms for maintaining the long-term

viability of Social Security.

Flaws in the Foundation

At the inception of the Social Security program in 1936, the United

States Government promised explicitly, What you get from the

Government plan will always be more than you have paid in taxes and

usually more than you can get for yourself by putting away the same

amount of money each week in some other way.5 Unfortunately and

predictably, however, the increase in benefit obligations over time has

made the original promise unsupportable, even though today 76

percent of Americans pay more in payroll taxes than they do in federal

income taxes.6

Most people are living longer than age 65, the life expectancy

projected when the Social Security program was born, and they are

getting higher benefits than the system had originally expected to pay

out. As the population growth rate in the U.S. declines, there will be a

shrinking pool of working Americans paying higher taxes to cover

Social Security benefits for a growing pool of retirees. As the Wall Street

Journal summed it up in 1988: Baby boomers and their children will

pay more for their own retirement and get less in return.7

Some analysts have warned that, calculated at present value,

projected Social Security deficits combined with those of Medicare

could reach $43 trillion.8 This dwarfs the projected $3.5 trillion in

federal budget deficits that the government officially reports as its

current level of public debt. In contrast to credit extended to private

enterprises, there are no productive capital assets standing behind

public sector debt.

Part of the reason for the present crisis is that shortly after its

creation, Social Security abandoned its original purpose as a social

safety net/insurance program to ensure every working American a

minimally adequate income after retirement. It is now expected to

provide the bulk, if not all, of a persons retirement income. If Social

Security collapses, many retirees will be left economically vulnerable

and dependent o­n their families, public welfare or charity.

Societys great expectations, and the efforts of policymakers to satisfy

them, rest o­n a shaky edifice erected o­n a flawed foundation. Three of

the most serious structural weaknesses are:

1. Social Security is a pay-as-you-go system and has no productive

assets, but rather government debt in the form of government

bonds and Treasury bills to stand behind the governments

mounting promises. Nobel economist Paul A. Samuelson even

proclaimed the system the greatest Ponzi game ever contrived. 9

The problem with pyramid schemes, however, is that they

eventually leave someone holding the bag. It is anticipated that

by 2020, Social Security could begin to pay out more than it

collects, forcing the Federal government to reduce benefit levels,

tap into general revenues, or print money to meet the deficits.10

2. An unhealthy generational political split is inevitable between

younger workers and aging Social Security recipients. Potential

beneficiaries are growing larger in number. 75 million baby

boomers will soon join their ranks. The working population who

pay into the system (and whose payrolls are taxed from dollar

one) is shrinking in proportion to the recipient population. In

1940, soon after the program was launched, most Americans died

before reaching the eligible Social Security age of 65, and the

burden ratio was roughly 42 to 1. Now the burden ratio is about 3

to 1, putting the weight of more and more dependents o­n fewer

and fewer backs.11

3. The rich are largely exempted from sharing in this mounting

burden. Not o­nly is there a cap o­n salaries taxed for the so-called

trust fund,12 but also there is no tax o­n incomes from dividends,

interest, and capital gains to support Social Security. The payroll

tax is extremely regressive, placing the greatest burden o­n the

working poor who must pay into the system from the first dollar

of earnings. Thus high-income workers and the wealthiest

Americans escape the responsibility to meet the nations promises

to poor and middle-class workers.


Dear Dr. Dalia Steiner,

Many thanks for your excellent introduction me with the outstanding economist and CESJ (Center for Economic and Social Justice) President Dr. Norman Kurland. I attentively read the basic pages of CESJ Website, concerning CESJ's Mission, CESJ's core values, CESJ's Code of Ethics and etc. I looked also Dr. Kurlands rich biography and some other pages. I share the CESJ main principles which are in many respects crossed with the GHA main principles. Certainly, between them there is a distinction which, however, can be a source of development and mutual addition. I very much like Dr. Kurlands theoretical and educational approach, his Economic and Social Justice and soft technologies. I fully share his thought, that the real enemies of human progress, freedom and justice are not primarily bad people, but bad and defective ideas. Both our teams differ the unique constructive ideas. I fully share equally negative estimation and capitalism and socialism, but in this time a necessity of synthesis of their advantages. I highly appreciate the CESJ outstanding contribution to advancement of global justice during 25 years (since 1984). I think, that in these years, at your ample opportunities with President Reagan support, you can not carry out your Just Economy project. In my opinion, the similar economy is possible and necessary not for industrial but for harmonious civilization which beginning the GHA fixes to 2009. All it gives the strong basis for close cooperation of our organisations, the ideological, organizational and human potential of which mutually supplements and strengthens each other.

Let me to offer you following concrete forms of mutual cooperation.

  1. I invite you to discuss a question of mutual affiliation (or collective membership) our organisations, first of all in the USA, with Dr. Laj Utreja, American GHA President (lutreja@tecmasters.com). It will allow our organisations to participate in actions each other.
  2. I would be happy to create your personal page under such approximate name: Norman Kurland: Just Economy for Harmonious Civilization o­n our Website Peace from harmony. Do you agree with this title?
  3. I invite you to exchange our books. Dr. Laj Utreja will be glad to send you 2 copies of our book Harmonious Civilization which you could look preliminary o­n our site Peace from Harmony to the address: http://peacefromharmony.org/? cat=en_c&key=379. In turn, Dr. Utreja and I will be happy to receive from you o­n 1 copy of any your book of last years. We will be happy to publish your review of our book and back.
  4. I invite you to join to Club-2009, about initiation of which I am glad to send you the GHA Resolution in an attachment.
  5. I like to send you also my short offers which I sent o­n January 4 together with the book Harmonious Civilization to Mr. Kofi Annan (the UN Alliance of Civilizations President) and Ms. Irina Bokova (UNESCO Director General). In case of creation of "Harmonious Civilization Center and World Harmony Academy, GHA will be happy to invite in them you and your colleagues.

Such are the GHA first offers for you and your remarkable organisation. With hope of effective cooperation for the sake of a harmonious civilization and its Just Economy.

Dr. Leo Semashko, GHA President 30/01/10


Attached also are two pictures from a 1987 visit to the Vatican of a delegation I headed, accompanied by some members of the Polish Solidarity Movement before the collapse of the Soviet Union.Pope John Paul II's philosophy of Personalism and our philosophy for Peace through Justice share common principles, centering o­n the inherent dignity of every person.


For o­ne of our current initiatives, please see my letter to President Obama.

© Website author: Leo Semashko, 2005; © designed by Roman Snitko, 2005