The New Capitalists: A Proposal to Free Economic Growth from the Slavery of Savings

The authors first published The Capitalist Manifesto, describing programs for transferring ownership of businesses to individuals. This second book describes the method as a "financed-capitalist program." The loans proposed for individuals to buy securities would be non-recourse. That is, like most home mortgage loans, the lender could foreclose on the securities purchased but the borrower would not have to pay any remaining balance. That risk would be insured by the Capital Diffusion Insurance Corporation (CDIC). The insurance would not protect against the failure of any one business. Rather, the borrower/investor would be required to have a diversified portfolio and the risk insured would be that the value of the entire portfolio sank below the amount of the loan. The insurance underwriting policies of the CDIC would determine which businesses could have their securities purchased in the financed-capitalist program. These policies would include an anti-monopoly limitation, the promotion of technological improvement, inflation control, preventing concentration of share ownership and encouraging equity financing over debt. There would also be CDIC policies for deciding which households could participate in the financed-capitalist program. For instance, they should not be ones who would use their freedom from working for a living "to fall into idleness, lasciviousness, perpetual play, or other mischief." Nor should they be people who would "continue feverishly to produce and accumulate . . . more wealth." Eligible households would need the "economic knowledge" to manage their investments, "or at least the aptitude and willingness to acquire such knowledge." They should have the "educational background" to "provide some basis for hope that the freedom from personal toil which can be achieved through capital acquisition would be constructively used to contribute to the work of civilization."