For American Lefties: Time to Put-up or Shut-up on the Economy

a specific, concrete, actionable proposal that would create the ultimate economic outcomes for American lefties

The American left bases its political agenda on ‘social justice’. Much of that has to do with macroeconomic outcomes: unemployment, poverty, and environmental issues top the list. Heretofore, actually solving any of those problems has been beyond even mentioning as a possibility; it has been assumed by lefties that the only way those issues could be ameliorated would be through government.

Politically, the left is bereft of new ideas. Meanwhile, the country continues to drift, inexorably if inconstantly, towards the precipice of an economic abyss that will make the Great Depression look small. Here is a new proposal that can arrest that development and should have American lefties dancing in the streets.

[For the record, I do have an M.A. in economics; my Master’s Thesis included a summary of the scholarly discussion of ‘distributive justice’ initiated by John Rawls’s book, A Theory of Justice (1971).]

The closest historical analogy to this proposal would be the revolutionary turn to the central-bank monetary system in England in 1694. That formalized taking from the monarchy the power to coin money.

This proposal would end the central bank’s responsibilities of being the lender of last resort for the central government and of helping to ‘manage’ the economy: the private banking system routinely making decisions that are explicitly political in nature because they are choices effected for the nation as a whole. With this proposal, the economy would not need to be managed by any entity; it would be totally self-regulating.

Beyond that, for an American lefty the ultimate economy would have no unemployment or poverty and more sustainability. If of all that could be accomplished within a stable, self-regulating, market-based economic system with no taxation and no public debt, so much the better. If sustainability could be increased without more regulations, that would be good, too. Politically, achieving all of those outcomes without using government at any point would be a knockout blow for American conservatism as it stands.

All of those outcomes are built into the structure of a revolutionary monetary system; they are positively guaranteed. Though revolutionary, this proposal is not radical. It would not tear down even one existing institutional structure.

There are no hidden costs. To be clear, there would still be no limit on income, property, or wealth. To prevent inflation, money would have to be pumped out of the economy, but, unlike taxation, no money would be collected from any individual or business before it could be used for consumption or investment. People and businesses could retain plenty of money — perhaps more, in total, they do now. (The dollar amount would depend on income.) Really, the only argument for preferring the current system to this proposed system is to say that, for all its woes, the system we have does allow hoarding unlimited amounts of money and that is more important than all of those other outcomes put together.

There are two ways to approach this monetary proposal. The less democratic of them might be the only real hope of getting it done.

One approach would be for Congress to establish a new Monetary Agency that would implement this new and different way of supplying the economy with money. Our central bank, the Federal Reserve System (the ‘Fed’), would still exist, but only as the banks’ bank. It would no longer lend money to the federal government; all government — federal, state, and local — would be funded from now on by the Monetary Agency (based on the current per capita level of total government spending). The Fed would not have any means to carry out the other responsibility with which it is charged at present, i.e. to ‘manage’ the economy.

Again, that approach would require Congress to act. The alternative would be for the Fed to implement this proposal on its own volition, leaving Congress out of it. It could conceivably do that on the basis of its existing lawful mandate to promote stability and minimize unemployment and inflation. The economy would still be completely self-regulating, governed passively but effectively by demographics — and only that.

The most succinct source for more information about this proposal would be my essay, “A Call for a (Further) Central Bank Revolution,” right here on All of the necessary information pertaining to this monetary proposal is there.

I do have a Web site, I have also developed an original approach to justice which does not involve any beliefs: mutual respect in effecting choices (i.e., choosing among perceived alternatives and taking action to bring that choice to fruition). The absence of beliefs means that it is non-ideological. (It is also non–theological, but what religion is incompatible with mutual respect?) In addition to the economic benefits already mentioned, applying that ethic to life would maximize liberty as a practical matter and reinforce political democracy.

Thinking about a really just economy was the starting point for all of these intellectual efforts of mine. I cannot emphasize too strongly, however, that this proposal can be judged in strictly economic terms, with no reference to justice whatsoever. Above all, ‘justice’ is never used to, well, justify unsound economics.

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Stephen Yearwood

unaffiliated, non-ideological, unpaid: M.A. in political economy (where philosophy and economics intersect) with a focus in money/distributive justice