As reprinted from The
American Muslim
IRAQ: Extending the Abraham Federation Model: A Just Third
Way for Bringing Democracy to the Iraqi People By Norman
G. Kurland, Center for Economic and Social Justice
Introduction by Dr. Robert Crane
In the course of human affairs a transcendent vision and strategy
for peace through justice can be more powerful than all the
bombs in the world. The United States has the bombs to carry
out a temporary holding action, but so far the current Administration
has presented no vision to solve or even address its dilemmas
in the Middle East or the broader challenge of global terrorism.
Walter Fauntroy, one of the heros of the 1960's civil rights
marches and a former member of the U.S. Congress from the
District of Columbia, has presented to Secretary Colin Powell
the following position paper, entitled "Extending the Abraham
Federation Model: A Just Third Way for Bringing Democracy
to the Iraqi People." On March lst, 2003, he flew to Baghdad,
together with Mahdi Bray, head of the Freedom Foundation of
the Muslim American Society, to join the human shields that
have already gathered there. The Reverend Fauntroy's mission
is to use this high-profile podium to call for American adoption
of the Abraham Federation as the basis for American policy
after regime change in Iraq.
The essence of the Abraham Federation concept is that peace
can come only from justice, and economic justice is the key
to both peace and democracy. Rather than merely talking about
democracy, the Abraham Federation position paper reproduced
below provides a strategy and very detailed policy provisions
for "nation building" in both Iraq and Palestine in order
to address what otherwise would be insoluable dilemmas.
The Abraham Federation embodies the heart of America's highest
ideals and therefore makes it possible for America to use
its enormous power in the world so that it will be loved and
not hated.
One project that is currently being pursued is to encourage
Pope John Paul II to fly to Baghdad as the ultimate human
shield where he can use this high-profile podium to address
the Muslims, Christians, and Jews of the world on the just
war doctrine and on the Abraham Federation as the best alternative
to the injustices that lead to both terrorism and terroristic
anti-terrorism.
Those who want to promote this project are urged to write
to His Holiness John Paul II, Apostolic Palace, 00120 Vatican
City State, Europe, or to his email accreditamenti@pressva.va
, which is a direct line to the Pope. And there is still time
to join Reverend Fauntroy in his mission as a human shield
by contacting me at transcendentlaw@aol.com
As-salaamu 'alaykum wa rahmat Allahi wa barakatuhu,
Robert D. Crane (aka Faruq 'Abd al Haqq)
Extending the Abraham Federation Model: A Just Third Way
For Bringing Democracy to the Iraqi People
February 2003
Introduction
As every day brings closer the prospect of war in Iraq, people
in America and the international community are becoming increasingly
divided. Many remain unconvinced that the Bush Administration
is justified in taking military action that will inevitably
cost the lives of Iraqi civilians and could possibly spark
an uncontrollable conflagration throughout the Middle East.
Most would concur that Saddam Hussein is a ruthless dictator
bent on obtaining weapons of mass destruction. Few doubt that
if given the opportunity, Saddam Hussein would use these against
his neighbors, starting with Israel. Most would also agree
that America has the overwhelming military and economic power
to win a war against Saddam Hussein. But power without a clear
and compelling vision of peace through justice, will lead
to continuing conflict and bloodshed, bringing more evil than
good in the long-run.
Let us assume that the UN inspectors continue to monitor the
situation in Iraq and Saddam Hussein keeps his promise to
eliminate and stop all imports and production of weapons of
mass destruction. Let us further assume that America agrees,
as long as the UN inspectors remain in Iraq, to hold off the
use of its armed forces now positioned to attack Iraq. What
is the end game of this extraordinary investment of US military
might and the UN’s diplomatic initiatives?
What people in America, the Middle East, Europe and the rest
of the world have yet to see is a clear vision of justice
and a concrete plan that will liberate the Iraqi people from
Saddam Hussein’s oppressive regime and bring a more just future
for all. The “Abraham Federation” model, described in the
following paper, offers President Bush and America a new paradigm
for addressing the increasingly complex crisis in the Middle
East. This paradigm is based not on artificial scarcity, but
on shared abundance; not on empowerment of a ruthless elite,
but on the fundamental God-given sovereignty of every member
of human society.
A New Model of Nation-Building for Iraq
and for Resolving the Conflict in the Holy Land
First proposed in 1978, the “Abraham Federation” strategy
was originally focused on the festering sore in the Middle
East — the tragic conflict between the Palestinian and Israeli
people — that is inflaming Muslim extremism and spreading
hatred of America and Jews throughout the world. Today, given
the imminence of a pre-emptive military strike against Saddam
Hussein by a US-led alliance, President Bush should appreciate
the relevance of the proposed strategy for offering the people
of Iraq, the Middle East, and the world a unifying, “peace
through justice” based model for nation-building.
This strategy would also neutralize the charge that America
is seeking to take over the oil fields of Iraq. Imagine how
America would be viewed by the poor and oppressed citizens
throughout the Arab world, if the oil fields of Iraq were
denationalized and every citizen of Iraq became a shareholder
in the oil company. (Such a proposal would be modeled along
the lines of the General Stock Ownership Corporation, or GSOC,
that was originally proposed in 1980 under US tax laws for
the citizens of Alaska in the divestiture of the British Petroleum
pipelines.)
By promoting through the UN such a “preemptive moral strike,”
America would prove before all nations of the world its commitment
to working with others to deliver real justice to the Iraqi
people and, by example, to the poor and oppressed of the world.
Such ideological and moral weaponry could offer a far more
powerful force than all of America’s overwhelming military
weaponry. And at the same time, America could provide a highly
innovative and humanizing solution to the practical problem
of stabilizing the world’s supply of oil, as the world continues
to seek Hydrogen Age alternatives to meet the future energy
needs of civilization.
The Abraham Federation model could be launched as a concurrent,
two-front ideological and economic development offensive in
both Iraq and the occupied territories on the West Bank and
Gaza. The new model of nation-building would harness the untapped
power of internally generated money, credit and other infrastructural
reforms to provide the resources for nation-building.
More comprehensive and dynamic than the Marshall Plan, the
Abraham Federation model would require little or no taxpayer
funds from the U.S., Europe, or any of the other developed
nations. If proven successful, it could be adapted for Afghanistan,
the Balkans, Kashmir, Chechnya, East Timor, the Congo, Angola,
Somalia, Colombia and many other pressure-cooker areas. Most
important, to people in the Middle East and throughout the
developing world, the Abraham Federation model offers fresh
ideas for combining market-based development solutions with
access to full democracy and justice for all.
The Abraham Federation:
A New Framework for Peace in the Middle East
Norman G. Kurland
© 1978, 1991, 1994, 2001, 2002, 2003 Center for Economic and
Social Justice
[Originally published in World Citizen News, Dec. 1978. Updated
and republished in American-Arab Affairs (now Middle East
Policy), Spring 1991, a publication of the Middle East Policy
Council. Updated and republished in Curing World Poverty:
The New Role of Property, John H. Miller, ed., published by
Social Justice Review in collaboration with the Center for
Economic and Social Justice, 1994. Available on the web site
of the Center for Economic and Social Justice at ]www.cesj.org.]
Jihad in America
On September 11, 2001, Jihad came to America. A global terrorist
network extended its deadly outreach beyond Israelis in the
West Bank and Israel to over 3,000 Americans and people from
over 80 other countries trapped in the World Trade Center
and Pentagon — two icons of America’s unparalleled global
military and financial power. This violation of America’s
homeland security cannot be disconnected from America’s leading
role, along with its World War II allies, in the birth of
Israel as a westernized “Jewish state.” 1947 marked the UN’s
“two state” solution to dividing up the former British-mandated
territory of Palestine. To America and the West, their influence
in creating a homeland for displaced Jewish survivors of the
Holocaust was morally justified. To Palestinian settlers and
Arab neighboring states in the Middle East, Western military
and financial power was being used to jam “Political Zionism”
and morally confused Western values down the throats of a
predominantly Muslim world.
There have been three major wars in 1948, 1967 and 1973 between
Israel and its Arab neighbors, interspersed by periodic Palestinian
rebellions against the existence of a “Jewish state.” Is it
possible that the original formulation for a two-state solution
was, in the face of the so-called “clash of civilizations,”
morally and systemically flawed from the outset?
Western handouts are no longer sufficient to stop the breeding
of terrorists. Conventional military power is necessary in
this battle but it also is not sufficient. And conventional
approaches to economic development have been counter-productive
in winning the hearts and minds of people who feel victimized
by global capitalism and betrayed by the false promises of
socialism.
Pope Paul VI advised us, “If you want Peace, work for Justice.”
Ultimately it is superior moral force that will uproot terrorism
at its source, not merely conventional sources of Western
power. More humanizing free enterprise principles of economic
and social justice must lead in formulating a more comprehensive
vision and launching a more effective strategy for achieving
lasting peace in “the Holy Land.”
Such a strategy, most would agree, must center on resolving
the historic land disputes between Palestinians and Israelis
that keep both sides locked in a “zero-sum” struggle. The
urgency of resolving the Palestinian-Israeli conflict was
underscored by President Bush’s courageous call for a global
“War on Terrorism” following September 11th.
The war declared by President Bush is properly aimed at defeating
a well-organized network of fanatics and suicide terrorists
indoctrinated with a perverted interpretation of Islamic principles
of justice and a distorted conspiratorial view of the root
causes of their rage. Fueled by perceived victimization by
Western “infidels” and Western support of a Jewish state in
the Middle East, terrorism in months following September 11th
escalated into increasingly grotesque displays of barbarism.
Many in the Islamic world, including mothers whose children
were turned into human bombs, glorify the “culture of death”
that continues to take the lives of innocent Israeli men,
women and children as well as Palestinians considered “traitors”
for opposing terrorism. The moral and spiritual roots of that
Jihad continue to baffle Western and Islamic scholars and
were only partially addressed by the otherwise excellent “Arab
Human Development Report 2002” commissioned by the United
Nations.
This paper will make a case against outdated land-for-peace
proposals for negotiating future control over the Holy Land,
as under the Oslo Agreement. It will also make a case, on
moral grounds, that the initial rush to recognize a “Palestinian
State” by the US State Department and many European leaders,
though well-intentioned, is unlikely to achieve a lasting
peace through justice for Palestinians, Israelis and other
persons living in the disputed territories. Who wants to be
a non-Jew in a “Jewish state,” a non-Muslim in an “Islamic
state,” a non-Christian in a “Christian state” — or, for that
matter, a Jew in a “Palestinian state”?
On the other hand, President Bush’s call to the Palestinian
people to select more democratically responsible leaders was
a wise move. It buys some time for President Bush and his
advisors to explore “Peace through Justice” strategies that
can stir the hearts and minds of Palestinians as well as Israelis.
What is needed now is a much bolder vision to stop terrorism
and bring all parties into a new framework to begin negotiating
beyond zero-sum politics.
What was missing in past peace initiatives to bring justice
and stability to the Holy Land? Are there different approaches
to nation-building that could turn hate into hope and rage
into creative outlets for those who see themselves victimized
by Western military and financial might? Can the future be
guided by the unifying moral values of the American Revolution
and the redemptive spirit of such visionary world leaders
as Abraham Lincoln, Anwar Sadat and Nelson Mandela? Is there
a way for leaders like President Bush to harness the moral
power of the West to begin to heal the wounds of perceived
injustices and inspire the creation of a socio-economic model
for sustaining peace through justice for all?
To address the previous questions, we should focus on whether
"self-determination" and justice can be achieved for persons
of all faiths and persuasions wanting to occupy the same land.
How can this be done without Israel's jeopardizing its own
security during the transition toward a comprehensive Middle
East peace settlement? Once the Israeli military withdraws
to the borders of Israel, what arrangements will secure the
lives and rights of Jewish settlers who, for religious reasons,
want to remain on the West Bank?
There is a way. The answer lies in a radically new and inclusionary
model of nation-building, where economic justice would become
the basis of social and political justice in the daily lives
of each citizen. It would offer a modern fulfillment of the
biblical concept of “Jubilee”. But instead of redistributing
land, a finite resource, the new nation would redistribute
future opportunities for every citizen to become an owner
of land and whatever can be built upon the land. Under an
“economic bill of rights” every citizen would gain equal access
to future ownership opportunities, guaranteeing a level playing
field in citizen participation as property owners in future
economic growth and profit sharing.
By decentralizing access to economic power and economic independence,
citizens would control government, not vice versa. Everyone’s
faith, spiritual life and political beliefs would be respected
and guaranteed by the rule of law. National “sovereignty”
would be built from the ground-up, based on securing the inherent
sovereignty of every individual and the sanctity of the family
unit. With "ownership-sharing" economics surpassing politics
in the daily lives of its citizens, economic power would be
widely diffused and the power of the state would be subordinated
to the power of the people.
The following proposal, first offered in 1978, is today more
timely than ever.
Finding Common Ground
Is it conceivable to create a nation in the Middle East that
accommodates Arabs and Israelis? Could a state be structured
to avoid becoming either a “Palestinian state,” or an “Islamic
state,” or a “Jewish state,” or simply an extension of Israel
or any bordering Arab state? Could such a state offer a new
form of sovereignty to stir the hearts and dreams of Arabs
and Jews? Could it avoid, on the one hand, the anarchy, tyranny
and injustices of other states in the world, and, on the other,
the totalitarian regimes and genocidal societies from which
Jews escaped to what is now Israel?
In short, could a new country be created that could guarantee
peace through justice for all?
The idea for such a country may first seem far-fetched. But
with a re-examination of the conflict, it becomes surprisingly
workable. And with the added boost of a dynamic economy focused
on creating new wealth and new owners of that wealth, the
idea of a new nation becomes downright irresistible.
Let's look at the problem.
The present Arab-Israeli dispute over land — particularly
the major impasse over the West Bank occupied by Israeli forces
since June 1967 — is a classic illustration of a "zero-sum"
game. In a zero-sum game, one side can gain only at the other's
expense. It is a “win-lose” situation.
The two sides have fought over this land for centuries. The
land is holy to three major religions. It is the symbolic
crossroads of the world community as it is strategically set
between the East and the West, as well as the North and the
South. Everyone, therefore, has a stake in a peaceful and
just resolution of the dispute — not just Palestinians and
Israelis.
Two obviously important points must be faced before we consider
the creation of a new nation. First, present hostilities must
not be ignored. This should be obvious. But any proposed solution
would rest on political quicksand unless it recognized existing
hatreds and fears of Jews and Arabs, as well as their legitimate
hopes and aspirations. To overcome these hostilities to the
point where Arabs and Jews can work out their differences,
we must look to the past for a common bond.
The Point of Reunification: Abraham
Arabs and Jews have a point of unity both can understand:
Abraham, the Old Testament patriarch.
Arabs trace their ancestry to Abraham through Ishmael, whom
he fathered through his wife's servant Hagar. Jews trace their
bloodlines to Abraham through his son Isaac and grandson Jacob,
who, according to the Bible, God later renamed Israel. The
name "Abraham" literally means "father of many nations." Having
once separated the descendants of Ishmael from the children
of Israel, 3,800 years later, Abraham could fulfill the biblical
prophecy not only of their unification but also of the eventual
unification and harmony of all nations and peoples.
Symbols of the past often serve as useful symbols for charting
the future. A federation of the spiritual and blood descendants
of Abraham could offer a bold political framework for taking
small steps in a new direction. Thus, rather appropriately,
the new nation could be named the "Abraham Federation."
With this philosophical common thread, the question is: Where
do we start? The answer is: In the historic region of Judea
and Samaria — the West Bank — and the Gaza Strip, where Arab
and Jewish settlements exist today under Israeli military
control.
Although some Arabs would dispute the legitimacy of all Israeli-occupied
territory, the Israeli military has the power to maintain
law and order over all areas it now patrols. Despite the intifada
and mounting international pressures on Israel, this reality
is unlikely to change in the foreseeable future. On the other
hand, the easy diffusion of modern military technology, including
weapons of mass destruction among Arab guerrillas and their
allies, makes a military status quo uneasy at best.
The main obstacle to peace, in this author's view, is not
the Israeli military or the deep-seated Holocaust fears which
justify in the minds of most Israelis the continued Israeli
military presence on the land where the Abraham Federation
could be created. Rather, the deeper issue is whether a more
just society can be conceived, which will eventually allow
the Israeli military presence to be phased out and replaced
by US and international security forces during the transition
to a viable Abraham Federation at peace with all its neighbors,
including Israel.
Some occupied territory under Israeli control is now open
to negotiation for a new status — at least as a foothold for
a more comprehensive, longer-term strategy in the future for
the entire Middle East.
The biblical region of Judea and Samaria — the West Bank (with
extensions in Gaza and other areas covered by the Oslo Agreement)
— could provide that foothold. It includes Bethlehem, Hebron
and the surrounding mountain region west of the Jordan River.
It also encompasses Jerusalem, which deserves special handling,
perhaps serving in the transition period as the capital of
the new nation as well as present Israel. Jerusalem could
even be designated by the UN as a special “global capital,”
to be administered by spiritual leaders of all faiths and
policed by security guards under the authority of the Security
Council of the UN.
The proposed strategy would go beyond the demeaning "autonomy"
proposals of the Israeli Likud Party. It would be less threatening
to Jewish settlers than the Labor Party's "land-for-peace"
proposals. And it would offer a significantly more just future
for all Palestinians than what they are now demanding.
If a new beginning can be made in the West Bank and Gaza,
with a free transit corridor linking the two areas, a more
comprehensive regional approach could later be negotiated,
based on the success of the Abraham Federation model.
The New Nation's Unique Economy
As a testing ground for a new nation, today's West Bank and
Gaza would be transformed into a laboratory for dynamic "win-win"
economic change, allowing revolutionary change in the economic
culture to precede ultimate change in the political culture.
Economic empowerment would thus become the foundation for
effective political empowerment in the lives of the people.
A basic premise of the new economic culture is the rejection
of artificial and disproven assumptions of scarcity. Today’s
scarcity could be overcome if West Bank and Gaza residents
would work together within a justice-driven free enterprise
system to create new wealth that could be traded globally,
with profits and ownership shared more equitably. This would
shift the primary focus of thinking from how to divide scarce
resources of the past, to planning the "open growth frontier"
being created by modern science, technology, and global production
and marketing systems. A second premise for rapid growth is
that sound moral values, along with sound market principles,
must be infused at all levels and within all institutions
of the economic process.
Land, of course, is finite. But as the philosopher-design
scientist R. Buckminster Fuller pointed out, creative energy
can be channeled into what he called "ephemeralization," the
process of doing-more-with-less. This entails the continuing
re-design of existing technologies, structures, and even social
"tools" like money, tax systems and global corporations and
financial institutions.
By introducing the world's most sophisticated technologies
(particularly in energy and food production) and redesigning
methods of participatory ownership, Arab and Jewish settlers
could transcend their competing exclusive claims to the "Holy
Land." They could complement each other's existing strength's
and potentials: Jewish settlement experience and advanced
energy and agricultural technologies, Arab financing, and
Palestinian self-assertion and drive.
Neither Capitalism Nor Socialism
Guidelines for constructing this model for peace in the Middle
East involve a radical departure from traditional approaches
to industrial development. Neither capitalism nor socialism
is adequate for building a successful economy for the Abraham
Federation. Neither combines maximum justice with maximum
efficiency. Both ignore the need for building economic sovereignty
into each citizen. Both leave ownership and control of modern
technology, natural resources and business enterprises to
a ruling few.
To avoid these dangers, the Abraham Federation would neither
own property nor permit future monopolies over the ownership
of the means of production. This principle alone would make
"sovereignty” in the Abraham Federation uniquely distinct
from any nation in history.
The Abraham Federation would recognize that sovereignty connotes
power and only human beings, not abstract “collectives”, can
exercise power. The major issue to be addressed in a democratic
world is which people will exercise what kinds of power, either
directly, jointly in association with others, or by delegation.
Escape from the "Wage System"
On August 3, 1987 President Ronald Reagan received the report
of the bipartisan Presidential Task Force on Project Economic
Justice, which, among other recommendations, advocated expanded
capital ownership as a new cornerstone for the future of US
economic policy, domestically and globally. President Reagan
then declared, “I’ve long believed one of the mainsprings
of our own liberty has been the widespread ownership of property
among our people and the expectation that anyone’s child,
even from the humblest of families, could grow up to own a
business or corporation.” Citing President Lincoln’s Homestead
Act as the historic precedent for the economic development
proposals of Project Economic Justice, President Reagan observed,
“A mightier guarantee of freedom is difficult to imagine.”
In a society where all power is supposed to rest with the
people, economic sovereignty must start at the individual
and family level. Since, in the words of Daniel Webster, “power
follows property,” if political power is to reside in the
people, property must be spread broadly. The best antidote
to concentrated power and monopolies is to empower all citizens
through decentralized ownership of all of society's enterprises.
Only then can those who run government and other social institutions
be held accountable to the people. Such an economically classless
society would be comprised of highly autonomous, interdependent
property owners, capable of associating with other "sovereign"
individuals for their mutual interests. Genuine economic democratization
serves as the ultimate check on the potential abuse of inherently
concentrated state power, and on abuses by the majority against
highly vulnerable minority groups and individuals.
What is common to all of today's economies are legal, financial
and other institutional barriers that prevent the average
worker and his family from escaping from the status of a worker-for-hire
and becoming a capital owner. If he is lucky, a worker can
get a job under a feudalistic "wage system." If he’s not,
he must turn to charity or welfare, an institutional form
of charity. In any event, most workers live from hand-to-mouth.
The non-owning worker is powerless and defenseless against
advancing technology and those who control his jobs and income
levels. His economic security remains vulnerable to labor-saving
technology or workers in the global labor market who are willing
to do the same work at lower wages.
Having no ownership stake in modern wealth-producing assets,
most workers never gain access to the economic independence
and entrepreneurial opportunities vital to a dynamic free
market economy. Under such an exclusionary market system,
the few are free to own and the many are free to work for
them or go hungry.
Policy Pillars of a Free and Just Market Economy
The Abraham Federation would offer an economic and legal system
based on (1) private property in the means of production,
(2) free and competitive markets for determining just prices,
just wages and just profits, and (3) a well-defined and limited
economic role of the state. But the constitution and laws
of the new nation would also be structured to (4) guarantee
each citizen with an equal opportunity to become an owner
of productive assets.
Each of these four basic pillars of a genuinely “free and
just market system” is essential and interdependent for creating
an environment for sustainable and balanced growth. They build
moral values into the economic environment, without which
free markets become unjust and unfree markets. Take one pillar
away and the system will become unbalanced, vulnerable to
corruption, monopolies and special privileges, and wasteful
of human potential. By integrating these four policy objectives,
the tax system and the money-creating powers of the state
would be restructured so that every citizen has equal access
to “social tools” (like a simple and just tax system , a stable
asset-backed currency and an ownership-spreading productive
credit system ) to acquire and accumulate enough productive
assets to meet his or her living needs upon retirement.
In a national ownership-sharing program, citizens would become
co-owners of land. In addition, they would accumulate and
receive dividends and property incomes from direct equity
ownership in new technologies, agribusinesses, industries,
and rentable space and infrastructure built upon the land.
Moreover, by the systematic spreading and sharing of ownership
power, one of the basic conditions for any future Holocausts
and breeding grounds for terrorists — alienation of large
numbers of workers — would gradually disappear.
The Vehicle for Change: A National "Capital Homesteading"
Strategy
Why should a national “Capital Homesteading” strategy capture
the attention of those now residing on the West Bank and the
Gaza Strip? The answer lies in the fact that the universal
right to own property (Article 17 of the Universal Declaration
of Human Rights) is frustrated systematically by every nation
today. This is especially true within modern industrial societies
where less than 1 percent of their citizens directly own and
control most of the industrial capital.
Economic justice in a modern global economy depends on widespread
individual access to ownership of technologically advanced
agricultural, industrial, and commercial enterprises, and
the means to finance their acquisition, operation and expansion.
Fortunately, precedents are now well established for creating
new enterprises, with skilled management and advanced technologies,
whose ownership is shared by all employees.
In the United States, over 10,000 companies with a total of
over 10 million employees have adopted employee stock ownership
plans or "ESOPs," 1,500 of which are majority-owned by their
employees. Most of these have been adopted since 1972. Employees
with no savings or credit have used an ESOP to become owners
of their companies — in some cases with up to 100 percent
of equity participation.
There are some cases where the ESOP did not work, and many
cases where ESOPs are not living up to their potential. This
happens when management and labor fail to create a justice-based
culture that respects the property rights as well as the ownership
responsibilities of worker-owners. However, the most successful
ESOP companies are world exemplars of “Justice-Based ManagementSM,”
a leadership philosophy that incorporates social justice in
corporate management. More widespread encouragement of this
leadership model by lawyers, accountants and consultants,
in this author’s opinion, would be far more effective than
passing more laws and hiring more government regulators, for
preventing future Enrons, WorldComs and similar Wall Street
scandals
Twenty laws have been passed by the U.S. Congress since 1973
to encourage the expanded use of ESOPs, including the reorganization
of the Northeast rail system, pension reform, tax reform,
trade policy, foreign economic development policy, as well
as other measures designed to greatly accelerate the adoption
of ESOPs by major U.S. corporations. The credit privileges
and special tax advantages that the U.S. government has given
to workers who adopt ESOPs, allow workers without savings
to purchase shares on credit wholly secured by the future
profits of the company. Because employees are directly linked
to productivity increases and profits through their ownership
rights, studies indicate that firms financed through ESOPs,
when combined with participatory management and gain sharing,
generally perform better than their competitors.
The ESOP is no longer a mystery in the Middle East. In 1989,
the $160 million Alexandria Tire Company was launched in Egypt,
creating the Middle East's largest radial truck tire plant,
in a joint venture with Pirelli Tire of Italy and other investors.
Thanks to the US Agency for International Development, over
600 worker-shareholders are benefiting from this transaction,
"earning" their ownership stakes through the most advanced
ESOP in the developing world.
The key to broad-based ownership is the democratization of
capital credit, going beyond micro-enterprise lending, as
in the Grameen Bank, to macro-enterprise lending. In the case
of the Alexandria Tire Company, this was supplied through
a unique application of Islamic banking principles. In the
future, the discount mechanism of central banks can supply
such asset-backed, self-liquidating credit to commercial bank
lenders for financing growth of broadly owned productive enterprises.
The Capital Homesteading concept is not limited to worker
ownership. Other variations of the expanded capital ownership
concepts that could be implemented in the Abraham Federation
would build individual equity stakes in capital-intensive
industries into the general population. These include stock
ownership plans for utility users and regular customers of
enterprises (CSOPs), community investment corporations (CICs)
for resident share ownership of local land development corporations
and community infrastructure, and personal investment accounts
or “Capital Homestead Accounts” for citizens to gain access
to credit to choose among a variety of ownership options (CHAs).
The CIC provides an ideal vehicle for keeping profits, equity
growth and land governance rights resulting from land and
infrastructural planning and development in the hands of members
of the local community, rather than government or outside
private developers.
Other significant developments indicating a growing world-wide
interest in the expanded capital ownership approach, include:
• Endorsement by President Reagan on August 3, 1987 of the
work of the bipartisan Presidential Task Force on Project
Economic Justice. This Congressionally-mandated task force
issued a report, High Road to Economic Justice, which offered
a bold strategy of expanded capital ownership for economic
revitalization in Central America and the Caribbean.
• The translation and publication into Polish of Every Worker
An Owner [published by the Center for Economic and Social
Justice], a compendium of writings by leading thinkers in
the expanded capital ownership area. Prior to the demise of
the Soviet Union, 15,000 copies of this Polish translation
were distributed throughout Solidarity channels in Poland.
In May 1988 USAID Administrator Alan Woods transmitted the
English version of this compilation of writings to every USAID
mission in the world.
• The development of a "parallel legal system" for Costa Rica
to foster system-wide experimentation based on economic democratization.
• ESOP laws established in the United Kingdom, Jamaica, Russia
and a growing number of developing and transforming economies.
The Abraham Federation would have an historic opportunity
to become the first nation to be launched with a comprehensive
and workable program to provide each of its citizens the means
to share in the private ownership of all its resources.
Highlights of the Abraham Federation
Here are some suggestions for initiating the Abraham Federation:
• First steps should start small, focusing on a relatively
small territory over which no existing nation-state has yet
declared its sovereignty, namely ancient Judea and Samaria
and the Gaza strip. If the new nation succeeds, the beachhead,
with its capital in the Old City of Jerusalem, will expand
naturally. Neighboring countries in the region will seek to
merge with the Abraham Federation and share the special benefits
described below.
• To foster maximum growth opportunities for the citizens
of the Abraham Federation, other countries in the Middle East,
including Israel, and other major industrial nations such
as the U.S., Japan and members of the European Community,
would sign a multilateral agreement treating all the land
in the Abraham Federation as a unique “global free market
zone.” In contrast to most free trade zones — often cesspools
that attract sweatshop industries and exploited workers —
the Abraham Federation would in microcosm be a model for a
global free trade system. Rather than merely providing special
investment concessions and free access to goods imported into
the zone, the global free market status would allow all goods
and services exported from this unique zone to be sold within
these cooperating countries with no duties, quotas, or other
trade barriers. This feature alone, after security against
terrorism is assured, would attract “leapfrog” technologies
and accelerate new investment and job opportunities for the
benefit of all producers, investors, worker-owners, suppliers
and global customers. “Capital Homesteading” tax and credit
incentives would add additional icing on the cake.
• A revolutionary advance over all existing nation-states
would be formed. The new nation would reject collectivist
and exclusionary concepts of nationalism and would carry the
concept of sovereignty or "self-determination" down to the
personal, family and community levels, an ideal implicit in
Judaism, Christianity, and Islam.
• The Abraham Federation would aim at bringing a higher order
of justice than any nation has ever offered its citizens.
It would offer acceptable safeguards to Israeli demands for
security and guarantee the right of all Jews and Palestinians
to visit and settle in the “Holy Land." It would offer Palestinians
"self-determination" and a religiously pluralistic "democratic
state" that would insure everyone complete freedom of religion.
It would also offer Jewish and Christian settlers the opportunity
to become citizens of the Abraham Federation. It would be
neither a collectivist Zionist state nor a collectivist Palestinian
state, but a new form of nation that members of all faiths
could build together.
• Politically, the new nation’s constitution would guarantee
a Jeffersonian form of democracy, open to all, with clearly
defined and limited functions given to government and all
political institutions. In addition to normal democratic checks
and balances on the "minimalist" government of the nation,
the major check on future concentrations of power would be
outside of government, based on “Capital Homesteading” policies
and institutions that would systematically spread economic
power and free enterprise ownership broadly, right down to
the individual level.
• Widespread diffusion of property would become the ultimate
constitutional safeguard for all human rights. Although the
new nation would have no "official" state religion, by systematically
spreading property and economic power among its citizens,
it would insure that freedom of religion, of association,
of the press and other protections of individual human rights
vis-à-vis the government would be built upon a solid economic
foundation.
• Thus, the new nation would be built on a foundation of personal
(as opposed to collective) political sovereignty, and that
foundation would in turn rest on personal economic sovereignty.
It would be a nation whose sovereignty is built from the ground
up, rather than from the top down. Individual, family, community
and minority rights would thus be protected from the potential
abuses of political majorities or traditional power elites.
In this way, religious freedom and cultural pluralism would
have stronger economic supports than other world trouble spots
that breed organized terrorism.
• During the transition to full self-determination, the Abraham
Federation would have diplomatic ties to Israel, Jordan and
other Arab neighbors. Initially, a UN trusteeship or multinational
administrative structure might be required to govern the area
as a global “Peace Zone,” with a timetable and measurable
benchmarks for handing over all governmental functions to
democratically elected representatives of all citizens of
the Abraham Federation — Arabs, Jews, Christians, and non-believers.
• Until the threat of suicide terrorism can be overcome, and
to allay legitimate Israeli fears for the security and freedom
of Jewish settlers in the occupied territories, the Israeli
military might have to be allowed temporarily to continue
to patrol the Abraham Federation under UN observers. That
Israeli presence could then be replaced, initially by a multinational
UN security force and then by the Federation’s police, as
the new political order creates stable conditions to remove
Israeli security concerns.
• The initial thrust of the people of this newly emerging
nation would be channeled more toward economic, than political,
self-determination: It would strive to absorb the creative
energies of Arabs, Jews, displaced Palestinians, Christians,
and others moving to this new nation, and harness them into
building a technologically advanced, dynamically growing and
more just form of free enterprise economy than exists in all
other nations.
• Free and open markets and respect for private property in
the means of production would be basic pillars for further
limiting the power of the state. Instead of redistributing
existing property, the new role of the state would be to create
a legal and policy environment to inspire and encourage the
simultaneous creation of new property and new owners.
• Instead of continuing historic and legalistic disputes over
something as finite as "holy land," the primary focus would
be on building upon the land the ever-expanding "technology
frontier."
• Start-up industries might include advanced energy projects
and high technology, vertically integrated agribusinesses,
and global processing and marketing enterprises that are broadly
owned by workers and farmers.
As revolutionary as this new framework may appear to some,
it is based on virtually universal moral principles. The process
of change, however, is inescapably evolutionary and depends
largely on conservative, case-tested methods and "tools."
The "tools" and fundamental principles for building such a
model “Capital Homesteading” nation already exist and have
been tested. They work. (The Ministry of Planning of Costa
Rica with U.S. development assistance designed a prototype
"parallel legal system" structured along these lines. While
not yet implemented, this model legislation could easily be
adapted to any country.)
Because it is grounded on common and traditional principles
of economic justice and social justice , orthodox Jews and
moderate Muslims, as well as several PLO representatives,
have reacted in an open-minded way to the Abraham Federation
concept when it has been explained to them. Former Lebanese
president Amin Gamayel told this author that it was consistent
with the original vision for a religiously pluralistic Lebanon.
A top advisor of King Abdullah II of Jordan also commented
favorably on the concept.
The next step is to test whether the Abraham Federation framework
might serve as a basis of a new dialogue between those with
power to speak for all Israelis and those with power to speak
for all Palestinians. The United States is in the position
to be an effective catalyst for bringing this fresh vision
to the peace table. This framework too may be inadequate and
prove to be unworkable. But it certainly deserves to be more
fully understood by all key decision-makers, especially spiritual
leaders, concerned with peace in the Middle East.
Many nations are offering their "solutions" to end Israeli
occupation of the West Bank. None of these initiatives seem
to be satisfactory to both sides of the conflict. In that
light, the Abraham Federation concept might well offer a more
hopeful and workable framework for those directly affected
to recapture the initiative, not merely for their own survival,
but for leading all mankind to a more just and peaceful future.
Conclusion: Transition to the New Nation
No rational dialogue and no genuine steps toward peace among
Arabs and Jews in the Middle East are possible within traditional
conceptual and ideological frameworks. These competing frameworks
all suffer from faulty assumptions, semantic ambiguities,
and poorly defined, often contradictory, objectives. A new
and more realistic framework is demanded. It must proceed
in small steps toward a broader, more comprehensive, and more
just solution, one not even conceivable under the old frameworks.
Many problems may arise in moving from the initial blueprint
stage to implementation, especially regarding security and
control over the Israeli military, immigration, and land-use
matters. But within a framework that takes into consideration
the legitimate concerns of Palestinians and Israelis, one
that offers special trade status in the global marketplace,
even these problems could be addressed for the mutual self-interest
of all citizens of the Abraham Federation.
Just as the offer of 160 acres of land to its propertyless
pioneers sparked America's development as an agricultural
power, the industrial equivalent of that ownership incentive
can now be offered to the propertyless Arabs, Jews, and others
living in Jerusalem and other places in the Abraham Federation.
Truth, justice, and peace can again go forth from Jerusalem.
Building a just and pluralistic nation is, of course, a complex
undertaking. But by focusing on the limitless possibilities
of industrial growth, rather than on endless confrontation
over scarce land resources, Arab and Jewish settlers of the
Abraham Federation can take a new look at their common problem.
Under the mantle of Abraham, they can step back into the past
in order to leap forward into a more just and hopeful future.
022203
End Notes
. 1 See " A Quick Comparison of Capitalism, Socialism and
CESJ's "Moral Third Way" at www.cesj.org
2 See "Defining Economic and Social Justice" on the home page
of the web site of the Center for Economic and Social Justice
at
www.cesj.org
Also see Ferree, William, The Act of Social Justice, Catholic
University of America, 1944. See also his Introduction to
Social Justice, Paulist Press, 1948; republished in 1997 by
the Center for Economic and Social Justice and available along
with other writings on economic and social justice at the
CESJ web site.
3 Crossette, Barbara. "Study Warns of Stagnation in Arab Societies,"
The New York Times, July 7, 2002.
4 According to the Bible, the fiftieth year following seven
seven-year periods was the "Year of Jubilee", or Sabbatical
year, to be celebrated by the freeing of Hebrew slaves, the
remission of debts and the restoration of ancestral property
to its original owners. EncyclopÊdia Britannica
5 This would institutionalize the main purposes of a just
government as expressed by George Mason, the father of the
American Bill of Rights, who authored the Virginia Declaration
of Rights, which declared that "all men are by nature equally
free and independent and have certain inherent rights . .
. namely, the enjoyment of life and liberty, with the means
of acquiring and possessing property, and pursuing and obtaining
happiness and safety." A critical omission in Jefferson's
authorship of the Declaration of Independence was Mason's
(following John Locke) heavy emphasis on access to the "means
of acquiring and possessing property" as the ultimate source
of personal economic sovereignty and all human rights. This
omission, some suggest due to Jefferson's moral ambiguity
over slavery, can and has led every nation since the beginning
of the industrial revolution away from broad-based ownership
of wealth-producing assets as the source of personal self-determination
and the ultimate check against the potential abuses of concentrated
public and private power. The constitution of the Abraham
Federation can correct this flaw.
6 See "Value-Based Management: A System for Building an Ownership
Culture," a paper presented at the ESOP Association 21st Annual
Conference, May 20-22, 1998 - Washington, D.C., available
at www.cesj.org
7 Zung, Thomas T.K., Buckminster Fuller: Anthology for a New
Millennium, St. Martin's Press, 2002; see also Fuller, R.
Buckminster , Critical Path, St. Martin's Press, 2002 edition.
8 See writings of Louis O. Kelso, especially the principles
of economic justice he developed with his co-author, the philosopher
Mortimer J. Adler in chapter 5 of The Capitalist Manifesto,
Random House, 1958. This book and other writings of Kelso
can be downloaded free on the web site of the Kelso Institute
for the Study of Economic Systems at www.kelsoinstitute.org
Other writings on Kelso's binary system of economics and his
classic critique of Karl Marx's Das Kapital are available
at the web site of the Center for Economic and Social Justice
at www.cesj.org
Kelso, a lawyer-investment banker as well as a brilliant economic
theorist, was also the inventor of practical ownership-broadening
innovations such as the employee stock ownership plan or "ESOP."
For an excellent textbook on Kelso's economic theory, see
Ashford, Robert and Shakespeare, Rodney, Binary Economics:
The New Paradigm, University Press of America, 1999.
9 "Beyond ESOP: Steps Toward Tax Justice", The Tax Executive,
April and July 1977. Available at www.cesj.org
10 "The Federal Reserve Discount Window", The Journal of Employee
Ownership Law and Finance, National Center for Employee Ownership,
Winter 1998, pp. 131-155.
11 Full details of the economic program outlined in the Abraham
Federation strategy are given in the report, Capital Homesteading
for Every Citizen, prepared for the William H. Donner Foundation
by the Center for Economic and Social Justice in December
2002. Free copies of the report (in PDF format) are available
at http://www.cesj.org/homestead/donnersocialsecurity.pdf
. Other writings on Capital Homesteading are also available
at www.cesj.org
For a detailed model "parallel legal system" for broadening
capital ownership, see A Proposed Law to Encourage the Democratization
of Future Capital Ownership for Citizens of Costa Rica, prepared
for the Costa Rican Minister of Planning under a USAID contract,
July 17, 1989, available at www.cesj.org
12 See footnote 11 and writings cited in footnotes 8, 9 and
10.
13 See Miller, John H. Curing World Poverty: The New Role
of Property, Social Justice Review, 1994
14 Kurland, Norman, "The South Bend Lathe Story: What Can
We Learn from an ESOP 'Failure'?" in The ESOP Association,
Journey to an Ownership Culture: Insights from the ESOP Community,
Scarecrow Press, 1997, pp. 41-49. Available at www.cesj.org
15 See "Organized for the Common Good Through Value-Based
Management" by William Nicholson, on the successes since 1983
of the ownership system at Western Building Products, Milwaukee,
Wisconsin. Available at www.cesj.org
(The term "Value-Based Management" has been changed to "Justice-Based
ManagementSM to reflect its governing principles of economic
and social justice and to differentiate this new leadership
philosophy and management system from what is now referred
to as "Value-Based Management" by business schools and Wall
Street investment banking firms, which merely seeks to maximize
long-term stock values for shareholders.) Where principles
of Justice-Based ManagementSM are applied, corporate boardroom
and workplace behavior embody and reinforce high moral standards.
Loyalty between top management, workers, outside shareholders,
customers and suppliers, is a two-way street. And corporate
governance is structured to achieve the transparency and accountability
that was lacking in Enron, WorldCom and other flagrant cases
of executive abuse. Further, executives of the best companies
have long-term investment horizons measuring their success
by dividend levels for all shareholders, profit sharing distributions
for all workers and value they bring to their customers. They
avoid trying to manipulate their share prices in public stock
exchanges. And the differential in compensation levels between
the highest paid executive and the lowest paid worker is generally
no more than 3 to 5 times a tolerable level for maintaining
a sense of community but not over 500 times as in some American
corporations.
16 See Kurland, Norman and Brohawn, Dawn, "Beyond Privatization:
An Egyptian Model for Democratizing Capital Credit for Workers",
paper presented to the American Bankers Conference on ESOPs,
New York City, June 12-13, 1989, as revised by authors, 1993.
Available at www.cesj.org
17 See Kurland, Norman, "A New Look at Prices and Money: The
Kelsonian Binary Model for Achieving Rapid Growth Without
Inflation," Journal of Socio-Economics, vol. 30, 2001, pp.
495-515; also available at www.cesj.org
18 See Capital Homesteading for Every Citizen, prepared for
the William H. Donner Foundation by the Center for Economic
and Social Justice in December 2002.
19 These vehicles are described in the Capital Homestead Act,
see footnote11, and in various papers at www.cesj.org
The "Capital Homestead Account" and its relationship to central
banking policy is described in "Saving Social Security" on
the CESJ web site.
20 See various papers on the Community Investment Corporation
as a for-profit citizen-owned land developer at www.cesj.org
21 Available at www.cesj.org
22 See footnote 8.
23 See "A New Look at Prices and Money: The Kelsonian Binary
Model for Achieving Rapid Growth Without Inflation,"
cited in footnote 17.
24 See footnote 11.
25 See writings cited in footnote 2.
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