The Wealth of Our Commonwealth: Money, Capital, and Finance in a Productive Commercial Republic

Authors

Robert Hockett

Abstract

There is a share of the investment capital available in any society that is generated by the public. In contemporary societies with well-developed payment systems and effective public governance, this share tends to grow large in comparison to that originated by non-public sources, the latter is intermediated and thus must be pre-accumulated, while the former is generated and is the source of what is accumulated. In spite of these truths, the US outsources management of its public capital stock to private sector financial institutions. This is a practice that a host of underappreciated collective action predicaments endemic to decentralized market exchange, most of them recursive and hence iteratively self-worsening without limit, ensures will result in misallocation and, therefore, poor modulation of credit aggregates as well. What is needed to draw public capital out of bubble-inflation and back into productive investment is to bring it back under public management, a project for which the present exposition provides a full architecture. This architecture is modeled as a stylized public balance sheet, taking the US Treasury and Federal Reserve System as a consolidated case study. Public liabilities take the form of Democratic Digital Dollars issued through interest-bearing digital Business and Citizen Wallets. Public assets take the form of public credit extended by the Treasury’s Federal Financing Bank (‘FFB’) and a newly ‘Spread Fed’ only for productive, not speculative, projects. A National Reconstruction & Development Council (‘NRDC’) and Price Stabilization Fund (‘The People’s Portfolio’) complete the picture, respectively affording democratic guidance as to what counts socially as ‘productive’ and collaring volatility among Systemically Important Prices and Indices (‘SIPIs’). Our public capital stock is a public resource in need of public management, which must be managed productively by and for the community.

First Page

191

Recommended Citation

Robert Hockett, The Wealth of Our Commonwealth: Money, Capital, and Finance in a Productive Commercial Republic, 7 Bus. Entrepreneurship & Tax L. Rev. 191 (2024).
Available at: https://scholarship.law.missouri.edu/betr/vol7/iss2/5