TINA -Part 3

In the prior installments of this series I’ve presented three real world examples of alternatives to capital. We can now build on those models to create a possible alternative to capital on a national scale. Luckily much of the work has already been done.

In his book, “After Capitalism”, author David Schweickart proposed replacing capital with social investment. His model involves a "capital asset tax" levied on all of the cooperative enterprises, which would then be returned back in the form of start-up and expansion grants provided by a social investment banking system.

Schweickart mentions a variety of ways that this banking system might function. His preference, which is the same as mine, is that the system should be set up to distribute the funds via regional authorities rather than distributed directly by the Federal government. The various regional authorities would then distribute these funds down to community level non-profit banks. These banks would operate on a mandate to provide the funds to the various economic enterprises for start-ups and pro-growth expansion investment in the form of grants with the goal of universal employment. This grant money would be added to the capital value of the enterprises, which would then be subject to the capital asset tax.

Along with Schweickart’s social investment network I would also want to see a dramatic expansion of the Community Development Corporations and the Community Development Financial Institutions mentioned in part 2. One reason for these additional bodies would be to expand the sources of capital for entrepreneurs and cooperatives. If the social investment banks miss an opportunity with an entrepreneur then a CDC of CDFI might take a chance and provide the needed investment. The more investment money from more sources the better the chances for innovation. Plus, they would provide political pressure on the social investment banks because they would be forced to compete for applicants to satisfy their mandate. In addition, their existence would help insure that investment isn’t controlled by bureaucrats.

I don’t mean to imply that Schweickart’s model is the only possible alternative. For example, Venezuela uses loans rather than grants as social investment for new cooperatives, which was a method advocated by John Stuart Mill. But Schweickart’s model does show that, along with CDC’s and CDFI’s, there are indeed viable alternatives to capital. TINA has been proven false and the final objection to the establishment of a successor system has been removed.

In the next and final installment of this series I’ll address some concerns expressed by readers.