The economic theories of both Binary Economics and Social Credit offer a solution to the gap between labor and capital that is the inherent flaw of capitalism, while each theory addresses the problem from a different perspective.
Binary Economics and Social Credit both seek the convergence of production and consumption, recognizing that producers in one section of the economy are also consumers in another section.Binary Economics proposes widespread capital distribution through various structures such as Employee Stock Ownership Plans and Community Investment Corporations to expand capital ownership. The problem that is addressed is the fact that labor and capital both produce value, but capital has the ability to overshadow the power of labor in capitalism. As ownership of human labor fails to provide for human needs, there is the need to expand capital ownership where workers, consumers, and residents would be voting shareholders of economic enterprises and be the recipient of dividends from those capital assets. This capital distribution would begin with interest-free loans that would develop the various mechanisms such as ESOPs, and the loans would be paid off from the initial dividend payments. Binary Economics understands that the economic sphere is the equivalence of labor and capital in order to function, and that capital distribution is the method for their convergence. This convergence of labor and capital acts as a supplement to production.
Social Credit, on the other hand, proposes that a public dividend be issued for all citizens based on their share of the Gross Domestic Product. The purpose of such a public dividend is to increase spending power for workers who have a limited ability to pay for commodities. Because labor is defined as a production cost, and the price of products must be more than the cost of that product, workers as consumers have a weaker spending power than the owners of capital. A public dividend recognizes that even though workers are in a subordinate position to owners of capital, both workers and owners are equal as citizens and each citizen has an equal claim of ownership on the total value produced by the nation. Social Credit understands that the economic sphere is the difference between wages and prices, and that a public dividend is the convergence of wages and prices in spending power. This convergence of wage and price acts as a supplement to consumption.
When Binary Economics or Social Credit are used, the gap between labor and capital is brought forward as a major flaw within capitalism. It is a flaw that perpetuates a hierarchy of power and continual appropriation and alienation. Binary Economics and Social Credit both offer a solution to this problem that renews the basic premises ofeconomic action. There is first and foremost a direct connection between desire and economics. The supposed state of nature, before any economic system emerges, is a relationship between desire and the commons. Humans, through their desire, will make use of the commons to fulfill those desires. The commons could be the commons of nature or the commons of ideas, among other types. The relationship between desire and the commons is the interaction of a subjective unconscious and an objective reality, and the economic eventually forms as a more articulated relationship between the subjective unconscious and objective reality. The formation of value results from this relationship. Value is the product that humans create from their interaction with objective reality. From this initial creation of value arises the formation of surplus value. At first, surplus value is the extra amount that each human creates beyond meeting basic needs, and it is this surplus value that is the first incarnation of money in exchange. This surplus value also takes on a different purpose within capitalism when it is appropriated from workers by owners and becomes the formation of hierarchy for the goal of control. The ability to own the surplus value of an economic system becomes a major issue, especially in comparison to the problem of the gap between labor and capital.
The battle over who controls the economic surplus in a society is tied to whether or not there is scarcity or abundance. Scarcity results in the appropriation of a surplus by those who are in positions of power in a society. Scarcity allows for various inequalities to exist since it is assumed that not everyone can have access to the resources in question. The fact of scarcity can be used as an excuse for continuing social inequalities. This inequality leads to the formation of entrenched hierarchy where there are those who have more power than others. In fact, it can be said that the inequality of access to resources is linked to the inequality of power that is the core of a hierarchy. The hierarchy that emerges appropriates the surplus and defines it usually as a private good rather than a public good. In contrast, abundance is the equal distribution of a surplus. When there is enough for all participants in the economic system, then there is no excuse for inequality in a social sense. Abundance as the formation of equality insures equal access to vital resources, and this equality leads to the formation of autonomy. Autonomy, as independence through self-determination, guarantees a distribution of a surplus as a public good. Both Binary Economics and Social Credit dispute the assumption made by capitalism that a surplus is a private good that has restricted access for only a few. Binary Economics and Social Credit both strive for a situation of abundance in some respect. Through such devices as Employee Stock Ownership Plans or a public dividend, the overall surplus that is generated by an economy is shared among all those in a society, making sure that each member of that society is autonomous both politically and economically. The key to both economic theories and their approaches is the idea that all citizens should be defined as co-owners of the economy.
The major obstacle to a principle of autonomy and an equality of power in capitalism is the inequality that exists in the relationship between labor and capital. Though capital may have the appearance of being a separate category from labor, dealing with money or equipment or buildings, capital is in fact a product of labor and its actions within the commons. Capital then takes on an independent existence and exerts more economic power than labor when labor is organized by capital. Production occurs either through labor or capital in any economic system, but it is under capitalism that one will see the subsumption of labor by capital. Those who own capital are interpreted as true owners of property, while labor is reduced to a production cost limited to certain functions within a larger social context. As capitalism is the hierarchy between labor and capital, with capital in the dominant position, both components of production serve different purposes. The long-term goal of capital is the reproduction of the system of capitalism as a whole, while the short-term goal of labor is the production of objects in particular. Binary Economics and Social Credit serve to expand ownership in order to erase the hierarchy between labor and capital, and a side effect of such an operation is the disruption of capitalism as a self-perpetuating system. The techniques of both theories strive to elevate the importance of labor as a factor of production while understanding that capital has a wider reach in terms of power and empowerment of individuals.
The first step to introduce both theories is to critique the formation of debt in the capitalist economy. In any society, various relationships of reciprocity emerge including trade relations. This reciprocity can either lead to mutuality or debt over the long-term. Mutuality is the equality of labor and capital, while debt is the inequality of labor and capital. Capitalism perpetuates debt at the expense of mutuality, specifically through the banking system and its practice of fractional reserve banking. Fractional reserve banking increases debt through interest that is not part of the original injection of money in the economy. Banks put the money supply into the economy through loans and then charge interest on those loans, thereby demanding that more money go into banks then what is taken out of banks. People become indebted to such a degree that it is almost impossible to be economically independent through alternative economic systems. This fractional reserve banking is also the divergence of banking and the state, making it harder to put forth political solutions to this system of general debt. However, interest-free loans can be used for the specific purpose of capital distribution and the formation of public infrastructure. These interest-free loans would achieve the goals of capital distribution and the formation of private worker ownership. Binary Economics and Social Credit both offer a way to go about designing a new economic alternative beyond capitalism that does not require centralized state planning.
The methods to expand capital ownership in Binary Economics can demonstrate a concrete set of operations that is more detailed than the public dividend advocated under Social Credit. The interest-free loans that would be issued would begin the process of capital distribution through the three areas of infrastructure development, startup loans for local businesses, and worker ownership for preexisting businesses. The loans for infrastructure would mean that the infrastructure in question, such as utility companies or public transportation, would be owned by the members of the community that would use such an infrastructure. The startup loans would encourage that the businesses in question would be cooperatives, and the process of ESOPs would increase worker ownership through the identity of workers as shareholders. The result of all three loans would be increased ownership over capital assets that produce value as well as the economic equality of that ownership. Economic equality would insure political and economic autonomy through the expansion of the democratic process as the best way to manage this distribution of capital ownership. Even though Binary Economics is more detailed, there is merit to the direct approach of Social Credit. The public dividend would be considered a rent on the private use of the commons, and would be distributed equally among citizens that are co-owners of that commons. As that money is issued, there can be ways to insure that inflation does not occur with the increase of money in the economy. Before a public dividend is issued, a constant ratio can be set as the total money supply by the total population. To make sure that this ratio is maintained, inflation can be limited through holding accounts for citizens where dividend payments are deposited but are kept from circulation until the ratio is recalibrated. Binary Economics and Social Credit serve to unite labor and capital and empower as many people as possible, approaching the problem from different perspectives, but they can both be implemented in a complementary fashion.