Academic journal article
By Ashford, Robert
St. John's Law Review , Vol. 79, No. 4
What else can public corporations do for women and people of color? What else can attorneys for women and people of color do to serve those clients better? Many goals have been suggested and advanced including (1) equal pay for equal work, (2) equal opportunity, (3) special consideration in light of history, biology, and special circumstances, (4) various forms of affirmative action, and (5) reparations for past wrongs, to mention a few. Many of these have been advanced not only as moral or ethical propositions, but as "win-win" opportunities not only for women and people of color, but also for corporations and shareholders as well. The italicized "else" in the two introductory questions set forth above seeks to identify additional opportunities rarely advanced or considered.
One of the most important duties of lawyers is to assist clients in identifying and securing their essential rights, responsibilities, and opportunities. One of the purposes of legal education is to assist lawyers, clients, and society in identifying and securing essential rights, responsibilities, and opportunities.
In the light of this duty and purpose, this Article describes one opportunity rarely suggested by counsel that may offer to people of color, women, public corporations, and their shareholders benefits far beyond the conventional wisdom and far greater than can be expected based on the mainstream economic theories (classical, neoclassical, and Keynesian) generally relied upon in formulating and evaluating plans and opportunities.
The opportunity is to secure for growing numbers, and eventually all women and people of color, the right to acquire capital with the earnings of capital.1 This is a right presently enjoyed by all well-capitalized people, which, of course, includes some women and people of color, but only a small minority of them.
To understand why this right, which is called "the binary property right," may be of singular importance to women and people of color, and also to essentially all poor and working people, and why its realization may also be in the interest of public corporations and most, if not all, of their shareholders, it is necessary for counsel for women and people of color to learn some basic principles of a little-understood theory of economics called "binary economics." Binary economics offers a conception of economics that is foundationally distinct from the economic theories presently employed by government, private enterprise, charitable foundations, policy institutes, individuals, and their counsel to formulate and evaluate economic policy.2
As explained more fully below, according to binary economics, instituting the binary property right is beneficial to women and people of color because it will over time greatly enhance their earning power and autonomy by supplementing their labor income and/or welfare benefits increasingly with their earnings from capital ownership. Instituting the binary property right will also benefit public corporations and their shareholders because it will provide a stable, growing, broadening, production-based consumer demand that will enable public corporations to employ their existing productive capacity more fully and profitably as well as invest more profitability to achieve greater growth.
To acquire capital with the earnings of capital, wellcapitalized people use: (1) the pre-tax earnings of capital, (2) collateral, (3) credit, (4) insurance and markets to diversify and reduce risk, and (5) a monetary policy intended to protect private property. The same institutions and practices that work profitably for well-capitalized people can also work profitably for all people. Moreover, in an economy operating at less than full capacity, if capital can competitively pay for its acquisition costs out of its future earnings primarily for existing owners, it can do so even more profitably if all people are included in the capital acquisition process. …