Have you had enough time to digest Measure (i)? Too bad…it’s time for the second tenet of the Manifesto. Let’s see how this measure can be applied to our current policy, and whether the United States meets the criteria for Measure (ii):
Measure (ii) “Gradual expropriation of landowners, industrialists, railroad magnates and shipowners, partly through competition by state industry, partly directly through compensation in the form of bonds.”
Private land ownership has been a benchmark of our historiography since the colonial inception. During early colonization, landowners were the only voting constituents. Perhaps over a third of these land owners were small farmers. Land ownership was essential to be counted in the public sphere. That ownership principle still stands today, right? Uh-oh.
“Gradual expropriation of landowners…” could be referred to as Eminent Domain here in the United States.
Technically the US Constitution’s Fifth Amendment provides that there will be no expropriation (confiscation) of private property “without just compensation.” Modern historical cases of US eminent domain, however, have proven time and again that “just compensation” isn’t exactly, well, just.
A case that may ring a bell is the case of a man named Gilbert Fornatora, of the Everglades in Florida. When, in 1989, the US Congress voted to “expand” the Everglades, the federal government worked with local zoning boards to devalue his property, resulting in a well-below market value price at the time his home was condemned. Mr. Fornatora lost his home, and his rights as a citizen.
That’s simply one example. Eminent domain (expropriation of property) cases vary in type: from government use for highways, railways, bridges, and other infrastructure – to how a private land owner can use his or her property. And who can forget the 2005 ruling on Kelo v. City of New London which set precedent that the government could seize homes, and then relocate them for the purpose of housing and development projects owned by a private property developer, and backed by the city officials? That epic case placed citizen homeowners at the mercy of city commissioners embedded with a private land developer for the purpose of a government funded HUD-type project.
During 20th century wartime, specifically during WWII, Truman expropriated railways and then again during the Korean War, Truman expropriated dozens of steel mills. The steel mill endeavor was eventually overturned…but you see where I’m going with this.
“…through compensation in the form of bonds…”
This section could be referred to as the monetization of national debt, as we see here in the United States. What is monetization of debt? Easiest explanation: It’s when a government prints more and more cash to cover the national debt (buy back issued bonds). The first securitization of debt was early in our history, possibly when Madison and Hamilton negotiated the state assumption of the national debt to pay off the Revolutionary War (against Jefferson’s better judgment). This funding of the domestic debt held states, regardless of whether they’d already paid off their war debts or not, responsible for additional monies to the federal government. This nationalization of the Republic’s debt also included a bond buy-back, at par, of the securities paid out to war veterans as their wages; many of whom had sold their securities to speculators for a fraction of the value, offering a potentially generous spread. The par buy-back would place those securities into the hands of big bankers and investors who would reap a hefty profit from the government buy-back, ultimately leaving the veterans with less than par value.
A more current example of monetization of the national debt could be considered the Federal Reserve’s attempt to avoid deflation in the early 2000’s with bond buy-backs through printing currency and steep reductions in interest rates.
Through a constant rattle of eminent domain and monetization of national debt, one could argue that Measure (ii) of the Manifesto has, in fact, been in place for decades. Are you worried yet? Ten more tenets to go…but we’re batting 100%, and it’s not looking too good so far for capitalism…or our Constitution.