Binary
Economic Modes for the Privatization of Public Assets
by Jerry N. Gauche
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Introduction
This article describes a practical approach to privatization, which
incorporates the principles of binary economics.
In the privatization of public assets binary economics
argues that (1) it matters who owns the privatized capital, (2) access
to capital is limited by risk, and (3) capital in concentrations producing
income that is not consumed retards economic growth. Consumer Stock
Ownership Plans and General Stock Ownership Plans provide means for
rapidly broadening capital ownership among the economically disenfranchised,
increasing per capita income and accelerating economic growth. Lessons
from the pursuit of General Stock Ownership Corporations (GSOCs) in
the United States include (1) political leaders cannot look to conventional
institutions to support initiatives for broadening capital ownership,
(2) eligibility for participation in programs promoting broadened capital
ownership can be vexing, (3) regulation of broadly held enterprises
may raise conflicts between the citizens' demand for income and the
state's demand for tax revenue, and (4) broadly held enterprises can
be perceived as a threat to the political status quo. Notwithstanding
these issues, the GSOC remains an effective means of achieving widespread
capital ownership through the privatizing of public assets without confiscating
the property of the wealthy and without creating a monolithic socialist
state.
The binary approach should be of particular interest to
socio-economists because it allows for distribution of income on market
principles. Since binary principles are not widely known in the socio-economic
community, the article begins with a brief review of the basics. It
then points out the unique opportunity presented by the present privatization
movement. Finally, the article describes the binary strategies that
might be combined with privatization.
is Vice President, Organizational Effectiveness, for National Oilwell,
a NYSE listed company based in Houston, Texas. Previously he served
as general manager and executive assistant to the CEO of BP Exploration,
and tax counsel to the Standard Oil Company (Ohio). As legislative counsel
to Senator Mike Gravel (D-Alaska), he worked with Louis Kelso on the
enabling legislation for General Stock Ownership Corporations. Jerry
holds economics and law degrees from the University of Oregon and a
masters degree from New York University. He writes and lectures extensively
on Binary Economics.
