IRAQ:  Extending the Abraham Federation Model: A Just Third Way for Bringing Democracy to the Iraqi

Introduction by Dr. Robert Crane

  In the course of human affairs a transcendent vision and strategy for peace through justice can be more powerful than all the bombs in the world.  The United States has the bombs to carry out a temporary holding action, but so far the current Administration has presented no vision to solve or even address its dilemmas in the Middle East or the broader challenge of global terrorism.

  Walter Fauntroy, one of the heros of the 1960’s civil rights marches and a former member of the U.S. Congress from the District of Columbia, has presented to Secretary Colin Powell the following position paper, entitled “Extending the Abraham Federation Model: A Just Third Way for Bringing Democracy to the Iraqi People.”  On March lst, 2003, he flew to Baghdad, together with Mahdi Bray, head of the Freedom Foundation of the Muslim American Society, to join the human shields that have already gathered there.  The Reverend Fauntroy’s mission is to use this high-profile podium to call for American adoption of the Abraham Federation as the basis for American policy after regime change in Iraq.

  The essence of the Abraham Federation concept is that peace can come only from justice, and economic justice is the key to both peace and democracy.  Rather than merely talking about democracy, the Abraham Federation position paper reproduced below provides a strategy and very detailed policy provisions for “nation building” in both Iraq and Palestine in order to address what otherwise would be insoluable dilemmas.

  The Abraham Federation embodies the heart of America’s highest ideals and therefore makes it possible for America to use its enormous power in the world so that it will be loved and not hated.

  One project that is currently being pursued is to encourage Pope John Paul II to fly to Baghdad as the ultimate human shield where he can use this high-profile podium to address the Muslims, Christians, and Jews of the world on the just war doctrine and on the Abraham Federation as the best alternative to the injustices that lead to both terrorism and terroristic anti-terrorism. 

  Those who want to promote this project are urged to write to His Holiness John Paul II, Apostolic Palace, 00120 Vatican City State, Europe, or to his email .(JavaScript must be enabled to view this email address) , which is a direct line to the Pope.  And there is still time to join Reverend Fauntroy in his mission as a human shield by contacting me at .(JavaScript must be enabled to view this email address)

      As-salaamu ‘alaykum wa rahmat Allahi wa barakatuhu,

              Robert D. Crane (aka Faruq ‘Abd al Haqq)

Extending the Abraham Federation Model:  A Just Third Way For Bringing Democracy to the Iraqi People

February 2003

Introduction

As every day brings closer the prospect of war in Iraq, people in America and the international community are becoming increasingly divided.  Many remain unconvinced that the Bush Administration is justified in taking military action that will inevitably cost the lives of Iraqi civilians and could possibly spark an uncontrollable conflagration throughout the Middle East.

Most would concur that Saddam Hussein is a ruthless dictator bent on obtaining weapons of mass destruction.  Few doubt that if given the opportunity, Saddam Hussein would use these against his neighbors, starting with Israel.  Most would also agree that America has the overwhelming military and economic power to win a war against Saddam Hussein.  But power without a clear and compelling vision of peace through justice, will lead to continuing conflict and bloodshed, bringing more evil than good in the long-run.

Let us assume that the UN inspectors continue to monitor the situation in Iraq and Saddam Hussein keeps his promise to eliminate and stop all imports and production of weapons of mass destruction.  Let us further assume that America agrees, as long as the UN inspectors remain in Iraq, to hold off the use of its armed forces now positioned to attack Iraq.  What is the end game of this extraordinary investment of US military might and the UN?s diplomatic initiatives? 

What people in America, the Middle East, Europe and the rest of the world have yet to see is a clear vision of justice and a concrete plan that will liberate the Iraqi people from Saddam Hussein?s oppressive regime and bring a more just future for all.  The ?Abraham Federation? model, described in the following paper, offers President Bush and America a new paradigm for addressing the increasingly complex crisis in the Middle East.  This paradigm is based not on artificial scarcity, but on shared abundance; not on empowerment of a ruthless elite, but on the fundamental God-given sovereignty of every member of human society.


A New Model of Nation-Building for Iraq
and for Resolving the Conflict in the Holy Land

First proposed in 1978, the ?Abraham Federation? strategy was originally focused on the festering sore in the Middle East ? the tragic conflict between the Palestinian and Israeli people ? that is inflaming Muslim extremism and spreading hatred of America and Jews throughout the world.  Today, given the imminence of a pre-emptive military strike against Saddam Hussein by a US-led alliance, President Bush should appreciate the relevance of the proposed strategy for offering the people of Iraq, the Middle East, and the world a unifying, ?peace through justice? based model for nation-building.

This strategy would also neutralize the charge that America is seeking to take over the oil fields of Iraq.  Imagine how America would be viewed by the poor and oppressed citizens throughout the Arab world, if the oil fields of Iraq were denationalized and every citizen of Iraq became a shareholder in the oil company.  (Such a proposal would be modeled along the lines of the General Stock Ownership Corporation, or GSOC, that was originally proposed in 1980 under US tax laws for the citizens of Alaska in the divestiture of the British Petroleum pipelines.)

By promoting through the UN such a ?preemptive moral strike,? America would prove before all nations of the world its commitment to working with others to deliver real justice to the Iraqi people and, by example, to the poor and oppressed of the world.  Such ideological and moral weaponry could offer a far more powerful force than all of America?s overwhelming military weaponry.  And at the same time, America could provide a highly innovative and humanizing solution to the practical problem of stabilizing the world?s supply of oil, as the world continues to seek Hydrogen Age alternatives to meet the future energy needs of civilization.

The Abraham Federation model could be launched as a concurrent, two-front ideological and economic development offensive in both Iraq and the occupied territories on the West Bank and Gaza.  The new model of nation-building would harness the untapped power of internally generated money, credit and other infrastructural reforms to provide the resources for nation-building.

More comprehensive and dynamic than the Marshall Plan, the Abraham Federation model would require little or no taxpayer funds from the U.S., Europe, or any of the other developed nations.  If proven successful, it could be adapted for Afghanistan, the Balkans, Kashmir, Chechnya, East Timor, the Congo, Angola, Somalia, Colombia and many other pressure-cooker areas.  Most important, to people in the Middle East and throughout the developing world, the Abraham Federation model offers fresh ideas for combining market-based development solutions with access to full democracy and justice for all.

The Abraham Federation:
A New Framework for Peace in the Middle East

Norman G. Kurland

? 1978, 1991, 1994, 2001, 2002, 2003 Center for Economic and Social Justice

[Originally published in World Citizen News, Dec. 1978. Updated and republished in American-Arab Affairs (now Middle East Policy), Spring 1991, a publication of the Middle East Policy Council. Updated and republished in Curing World Poverty: The New Role of Property, John H. Miller, ed., published by Social Justice Review in collaboration with the Center for Economic and Social Justice, 1994. Available on the web site of the Center for Economic and Social Justice at ]www.cesj.org.]

Jihad in America

On September 11, 2001, Jihad came to America.  A global terrorist network extended its deadly outreach beyond Israelis in the West Bank and Israel to over 3,000 Americans and people from over 80 other countries trapped in the World Trade Center and Pentagon ? two icons of America?s unparalleled global military and financial power.  This violation of America?s homeland security cannot be disconnected from America?s leading role, along with its World War II allies, in the birth of Israel as a westernized ?Jewish state.?  1947 marked the UN?s ?two state? solution to dividing up the former British-mandated territory of Palestine.  To America and the West, their influence in creating a homeland for displaced Jewish survivors of the Holocaust was morally justified.  To Palestinian settlers and Arab neighboring states in the Middle East, Western military and financial power was being used to jam ?Political Zionism? and morally confused Western values down the throats of a predominantly Muslim world. 

There have been three major wars in 1948, 1967 and 1973 between Israel and its Arab neighbors, interspersed by periodic Palestinian rebellions against the existence of a ?Jewish state.?  Is it possible that the original formulation for a two-state solution was, in the face of the so-called ?clash of civilizations,? morally and systemically flawed from the outset? 

Western handouts are no longer sufficient to stop the breeding of terrorists.  Conventional military power is necessary in this battle but it also is not sufficient.  And conventional approaches to economic development have been counter-productive in winning the hearts and minds of people who feel victimized by global capitalism and betrayed by the false promises of socialism.

Pope Paul VI advised us, ?If you want Peace, work for Justice.?  Ultimately it is superior moral force that will uproot terrorism at its source, not merely conventional sources of Western power.  More humanizing free enterprise principles of economic and social justice must lead in formulating a more comprehensive vision and launching a more effective strategy for achieving lasting peace in ?the Holy Land.? 

Such a strategy, most would agree, must center on resolving the historic land disputes between Palestinians and Israelis that keep both sides locked in a ?zero-sum? struggle.  The urgency of resolving the Palestinian-Israeli conflict was underscored by President Bush?s courageous call for a global ?War on Terrorism? following September 11th. 

The war declared by President Bush is properly aimed at defeating a well-organized network of fanatics and suicide terrorists indoctrinated with a perverted interpretation of Islamic principles of justice and a distorted conspiratorial view of the root causes of their rage.  Fueled by perceived victimization by Western ?infidels? and Western support of a Jewish state in the Middle East, terrorism in months following September 11th escalated into increasingly grotesque displays of barbarism.

Many in the Islamic world, including mothers whose children were turned into human bombs, glorify the ?culture of death? that continues to take the lives of innocent Israeli men, women and children as well as Palestinians considered ?traitors? for opposing terrorism.  The moral and spiritual roots of that Jihad continue to baffle Western and Islamic scholars and were only partially addressed by the otherwise excellent ?Arab Human Development Report 2002? commissioned by the United Nations. 

This paper will make a case against outdated land-for-peace proposals for negotiating future control over the Holy Land, as under the Oslo Agreement.  It will also make a case, on moral grounds, that the initial rush to recognize a ?Palestinian State? by the US State Department and many European leaders, though well-intentioned, is unlikely to achieve a lasting peace through justice for Palestinians, Israelis and other persons living in the disputed territories.  Who wants to be a non-Jew in a ?Jewish state,? a non-Muslim in an ?Islamic state,? a non-Christian in a ?Christian state? ? or, for that matter, a Jew in a ?Palestinian state??

On the other hand, President Bush?s call to the Palestinian people to select more democratically responsible leaders was a wise move.  It buys some time for President Bush and his advisors to explore ?Peace through Justice? strategies that can stir the hearts and minds of Palestinians as well as Israelis.  What is needed now is a much bolder vision to stop terrorism and bring all parties into a new framework to begin negotiating beyond zero-sum politics.

What was missing in past peace initiatives to bring justice and stability to the Holy Land?  Are there different approaches to nation-building that could turn hate into hope and rage into creative outlets for those who see themselves victimized by Western military and financial might?  Can the future be guided by the unifying moral values of the American Revolution and the redemptive spirit of such visionary world leaders as Abraham Lincoln, Anwar Sadat and Nelson Mandela?  Is there a way for leaders like President Bush to harness the moral power of the West to begin to heal the wounds of perceived injustices and inspire the creation of a socio-economic model for sustaining peace through justice for all?

To address the previous questions, we should focus on whether “self-determination” and justice can be achieved for persons of all faiths and persuasions wanting to occupy the same land.  How can this be done without Israel’s jeopardizing its own security during the transition toward a comprehensive Middle East peace settlement?  Once the Israeli military withdraws to the borders of Israel, what arrangements will secure the lives and rights of Jewish settlers who, for religious reasons, want to remain on the West Bank?

There is a way. The answer lies in a radically new and inclusionary model of nation-building, where economic justice would become the basis of social and political justice in the daily lives of each citizen.  It would offer a modern fulfillment of the biblical concept of ?Jubilee?.  But instead of redistributing land, a finite resource, the new nation would redistribute future opportunities for every citizen to become an owner of land and whatever can be built upon the land.  Under an ?economic bill of rights? every citizen would gain equal access to future ownership opportunities, guaranteeing a level playing field in citizen participation as property owners in future economic growth and profit sharing.

By decentralizing access to economic power and economic independence, citizens would control government, not vice versa.  Everyone?s faith, spiritual life and political beliefs would be respected and guaranteed by the rule of law.  National ?sovereignty? would be built from the ground-up, based on securing the inherent sovereignty of every individual and the sanctity of the family unit.  With “ownership-sharing” economics surpassing politics in the daily lives of its citizens, economic power would be widely diffused and the power of the state would be subordinated to the power of the people.

The following proposal, first offered in 1978, is today more timely than ever.

Finding Common Ground

Is it conceivable to create a nation in the Middle East that accommodates Arabs and Israelis? Could a state be structured to avoid becoming either a ?Palestinian state,? or an ?Islamic state,? or a ?Jewish state,? or simply an extension of Israel or any bordering Arab state? Could such a state offer a new form of sovereignty to stir the hearts and dreams of Arabs and Jews?  Could it avoid, on the one hand, the anarchy, tyranny and injustices of other states in the world, and, on the other, the totalitarian regimes and genocidal societies from which Jews escaped to what is now Israel?

In short, could a new country be created that could guarantee peace through justice for all?

The idea for such a country may first seem far-fetched. But with a re-examination of the conflict, it becomes surprisingly workable. And with the added boost of a dynamic economy focused on creating new wealth and new owners of that wealth, the idea of a new nation becomes downright irresistible.

Let’s look at the problem.

The present Arab-Israeli dispute over land ? particularly the major impasse over the West Bank occupied by Israeli forces since June 1967 ? is a classic illustration of a “zero-sum” game. In a zero-sum game, one side can gain only at the other’s expense.  It is a ?win-lose? situation.

The two sides have fought over this land for centuries. The land is holy to three major religions. It is the symbolic crossroads of the world community as it is strategically set between the East and the West, as well as the North and the South. Everyone, therefore, has a stake in a peaceful and just resolution of the dispute ? not just Palestinians and Israelis.

Two obviously important points must be faced before we consider the creation of a new nation. First, present hostilities must not be ignored. This should be obvious. But any proposed solution would rest on political quicksand unless it recognized existing hatreds and fears of Jews and Arabs, as well as their legitimate hopes and aspirations. To overcome these hostilities to the point where Arabs and Jews can work out their differences, we must look to the past for a common bond.

The Point of Reunification: Abraham

Arabs and Jews have a point of unity both can understand: Abraham, the Old Testament patriarch.

Arabs trace their ancestry to Abraham through Ishmael, whom he fathered through his wife’s servant Hagar.  Jews trace their bloodlines to Abraham through his son Isaac and grandson Jacob, who, according to the Bible, God later renamed Israel. The name “Abraham” literally means “father of many nations.” Having once separated the descendants of Ishmael from the children of Israel, 3,800 years later, Abraham could fulfill the biblical prophecy not only of their unification but also of the eventual unification and harmony of all nations and peoples.

Symbols of the past often serve as useful symbols for charting the future. A federation of the spiritual and blood descendants of Abraham could offer a bold political framework for taking small steps in a new direction. Thus, rather appropriately, the new nation could be named the “Abraham Federation.”

With this philosophical common thread, the question is: Where do we start? The answer is: In the historic region of Judea and Samaria ? the West Bank ? and the Gaza Strip, where Arab and Jewish settlements exist today under Israeli military control.

Although some Arabs would dispute the legitimacy of all Israeli-occupied territory, the Israeli military has the power to maintain law and order over all areas it now patrols. Despite the intifada and mounting international pressures on Israel, this reality is unlikely to change in the foreseeable future.  On the other hand, the easy diffusion of modern military technology, including weapons of mass destruction among Arab guerrillas and their allies, makes a military status quo uneasy at best.

The main obstacle to peace, in this author’s view, is not the Israeli military or the deep-seated Holocaust fears which justify in the minds of most Israelis the continued Israeli military presence on the land where the Abraham Federation could be created. Rather, the deeper issue is whether a more just society can be conceived, which will eventually allow the Israeli military presence to be phased out and replaced by US and international security forces during the transition to a viable Abraham Federation at peace with all its neighbors, including Israel.

Some occupied territory under Israeli control is now open to negotiation for a new status ? at least as a foothold for a more comprehensive, longer-term strategy in the future for the entire Middle East.

The biblical region of Judea and Samaria ? the West Bank (with extensions in Gaza and other areas covered by the Oslo Agreement) ? could provide that foothold. It includes Bethlehem, Hebron and the surrounding mountain region west of the Jordan River. It also encompasses Jerusalem, which deserves special handling, perhaps serving in the transition period as the capital of the new nation as well as present Israel.  Jerusalem could even be designated by the UN as a special ?global capital,? to be administered by spiritual leaders of all faiths and policed by security guards under the authority of the Security Council of the UN.

The proposed strategy would go beyond the demeaning “autonomy” proposals of the Israeli Likud Party.  It would be less threatening to Jewish settlers than the Labor Party’s “land-for-peace” proposals.  And it would offer a significantly more just future for all Palestinians than what they are now demanding.

If a new beginning can be made in the West Bank and Gaza, with a free transit corridor linking the two areas, a more comprehensive regional approach could later be negotiated, based on the success of the Abraham Federation model.

The New Nation’s Unique Economy

As a testing ground for a new nation, today’s West Bank and Gaza would be transformed into a laboratory for dynamic “win-win” economic change, allowing revolutionary change in the economic culture to precede ultimate change in the political culture.  Economic empowerment would thus become the foundation for effective political empowerment in the lives of the people.  A basic premise of the new economic culture is the rejection of artificial and disproven assumptions of scarcity.  Today?s scarcity could be overcome if West Bank and Gaza residents would work together within a justice-driven free enterprise system to create new wealth that could be traded globally, with profits and ownership shared more equitably. This would shift the primary focus of thinking from how to divide scarce resources of the past, to planning the “open growth frontier” being created by modern science, technology, and global production and marketing systems.  A second premise for rapid growth is that sound moral values, along with sound market principles, must be infused at all levels and within all institutions of the economic process.

Land, of course, is finite. But as the philosopher-design scientist R. Buckminster Fuller pointed out, creative energy can be channeled into what he called “ephemeralization,” the process of doing-more-with-less. This entails the continuing re-design of existing technologies, structures, and even social “tools” like money, tax systems and global corporations and financial institutions. 

By introducing the world’s most sophisticated technologies (particularly in energy and food production) and redesigning methods of participatory ownership, Arab and Jewish settlers could transcend their competing exclusive claims to the “Holy Land.”  They could complement each other’s existing strength’s and potentials: Jewish settlement experience and advanced energy and agricultural technologies, Arab financing, and Palestinian self-assertion and drive.

Neither Capitalism Nor Socialism

Guidelines for constructing this model for peace in the Middle East involve a radical departure from traditional approaches to industrial development. Neither capitalism nor socialism is adequate for building a successful economy for the Abraham Federation. Neither combines maximum justice with maximum efficiency. Both ignore the need for building economic sovereignty into each citizen. Both leave ownership and control of modern technology, natural resources and business enterprises to a ruling few.

To avoid these dangers, the Abraham Federation would neither own property nor permit future monopolies over the ownership of the means of production. This principle alone would make “sovereignty? in the Abraham Federation uniquely distinct from any nation in history.

The Abraham Federation would recognize that sovereignty connotes power and only human beings, not abstract ?collectives?, can exercise power.  The major issue to be addressed in a democratic world is which people will exercise what kinds of power, either directly, jointly in association with others, or by delegation.

Escape from the “Wage System”

On August 3, 1987 President Ronald Reagan received the report of the bipartisan Presidential Task Force on Project Economic Justice, which, among other recommendations, advocated expanded capital ownership as a new cornerstone for the future of US economic policy, domestically and globally.  President Reagan then declared, ?I?ve long believed one of the mainsprings of our own liberty has been the widespread ownership of property among our people and the expectation that anyone?s child, even from the humblest of families, could grow up to own a business or corporation.?  Citing President Lincoln?s Homestead Act as the historic precedent for the economic development proposals of Project Economic Justice, President Reagan observed, ?A mightier guarantee of freedom is difficult to imagine.?

In a society where all power is supposed to rest with the people, economic sovereignty must start at the individual and family level. Since, in the words of Daniel Webster, ?power follows property,? if political power is to reside in the people, property must be spread broadly. The best antidote to concentrated power and monopolies is to empower all citizens through decentralized ownership of all of society’s enterprises. Only then can those who run government and other social institutions be held accountable to the people. Such an economically classless society would be comprised of highly autonomous, interdependent property owners, capable of associating with other “sovereign” individuals for their mutual interests. Genuine economic democratization serves as the ultimate check on the potential abuse of inherently concentrated state power, and on abuses by the majority against highly vulnerable minority groups and individuals.

What is common to all of today’s economies are legal, financial and other institutional barriers that prevent the average worker and his family from escaping from the status of a worker-for-hire and becoming a capital owner.  If he is lucky, a worker can get a job under a feudalistic “wage system.”  If he?s not, he must turn to charity or welfare, an institutional form of charity.  In any event, most workers live from hand-to-mouth.  The non-owning worker is powerless and defenseless against advancing technology and those who control his jobs and income levels.  His economic security remains vulnerable to labor-saving technology or workers in the global labor market who are willing to do the same work at lower wages.

Having no ownership stake in modern wealth-producing assets, most workers never gain access to the economic independence and entrepreneurial opportunities vital to a dynamic free market economy.  Under such an exclusionary market system, the few are free to own and the many are free to work for them or go hungry.

Policy Pillars of a Free and Just Market Economy

The Abraham Federation would offer an economic and legal system based on (1) private property in the means of production, (2) free and competitive markets for determining just prices, just wages and just profits, and (3) a well-defined and limited economic role of the state.  But the constitution and laws of the new nation would also be structured to (4) guarantee each citizen with an equal opportunity to become an owner of productive assets.

Each of these four basic pillars of a genuinely ?free and just market system? is essential and interdependent for creating an environment for sustainable and balanced growth.  They build moral values into the economic environment, without which free markets become unjust and unfree markets.  Take one pillar away and the system will become unbalanced, vulnerable to corruption, monopolies and special privileges, and wasteful of human potential.  By integrating these four policy objectives, the tax system and the money-creating powers of the state would be restructured so that every citizen has equal access to ?social tools? (like a simple and just tax system , a stable asset-backed currency and an ownership-spreading productive credit system ) to acquire and accumulate enough productive assets to meet his or her living needs upon retirement.

In a national ownership-sharing program, citizens would become co-owners of land. In addition, they would accumulate and receive dividends and property incomes from direct equity ownership in new technologies, agribusinesses, industries, and rentable space and infrastructure built upon the land.  Moreover, by the systematic spreading and sharing of ownership power, one of the basic conditions for any future Holocausts and breeding grounds for terrorists ? alienation of large numbers of workers ? would gradually disappear.


The Vehicle for Change: A National “Capital Homesteading” Strategy

Why should a national ?Capital Homesteading?  strategy capture the attention of those now residing on the West Bank and the Gaza Strip?  The answer lies in the fact that the universal right to own property (Article 17 of the Universal Declaration of Human Rights) is frustrated systematically by every nation today. This is especially true within modern industrial societies where less than 1 percent of their citizens directly own and control most of the industrial capital.

Economic justice in a modern global economy depends on widespread individual access to ownership of technologically advanced agricultural, industrial, and commercial enterprises, and the means to finance their acquisition, operation and expansion. Fortunately, precedents are now well established for creating new enterprises, with skilled management and advanced technologies, whose ownership is shared by all employees.

In the United States, over 10,000 companies with a total of over 10 million employees have adopted employee stock ownership plans or “ESOPs,” 1,500 of which are majority-owned by their employees. Most of these have been adopted since 1972.  Employees with no savings or credit have used an ESOP to become owners of their companies ? in some cases with up to 100 percent of equity participation. 

There are some cases where the ESOP did not work, and many cases where ESOPs are not living up to their potential.  This happens when management and labor fail to create a justice-based culture that respects the property rights as well as the ownership responsibilities of worker-owners.  However, the most successful ESOP companies are world exemplars of ?Justice-Based ManagementSM,? a leadership philosophy that incorporates social justice in corporate management.  More widespread encouragement of this leadership model by lawyers, accountants and consultants, in this author?s opinion, would be far more effective than passing more laws and hiring more government regulators, for preventing future Enrons, WorldComs and similar Wall Street scandals

Twenty laws have been passed by the U.S. Congress since 1973 to encourage the expanded use of ESOPs, including the reorganization of the Northeast rail system, pension reform, tax reform, trade policy, foreign economic development policy, as well as other measures designed to greatly accelerate the adoption of ESOPs by major U.S. corporations.  The credit privileges and special tax advantages that the U.S. government has given to workers who adopt ESOPs, allow workers without savings to purchase shares on credit wholly secured by the future profits of the company. Because employees are directly linked to productivity increases and profits through their ownership rights, studies indicate that firms financed through ESOPs, when combined with participatory management and gain sharing, generally perform better than their competitors.

The ESOP is no longer a mystery in the Middle East. In 1989, the $160 million Alexandria Tire Company was launched in Egypt, creating the Middle East’s largest radial truck tire plant, in a joint venture with Pirelli Tire of Italy and other investors. Thanks to the US Agency for International Development, over 600 worker-shareholders are benefiting from this transaction, “earning” their ownership stakes through the most advanced ESOP in the developing world. 

The key to broad-based ownership is the democratization of capital credit, going beyond micro-enterprise lending, as in the Grameen Bank, to macro-enterprise lending.  In the case of the Alexandria Tire Company, this was supplied through a unique application of Islamic banking principles.  In the future, the discount mechanism of central banks can supply such asset-backed, self-liquidating credit to commercial bank lenders for financing growth of broadly owned productive enterprises.

The Capital Homesteading concept is not limited to worker ownership.  Other variations of the expanded capital ownership concepts that could be implemented in the Abraham Federation would build individual equity stakes in capital-intensive industries into the general population. These include stock ownership plans for utility users and regular customers of enterprises (CSOPs), community investment corporations (CICs) for resident share ownership of local land development corporations and community infrastructure, and personal investment accounts or ?Capital Homestead Accounts? for citizens to gain access to credit to choose among a variety of ownership options (CHAs).  The CIC provides an ideal vehicle for keeping profits, equity growth and land governance rights resulting from land and infrastructural planning and development in the hands of members of the local community, rather than government or outside private developers.

Other significant developments indicating a growing world-wide interest in the expanded capital ownership approach, include:

? Endorsement by President Reagan on August 3, 1987 of the work of the bipartisan Presidential Task Force on Project Economic Justice. This Congressionally-mandated task force issued a report, High Road to Economic Justice, which offered a bold strategy of expanded capital ownership for economic revitalization in Central America and the Caribbean.

? The translation and publication into Polish of Every Worker An Owner [published by the Center for Economic and Social Justice], a compendium of writings by leading thinkers in the expanded capital ownership area. Prior to the demise of the Soviet Union, 15,000 copies of this Polish translation were distributed throughout Solidarity channels in Poland.  In May 1988 USAID Administrator Alan Woods transmitted the English version of this compilation of writings to every USAID mission in the world.

? The development of a “parallel legal system” for Costa Rica to foster system-wide experimentation based on economic democratization.

? ESOP laws established in the United Kingdom, Jamaica, Russia and a growing number of developing and transforming economies.


The Abraham Federation would have an historic opportunity to become the first nation to be launched with a comprehensive and workable program to provide each of its citizens the means to share in the private ownership of all its resources.

Highlights of the Abraham Federation

Here are some suggestions for initiating the Abraham Federation:

? First steps should start small, focusing on a relatively small territory over which no existing nation-state has yet declared its sovereignty, namely ancient Judea and Samaria and the Gaza strip. If the new nation succeeds, the beachhead, with its capital in the Old City of Jerusalem, will expand naturally.  Neighboring countries in the region will seek to merge with the Abraham Federation and share the special benefits described below.

? To foster maximum growth opportunities for the citizens of the Abraham Federation, other countries in the Middle East, including Israel, and other major industrial nations such as the U.S., Japan and members of the European Community, would sign a multilateral agreement treating all the land in the Abraham Federation as a unique ?global free market zone.?  In contrast to most free trade zones ? often cesspools that attract sweatshop industries and exploited workers ? the Abraham Federation would in microcosm be a model for a global free trade system.  Rather than merely providing special investment concessions and free access to goods imported into the zone, the global free market status would allow all goods and services exported from this unique zone to be sold within these cooperating countries with no duties, quotas, or other trade barriers. This feature alone, after security against terrorism is assured, would attract ?leapfrog? technologies and accelerate new investment and job opportunities for the benefit of all producers, investors, worker-owners, suppliers and global customers.  ?Capital Homesteading? tax and credit incentives would add additional icing on the cake.

? A revolutionary advance over all existing nation-states would be formed. The new nation would reject collectivist and exclusionary concepts of nationalism and would carry the concept of sovereignty or “self-determination” down to the personal, family and community levels, an ideal implicit in Judaism, Christianity, and Islam.

? The Abraham Federation would aim at bringing a higher order of justice than any nation has ever offered its citizens. It would offer acceptable safeguards to Israeli demands for security and guarantee the right of all Jews and Palestinians to visit and settle in the ?Holy Land.” It would offer Palestinians “self-determination” and a religiously pluralistic “democratic state” that would insure everyone complete freedom of religion. It would also offer Jewish and Christian settlers the opportunity to become citizens of the Abraham Federation.  It would be neither a collectivist Zionist state nor a collectivist Palestinian state, but a new form of nation that members of all faiths could build together.

? Politically, the new nation?s constitution would guarantee a Jeffersonian form of democracy, open to all, with clearly defined and limited functions given to government and all political institutions. In addition to normal democratic checks and balances on the “minimalist” government of the nation, the major check on future concentrations of power would be outside of government, based on ?Capital Homesteading? policies and institutions that would systematically spread economic power and free enterprise ownership broadly, right down to the individual level.

? Widespread diffusion of property would become the ultimate constitutional safeguard for all human rights. Although the new nation would have no “official” state religion, by systematically spreading property and economic power among its citizens, it would insure that freedom of religion, of association, of the press and other protections of individual human rights vis-୶is the government would be built upon a solid economic foundation.

? Thus, the new nation would be built on a foundation of personal (as opposed to collective) political sovereignty, and that foundation would in turn rest on personal economic sovereignty. It would be a nation whose sovereignty is built from the ground up, rather than from the top down. Individual, family, community and minority rights would thus be protected from the potential abuses of political majorities or traditional power elites. In this way, religious freedom and cultural pluralism would have stronger economic supports than other world trouble spots that breed organized terrorism.

? During the transition to full self-determination, the Abraham Federation would have diplomatic ties to Israel, Jordan and other Arab neighbors. Initially, a UN trusteeship or multinational administrative structure might be required to govern the area as a global ?Peace Zone,? with a timetable and measurable benchmarks for handing over all governmental functions to democratically elected representatives of all citizens of the Abraham Federation ? Arabs, Jews, Christians, and non-believers.

? Until the threat of suicide terrorism can be overcome, and to allay legitimate Israeli fears for the security and freedom of Jewish settlers in the occupied territories, the Israeli military might have to be allowed temporarily to continue to patrol the Abraham Federation under UN observers.  That Israeli presence could then be replaced, initially by a multinational UN security force and then by the Federation?s police, as the new political order creates stable conditions to remove Israeli security concerns.

? The initial thrust of the people of this newly emerging nation would be channeled more toward economic, than political, self-determination: It would strive to absorb the creative energies of Arabs, Jews, displaced Palestinians, Christians, and others moving to this new nation, and harness them into building a technologically advanced, dynamically growing and more just form of free enterprise economy than exists in all other nations.

? Free and open markets and respect for private property in the means of production would be basic pillars for further limiting the power of the state. Instead of redistributing existing property, the new role of the state would be to create a legal and policy environment to inspire and encourage the simultaneous creation of new property and new owners.

? Instead of continuing historic and legalistic disputes over something as finite as “holy land,” the primary focus would be on building upon the land the ever-expanding “technology frontier.”

? Start-up industries might include advanced energy projects and high technology, vertically integrated agribusinesses, and global processing and marketing enterprises that are broadly owned by workers and farmers.


As revolutionary as this new framework may appear to some, it is based on virtually universal moral principles. The process of change, however, is inescapably evolutionary and depends largely on conservative, case-tested methods and “tools.”

The “tools” and fundamental principles for building such a model ?Capital Homesteading? nation already exist and have been tested. They work. (The Ministry of Planning of Costa Rica with U.S. development assistance designed a prototype “parallel legal system” structured along these lines.  While not yet implemented, this model legislation could easily be adapted to any country.)

Because it is grounded on common and traditional principles of economic justice and social justice , orthodox Jews and moderate Muslims, as well as several PLO representatives, have reacted in an open-minded way to the Abraham Federation concept when it has been explained to them.  Former Lebanese president Amin Gamayel told this author that it was consistent with the original vision for a religiously pluralistic Lebanon.  A top advisor of King Abdullah II of Jordan also commented favorably on the concept.

The next step is to test whether the Abraham Federation framework might serve as a basis of a new dialogue between those with power to speak for all Israelis and those with power to speak for all Palestinians. The United States is in the position to be an effective catalyst for bringing this fresh vision to the peace table.  This framework too may be inadequate and prove to be unworkable. But it certainly deserves to be more fully understood by all key decision-makers, especially spiritual leaders, concerned with peace in the Middle East.

Many nations are offering their “solutions” to end Israeli occupation of the West Bank. None of these initiatives seem to be satisfactory to both sides of the conflict. In that light, the Abraham Federation concept might well offer a more hopeful and workable framework for those directly affected to recapture the initiative, not merely for their own survival, but for leading all mankind to a more just and peaceful future.

Conclusion: Transition to the New Nation

No rational dialogue and no genuine steps toward peace among Arabs and Jews in the Middle East are possible within traditional conceptual and ideological frameworks.  These competing frameworks all suffer from faulty assumptions, semantic ambiguities, and poorly defined, often contradictory, objectives. A new and more realistic framework is demanded.  It must proceed in small steps toward a broader, more comprehensive, and more just solution, one not even conceivable under the old frameworks.

Many problems may arise in moving from the initial blueprint stage to implementation, especially regarding security and control over the Israeli military, immigration, and land-use matters. But within a framework that takes into consideration the legitimate concerns of Palestinians and Israelis, one that offers special trade status in the global marketplace, even these problems could be addressed for the mutual self-interest of all citizens of the Abraham Federation.

Just as the offer of 160 acres of land to its propertyless pioneers sparked America’s development as an agricultural power, the industrial equivalent of that ownership incentive can now be offered to the propertyless Arabs, Jews, and others living in Jerusalem and other places in the Abraham Federation. Truth, justice, and peace can again go forth from Jerusalem.

Building a just and pluralistic nation is, of course, a complex undertaking. But by focusing on the limitless possibilities of industrial growth, rather than on endless confrontation over scarce land resources, Arab and Jewish settlers of the Abraham Federation can take a new look at their common problem. Under the mantle of Abraham, they can step back into the past in order to leap forward into a more just and hopeful future.

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End Notes

.  1 See ” A Quick Comparison of Capitalism, Socialism and CESJ’s “Moral Third Way” at www.cesj.org

2 See “Defining Economic and Social Justice” on the home page of the web site of the Center for Economic and Social Justice at

www.cesj.org Also see Ferree, William, The Act of Social Justice, Catholic University of America, 1944. See also his Introduction to Social Justice, Paulist Press, 1948; republished in 1997 by the Center for Economic and Social Justice and available along with other writings on economic and social justice at the CESJ web site.

3 Crossette, Barbara. “Study Warns of Stagnation in Arab Societies,” The New York Times, July 7, 2002.

4 According to the Bible, the fiftieth year following seven seven-year periods was the “Year of Jubilee”, or Sabbatical year, to be celebrated by the freeing of Hebrew slaves, the remission of debts and the restoration of ancestral property to its original owners. Encyclopʤia Britannica

5 This would institutionalize the main purposes of a just government as expressed by George Mason, the father of the American Bill of Rights, who authored the Virginia Declaration of Rights, which declared that “all men are by nature equally free and independent and have certain inherent rights . . . namely, the enjoyment of life and liberty, with the means of acquiring and possessing property, and pursuing and obtaining happiness and safety.” A critical omission in Jefferson’s authorship of the Declaration of Independence was Mason’s (following John Locke) heavy emphasis on access to the “means of acquiring and possessing property” as the ultimate source of personal economic sovereignty and all human rights. This omission, some suggest due to Jefferson’s moral ambiguity over slavery, can and has led every nation since the beginning of the industrial revolution away from broad-based ownership of wealth-producing assets as the source of personal self-determination and the ultimate check against the potential abuses of concentrated public and private power. The constitution of the Abraham Federation can correct this flaw.

6 See “Value-Based Management: A System for Building an Ownership Culture,” a paper presented at the ESOP Association 21st Annual Conference, May 20-22, 1998 - Washington, D.C., available at www.cesj.org

7 Zung, Thomas T.K., Buckminster Fuller: Anthology for a New Millennium, St. Martin’s Press, 2002; see also Fuller, R. Buckminster , Critical Path, St. Martin’s Press, 2002 edition.

8 See writings of Louis O. Kelso, especially the principles of economic justice he developed with his co-author, the philosopher Mortimer J. Adler in chapter 5 of The Capitalist Manifesto, Random House, 1958. This book and other writings of Kelso can be downloaded free on the web site of the Kelso Institute for the Study of Economic Systems at www.kelsoinstitute.org Other writings on Kelso’s binary system of economics and his classic critique of Karl Marx’s Das Kapital are available at the web site of the Center for Economic and Social Justice at www.cesj.org Kelso, a lawyer-investment banker as well as a brilliant economic theorist, was also the inventor of practical ownership-broadening innovations such as the employee stock ownership plan or “ESOP.” For an excellent textbook on Kelso’s economic theory, see Ashford, Robert and Shakespeare, Rodney, Binary Economics: The New Paradigm, University Press of America, 1999.

9 “Beyond ESOP: Steps Toward Tax Justice”, The Tax Executive, April and July 1977. Available at www.cesj.org

10 “The Federal Reserve Discount Window”, The Journal of Employee Ownership Law and Finance, National Center for Employee Ownership, Winter 1998, pp. 131-155.

11 Full details of the economic program outlined in the Abraham Federation strategy are given in the report, Capital Homesteading for Every Citizen, prepared for the William H. Donner Foundation by the Center for Economic and Social Justice in December 2002. Free copies of the report (in PDF format) are available at http://www.cesj.org/homestead/donnersocialsecurity.pdf . Other writings on Capital Homesteading are also available at www.cesj.org For a detailed model “parallel legal system” for broadening capital ownership, see A Proposed Law to Encourage the Democratization of Future Capital Ownership for Citizens of Costa Rica, prepared for the Costa Rican Minister of Planning under a USAID contract, July 17, 1989, available at www.cesj.org

12 See footnote 11 and writings cited in footnotes 8, 9 and 10.

13 See Miller, John H. Curing World Poverty: The New Role of Property, Social Justice Review, 1994

14 Kurland, Norman, “The South Bend Lathe Story: What Can We Learn from an ESOP ‘Failure’?” in The ESOP Association, Journey to an Ownership Culture: Insights from the ESOP Community, Scarecrow Press, 1997, pp. 41-49. Available at www.cesj.org

15 See “Organized for the Common Good Through Value-Based Management” by William Nicholson, on the successes since 1983 of the ownership system at Western Building Products, Milwaukee, Wisconsin. Available at www.cesj.org (The term “Value-Based Management” has been changed to “Justice-Based ManagementSM to reflect its governing principles of economic and social justice and to differentiate this new leadership philosophy and management system from what is now referred to as “Value-Based Management” by business schools and Wall Street investment banking firms, which merely seeks to maximize long-term stock values for shareholders.) Where principles of Justice-Based ManagementSM are applied, corporate boardroom and workplace behavior embody and reinforce high moral standards. Loyalty between top management, workers, outside shareholders, customers and suppliers, is a two-way street. And corporate governance is structured to achieve the transparency and accountability that was lacking in Enron, WorldCom and other flagrant cases of executive abuse. Further, executives of the best companies have long-term investment horizons measuring their success by dividend levels for all shareholders, profit sharing distributions for all workers and value they bring to their customers. They avoid trying to manipulate their share prices in public stock exchanges. And the differential in compensation levels between the highest paid executive and the lowest paid worker is generally no more than 3 to 5 times a tolerable level for maintaining a sense of community but not over 500 times as in some American corporations.

16 See Kurland, Norman and Brohawn, Dawn, “Beyond Privatization: An Egyptian Model for Democratizing Capital Credit for Workers”, paper presented to the American Bankers Conference on ESOPs, New York City, June 12-13, 1989, as revised by authors, 1993. Available at www.cesj.org

17 See Kurland, Norman, “A New Look at Prices and Money: The Kelsonian Binary Model for Achieving Rapid Growth Without Inflation,” Journal of Socio-Economics, vol. 30, 2001, pp. 495-515; also available at www.cesj.org

18 See Capital Homesteading for Every Citizen, prepared for the William H. Donner Foundation by the Center for Economic and Social Justice in December 2002.

19 These vehicles are described in the Capital Homestead Act, see footnote11, and in various papers at www.cesj.org The “Capital Homestead Account” and its relationship to central banking policy is described in “Saving Social Security” on the CESJ web site.

20 See various papers on the Community Investment Corporation as a for-profit citizen-owned land developer at www.cesj.org

21 Available at www.cesj.org

22 See footnote 8.

23 See “A New Look at Prices and Money: The Kelsonian Binary Model for Achieving Rapid Growth Without Inflation,”

cited in footnote 17.

24 See footnote 11.

25 See writings cited in footnote 2.

 


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