Islamic Economics: Failure to Share Both Risk and Ownership Caused the Sub-Prime Collapse
by Dr. Robert D. Crane
Ownership of wealth producing assets is the key to both the rise and fall of civilizations. The American sub-prime crisis of 2008 is merely a blip in the broader crisis of a growing wealth gap both within and among nations and of the failure to perfect our institutions of money, credit, taxation, and law to reverse otherwise fatal trends. The establishment gurus, both liberal and conservative, see problems but no answers.
Solution number one is the basic principle of sharing the risk by linking the creation of money not to debt but to production in accordance with the Real Bills doctrine. Solution number two is to link the creation of money to broadened capital ownership through the Just Third Way. Solution number three is the specific strategy of Capital Homesteading, as advocated by President Ronald Reagan and spelled out in the Center for Economic and Social Justice’s book by this title, available at http://www.cesj.org .
E. J. Dionne in his article of July 10th, 2008, “The Death of Reaganonomics,” ( http://www.truthdig.com/report/item/20080710_the_death_of_reaganomics/?ln ) misses the point. He wants to solve all problems by government regulation. Reaganonomics never died. It has never been understood as he did, namely, as a means to broaden capital ownership. President Reagan was interested equally in promoting both macro growth and macro justice by overcoming the entrenched institutional barriers to both. He wanted to grow the pie through free market economics by assuring that everyone has a piece.