detail for book

The following, from a 2005 paper of mine, provides a good summary of the argument with quotations and bibliographic citations. Feel free to use for any project of Warren Mosler, as per his instructions. Also, please let me know if you have any further questions or I can provide any additional information. In addition to the information on Colonial Africa, I have added a brief section on Europe and Asia, where the same phenomenon can be found. Also, I refer to a 2006 paper of mine that provides evidence that many of the most famous names in the history of economics were well aware of the phenomenon. Also many political scientists, policy-makers, sociologists, historians, etc. Finally, I have also documented the “tax-driven cowrie shell” from both Africa and Asia, that is, contrary to what has previously been thought (by such economists as Milton Friedman), cowrie currency was not a so-called ‘primitive’ money, but was similarly tax-driven as colonial currency or today’s dollar. Let me know if you would like these references as well.

The economist “Rodney” Warren refers to is Walter Rodney, and his book is in the bibliography. I provide examples from many African colonies, such as Nigeria, German East Africa, French West Africa, British Central Africa, Upper Volta, Southern Rhodesia, and South Africa, but not specifically Ghana. If you need examples specifically from Ghana, let me know and I can provide them.

Once again, please do not hesitate to contact me directly anytime for further assistance. My contact info follows.

Sincerely,

Mathew Forstater

Professor of Economics

University of Missouri—Kansas City

From:

Mathew Forstater, 2005, “Taxation and Primitive Accumulation: The Case of Colonial Africa” in Research in Political Economy, Vol. 22, pp. 51-64.

Direct taxation [and the requirement that tax obligations be settled in colonial currency] was used to force Africans to work as wage laborers, to compel them to grow cash crops, to stimulate labor migration and control labor supply, and to monetize the African economies. Part of this latter was to further incorporate African economies into the larger emerging global capitalist system as purchasers of European goods. If Africans were working as wage laborers or growing cash crops instead of producing their own subsistence, they would be forced to purchase their means of subsistence, and that increasingly meant purchasing European goods, providing European capital with additional markets. It thus also promoted, in various ways, marketization and commoditization. [Direct taxation] appears to have been one of the most powerful policies in terms of both its wide variety of functions, its universality in the African colonial context, and its success in achieving its intended effects. Of course, taxation was not the sole determinant of primitive accumulation [note: “primitive accumulation” or similar terms such as primary accumulation or original accumulation, was a term used by the Classical economists, such as Adam Smith, David Ricardo, and Karl Marx to refer to the process by which subsistence workers became wage-laborers, and the process of early capitalist development in general]. But it has certainly been under-recognized in the literature on primitive accumulation. The history of direct taxation also has some wider theoretical implications. It shows, for example, “that ‘monetization’ did not spring forth from barter; nor did it require ‘trust’—as most stories about the origins of money claim” (Wray, 1998, p. 61). In the colonial context, money was clearly a “creature of the state”. In addition, this phenomenon was in no way unique to the African case. As will be seen following the section on Africa, the same process was also found in Europe, Asia, and elsewhere.

TAXATION AND PRIMITIVE ACCUMULATION IN COLONIAL AFRICA

Colonial administrators at first believed that market incentives and persuasion might result in a forthcoming supply of labor:

Initially the French imagined that if they would only create new needs for the Africans, the indigenous people would go out to work. When this did not happen, the French introduced taxes so as to make Africans earn wages. (Coquery-Vidrovitch, 1969, pp. 170-171)

From the first it was assumed that ample cheap labor was a major asset in Africa…Practical experience soon showed, however, that Africans did not, as a rule, approximate to Indian coolies. Few in sub-Saharan African had experience of working for pay or outside the traditional subsistence economy, and few had any real need to do so. In course of time monetary incentives might generate a voluntary labor force, but during the first decades after pacification neither governments nor private investors could afford to wait indefinitely for the market to work this revolution. (Fieldhouse, 1971, p. 620)

A number of methods were utilized to compel Africans to provide labor and cash crops. Among these were work requirements, pressure for ‘volunteers’, land policy squeezing Africans into ‘reserves’ destroying the subsistence economy, and ‘contracts’ with penal sanctions (Fieldhouse, 1971, pp. 620-621). But the most successful method turned out to be direct taxation.

Direct taxation was used throughout Africa to compel Africans to produce cash crops instead of subsistence crops and to force Africans to work as wage laborers on European farms and mines:

In those parts of Africa where land was still in African hands, colonial governments forced Africans to produce cash crops no matter how low the prices were. The favourite technique was taxation. Money taxes were introduced on numerous items—cattle, land, houses, and the people themselves. Money to pay taxes was got by growing cash crops or working on European farms or in their mines. (Rodney, 1972, p. 165, original emphasis)

The requirement that taxes be paid in colonial currency rather than in-kind was essential to producing the desired outcome, as well as to monetize the African communities, another part of colonial capitalist primitive accumulation and helping to create markets for the sale of European goods:

African economies were monetised by imposing taxes and insisting on payments of taxes with European currency. The experience with paying taxes was not new to Africa. What was new was the requirement that the taxes be paid in European currency. Compulsory payment of taxes in European currency was a critical measure in the monetization of African economies as well as the spread of wage labor. (Ake, 1981, pp. 333-334)

Colonial governors and other administrators were well aware of this ‘secret’ of colonial capitalist primitive accumulation, although they often justified the taxation on other grounds, some ideological and others demonstrating the multiple purposes of taxation from the colonial point of view. “One Governor, Sir Perry Girouard, is reported to say: ‘We consider that taxation is the only possible method of compelling the native to leave his reserve for the purpose of seeking work’” (Buell, 1928, p. 331). First Governor General of the Colony and Protectorate of Nigeria, Sir Frederick Lugard’s Political Memoranda and Political Testimonies are filled with evidence regarding direct taxation: “Experience seems to point to the conclusion that in a country so fertile as this, direct taxation is a moral benefit to the people by stimulating industry and production” (Lugard, 1965a, p. 118). Lugard’s belief that “Direct taxation may be said to be the corollary of the abolition, however, gradual, of forced labour and domestic slavery” (1965a, p. 118), acknowledges the role of direct taxation in forcing Africans to become wage-laborers. Lugard was also clear that the “tax must be collected in cash wherever possible…The tax thus promotes the circulation of currency with its attendant benefits to trade” (1965a, p. 132).

Lugard and other colonial administrators cited a number of other justifications for direct taxation:

Even though the collection of the small tribute from primitive tribes may at first seem to give more trouble than it is worth, it is in my view of great importance as an acknowledgement of British Suzerainty…It is, moreover, a matter of justice that all should pay their share alike, whether civilized or uncivilized, and those who pay are quick to resent the immunity of others. Finally, and in my judgment the most cogent reason, lies in the fact that the contact with officials, which the assessment and collection necessitates, brings these tribes into touch with civilizing influences, and promotes confidence and appreciation of the aims of Government, with the security it affords from slave raids and extortion.” (Lugard, 1965b, pp. 129-130)

The tax affords a means to creating and enforcing native authority, of curbing lawlessness, and assisting in tribal evolution, and hence it becomes a moral benefit, and is justified by the immunity from slave-raids which the people now enjoy.” (p. 173)

Taxation was also justified on grounds that it assisted in ‘civilizing’ African peoples: “For the native,” Ponty stated in 1911, “taxation, far from being the sign of a humiliating servitude, is seen rather as proof that he is beginning to rise on the ladder of humanity, that he has entered upon the path of civilization. To ask him to contribute to our common expenses is, so to speak, to elevate him in the social hierarchy” (Conklin, 1997, p. 144). Colonial tax policies were also introduced in the name of the ‘dignity’ of, and the obligation to, work, where contact with Europeans again was emphasized:

From this need for native labor, the theory of the dignity of labor has developed; this dignity has been chiefly noticeable in connection with labor in the alienated areas. The theory has also developed that it is preferable for the native to have direct contact with the white race so that his advance in civilization should be more rapid than if he remained in his tribal area attending to his own affairs. This is the “inter-penetration” theory in contrast to the “reserve” or “separation” theory. (Dilley, 1937, p. 214)

All of these functions of direct taxation may be seen in some sense as part of colonial capitalist primitive accumulation, whether as assisting in promoting marketization or serving ideological functions in the reproduction of the colonial capitalist mode.

Several points concerning the role of direct taxation in colonial capitalist primitive accumulation need to be made. First, direct taxation means that the tax cannot be, e.g., an income tax. An income tax cannot assure that a population that possesses the means of production to produce their own subsistence will enter wage labor or grow cash crops. If they simply continue to engage in subsistence production, they can avoid the cash economy and thus escape the income tax and any need for colonial currency. The tax must therefore be a direct tax, such as the poll tax, hut tax, head tax, wife tax, and land tax. Second, although taxation was often imposed in the name of securing revenue for the colonial coffers, and the tax was justified in the name of Africans bearing some of the financial burden of running the colonial state, in fact the colonial government did not need the colonial currency held by Africans. What they needed was for the African population to need the currency, and that was the purpose of the direct tax. The colonial government and European settlers must ultimately be the source of the currency, so they did not need it from the Africans. It was a means of compelling the African to sell goods and services, especially labor services for the currency. Despite the claims by the colonial officials that the taxes were a revenue source, there is indication that they understood the working of the system well. For example, often the tax was called a “labor tax” or “prestation.” Under this system, one was relieved of their tax obligation if one could show that one had worked for some stated length of time for Europeans in the previous year (see, e.g., Christopher, 1984, pp. 56-57; Crowder, 1968, p. 185; Davidson, 1974, pp. 256-257; Dilley, 1937, p. 214; Wieschoff, 1944, p. 37). It is clear in this case that the purpose of the tax was not to produce revenue.

To achieve its intended effects, it was also important that the direct tax be enforced, and numerous penalties existed for failing to meet one’s obligation. In German East Africa, “Sanctions against non-payment were severe—huts were burnt and cattle confiscated—so tax defaulters were not numerous” (Gann and Duignan, 1977, pp. 202-203). All kinds of harsh penalties for failing to pay taxes have been documented:

If a man refused to pay his taxes, the Mossi chief was permitted to sequester his goods and sell them. If the man had neither the taxes nor the goods, the chief had to send him and his wife (or wives) to the administrative post to be punished. Sometimes, a man and his wife would be made to look at the sun from sunrise to sunset while intoning the prayer Puennam co mam ligidi (“God, give me money”). Other times a man would be made to run around the administrative post with his wife on his back; if he had several wives, he had to take each one in turn. Then his wife or wives had to carry him around. (Skinner, 1970, p. 127)

Collective punishments were also used widely to enforce the tax. At the very least, failure to “pay could be met, and regularly was met, by visits from the colonial police and spells of ‘prison labour’.” (Davidson, 1974, pp. 256-257)

Another important element in assuring the smooth functioning of the direct tax system was keeping wages low, which had the additional benefit of keeping costs down for private employers. If wages were too high relative to the tax burden, Africans would only work enough to pay off their tax obligation and the labor supply would remain limited:

While taxation is high, wages are very low. It would not do to pay the Natives too much for they would not work a day more than it was absolutely necessary to get tax money. So employers pay the minimum in order to exploit their labourers as long as possible. (Padmore, 1936, p. 67)

Direct taxation was also used to promote and control migration of wage labor. If wage labor and money for cash crops was not available locally, Africans were forced to migrate to plantations and mines to find money wages (see, e.g., Greenberg, 1987; Groves, 1969; Onselan, 1976; although see also Manchulle, 1997, especially p. 8, for a critique).

TAXATION AND PRIMITIVE ACCUMULATION IN EUROPE AND ASIA

In arguing that taxation played an important role in primitive accumulation, this paper has focused on the case of Colonial Africa, but this should in no way imply that the process was limited to Africa. Evidence has already been mentioned in passing with reference to Russia and elsewhere. Vries, in a section entitled “Taxes, the Financial Revolution, War, Primitive Accumulation, and Empire” from his article “Governing Growth: A Comparative Analysis of the Role of the State in the Rise of the West” (Vries, 2002), argues that:

Praising Europe’s state-system and its mercantilist competition implies, whether one likes it or not, praising taxes. The increase of taxation we see in mercantilist countries may also have been a blessing in disguise. Paying them may have been an unpleasant experience, but it need not necessarily have been a bad thing from a macro-economic point of view. It is not farfetched to expect that ever-increasing taxes forced people to work harder and longer. Since the economy of large parts of early modern Europe was characterized by un(der)employment and under-utilization of the available means of production, there was plenty of room for increased production. Moreover, the fact that taxes were collected in money, led to increasing commercialization. Which in turn could increase government income via indirect taxes. (Vries, 2002, p. 75)

Despite Vries’ view of the process as a ‘blessing’, etc., it is clear that the description highlights the ways in which money taxes affected labor supply and monetization in early modern Europe, and even uses the term ‘primitive accumulation’. Later in the article, Vries reports that, in China, “one finds officials proclaiming that taxes ought to be raised to force the populace to work harder” (Vries, 2002, p. 95; for more on China, see Von Glahn, 1996). Vries goes on to report that this development took place throughout Europe and Asia:

When it comes to the way taxes were levied, monetization appears to be the tendency in the entire Eurasian continent. This process had progressed furthest in Europe. All governments preferred to get their income in money and to a very large extent managed to do so. In China an important grain levy continued to exist, but all other important government taxes had gradually been transformed into monetary payments. In India taxes for the central government had to be paid in cash. In the Ottoman Empire monetization made the least progress, but with the increasing weight of cizye, avariz, and tax farming, here too cash payments were on the rise. (Vries, p. 98)

Additional support for Europe and Western Asia is provided by Banaji (2001). Evidence for the notion that money taxes force pressures for increased market activity is provided by the reverse development, namely that a “decline in the exaction of money taxes brought about a decline in trade” (Hopkins, 1980, p. 116, quoted in Banaji, 2001, p. 16). Banaji goes on to report that:

the relentless pressure for taxation in money would also mean that despite the commercial decline which is supposed to have occurred in the Mediterranean of the seventh century, Egyptian landowners and rural communities were undoubtedly forced to meet their monetary obligations through increased production for the market (or participation in it as wage-labourers). (Banaji, 2001, p. 158)

Additional research is necessary to provide a more comprehensive and detailed documentation of the role of monetary taxation in monetization, marketization, and the creation of wage-labor and cash crop production in other regions and time periods, but it is clear that the historical process was in no way confined to Colonial Africa. The fact that various aspects of the phenomenon were recognized by economists as geographically, temporally, and theoretically diverse as Adam Smith, John Stuart Mill, Karl Marx, Fred M. Taylor, Philip Henry Wicksteed, W. Stanley Jevons, Karl Polanyi, and John Maynard Keynes supports the position that it existed with a great deal of generality (see Forstater, 2006).

BIBLIOGRAPHY

Ake, Claude, 1981, A Political Economy of Africa, Essex, England: Longman Press.

Amin, Samir, 1976, Unequal Development, New York: Monthly Review Press.

Banaji, Jairus, 2001, Agrarian Change in Late Antiquity, Oxford: Oxford University Press.

Buell, Raymond Leslie, 1928, The Native Problem in Africa, Vol. 1, New York: Macmillan.

Christopher, A. J., 1984, Colonial Africa, London: Croom Helm.

Conklin, Alice L., 1997, A Mission to Civilize: The Republican Idea of Empire in France and West Africa, 1895-1930, Stanford, CA: Stanford University Press.

Coquery-Vidrovitch, Catherine, 1969, “French Colonization in Africa to 1920: Administration and Economic Development,” in L. H. Gann and P. Duignan (eds.), Colonialism in Africa, 1870-1914, Volume 1: The History and Politics of Colonialism, 1870-1914, Cambridge: Cambridge University Press.

Coquery-Vidrovitch, Catherine, 1986, “French Black Africa,” in A. D. Roberts (ed.), The Cambridge History of Africa, Volume 7, from 1905 to 1940, Cambridge: Cambridge University Press.

Crowder Michael, 1968, West Africa Under Colonial Rule, Evanston, IL: Northwestern University Press.

Crowder, Michael, 1970, “The White Chiefs of Tropical Africa,” in L. H. Gann and P. Duignan (eds.), Colonialism in Africa, 1870-1960, Volume II: The History and Politics of Colonialism, 1914-1960, Cambridge: Cambridge University Press.

Davidson, Basil, 1974, Africa in History, new revised edition, New York: Collier.

Dilley, Marjorie Ruth, 1937, British Policy in Kenya, New York: Barnes and Noble.

Fieldhouse, David K., 1971, “The Economic Exploitation of Africa: Some British and French Comparisons,” in P. Gifford and W. R. Louis (eds.), France and Britain in Africa: Imperial Rivalry and Colonial Rule, New Haven, CT: Yale University Press.

Forstater, Mathew, 2006, “Tax-Driven Money: Additional Evidence from the History of Thought, Economic History, and Economic Policy,” in M. Setterfield, ed., Complexity, Endogenous Money, and Exogenous Interest Rates: Festschrift in Honor of Basil J. Moore, Cheltenham, U.K.: Edward Elgar.

Freund, Bill, 1984, The Making of Contemporary Africa, Bloomington, Indiana University Press.

Gann, L. H. and Peter Duignan, 1977, The Rulers of German Africa, 1884-1914, Stanford, CA: Stanford University Press.

Greenberg, Stanley B., 1987, Legitimating the Illegitimate: State, Markets, and Resistance in South Africa, Berkeley, CA: University of California Press.

Groves, Charles Pelham, 1969, “Missionary and Humanitarian Aspects of Imperialism from 1870 to 1914,” in L. H. Gann and P. Duignan (eds.), Colonialism in Africa, 1870-1914, Volume 1: The History and Politics of Colonialism, 1870-1914, Cambridge: Cambridge University Press.

Lugard, F. D., 1965a [1906, 1918], “Lugard’s Political Memoranda: Taxation, Memo No. 5” in A. H. M. Kirk-Greene (ed.), The Principles of Native Administration in Nigeria: Selected Documents, 1900-1947, London: Oxford University Press.

Lugard, F. D., 1965b [1922], “Lugard’s Political Testimony,” in A. H. M. Kirk-Greene (ed.), The Principles of Native Administration in Nigeria: Selected Documents, 1900-1947, London: Oxford University Press.

Manchulle, François, 1997, Willing Migrants: Soninke Labor Diasporas, 1848-1960, Athens, OH: Ohio University Press.

McCracken, John, 1986, “British Central Africa,” in A. D. Roberts (ed.), The Cambridge History of Africa, Volume 7, from 1905 to 1940, Cambridge: Cambridge University Press.

Onselan, Charles van, 1976, Chibaro: African Mine Labour in Southern Rhodesia, 1900-1933, London: Pluto Press.

Padmore, George, 1936, How Britain Rules Africa, New York: Negro Universities Press.

Rodney, Walter, 1972, How Europe Underdeveloped Africa, Washington, D. C.: Howard University Press.

Skinner, Elliott P., 1970, “French Colonialism and Transformation of Traditional Elites: Case of Upper Volta,” in W. Cartey and M. Kilson (eds.), The Africa Reader: Colonial Africa, New York: Random House.

Temu, A., and B. Swai, 1981, Historians and Africanist History: A Critique, London: Zed Books.

Thomas, Clive Y., 1984, The Rise of the Authoritarian State in Peripheral Societies, New York: Monthly Review Press.

Von Glahn, Richard, 1996, Fountain of Fortune, Berkeley: University of California Press.

Vries, P. H. H., 2002, ““Governing Growth: A Comparative Analysis of the Role of the State in the Rise of the West,” Journal of World History, Vol. 13, No. 1, pp. 67-138.

Wieschoff, H. A., 1944, Colonial Policies in Africa, Philadelphia: University of Pennsylvania Press.

Social Security commentary published


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Social Security: Another Case of Innocent Fraud?

By Mathew Forstater and Warren Mosler

August 6th — In his recent book, The Economics of Innocent Fraud, John Kenneth Galbraith surveys a number of false beliefs that are being perpetuated among the American people about how our society operates: innocent (and sometimes not-so-innocent) frauds. There is perhaps no greater fraud being committed presently—and none in which the stakes are so high—as the fraud being perpetrated regarding government insolvency and Social Security. President Bush uses the word “bankruptcy” continuously. And the opposition agrees there is a solvency issue, questioning only what to do about it.
Fortunately, there is a powerful voice on our side that takes exception to the notion of government insolvency, and that is none other than the Chairman of the Federal Reserve. The following is from a transcript of a recent interview with Fed Chairman Alan Greenspan:

    RYAN… do you believe that personal retirement accounts can help us achieve solvency for the system and make those future retiree benefits more secure?

    GREENSPAN: Well, I wouldn’t say that the pay-as-you-go benefits are insecure, in the sense that there’s nothing to prevent the federal government from creating as much money as it wants and paying it to somebody. The question is, how do you set up a system which assures that the real assets are created
    which those benefits are employed to purchase. (emphasis added)

For a long time we have been saying there is no solvency issue (see C-FEPS Policy Note 99/02 and the other papers cited in the bibliography at the end of this report). Now with the support of the Fed Chairman, maybe we can gain some traction.

Let us briefly review, operationally, government spending and taxing. When government spends it credits member bank accounts. For example, imagine you turn on your computer, log in to your bank account, and see a balance of $1,000 while waiting for your $1,000 Social Security payment to hit. Suddenly the $1,000 changes to $2,000. What did the government do to make that payment? It did not hammer a gold coin into a wire connected to your account. It did not somehow take someone’s taxes and give them to you. All it did was change a number on a computer screen. This process is operationally independent of, and not operationally constrained by, tax collections or borrowing.

That is what Chairman Greenspan was telling us: constraints on government payment can only be self-imposed.

And what happens when government taxes? If your computer showed a $2,000 balance, and you sent a check for $1,000 to the government for your tax payment, your balance would soon change to $1,000. That is all—the government changed your number downward. It did not “get” anything from you. Nothing jumped out of the government computer into a box to be spent later. Yes, they “account” for it by putting information in an account they may call a “trust fund,” but this is “accounting”—after the fact record-keeping—and has no operational impact on government’s ability to later credit any account (i.e., spend!).

Ever wonder what happens if you pay your taxes in actual=2 0cash? The government shreds it. What if you lend to the government via buying its bonds with actual cash? Yes, the government shreds the cash. Obviously, the government doesn’t actually need your “funds” per se for further operational purpose.

Put another way, Congress ALWAYS can decide to make Social Security payments, previous taxing or spending not withstanding, and, operationally, the Fed can ALWAYS process whatever payments Congress makes. This process is not revenue constrained. Operationally, collecting taxes or borrowing has no operational connection to spending. Solvency is not an issue. Involuntary government bankruptcy has no application whatsoever! Yet “everyone” agrees—in all innocence—that there is a solvency problem, and that it is just a matter of when. Everyone, that is, except us and Chairman Greenspan, and hopefully now you, the reader, as well!

So if solvency is a non-issue, what are the issues? Inflation, for one. Perhaps future spending will drive up future prices. Fine! How much? What are the projections? No one has even attempted this exercise. Well, it is about time they did, so decisions can be made on the relevant facts.

The other issue is how much GDP we want seniors to consume. If we want them to consume more, we can award them larger checks, and vice versa. And we can do this in any year. Yes, it is that simple. It is purely a political question and not one of “finance.”

If we do want seniors to participate in the future profitability of corporate America, one option (currently not on the table) is to simply index their future Social Security checks to the stock market or any other indicator we select—such as worker productivity or inflation, whatever that might mean.

Remember, the government imposes a 30% corporate income tax, which is at least as good as owning 30% of all the equity, and has at least that same present value. If the government wants to take a larger or smaller bite from corporate profits, all it has to do is alter that tax—it has the direct pipe. After all, equity is nothing more than a share of corporate profits. Indexation would give the same results as private accounts, without all the transactional expense and disruption.

Now on to the alleged “deficit issue” of the private accounts plan. The answer first—it’s a non-issue. Note that the obligation to pay Social Security benefits is functionally very much the same as having a government bond outstanding—it is a government promise to make future payments. So when the plan is enacted the reduction of future government payments is substantially offset” by future government payments via the new bonds issued. And the funds to buy those new bonds come (indirectly) from the reductions in the Social Security tax payments—to the penny. The process is circular. Think of it this way. You get a $100 reduction of your Social Security tax payment. You buy $100 of equities. The person who sold the equities to you has your $100 and buys the new government bonds. The government has new bonds outstanding to him or her, but reduced Social Security obligations to you with a present value of about $100. Bottom line: not much has changed. One person has used his or her $100 Social Security tax savings to buy equities and has given up about $100 worth of future Social Security benefits (some might argue how much more or less than $100 is given up, but the point remains). The other person sold the equity and used that $100 to buy the new government bonds. Again, very little has changed at the macro level. Close analysis of the “pieces” reveals this program is nothing but a “wheel spin.”

Never has so much been said by so many about a non-issue. It is a clear case of “innocent fraud.” And what has been left out? Back to Chairman Greenspan’s interview—what are we doing about increasing future output? Certainly nothing in the proposed private account plan. So if we are going to take real action, that is the area of attack. Make s ure we do what we can to make the real investments necessary for tomorrow’s needs, and the first place to start for very long term real gains is education. Our kids will need the smarts when the time comes to deal with the problems at hand.

References

•Galbraith, John Kenneth, 2004, The Economics of Innocent Fraud: Truth for Our Time, Boston: Houghton Mifflin.

•Wray, L. Randall, 1999, “Subway Tokens and Social Security,” C-FEPS Policy Note 99/02, Kansas City, MO: Center for Full Employment and Price Stability, January, (http://www.cfeps.org/pubs/pn/pn9902.html).

•Wray, L. Randall, 2000, “Social Security: Long-Term Financing and Reform,” C-FEPS Working Paper No. 11, Kansas City, MO: Center for Full Employment and Price Stability, August, (http://www.cfeps.org/pubs/wp/wp11.html).

•Wray, L. Randall and Stephanie Bell, 2000, “Financial Aspects of the Social Security ‘Problem’,” C-FEPS Working Paper No. 5, Kansas City, MO: Center for Full Employment and Price Stability, January, (ht tp://www.cfeps.org/pubs/wp/wp5.html).


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