Unlocking the Labor Cage: Capitalism in the Twenty-First Century

Available Summer 2016
Available Now on Amazon

For as long as the technics of society change, no existing division of wealth is immune from attack.

— Robert Heilbroner

Unlocking the Labor Cage is the first step to reconfiguring capitalism for the twenty-first century. Contemporary economic theory restricts capitalism to three methods of currency circulation. The first and primary being the voluntary exchange of capital for labor. The second being the involuntary acquisition of capital by governments through taxation. The final being the voluntary donation of profits to charitable organizations. These are the only three options currently available. Due to technological unemployment through digitization and automation, the primary method is quickly disappearing. Unlocking the Labor Cage is a proposition for adding a critically needed and voluntary fourth method: The circulation of currency through voluntary private sector investment of excess corporate cash reserves into education based on the value of a corporation’s user generated content.

Century-old corporate accounting practices for cash reserves were developed in a time when business executives relied on newspapers, fax machines, the U.S. Postal Service, and hand printed accounting ledgers to track market conditions and company performance. Whereas today’s companies are extremely nimble and have instant access to a wealth of data to make decisions and respond quickly to market conditions. Therefore, it is arguable that current levels of cash reserves are damaging not only to the performance of the company, but to all stakeholders, including shareholders.

Contemporary policy makers and economists have been unsuccessful in identifying these significant flaws in our economic system and are blindly hopeful that enough jobs will eventually be created to restore vibrancy. While the creation of jobs and new industries will certainly occur following investments in the fields of Science, Technology, Engineering, and Math, popularly known as STEM education, the basic understanding of what a “job” will be in the future must be adjusted. In our knowledge age of “big data” we must expand the definition and metrics of compensable value creation.

By investing just one percent of the technology sector’s current cash reserves into unrestricted undergraduate fellowships, nearly 150 thousand students could be awarded fellowships annually. Unlike philanthropic giving or taxation these investments would be soundly based on the overall value of a company’s user generated content; and the institutions receiving investments would be held accountable for student performance. However, because current tax code would identify these investments as philanthropic, corporations could repatriate funds for these investments with zero tax burden.

This upgrade to our antiquated economic operating system is just one step. A voluntary step with huge ramifications for society. A major step into a true knowledge economy. With hundreds of thousands of people able to focus on education without the need for traditional employment, upward pressure would be placed on wages. Competition for funds would place significant downward pressure on college administrative costs while incentivizing the hiring of more faculty professors. As universities refocus on education over administration the deplorable treatment of adjuncts would come to an end. Without being concerned about college’s “return on investment” emphasis would return to the importance of a liberal arts degree over premature specialization. This new source of funding for education would also loosen the stranglehold of debt that has been placed on our young adults by a broken system. Furthermore, the overall cost of higher education would decline allowing even more fellowships to be offered; further expanding the societal benefits.

Funding education is just an initial step to introduce this new method of currency circulation. While user generated content is a measurable corporate asset, it’s creation cannot typically be directly compensated without destroying the nature of the data. Therefore this investment in education is a timely opportunity to begin experimenting with this method as a way to cultivate future user generated content. User generated content is already quantified and monetized by the advertising industry, where according the Interactive Advertising Bureau, $27.5 billion was spent in just the first half of 2015.

Private sector adoption of this proposal is the first step to building a stronger and more sustainable economy and society. This proposal will create transactions and stimulate the economy. Similar to the argument of Victor Lebow in 1955 for our economic need for consumerism, and the use of television advertising to drive demand; the impact of this proposal will be felt throughout society and over many decades.

Once user generated content is recognized as a critical corporate asset to be actively cultivated, the opportunities for corporate accounting principles to evolve and circulate currency through an increasingly wide variety of investments becomes available. The distribution of wealth within the economy would begin to shift dramatically. This shift will reestablish a flourishing middle class, while sustaining healthy and profitable corporations; corporations, now economically enabled to adjust to the needs of a knowledge driven modern society.

For more information about this project please visit LaborCage.com.

One comment

  1. Good talking with you. Look forward to more.


    What Archimedes said of the mechanical powers, may be applied to Reason and Liberty: “Had we,” said he, “a place to stand upon, we might raise the world.” The revolution of America presented in politics what was only theory in mechanics.

    Thomas Paine (1737-1809)
    American Author and Revolutionary
    The Rights of Man
    Part the Second, 1792
    Combining Principle and Practice: Introduction

    The good opinion of mankind, like the lever of Archimedes, with the given fulcrum, moves the world.

    Thomas Jefferson (1743-1826)
    (Letter from Thomas Jefferson to M. Correa de Serra, 1814)
    The Writings of Thomas Jefferson
    Memorial Edition (Lipscomb and Bergh, editors)
    Washington, D.C., 1903-04
    Volume 14, page 222

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