AGSOC would borrow money from banks, insurance companies and
other large investments
proposed by AGSOC and investment should fail, the
eventually on lenders would
financial strength be able to recover
of AGSOC itself. If an AGSOC any money from the shareholders.
They could only look to the AGSOC money to make sound, productive agriculture, fishing, communications,
itself for AGSOC debts. AGSOC would use the borrowed
Investments in energy projects, timber – all would be possible, but
investment security would be a prime goal. AGSOC earnings would be used to pay back lenders according
investments would earn money, and those to a predetermined schedule. The AGSOC
would be exempted from paying corporate income tax on its earnings. the amount needed to pay back lenders are profit. This profit would be stock owners on a per-share basis and paid out to each stockholder by
AGSOC earnings beyond divided among the Alaska dividend checks. By law,
the AGSOC would have to pay out virtually all its profits (90% minimum) to
instead of retaining earnings. When AGSOC’s investment would go to shareholders as dividends.
its stockholders return from an
The Washington Post at the time said, “[O]rdinary people, even poor people, could accumulate wealth in the same way that well-to-do people make their assets grow, if the government will intervene. A person who has sufficient assets or earnings to guarantee his or her credit can borrow money to make investments, pledging to pay back the loan with the new income expected from the investments. If the venture is a success, the person winds up with new capital that paid for itself, but nobody calls this process a ‘giveaway.’ It’s called ‘risk-taking’ in the free enterprise system . . . . [G]overnment, which in effect aggregates the assets of all citizens, can [by underwriting some of the risk] provide a mechanism for extending a share of credit to everyone – a chance to buy something based on its anticipated future earnings.” (Greider, 1978).
While the Alaska experience did not result in an operational GSOC, it did point up a number of issues relevant to their use in other contexts. GSOCs and other forms of broad capital ownership invariably raise political issues. Classical economics provides no foundation for broad capital ownership. There is a significant educational effort required to enlighten the political infrastructure regarding the benefits of broadened capital ownership and build the foundation for a philosophical approach to support governmental action. Binary economics is not the common view of the economic world held by most political operatives or their staff. In pursuing the creation of General Stock Ownership Corporations the proponent should be prepared for a lengthy and persistent educational process.
In addition to the processes required to educate legislators and staff regarding the economic foundations of General Stock Ownership Corporations, the proponents can expect significant regulatory issues. In the United States, issues of securities regulation, shareholder rights, and state regulation of GSOC operations all come to the fore in the debate over the creation of a General Stock Ownership Corporation. Enabling legislation may require the amendment of existing statutes and regulations governing taxation, securities regulation, shareholders’ rights and corporate organizational structures.
The class of individuals Plan or Corporation can citizens of the political
eligible to become participants in a General Stock Ownership
be vexing. In the Alaska situation jurisdiction become shareholders
it was intended that in the corporation.
all the Two