Community-building is done from the grass-roots up. It can’t be done effectively, if the community is too large. Without grass-roots participation, there is no community. These three rules are obvious, yet usually not applied in the modern world. And we wonder why alienated people turn to vice and crime (not to mention poverty now as a major cause of this). People are social beings. Without a sense of belonging, they feel lost. Now, we believe that religion has a great role to play here. But in this article there is no space to go into that. We can only explain the solidarist contribution, especially how it can stimulate the participative element in community-building.
The ‘CIC’ is yet another solidarist instrument, developed by CESJ along Kelsonian principles. We have already seen how citizens can become owners of a country’s natural resources (cf. the article on the Cuban National Bank of Natural Resources). On the community level something similar can be done. Again, the essential point is to turn individual citizens into capital owners, basically giving them back what was theirs all along. All residents of the Cuban town of Nueva Paz, for instance, can be made equal shareholders of the Nueva Paz Community Investment Center (the ‘Nueva Paz CIC’), a commercially driven for-profit company that will exploit the town’s commercial assets.
Now, Nueva Paz lies smack on the main road (‘autopista’) from Havana to Guantanamo. Near the viaduct there is a lot of open space available for the development of an industrial area. The Nueva Paz CIC could do this. Industrial buildings could be constructed there, financed with newly created money by the Cuban Central Bank at 0% interest (only default risk premium would have to be paid). These buildings could be rented out to industrial companies that need easy and quick access to the autopista. The whole industrial complex could be provided with 100% green energy to be generated by the Nueva Paz CIC’s own power plant, fuelled by Nueva Paz’ household and agricultural waste, again financed by the Cuban Central Bank. All these investments would have to be exploited commercially. All net profits would be paid out annually to Nueva Paz’ residents/share- holders.
The example worked out here for Nueva Paz, is actually in the process of being turned into reality in East St. Louis, U.S.A. For various reasons the CIC was incorporated as a co-operative there, but the basic principle has remained the same. All net profits will flow directly to the residents of East St. Louis. More info on this project can be found at www.cesj.org .
No more ‘rickety tin cans’
The last major capital-diffusing instrument suggested by Louis Kelso, is the ‘RECOP’. It stands for ‘Residential Capital Ownership Plan’. Kelso held that a good solid home that will last 100 years or more, is also a capital good. In fact, it is the basis of a person’s capital estate. There is some disagreement about this among proponents of Solidarism (one could view a residential house as a consumptive good), but we agree with
Kelso.
The plan is simple. The Cuban Central Bank (or an offshoot thereof, the Cuban National Housing Agency) could extend mortgage loans to any person residing in Cuba wishing to build a new home. These loans would be extended at 0% interest; only default risk insurance would have to be paid on top of the loan (less than 2%). The Bank or Agency would use its money creation power to finance these loans.
‘No rickety tin cans’, Kelso would say, ‘but solid spacious homes, built to last’. We wonder what the people living in Hector Molina’s old sugar-warehouse would think of this idea? Or the people living in the millions of shacks and slum-houses scattered about Cuba?
Obviously, this is not an overnight plan and the repayment capacity of the borrowers also plays an important role in what is possible and what is impossible. But, basically, the plan is sound. And the 0% interest-rate as well as the second income from capital which solidarist citizens would receive, makes a lot more possible than is the case now. Within a few short years, privately owned housing would improve miraculously in Cuba.