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The Secret Rise of 21st Century Democracy

from Truthout, Wednesday, 20 February 2013 00:00

By Margaret Flowers and Kevin Zeese, Truthout | News Analysis

New economies based on greater democratic control, real representation and citizen participation are on the rise. There is much to be learned from countries like Venezuela that break from the Washington Consensus.

If Americans knew the truth about the growth of real democracy in Venezuela and other Latin American countries, we would demand economic democracy and participatory government, which together would threaten the power of concentrated wealth. The seeds of both are beginning to sprout in the US despite efforts to keep Americans ignorant about them. Real democracy creates a huge challenge to the oligarchs and their neoliberal agenda because it is driven by human needs, not corporate greed. That is why major media in the US, which are owned by six corporations, aggressively misinform the public about Chavez and the Bolivarian Revolution.

Mark Weisbrot of the Center for Economic and Policy Research writes, "The Western media reporting has been effective. It has convinced most people outside of Venezuela that the country is run by some kind of dictatorship that has ruined it." In fact, just the opposite is true. Venezuela, since the election of Chavez, has become one of the most democratic nations on Earth. Its wealth is increasing and being widely shared. But Venezuela has been made so toxic that even the more liberal media outlets propagate distortions to avoid being criticized as too leftist. Venezuela is a front line in the battle between the elites and the people over US-style democracy, as we described in Part I of this series.

We spoke with Mike Fox, who went to Venezuela in 2006 to see for himself what was happening. Fox spent years documenting the rise of participatory democracy in Venezuela and Brazil. He found a grassroots movement creating the economy and government they wanted, often pushing Chavez further than he wanted to go. Venezuelan democracy and economic transformation are bigger than Chavez. Chavez opened a door to achieve the people's goals: literacy programs in the barrios, more people attending college, universal access to health care, as well as worker-owned businesses and community councils where people make decisions for themselves. Change came through decades of struggle leading to the election of Chavez in 1998, a new constitution and ongoing work to make that constitution a reality.

Challenging American Empire

The subject of Venezuela is taboo because it has been the most successful country to repel the neoliberal assault waged by the US on Latin America. This assault included Operation Condor, launched in 1976, in which the US provided resources and assistance to bring friendly dictators who supported neoliberal policies to power throughout Latin America. These policies involved privatizing national resources and selling them to foreign corporations, de-funding and privatizing public programs such as education and health care, deregulating and reducing trade barriers.

In addition to intense political repression under these dictators between the 1960s and 1980s, which resulted in imprisonment, murder and disappearances of tens of thousands throughout Latin America, neoliberal policies led to increased wealth inequality, greater hardship for the poor and working class, as well as a decline in economic growth.

Neoliberalism in Venezuela arrived through a different path, not through a dictator. Although most of its 20th century was spent under authoritarian rule, Venezuela has had a long history of pro-democracy activism. The last dictator, Marcos Jimenez Perez, was ousted from power in 1958. After that, Venezuelans gained the right to elect their government, but they existed in a state of pseudo-democracy, much like the US currently, in which the wealthy ruled through a managed democracy that ensured the wealthy benefited most from the economy.

As it did in other parts of the world, the US pushed its neoliberal agenda on Venezuela through the International Monetary Fund (IMF) and World Bank. These institutions required Structural Adjustment Programs (SAP) as terms for development loans. As John Perkins wrote in Confessions of an Economic Hit Man, great pressure was placed on governments to take out loans for development projects. The money was loaned by the US, but went directly to US corporations who were responsible for the projects, many of which failed, leaving nations in debt and not better off. Then the debt was used as leverage to control the government's policies so they further favored US interests. Anun Shah explains the role of the IMF and World Bank in more detail in Structural Adjustment - a Major Cause of Poverty.

A turning point in the Venezuelan struggle for real democracy occurred in 1989. President Carlos Andres Perez ran on a platform opposing neoliberalism and promised to reform the market during his second term. But following his re-election in 1988, he reversed himself and continued to implement the "Washington Consensus" of neoliberal policies - privatization and cuts to social services. The last straw came when he ended subsidies for oil. The price of gasoline doubled and public transportation prices rose steeply. Protests erupted in the towns surrounding the capitol, Caracas, and quickly spread into the city itself. President Perez responded by revoking multiple constitutional rights to protest and sending in security forces who killed an estimated 3,000 people, most of them in the barrios. This became known as the "Caracazo" ("the Caracas smash") and demonstrated that the president stood with the oligarchs, not with the people.

Under President Perez, conditions continued to deteriorate for all but the wealthy in Venezuela. So people organized in their communities and with Lieutenant Colonel Hugo Chavez attempted a civilian-led coup in 1992. Chavez was jailed, and so the people organized for his release. Perez was impeached for embezzlement of 250 million bolivars and the next president, Rafael Caldera, promised to release Chavez when he was elected. Chavez was freed in 1994. He then traveled throughout the country to meet with people in their communities and organizers turned their attention to building a political movement.

Chavez ran for president in 1998 on a platform that promised to hold a constituent assembly to rewrite the constitution saying, "I swear before my people that upon this moribund constitution I will drive forth the necessary democratic transformations so that the new republic will have a Magna Carta befitting these new times." Against the odds, Chavez won the election and became president in 1999.

While his first term was cautious and center-left, including a visit by Chavez to the NY Stock Exchange to show support for capitalism and encourage foreign investment, he kept his promise. Many groups participated in the formation of the new constitution, which was gender-neutral and included new rights for women and for the indigenous, and created a government with five branches adding a people's and electoral branches. The new constitution was voted into place by a 70 percent majority within the year. Chavez also began to increase funding for the poor and expanded and transformed education.

Since then, Chavez has been re-elected twice. He was removed from power briefly in 2002, jailed and replaced by Pedro Carmona, the head of what is equivalent to the Chamber of Commerce. Fox commented that the media was complicit in the coup by blacking it out and putting out false information. Carmona quickly moved to revoke the constitution and disband the legislature. When the people became aware of what was happening, they rapidly mobilized and surrounded the capitol in Caracas. Chavez was reinstated in less than 48 hours.

One reason the Chavez election is called a Bolivarian Revolution is because Simon Bolivar was a military political leader who freed much of Latin America from the Spanish Empire in the early 1800s. The election of Chavez, the new constitution and the people overcoming the coup set Venezuela on the path to free itself from the US empire. These changes emboldened the transformation to sovereignty, economic democracy and participatory government.

In fact, Venezuela paid its debts to the IMF in full five years ahead of schedule and in 2007 separated from the IMF and World Bank, thus severing the tethers of the Washington Consensus. Instead, Venezuela led the way to create the Bank of the South to provide funds for projects throughout Latin America and allow other countries to free themselves from the chains of the IMF and World Bank too.

The Rise of Real Democracy

The struggle for democracy brought an understanding by the people that change only comes if they create it. The people viewed Chavez as a door that was opened for them to create change. He was able to pass laws that aided them in their work for real democracy and better conditions. And Chavez knew that if the people did not stand with him, the oligarchs could remove him from power as they did for two days in 2002.

With this new understanding and the constitution as a tool, Chavez and the people have continued to progress in the work to rebuild Venezuela based on participatory democracy and freedom from US interference. Chavez refers to the new system as "21st century socialism." It is very much an incomplete work in progress, but already there is a measurable difference.

Mark Weisbrot of CEPR points out that real GDP per capita in Venezuela expanded by 24 percent since 2004. In the 20 years prior to Chávez, real GDP per person actually fell. Venezuela has low foreign public debt, about 28 percent of GDP, and the interest on it is only 2 percent of GDP. Weisbrot writes: "From 2004-2011, extreme poverty was reduced by about two-thirds. Poverty was reduced by about one-half, and this measures only cash income. It does not count the access to health care that millions now have, or the doubling of college enrollment - with free tuition for many. Access to public pensions tripled. Unemployment is half of what it was when Chávez took office." Venezuela has reduced unemployment from 20 percent to 7 percent.

Venezuela is making rapid progress on other measures too. It has a high human development index and a low and shrinking index of inequality. Wealth inequality in Venezuela is half of what it is in the United States. It is rated "the fifth-happiest nation in the world" by Gallup. And Pepe Escobar writes that,"No less than 22 public universities were built in the past 10 years. The number of teachers went from 65,000 to 350,000. Illiteracy has been eradicated. There is an ongoing agrarian reform." Venezuela has undertaken significant steps to build food security through land reform and government assistance. New homes are being built, health clinics are opening in underserved areas and cooperatives for agriculture and business are growing.

Venezuelans are very happy with their democracy. On average, they gave their own democracy a score of seven out of ten while the Latin American average was 5.8. Meanwhile, 57 percent of Venezuelans reported being happy with their democracy compared to an average for Latin American countries of 38 percent, according to a poll conducted by Latinobarometro. While 81 percent voted in the last Venezuelan election, only 57.5 percent voted in the recent US election.

This is not to say that the process has been easy or smooth. The new constitution and laws passed by Chavez have provided tools, but the government and media still contain those who are allied with the oligarchy and who resist change. People have had to struggle to see that what is written on paper is made into a reality. For example, Venezuelans now have the right to reclaim urban land that is fallow and use it for food and living. Many attempts have been made to occupy unused land and some have been met by hostility from the community or actual repression from the police. In other cases, attempts to build new universities have been held back by the bureaucratic process.

It takes time to build a new democratic structure from the bottom up. And it takes time to transition from a capitalist culture to one based on solidarity and participation. In "Venezuela Speaks," one activist, Iraida Morocoima, says "Capitalism left us with so many vices that I think our greatest struggle is against these bad habits that have oppressed us." She goes on to describe a necessary culture shift as, "We must understand that we are equal, while at the same time we are different, but with the same rights."

Chavez passed a law in 2006 that united various committees in poor barrios into community councils that qualify for state funds for local projects. In the city, community councils are composed of 200 to 400 families. The councils elect spokespeople and other positions such as executive, financial and "social control" committees. The councilmembers vote on proposals in a general assembly and work with facilitators in the government to carry through on decisions. In this way, priorities are set by the community and funds go directly to those who can carry out the project such as building a road or school. There are currently more than 20,000 community councils in Venezuela creating a grassroots base for participatory government.

A long-term goal is to form regional councils from the community councils and ultimately create a national council. Some community councils already have joined as communes, a group of several councils, which then have the capacity for greater research and to receive greater funds for large projects.

The movement to place greater decision-making capacity and control of local funds in the hands of communities is happening throughout Latin America and the world. It is called participatory budgeting and it began in Porto Alegre, Brazil in 1989 and has grown so that as many as 50,000 people now participate each year to decide as much as 20 percent of the city budget. There are more than 1,500 participatory budgets around the world in Latin America, North America, Asia, Africa, and Europe. Fox produced a documentary, Beyond Elections: Redefining Democracy in the Americas, which explains participatory budgeting in greater detail.

The Absent Conversation: Who Should Own America?

by Gary Reber

from the Huffington Post, posted 10/29/2012

As the president, Senate and Congressional elections in the United States near the Nov. 6 ballot date, it is evident that none of the candidates speak of a vision for a future system of economic democracy based on equality of opportunity for every person to become an owner of productive capital. This is particularly of importance for the person elected to the presidency, as the President of the United States has the national stage at his or her disposal to espouse targeted leadership. As you read this article, the intent is to query "Who should own America?" going forward.

Why the focus on "productive capital?" Physical capital is non-human "things" owned by people used to produce products and services (productive land, resources, structures, infrastructure, tools, machines, super-automation, robotics, digital computerized processing and operations, etc. and certain intangibles that have the characteristics of property such as patents and trade names). Real physical capital isn't money; it is measured in money (financial capital), but it is really producing power and earning power through ownership of the non-human factor of production. In the law, property is the bundle of rights that determines one's relationship to things.

The reality which is ignored in our political discussions and even by conventional economists and the media is that productive capital is increasingly the source of the world's economic growth and, therefore, should become the source of added property ownership incomes for all. The ownership of productive capital is the source of wealth and income for the richest Americans -- not a job.

Businesses, whether small or large, or sole proprietors, partnerships, or business corporations are formed to provide products and services at a profit. Their success or failure is dependent on whether or not there are "customers with money."

Unfortunately, politicians, economists and the media focus on job creation as the only way to create "customers with money" and provide a source of income for peoples' livelihood. Yet the demand for people (labor workers who contribute manual, intellectual, creative and entrepreneurial work) is being made less necessary as productive capital is increasingly the source of the world's economic growth. What should we conclude from this assessment of reality? Well, simply that if both labor and productive capital are interdependent factors of production, and if capital's proportionate contributions are increasing relative to that of labor, then equality of opportunity and economic justice demands that the right to property (and access to the means of acquiring and possessing property) must in justice be extended to all.

The role of physical capital is to do ever more of the work, which produces income to the business owners. Full employment is not an objective of businesses. Companies strive to keep labor input and other costs at a minimum in order to maximize profit. Private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical capital's ever increasing role.

The function of research and technology is to invent tools to reduce toil, enable otherwise impossible production, create new highly automated industries, and significantly change the way in which products and services are produced from labor intensive to capital intensive -- the core function of technological innovation and invention. Technological change makes tools, machines, structures, and processes ever more productive while leaving human productiveness largely unchanged (our human abilities are limited by physical strength and brain power -- and relatively constant).

It is the exponential disassociation of production and consumption that is the problem in the United States economy, and the reason that ordinary citizens must gain access to productive capital ownership to improve their economic well-being.

What we really need in this 2012 presidential election year is a national discussion on the topic of the importance of productive capital ownership and how we can expand the base of private productive capital ownership simultaneously with the creation of new productive capital formation, with the aim of building long-term financial security for all Americans through accumulating a viable income-producing capital estate.

If we are to significantly expand the population of "customers with money" and significantly grow the economy, then the ownership of productive capital must be spread more broadly and simultaneously with the growth, without taking anything away from the 1 to 10 percent of the people who now own 50 to 90 percent of the wealth controlled by businesses. Thus, productive capital income would be distributed more broadly and the demand for products and services would be distributed more broadly from the earnings of capital and result in the sustentation of consumer demand, which will promote economic growth. That also means that society can profitably employ unused productive capacity and invest in more productive capacity to service the demands of a growth economy.

Unfortunately, ever since the 1946 passage of the Full Employment Act, economists and politicians formulating national economic policy have beguiled us into believing that economic power is democratically distributed if we have full employment -- thus the political focus on job creation and redistribution of wealth rather than on full production and broader productive capital ownership accumulation resulting from ownership creation. This is manifested in the misguided belief that labor work is the only way to participate in production and earn income.

Thus, when politicians advocate taxpayer money spending to stimulate industry development, there needs to be a conscious policy to broaden private, individual ownership in the companies benefiting from the stimulus -- not just argue the justification for taxation redistribution and further national debt based on how many jobs would result. We also need to incentivize business corporations to pay out all their profits as taxable personal incomes to avoid paying corporate income taxes and to finance their growth by issuing new full dividend payout shares for broad-based citizen ownership.

To accomplish this we must ensure that future economic growth be financed to create new owners of expanding existing and future businesses to ensure that the consumer populous is able to get the money to buy the products and services produced as a result of substituting "machines" for people.

But how can we accomplish this goal of creating new owners of future productive capital investment simultaneously with the growth of the economy?

The solution requires that the Federal Reserve stop monetizing unproductive debt, including bailouts of banks "too big to fail" and Wall Street derivatives speculators, and begin creating an asset-backed currency that could enable every man, woman and child to establish a Capital Homestead Account or "CHA" (a super-IRA or asset tax-shelter for citizens) at their local bank to acquire a growing dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income. Policies need to insert American citizens into the low or no-interest investment money loop to enable non- and undercapitalized Americans, including the working class and poor, to build wealth and become "customers with money." That's what the Capital Homestead Act addresses.

The "Capital Homesteading" concept is the direction America needs to take to build an OWNERSHIP CULTURE and ensure a balance between production and consumption.

For specifics please visit the Capital Homestead Act.

Own or be owned!

The Origins of and Need for Economic Democracy in South Korea

                                 

Article 119, Item 2 for economic democracy was signed into the South Korean constitution just after the June 1987 Democratization Movement by both ruling party and opposition politicians.

By Kwak Jung-soo, business correspondent

Article 119, Item 2 of the Republic of Korea’s constitution specifies the role of the state in ensuring economic democracy: “The State may regulate and coordinate economic affairs in order to maintain the balanced growth and stability in the national economy, to ensure proper distribution of income, to prevent domination of the market and the abuse of economic power, and to democratize the economy through harmony among the economic agents.”

Now, with a presidential election coming in December, the topic of economic democracy sits alongside social welfare as a crucial part of the zeitgeist. Even executives at chaebol (conglomerate groups) have stated off the record that there “doesn’t appear to be any turning this tide.”

 After taking power in a military coup d’etat in 1961, the Park Chung-hee administration launched a five-year economic development plan the following year. This government-led industrialization strategy brought about the so-called “Miracle on the Han River,” but it also caused a host of side effects: foreign dependence, a deepening divide between rich and poor, and free rein for the massive chaebol driving the economy.

The growth of these chaebol came courtesy of deliberate resource allocation by the government and sacrifices by the public, but their behavior has been less about concessions and restraint than about boundless greed. Kim Jong-in, head of the New Frontier Party’s committee for the Pursuit of Citizen Happiness, said talk about the need to add economic democracy stipulations to the Constitution dated at least as far back as 1975 and the Park era. As a National Assembly member for the Democratic Justice Party (predecessor to the NFP), Kim headed an economic subcommittee in the special parliamentary committee for the amendment of the Constitution in 1987.

The process leading up to Item 2 that year was anything but smooth sailing. Representing the business community, the Federation of Korean Industries (FKI) set up a public relations committee to thwart the amendment, headed by Daewoo chairman Kim Woo-jung. It also set aside a massive 2 billion won budget for publicity -- the equivalent of 400-500 billion won today.

The FKI’s lobbying efforts went as far as the Blue House. “Couldn’t we omit Item 2?”, asked then-President Chun Doo-hwan about the amendment, the effort having already gotten under way with the June 29 Declaration in 1987. He watched Kim’s face as the subcommittee chair delivered a report on the amendments related to the economy. Kim held out. “Even if we try to make a law controlling chaebol to prevent society from blowing up, the business world will call it unconstitutional and block it,” he said. “We need this clause in there to prevent that from happening.” After a moment, Chun finally nodded his head.

The Great Depression in the US provides a clear-cut example of why a constitutional grounds for economic democracy is necessary. After being elected president in 1932, Franklin D. Roosevelt convened a special meeting of Congress and developed a host of social and economic reform bills as part of his New Deal. Many of them were ruled unconstitutional by the Supreme Court, which was steeped in laissez-faire ideology at the time. For instance, the National Industry Recovery Act, which would have recognized workers’ rights to organization and collective bargaining and stabilized employment by stipulating a minimum wage and maximum working hours of 60 per week, was blocked on the peculiar rationale that it violated tge freedoms of workers as well as management.

The roots of economic democracy in the history of capitalism can be traced back to the late 19th century. Otto von Bismark, Germany’s first chancellor, introduced a variety of social security measures in the 1870s to protect workers from disease and industrial accidents. His aim was to achieve a stable system. Confronted with opposition from the bourgeoisie, he responded by calling attention to the increasing presence of workers’ socialist parties in parliament. He said, “You, the bourgeoisie have to make concessions to protect yourself.” 

 With the New Deal in the 1930s, the US government opted for Keynesianism and market intervention over the laissez faire approach as a way of rebuilding the economy. With this, it ushered in a new chapter in the history of economic democracy.

South Koreans went through a long battle with dictatorship before finally winning political democracy in 1987. But the 25 years since Item 2 was instituted have failed to resolve the festering socioeconomic contradictions that emerged over the country’s rapid growth process, including the concentration of wealth in the hands of chaebol and income polarization. One leading example of economic democracy policy over the last quarter century involves efforts to limit the concentration of chaebol’s economic power. A number of measures were taken, with chaebol designated “large-scale corporate groups” and subjected to limits of mutual investment between affiliates and total equity investment, constraints on voting rights for the stocks of financial and insurance company affiliates, regulations on holding company activities, and bans on improper assistance between affiliates.

But the effects of those measures have been minimal. The measures have gone through a repeated cycle of trial and error, their consistency hampered by changes with each new administration.

The Lee Myung-bak administration has been heavily pro-business in its policies. As result, South Korean society has taken step backward at a time when the so-called “trickle down effect” (chaebol gains working their way down to the general public) is weakening and polarization is on the rise. Ironically, this proved the catalyst for a revival of economy democracy as a zeitgeist more than two decades after the Constitution’s amendment. “The chaebol are pointing to Item 1 of Article 119 [‘The economic order of the Republic of Korea is based on a respect for the freedom and creative initiative of enterprises and individuals in economic affairs’] as a basis for repudiating Item 2,” noted Democratic United Party lawmaker Hong Jong-hak. “But the reality is that even Item 1 isn‘t being executed, since the freedoms and creativity of the weak are being utterly disregarded.” Will this 25th anniversary revival bear fruit? Kim Jong-in expressed confidence that it will. “No matter who becomes president, they will have no choice in the matter,” he said. “If they don’t effectively push economic democracy and chaebol reform, they‘ll end up an early lame duck and the administration will be short-lived.” But Solidarity for Economic Reform director Kim Sang-jo advocated a more cautious approach. “This isn’t something that can be done during a president’s five-year term,” he said. “And the bad economic climate forecasted for here and overseas next year could end up hindering economic democracy efforts.” Some observers warned that delaying economic democracy would only exacerbate the crisis. “Historically, the roots of economic crisis have been in undemocratic economies, where economic power was concentrated in a few hands and the environment was pro-business and deregulation-heavy,” said You Jong-il, a professor at the Korea Development Institute School of Public Policy and Management.

“Economic democracy is the best structural reform approach for preventing and overcoming crisis.” 

 Please direct questions or comments to [english@hani.co.kr]

A Second Bill of Rights Would Restore Economic Democracy

By JAMES BERTOLONE

Rochester Business Journal, August 31, 2012

On Aug. 11, union members, non-union workers and our allies from across the country joined together in Philadelphia to redirect the public debate of this election season toward what Americans really need-an investment and focus on our country and our people. The failed policies of more than a generation, which have benefited mostly the superwealthy, are destroying the American dream and the foundation of a strong economy.

The rally kicked off the Workers Stand for America campaign, with tens of thousands of people endorsing a Second Bill of Rights that sets forth principles to guide government, business leaders, organizations and individuals toward a common goal of a just and fair society. The Second Bill of Rights includes the rights to full employment and a living wage, goals well within our reach if the private and public sectors invest in America's infrastructure, promote industrial development and make job creation a top policy priority.

We also are demanding full participation in the electoral process. Recent initiatives to deny large groups of citizens the right to vote are immoral, plain and simple. At a time when our courts have empowered money over people, any attempt to reduce the rolls of eligible voters is an assault on our democracy and an affront to our nation's struggle against voting restrictions based on property ownership, race, religion and gender. Allegations of voter fraud were investigated for years under President George W. Bush with nothing to show for it. Voter apathy, due to the fewer wealthy voices drowning out the voices of the many, is the real voter problem.

America's Second Bill of Rights includes a right to a voice at work-to bargain collectively for improved wages, benefits and working conditions-since workers have been denied the freedom of association in the workplace that is required by the Bill of Rights. For a generation, most of the wealth created by increasing worker productivity has gone to the wealthiest few, destroying the post-war social compact.

We also include in the Second Bill of Rights a right to a good education, believing that this is a foundation of our democracy. A high-quality education is vital to our competitive position in the world economy and the principal means by which Americans empower themselves to participate in our nation's economic and political systems. Good, affordable education should be available to all from prekindergarten to college, including apprenticeships and skills training to prepare for work.

Lastly, America's Second Bill of Rights demands a secure and healthy future, with a baseline level of health care, unemployment insurance and retirement security. The social compact that served our nation well for many decades has been badly eroded. We call on government and private industry together to confront the issues of access to health care, weakening of unemployment coverage and inadequate pensions that undermine the ability to retire in dignity, even as Social Security and Medicare are under strain and threatened with cutbacks.

These petitions supporting America's Second Bill of Rights will be delivered to both the Democratic and Republican national conventions. Those who know their presidential history recognize that labor's push for a Second Bill of Rights is a renewal, with some updating, of Franklin D. Roosevelt's call for a Second Bill of Rights in his State of the Union message of 1944. As FDR could see World War II coming to its conclusion, he reminded the public of the causes of the war, declaring, "We have come to a clear realization of the fact that true individual freedom cannot exist without economic security and independence. ... People who are hungry and out of a job are the stuff of which dictatorships are made."

FDR called for moving forward toward the goals of decent jobs with living wages, an economy free from unfair competition and unfair trade, free from monopolies at home or abroad. He proclaimed a right to a decent home, medical care, a good education and protection from the economic fears of old age, sickness, accident and unemployment.

He also warned of a domestic reaction like that which followed World War I. "If history were to repeat itself and we were to return to the so-called 'normalcy' of the 1920s, then it is certain that even though we shall have conquered our enemies on the battlefields abroad, we shall have yielded to the spirit of fascism here at home." We are seeing this now in the eurozone as austerity, with Germany calling the shots, has increased unemployment and is shredding the safety net. Violent anarchists on the left and violent Nazi-type hate groups on the right are on the rise. More than one expert has stated that if the austerity is not loosened, we will see Germany destroying Europe for the third time in a century.

Studies now show that American working people have lost about 40 percent of their wealth during this Great Recession, with African Americans and people of other minorities losing closer to 60 percent of their assets. The assets of most working people include little more than their homes and small 401(k) accounts, and the financial sector bears a heavy responsibility for the damage caused by its malfeasance. As someone who was a teenager when the Civil Rights Act became law, now seeing almost all the economic progress made by Americans of color over four decades wiped out, I view this as a devastating development for all Americans.

I am often asked to speak on labor and economic justice issues to many unions, community and political groups, advocacy groups and classes at local colleges. As the quotes from FDR's 1944 speech show, much of labor's Second Bill of Rights is not new territory; calls for implementing such reforms certainly predate FDR. In the past year I have often heard disappointment with the lack of progress on these issues as promised in 2008 by Barack Obama, and I agree with some of these criticisms and have said so in print. For the most part, however, it is not true that the president and the Democrats had control of Congress in 2009, not with the filibuster rule. The Democrats were several votes short of a filibuster-proof Senate majority after the 2008 elections. I lobbied hard on changing the filibuster rule in late 2008 and in late 2010.

Sen. Kirsten Gillibrand helped lead the fight on the filibuster change when the rules were set in the new Congress in January 2009. The effort fell seven votes short of the 51 needed to change the rules, mainly because Senate Majority Leader Harry Reid was against it, as was our senior senator, Chuck Schumer. Reid has now apologized publicly, saying he was wrong and the filibuster has allowed 41 senators, representing states with about one-third of U.S. population, to stop everything.

According to Reid's public statement, the filibuster has been used more than 360 times by Senate Republicans to stop all attempts to accelerate economic recovery. In just the last few weeks, we have seen the filibuster prevent the majority from passing the Disclose Act and the American Jobs Act. The Disclose Act would require Citizens United electioneering groups to identify the people who give more than $10,000 for political ads and campaign funding. The American Jobs Act would eliminate tax breaks for creating a job offshore or moving a job offshore, a proposal supported by a majority of Americans in both parties.

Majorities of voters in both parties also support ending the Bush tax cuts for the wealthy, halting the outsourcing of jobs, stopping China's unfair trade practices and eliminating tax subsidies for big oil. But none of that will happen with this Tea Party Congress, a Congress with the lowest approval rating ever measured. A recent survey had the Tea Party Congress at 9 percent approval, below oil companies, banksters, CEOs and even Hugo Chavez of Venezuela. Congress' approval rating is higher than only Fidel Castro's 7 percent.

It is time to demand a Congress that addresses a Second Bill of Rights for America.

James Bertolone is president of the Rochester Labor Council, AFL-CIO. He also is president of the American Postal Workers Union Local 215.

Emerson Meets Wall Street: Systems Think, the Citizen Dividend, and Economic Democracy

by D.R. Thompson

from The Potomac, Winter 2009

RECENT ECONOMIC TURMOIL BEGS the question of whether or not we've created, with globalization, a monster without limits – as Joe Biden would say 'Wall Street Gone Wild'. It seems a lot of intelligence combined with a great deal of greed has created an interesting financial box for the world to work itself out of. At work is an economic syndrome that cannot be looked at in black and white terms and is thus outside of the realm of most politician's tendency toward a mythic, good-guy/bad-guy outlook. Over the past 25 years, certainly since Reagan's term in office, we have been intent on dumbing down our politicians and our population just during the historic period when we most need them to be able to think. Yet, there is still hope, because enlightened thinking is no longer a luxury, but a requirement of survival as the world of high finance is being stripped bare of any vestige of credibility.  

What I'll explore here are three areas that could lead us toward a more humane and enlightened economics. These include the power of systems thinking, the benefits of a citizen's dividend and/or basic income guarantee for all people, and the general concept of Economic Democracy. A quick google on any of these terms can provide a good basic education, as well of a sense of the individuals promoting these ideas, should after reading this essay you find the concepts intriguing.   

At the root of the current conundrum we face is our economic crisis. However, it is my feeling, and I believe many Obama supporters would agree with me, that the issues outside of our economy are of equal importance. These would include, listing the most pressing: energy, the environment, poverty, debt addiction, and the failings of health care, and education to name a few. And that is just within the United States. My sense is that to address the fundamental economic issues outside of the others would be a mistake, and that we indeed have a unique opportunity with this election to start on a path of sustainable economic growth that in fact enhances the environment, empowers individuals, creates 'green' prosperity, enlarges the educational opportunities for our young people, and enables us to address the problems of health care. But 'how' do you ask can we do all of this at once?   

A rigorous approach to systems thinking would eliminate what seem intuitively to be bad choices from our policy making process.

First, we need to think systemically. There has in fact developed an incredible discipline in recent years surrounding systems thinking and, for lack of a better term, systems architecture, which can be applied to just about any set of human problems. One area where systems thinking and architecture has been aggressively applied to a very complex issue relates to aviation. The result of that architectural effort has been the Federal government-led NextGen initiative that is 25 years in scope and deals with very complex modeling of relationships between private-public sector relationships, technology, the physical air space, and a myriad of other factors. This complex, interrelated and interdependent modeling effort has then resulted in a series of concrete changes and proposals for how aviation, air traffic control and the relationship between regulation and free markets can work most effectively. Run through the Joint Planning and Development Office (JPDO), this cross-agency effort can and should be replicated for the economy. What we need, in other words, is a Joint Economic Policy Office that coordinates economic policy between agencies, including Health and Human Services, Education, Environment, Housing, Labor and so on.   

Such a cross-agency systems approach can and should be accomplished with our economic sphere in such a way to confront the myriad of problems we have confronting us. So, for example, we should not "knee jerk", respond in a linear fashion to our energy problems by freeing up all of the drilling off shore. To do so is not thinking systemically, as it is painfully obvious that fossil fuels are not the primary energy of the future, i.e., are not a viable sustainable energy solution. So why pursue that path if it is so obviously not a long-term option? A rigorous approach to systems thinking would eliminate what seem intuitively to be bad choices from our policy making process.   

But doesn't this smack of central planning? It won't be as long as the primary goal is to develop policy, and policy by its nature is not intended to dictate, but to influence change.   

Ultimately I believe systems thinking as related to the economy can lead us to an enlightened economics that frees us from our current plight of perpetual war, perpetual debt and perpetual prescriptions by seeing that solutions to war, economy, debt and ultimately even human and environmental health are inter-related.   

Debt-addiction, over the long term, is unsustainable as it ultimately leads to a society of debt-slaves, even if this was not the intended result. In the end we wind up with a society which is literally unable to function outside of debt ...

As a first step, I believe that systems analysis must be applied to our current method of debt-financing the gap between what we can produce and what we can consume. I for one am convinced that what could result from such an analysis is some kind of minimum guaranteed income program that rewards the overall productivity of our society and world rather than 'punishes' us through interest. This idea should be put through the rigors of systems analysis, along with many others such as social investment programs and public-private banking, all part and parcel of what the next wave of progressive policy that many call 'Economic Democracy', some of which is already showing up in legislation backed by the Bush administration and Henry Paulson, as he pushes to solve the finance mess through social investment in private sector banking. Bush himself even coined the term 'democratic capitalism' when referring to the agenda of the upcoming Bretton Woods-like economic summit (Bretton Woods being the financial confab in 1944 that defined the post WWII financial environment) – a series of meetings that will bring together world leaders in late 2008 (including President-Elect Obama) in an attempt to further shore up a new approach to the economic crises.   

The idea of a citizen dividend and/or basic income guarantee (aka, BIG) within the context of economic democracy assumes that all people have equal worth and that all individuals, simply by being born into the planet, should be able to live without, for lack of a better term, having to pay for the right to do so. Thus all eligible individuals should receive a BIG and/or dividend that would, over time, empower what is currently a perpetually indebted underclass. Debt-addiction, over the long term, is unsustainable as it ultimately leads to a society of debt-slaves, even if this was not the intended result. In the end we wind up with a society which is literally unable to function outside of debt and where everyone is caught in its web, even, strangely, many of the wealthy themselves. What needs to be questioned, therefore, is the validity of our current form of finance capitalism, and whether or not this is the only viable model at our disposal. If we decide on a different path, it is completely within our power to re-organize the debt relationships, our banking systems, our methods of valuing labor, our ideas related to 'productive' and 'non-productive' endeavors in order to shift from debt-addiction to citizen ownership and economic empowerment. All of this could be done equitably, with currently wealthy individuals being compensated for any losses and in many ways benefiting enormously by increased consumer spending.    

To be sure, inflation can show up in economic bubbles (i.e., stock or real estate), as we have just experienced – but a systems approach could model what those potential bubbles are and address potential problems with sound policy.

How do we afford this? First, revenues currently tagged for Social Security and unemployment would be moved to an overall BIG fund. Second, income tax for most individuals and families could be removed and replaced by other revenue sources, including an intelligent licensing and fee system for corporations (many use fees essentially allow corporations to pay nominal fees for access to publicly-owned resources), coupled with a consumption tax and/or corporate assets tax that would allow the government to intelligently influence consumerism and/or invest in industries that provide a green-friendly and sustainable future. Moreover, above a certain level, individuals and families could still pay a progressive income tax (for example, families making over $250K a year). The fact of the matter is that a large swath of low-income persons already pays no income tax at all.   

In addition to the revenue sources already mentioned, a citizen dividend could also be funded through government ownership of large percentages of the financial system (currently part of the Bush/ Paulson financial plan!), essentially channeling those profits across a broader level of society -- profits that had heretofore been limited to a minute percentage of the population.   

Finally, we can work on an international level to create a regime of debt forgiveness for all nations, including industrialized nations such as the United States, in order to free future generations from the shackles of unsustainable levels of debt.   

Wouldn't this all be inflationary? Well, if George Bush's policies have done anything they have proven the resiliency to the modern, productive economy to inflation; Bush has, in fact, increased federal spending more than all previous president's combined, with relatively minor impact on inflation. To be sure, inflation can show up in economic bubbles (i.e., stock or real estate), as we have just experienced – but a systems approach could model what those potential bubbles are and address potential problems with sound policy. The same level of analysis could be brought to bear on the international impact of such policies. But if we taxed intelligently, and channeled our resources from a war economy to a green and virtual one (i.e., the next level of the Internet), we could very well find ourselves with increased wealth, reduced deficits, massively reduced poverty and homelessness, and a much happier population that should able to avoid to a great extent the downside of inflationary bubbles.   

To date, all efforts toward guaranteed income, including Social Security and minimum wage, have been beneficial for the overall health of the economy, and Social Security has helped millions of retirees be more self reliant.

Would such a scheme actually cause more wealth? The recent economic stimulus package (2008) showed us an example: while GDP shot up by at least a couple of percentage points due to the stimulus totaling perhaps 'a mere' US $100 billion in Q2 2008, massive injections of liquidity by the Fed into the banks totaling hundreds of billions (through loans) during the same period did not serve to un-freeze the credit crisis because the banks did not loan the money but instead hoarded cash, and we were in recession by Q3. In short, people spend money out of necessity while institutions, if lacking direction, will tend to hoard cash out of fear. This behavior is a microcosm of what a larger move toward economic democracy could portend if we unleashed the power of a citizen dividend.   

But do we 'deserve' a basic income and/or dividend? According to Robert Reich in his recent book Supercapitalism:   

"… American is far more productive than it was 20 or 30 years ago, but most people haven't shared much in the bounty. Had median household income continued to grow at the same rate productivity grew over the last thirty years, the typical household would have earned $20,000 more in 2006 than it actually did."   

Given these statistics, a $10,000 or even $20,000 a year citizen dividend begins to make sense.   

At first, one might cringe that the idea of a citizen dividend and/or BIG is too socialistic and makes the people much too dependent on what is essentially a universal government handout. But in a technological age, when the romanticized, agrarian-based self-reliance of some of our country's founding philosophers such as Thomas Jefferson and Henry David Thoreau is an ideal that can never be realized, a universal, no strings, guaranteed income could in fact create a kind of stable post modern economic infrastructure that would actually enable self reliance to flourish. To date, all efforts toward guaranteed income, including Social Security and minimum wage, have been beneficial for the overall health of the economy, and Social Security has helped millions of retirees be more self reliant. Why shouldn't a citizen dividend/BIG have the same kind of effect? By the way, early in the last century conservatives fought long and hard against both Social Security and minimum wage, and certainly have been proven wrong on both fronts.   

Economic Democracy is simply an extension of the legacy of Emerson, Thoreau, Gandhi, Martin Luther King Jr. and others into the realm of economics ...

One of America's most influential (and underrated ) philosophers, Ralph Waldo Emerson (the founder of the American Transcendentalism), would in fact be quite happy with a movement toward a citizen dividend, basic income guarantees and Economic Democracy, even though at first this might not seem intuitively evident. I mention Emerson because he is so important and fundamental driver of many modern progressives, including (in the United States) Martin Luther King Jr. and thus Barack Obama. Emerson, along with David Thoreau, literally forged the unique idea of American individualism and self reliance, the use of non-violence as a tool for change, and the need for education to be student-centered. And this student-centered approach to education is one of the primary reasons why American society is so much looked to for creativity and innovation. It is largely because Emerson and his colleagues stressed the right and need for individual awakening and the nurturing of the individual creative spirit that the American society is so innovative and flexible. And it is because of the creativity and flexibility that we have fostered Universities that are, to this day, the best in the world and, one could argue, the direct result of the educational influences of the Boston intellectuals such as Dickenson, Alcott (both Bronson and his daughter Louisa May), and Channing that were the contemporaries of Emerson's.   

Economic Democracy is simply an extension of the legacy of Emerson, Thoreau, Gandhi, Martin Luther King Jr. and others into the realm of economics (Gandhi, King and Thomas Paine in fact supported a guaranteed minimum income!), allowing us to create a bedrock of economic freedom and stability, enabling people to pursue a variety of individual goals outside of those that are 'productive' in the eyes of those that control capital. By creating an guaranteed national citizen dividend, quite contrary to creating a citizenry content to 'live off the dole' people would instead turn to a myriad of business, creative and personal pursuits that will in turn generate massive economic growth in areas that are fostered by the desires of individuals for personal fulfillment, a movement toward green economics and virtual economics, and away from the shallow, consumerist, controlling and profiteering agendas of a the capitalist elite. While a majority of people would use the dividend as a supplement to a larger income (thus the idea of 'living off the dole' is a myth), many would also pool their resources and begin, for example, communities dedicated to local and individual improvement, philosophy and the arts, alternative universities and media (all via a new level of the Internet, AKA Internet II), and a plethora of other enterprises as yet unknown that could be steered, with enlightened leadership, toward a sustainable future. Even if a section of the population chose simply to live off of their guaranteed income, those people would by design need to choose a simple, more environmentally friendly lifestyle – maybe not such a bad thing in our current age. Moreover, less people in the labor pool could force more innovation through more production software (empowered by Internet II) and other advances in technology such as robotics.   

In short, many biases against so called 'socialist' ideas are cultural, and are the result of an implicit, long-term propaganda effort that allows the purveyors of the economic status quo to control the range of and access to ideas via the media.

Again, this is not socialism in the Soviet style. Why? First, and foremost, while any dividend or BIG would be guaranteed, the government would not directly influence how it was spent. This makes it, in this sense, a market stimulus that would drive market demand. It is only because the American population has been force fed by the current, corporate-owned media to fear of anything hinting at the socialized, and that most truly progressive economic ideas are completely locked out of the debate within the mass media, and as a result that people are clueless as to range of options in front of them. With the Internet, and its democratization of ideas, many people have been supplementing their corporate media experience with Internet searches that broaden their perspective and allow them to see that there are indeed alternatives to the current system of finance capitalism that is patently unsustainable even in the eyes of a ten year old. Even some of the pundits of the corporate mass media are getting that point, whether that is Lou Dobbs or Glen Beck of CNN or those within Fox News and MSNBC. And while Glen Beck and Fox News would not necessarily support the ideas of Economic Democracy, they should certainly respect the choice of the people to head in that direction.   

In short, many biases against so called 'socialist' ideas are cultural, and are the result of an implicit, long-term propaganda effort that allows the purveyors of the economic status quo to control the range of and access to ideas via the media. Rather than trap people in the false promises of credit-laced prosperity which creates an incredible reliance on the financial services sector, becomes demeaning to people over time, and creates an ever-growing reality of income inequality, why not provide basically a no-strings applied grant or dividend that, coupled with an intelligent morphing of bankruptcy laws into debt forgiveness programs – including debt forgiveness on the national level – becomes a de facto investment in people that will mitigate income disparities and, ironically, as described, create a better opportunity for overall prosperity than we currently have. We can look to the third world to micro-lending and grants as examples as to what people can do if given even a modicum of support and incentive. Moreover, it is precisely this investment in people and their potential that Emerson and Thoreau would support, because it is the power of the individual that they sought to unleash. Certainly Emerson would cringe if he were to learn that we launch our best, young, university-trained minds into the workforce and their post-educational life not with a sense of hope and opportunity, but often saddled with huge educational debt, sometimes mounting to hundreds of thousands of dollars!   

We should move forward with these ideas now, and create an economic future for ourselves and our children that is worth living. I for one am sick of watching the DOW move up and down 500 points on a regular basis like some annoying child trying to constantly get my attention. It's time to wake up and smell the credit card offer for what it was and, as adults, introduce some much-needed maturity into the playground.

The ideas of Economic Democracy will not eliminate individualism, self reliance and capitalism. Rather, they will enhance individual potential and democratize capitalism much as the Internet is and will continue to democratize media and is itself an experiment in the power of individualism. And the result will be for the benefit of the many over the long term.   

It is time we "reset" the world economy and shape a new model of market-based, hybrid public-private social capitalism, and do it quickly for the sake of our long term survival.   

Martin Luther King Jr. spoke of this kind of hybrid or balanced economy:   

"Communism forgets that life is individual. Capitalism forgets that life is social, and the Kingdom of Brotherhood is found neither in the thesis of Communism nor the antithesis of Capitalism but in a higher synthesis. It is found in a higher synthesis that combines the truths of both".   

And it is a stable synthesis of the social and the individual economic requirements that we should focus on moving forward, for our emphasis on the short term, while seeming to be quite the joy ride to some, has left the rest of us holding the proverbial bag. We might look back to Martin Luther King Jr., and forward to Barack Obama and Congressional progressives, for those ideas.   

In 2006, the basic income guarantee was in fact proposed on the national level by State Representative Bob Filner (D-CA) as H.R. 5257, supported by author Matthew Rothschild. Moreover, economists such as John Kenneth Galbraith and even Milton Friedman have supported the idea of BIG.   

We should move forward with these ideas now, and create an economic future for ourselves and our children that is worth living. I for one am sick of watching the DOW move up and down 500 points on a regular basis like some annoying child trying to constantly get my attention. It's time to wake up and smell the credit card offer for what it was and, as adults, introduce some much-needed maturity into the playground.  

  For further reading you can Google: Economic Democracy, Citizen Dividend, Basic Income Guarantee (BIG), Systems Thinking

Participatory Budgeting Lets Citizens Experiment With Economic Democracy

by Michelle Chan, posted in Huffington Post, April 16, 2012

For many American cities, the budget process is basically fiscal hell, and the politics of plugging potholes and funding schools akin to legislative purgatory. But a tiny miracle just arrived in New York City. Communities are experimenting with Participatory Budgeting, a system for giving local people a say in planning their budget priorities. While it's no magic bullet, the program marks a small step toward economic democracy in Gotham.

The Participatory Budgeting in New York City (PBNYC) project is just a pilot so far, starting with a pot of a few million dollars. But the main goal is to empower "community members, in partnership with participating City Council Members, to decide for themselves what investments their community needs," according to Community Voices Heard, the project's leading grassroots coordinating group.

After weeks of intense discussions among thousands of residents, PBNYC announced a number of winners, including playground improvements, a library vending machine, transportation services for seniors. Other proposals ranged from tech equipment for local schools to an ultrasound system for a community hospital. These projects may seem mundane, but the real win in this process is the process itself: people assembling for a meaningful dialogue about how to use their resources. When working-class folks in diverse communities have an inclusive forum to invest public money according to their priorities, they have a mechanism for translating their daily contributions as workers and taxpayers into political efficacy. Who'd have thought that voting to add trash cans on the street or renovate public housing could be a democratic milestone?

Still, what seems like an unprecedented step forward for notoriously mismanaged and politically stagnant U.S. cities is pretty routine in other parts of the world.

Participatory Budgeting was launched more than 20 years ago in Porto Alegre, Brazil and has spread globally as a model that offers both monetary and spiritual rewards, as Maria Hadden and Josh Lerner explain at Shareable:

PB generally involves a year-long cycle of public meetings. Community members discuss local needs and develop project proposals to meet these needs, then invite the public to vote on which projects get funded.

This innovative model has become popular across Latin America, Europe, Africa, and Asia, and the United Nations has named PB a best practice of democratic governance. Cities, counties, states, schools, and housing authorities have used it to give local people control over public spending.

As with all forms of participatory politics, not every proposal is a winner, and there will always be disagreement. But unlike the shady fiscal roulette that lawmakers often play with your tax dollars, PB gives ordinary people real leverage to direct spending according to their idea of the greater good. Ideally, after all the arguing and negotiations run their course, participants will feel that they're part of an open process and that all stakeholders, be they officials or ordinary citizens, are committed to a relatively democratic process.

Could it happen in a bureaucratic, highly stratified city like New York? Advocates note that some community members may be reluctant to complicate fiscal sausage-making even further. Some may fear that powerful groups could manipulate or co-opt the process, or just prefer to leave such matters in the hands of professional politicians (perhaps wanting to avoid the kind of chaos associated with state referendum controversies). But for bread-and-butter fiscal matters, PB's unique benefit is giving communities concrete control over resources that are supposed to belong to them.

Hadden and Lerner point out that this participatory paradigm helps "level the playing field" because "traditionally underrepresented groups often participate more than usual in PB, which helps direct resources to communities with the greatest needs." In addition, people grow more invested in the system: "Through regular meetings and assemblies, people get to know their neighbors and feel more connected to their city... Budget assemblies connect community groups and help them recruit members."

For Community Voices Heard, PB fits into a broader mission of making government more responsive to poor and disenfranchised groups. The organization has also helped lead innovations in publicly sponsored jobs programs for people receiving public assistance. The group is pushing an initiative known as Transitional Jobs, designed to improve upon the traditional dead-end "workfare" programs of many state welfare bureaucracies by connecting people to decent-paying, meaningful work and educational programs. According to a recent CVH report, though Transitional Jobs pilots have faced some funding and operational challenges, they have brought an infusion of government resources into progressive workforce programs and generated about 3,000 jobs over two years.

Both PB and Transitional Jobs remain a work in progress. Vincent Villano, Participatory Budgeting and Policy Research Coordinator at CVH, told In These Times:

there is a connection between investing in job creation for low-income communities and the participatory budgeting process. For example, there is a chance that in the future the capital projects that are funded through PB could be built by those who are unemployed or underemployed members of a Council District -- like a sweat equity program or something like that. The beauty of the PB process is that the possibilities are endless... The PB process is still in its infancy here in NYC, but it is completely feasible to imagine a stronger connection between this process and alternative job programs for welfare workers like Transitional Jobs.

 

But PBNYC is currently constrained by limited funding, Villano said, and programatically, the process in its embryonic form "only used capital discretionary funds for 'bricks and mortar' projects as opposed to expense discretionary funds which could be used for 'people, services and programs.'" In other words, it might be a good while before citizen-led budgeting can apply to deeper, long-range economic initiatives to strengthen working-class communities.

But even as an experiment, Participatory Budgeting in New York City demonstrates that, given the resources and power to help shape their economic future, people can change how their communities work -- and take credit for making it happen.

Cross-posted from In These Times

From Neo-Liberalism to Economic Democracy: An Alternative Road for Europe

By Nyegosh Dube 36 Comments, 04/04/2012, from Social Europe Journal

In February 2009, the European Parliament adopted a resolution on social economy which among other things called for “experimentation with new economic and social models” and declared that the social economy is “important, both symbolically and in terms of performance, for the purpose of strengthening industrial and economic democracy”.  We see here a clear statement of support for alternative models, and specifically for economic democracy. The resolution was passed by an 89% majority, indicating that the concept of economic democracy can win broad support in Europe. Three years have gone by – a serious effort should now be made to turn this idea into reality.

While the resolution was not exactly a ringing manifesto to transform the existing economic order, it was a green light to accelerate its pluralisation through development of alternative, more democratic, forms of enterprise, ownership, and investment. The crisis of 2008-2009, whose effects are still with us, including the ongoing debt crisis, highlighted the need for alternatives to the status quo with a view to greater equality in the distribution of economic power and, with it, of wealth and income.

Social democracy as a counterweight to economic undemocracy has been difficult to sustain, and is struggling under the onslaught of the neo-liberal anti-social model, whose values, policy prescriptions, and real-life consequences undermine the European Social Model. Now, the way forward is quite straightforward: we need to get on the road to economic democracy, and that means challenging the undemocratic, unaccountable corporate power that has been at the heart not only of neo-liberalism, but of traditional Keynesianism and the “social market economy” as well. Of course, under neo-liberalism, this power is unleashed to a much greater extent, with fewer constraints imposed by the state, unions, or other social forces. It’s time to change this. It’s time to make a sustained multi-pronged effort to pluralise, democratise, and de-corporatise the economies of the European Union.

Moving towards Economic Democracy – Challenging the Status Quo

Europe already has noteworthy islands of micro-level economic democracy in the form of worker cooperatives and employee-owned companies, as well as works councils and co-determination. Spain’s large Mondragon cooperative group is proof that industrial firms can function just fine without wealthy owners and shareholders and massively overpaid executives. Britain’s Scott Bader, a highly successful chemical company, is further proof: it is owned by a charitable trust that belongs to its workers and is run democratically by them. Germany’s Bosch, like all bigger German firms, practices co-determination (as required by law), but in addition is largely foundation-owned and channels its profits mostly into philanthropic activities.

Companies like these, without external shareholders or private owners (or with only limited roles for them), besides being immune to takeovers, are not connected with a wealthy investor class and corporate oligarchy. They show that firms can prosper without this class, while empowering workers and serving society. Mondragon, in fact, has its own bank that provides capital for start-ups and investments within the group, and Italy’s large cooperative sector, especially prominent in the Emilia-Romagna region, has its own investment funds, like Coopfond, which support the creation and growth of cooperatives.

But at the same time shareholding can be a powerful tool for economic democracy in the form of multi-company worker ownership where working people collectively invest in dozens of companies and gain substantial ownership of them, with the aim of boosting employment, supporting local economies, and achieving other worthy objectives, as we see in Canada with the Quebec Solidarity Fund, a labour-sponsored pension-based investment fund. Multi-company worker investment was also proposed under Sweden’s ingenious Meidner Plan of the 1970s which envisioned employee ownership in sector-based groups of large companies being built up over time through mandatory annual allocation of shares to wage-earner funds, amounting to 20% of profits.

Economic Democracy at the Societal Level

We need more Mondragons, more Scott Baders, more Emilia-Romagnas, and more Quebecs. But we also need economic democracy at the macro or societal level, i.e. mechanisms through which citizens can democratically steer economies – and the large corporations at their core – to serve their interests. One such mechanism could be a National Investment Fund that allocates resources in line with democratically set priorities. It can take the form of a public trust, a national-scale but decentralised foundation-plus-bank – with its governance representing both the current balance of political forces and civil society stakeholders. (When necessary, the National Funds would act in concert at EU level.)

Here’s one possible scenario: We divide companies into two groups – large shareholding corporations, which form the main power base of the corporate oligarchy, and all the rest. We democratise the first group by giving the National Fund ownership of one-sixth of each corporation but control of one-third (through shares with double voting power) and at the same time we institute the Meidner Plan to build up worker ownership (through standard shares) to a point where wage-earner funds and the National Fund together gain majority control of these corporations. In exchange, we abolish corporate taxes on these companies. Internally, we implement co-determination where it isn’t in place already.

Regarding the rest, we set a target of converting one-third of them into employee-owned firms (including cooperatives) and foundation-owned firms (with co-determination) over a ten-year period – and we also set up Quebec-style funds that can acquire equity in companies within this group. Naturally, we provide the necessary state support and incentives. Last but not least, we set up regional public investment councils (with broad-based representation) to vet major investments by firms in either of the two basic groups to ensure they don’t harm workers or communities.

The result of all this would be greater pluralism, both vertical (i.e. within the large corporations) and horizontal, a true mixed economy with a substantial democratic content. This combined with financial sector democratisation (a big topic in itself!), wealth taxation, income ratios (stipulating maximum intra-organisational differentials), and greater unionisation would lead to much more democratic and egalitarian societies in Europe. What we now need is political parties, trade unions, cooperative federations, the employee ownership sector, and civil society groups to take up the cause of economic democracy. Perhaps we can start with a new resolution by the European Parliament – this time focusing exclusively on economic democracy, and a little more ringing, a little more transformational!

What the World Needs Now? - More Cooperation or More Competition?

by John Lawrence

When I was a graduate student at UCSD in the midst of the anti-war movement, protesting the war in Vietnam, I went to the library and pondered what would make the world a better place, what could I do to contribute something that might make war less likely and peace time activity more likely. I concluded that more cooperation was needed. More ways to resolve conflicts big and small. For example, democratic voting systems resolve conflicts in such a way that solutions are found that are acceptable to all parties for the most part. I took it for granted that institutions that provided for more cooperation and less competition were more desirable. I thought that this was what the Enlightenment was all about. My heroes were the Enlightenment superstars: Jeremy Bentham, John Stuart Mill, Rousseau, Diderot, Voltaire, John Locke.

As I sat there and went through the stacks, I discovered another field and another set of superstars. Social choice has a long history going back to the French Enlightenment philosophers, the Marquis de Condorcet and Jean-Charles de Borda, and even further back than that. One of the 19th century superstars in this field was none other than the Rev. C. L. Dodgson otherwise known as Lewis Carroll, the author of Alice in Wonderland. These guys came up with voting systems which are essential to democracy and are essential to the whole notion of cooperation and conflict resolution. The most recent work in this field was by Kenneth Arrow who published a book Social Choice and Individual Values in the 1950s which attempted to generalize conflict resolution in society in both the political and economic spheres. Arrow concluded that this was impossible and came up with his famous Impossibility Theorem which was a generalization using sophisticated mathematics of the paradox of voting that was known to Condorcet hundreds of years ago. Therefore, Arrow concluded democracy was impossible and any economic system other than capitalism was impossible too. Hmmm, I thought, this is obviously a cop-out because some political and economic systems are more desirable than others and Arrow has done nothing except to throw cold water on any framework that could consider these. I took it as my self-assigned task to prove that Arrow was wrong, that social choice is possible. My work can be found on the website Social Choice and Beyond.

My latest work is "Politonomics: A Meta-Theory Encompassing Political and Economic Decision Making." This is from the Abstract:

In “Social Choice and Individual Values,” Kenneth Arrow said , “In a capitalist democracy there are essentially two methods by which social choices can be made: voting, typically used to make ‘political’ decisions, and the market mechanism, typically used to make ‘economic’ decisions.” This paper resolves that dichotomy by developing a meta-theory from which can be derived methods for both political and economic decision making. This theory overcomes Arrow’s Impossibility Theorem in which he postulates that social choice is impossible and compensates for strategic voting, an undesirable aspect of decision making according to Gibbard and Satterthwaite. Thus the politonomics meta-theory spawns both political and economic systems which are indeed possible and which cannot be gamed. In a typical voting system the outcome of an election among several candidates results in one realized outcome – the winner of the election - which applies to all voters. In a typical economic system, a consumer may choose among a variety of possible baskets of consumer items and work programs with the result that multiple realized outcomes are possible with a unique or quasi-unique outcome for each worker/consumer. As the number of possible realized outcomes of a political-economic decision making process increases, the process becomes more economic and less political in nature and vice versa. We show that as the number of possible realized outcomes increases, voter/consumer/worker satisfaction or utility increases both individually and collectively.

I never considered, as I sat there pondering, that there would be people who would argue that what the world needed was not more cooperation but more competition, but, as I sit here today, I realize that the whole conservative right wing is in favor of just that. They want not more cooperation in either the political or economic realm but more competition believing that only winners should prevail and human progress is only possible when you give free reign to those among us who are the most talented, intelligent and ambitious. They believe that competition will result in the strongest among us winning just as Nietzsche believed that a good war hallows every cause. Their ethic is that the naturally gifted elite should prevail, and they are not concerned about what happens to the rest of us or of who is trampled in the process. This is also the philosophy of Ayn Rand as espoused in her novels Atlas Shrugged and The Fountainhead.

The debate today about increasing inequality in the world has to do with the prevalent conservative belief that only the strong should survive and be promoted and that freedom should preclude equality as a value. The rich should get more tax breaks because they are the true instigators of human progress and should be catered to at every turn. Perhaps a few crumbs will trickle down to the rest of us. This kind of thinking is counter to the Enlightenment and is fast returning us to a neo-Dark Age. No more is human progress to be measured in reduction of poverty and extension of basic services like health care to everyone. It is to be measured in terms of the great advances to human civilization like iPads, iPods and iPhones. People who are capable of coming up with these advances should be cut every break and none of the billions of dollars they make should be transferred by government to the least of these among us like the homeless, the poverty-stricken and the destitute because, well, they are the least among us, not the best among us who should be given every break.

Nevertheless, I remain in the camp of those who think that more cooperation in the political and economic spheres will do more for human progress than more competititon. I also have spent about 40 years in my spare time trying to prove that Arrow was wrong, that social choice is not impossible and that democracy in both the political and economic spheres is not only possible but desirable. This has a lot to do with voting systems, democratic institutions and constitutions but also with cooperative economic systems in which freedom is seen not as the freedom to make money at other people's expense (the losers in the competitive struggle) but the freedom to work as much or as little as one chooses and in accordance with one's preferences as much as possible. Freedom from work is for many people just as desirable a goal as the freedom to make billions of dollars, and wealthy people who don't have to work would be the first to tell you that. Economic democracy in my view is more desirable than cutthroat capitalism, and can be practiced not only at the national level, but at the enterprise level in the form of co-ops like the Mondragon Corporation.

Marx's famous definition of the "good society" was "from each according to his ability, to each according to his needs." This of course was perverted in defining communism as a society where all the wealth created by those who had a lot of talent and ability as well as a strong work ethic combined with those who had not so much in those categories would be thrown into a pot and then divided up in equal portions and handed out by the government. Such need not be the case in achieving the "good society." The "needs" part is pretty basic and could probably be accomplished with abouit 10% of the wealth that exists in the world today. Most people can provide for their own needs - no transfer necessary. There are some who cannot and to transfer a small part of the wealth of the wealthy to provide for their basic needs seems to me to be no more than humane. That still leaves the vast amount of wealth in the hands of the wealthy. In other words if you total up how much it would cost to provide for all the basic needs of everyone in the world and tote up how much wealth there exists in the world, it would take a fraction of all that wealth to provide the basic needs for everyone who cannot provide for their basic needs themselves who turn out to be mainly children, seniors and handicapped (whether physically or mentally) people.

A recent documentary by German TV station Deutsche Welle pointed out that half the world's production of food is wasted because super markets only want perfect vegetables and ones with slight blemishes are thrown out even though they are perfectly edible. Shelves need to be fully stocked with bread right up till closing hours even though any bread left over at the end of day will be thrown out as "day old." All the food that is thrown out by advanced nations is enough to feed all the world's hungry three times over although no governments or other institutions, much less the supermarkets themselves, seem to be interested in organizing that effort. This is what I mean by the fact that the basic needs of all the world's people could be satisfied without subtracting much if anything from the world's wealthy although a lot of them would admit they do not need incomes of millions of dollars a day like the Fortune 400 billionaires have.

Another documentary noted that Finnish school children have the highest test scores in the world despite the fact that they have one of the world's shortest school days with 15 minutes intermissions between classes during which time they are encouraged to go outdoors and play. All grades have large amounts of music, art and self-defined projects. They don't teach to the test. They are concerned with the development of each student as an overall human being not just as some super competitive cog in a nationally competitive machine. The Chinese on the other hand have the opposite approach demanding that children learn by rote methods and extra hours in school and at study. The Finnish schools are all public and everyone is accepted into every class. There are no advanced classes or tracking of students into lesser classes if they are not among the elite intellectually. Everyone is thrown in together; yet they have the best outcomes of any country in the world on standardized international tests. Egalitariansim seems to gain the best results.

An egalitarian ethic in which the concern is for the development of the whole human being rather than a promotion of just those who have superior abilities in accordance with a competitive ethic seems to me to be the most humanitarian way to treat both children and adults. The 1948 Universal Declaration of Human Rights already provides for most of the "from each according to their abilities, to each according to their needs" ethic. It calls for free health care which most advanced socierties, with the exception of the United States, already provide. It calls for free education and other public institutions and covers most basic human needs including food and shelter.

Here are Articles 25 and 26:

Article 25.

• (1) Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.
• (2) Motherhood and childhood are entitled to special care and assistance. All children, whether born in or out of wedlock, shall enjoy the same social protection.

Article 26.

• (1) Everyone has the right to education. Education shall be free, at least in the elementary and fundamental stages. Elementary education shall be compulsory. Technical and professional education shall be made generally available and higher education shall be equally accessible to all on the basis of merit.
• (2) Education shall be directed to the full development of the human personality and to the strengthening of respect for human rights and fundamental freedoms. It shall promote understanding, tolerance and friendship among all nations, racial or religious groups, and shall further the activities of the United Nations for the maintenance of peace.
• (3) Parents have a prior right to choose the kind of education that shall be given to their children.

All the basic needs of everyone on the planet could be provided for without subtracting much of the wealth of the rich since most people can provide for at least their basic needs without any transfer of wealth whatsover being necessary. Interestingly, the US among other nations does provide food security for the poor through its food stamps program. And of course seniors are provided for through Medicare, Medicaid and Social Security, programs which conservative free marketers are anxious to change or eliminate.

I am with the Enlightenment thinkers especially the English utilitarians like Jeremy Bentham and John Stuart Mill who thought about the happiness of society as a whole and concluded that everyone counted, not only the ones with exceptional talent, ability and other admirable qualities. A society should be judged by how it treats "the least of these my brethren" which is the core and essence of Jesus' teachings but, sad to say, not the core and essence of Christianity as it exists in the world today. Perhaps we should start thinking about an alternative constitution for the US which has the world's oldest constitution (236 years old!) while being the world's youngest advanced nation. Other societies including most European societies while being older than the US have newer constitutions. As far-sighted as the Founding Fathers were, a new and updated constitution incorporating not only political but also economic rights along the lines of the UN Declaration of Human Rights would do much to right the wrongs and shortcomings of present day America and the world.

Naomi Klein: 'If You Take Climate Change Seriously, You Have to Throw Out the Free-Market Playbook'

Published on Wednesday, February 29, 2012 by Common Dreams

Naomi Klein on ideological impediments to addressing climate change and how to move forward

- Common Dreams staff

In an interview with Solutions, author and activist Naomi Klein discusses how market-based solutions are not going to meet the needs required to address climate change and how ideologies have hampered both the left and right in climate action. She also states that the Occupy movement has been "a game-changer." There is a way forward, Klein says, and it involves "changing the mix in a mixed economy."

* * *

Throwing Out the Free Market Playbook: An Interview with Naomi Klein

from Solutions

Perhaps one of the most well-known voices for the Left, Canadian Naomi Klein is an activist and author of several nonfiction works critical of consumerism and corporate activity, including the best sellers No Logo (2000) and Shock Doctrine (2007).

In your cover story for the Nation last year, you say that modern environmentalism successfully advances many of the causes dear to the political Left, including redistribution of wealth, higher and more progressive taxes, and greater government intervention and regulation. Please explain.

The piece came out of my interest and my shock at the fact that belief in climate change in the United States has plummeted. If you really drill into the polling data, what you see is that the drop in belief in climate change is really concentrated on the right of the political spectrum. It’s been an extraordinary and unusual shift in belief in a short time. In 2007, 71 percent of Americans believed in climate change and in 2009 only 51 percent believed—and now we’re at 41 percent. So I started researching the denial movement and going to conferences and reading the books, and what’s clear is that, on the right, climate change is seen as a threat to the Right’s worldview, and to the neoliberal economic worldview. It’s seen as a Marxist plot. They accuse climate scientists of being watermelons—green on the outside and red on the inside.

It seems exaggerated, but your piece was about how the Right is in fact correct.

I don’t think climate change necessitates a social revolution. This idea is coming from the right-wing think tanks and not scientific organizations. They’re ideological organizations. Their core reason for being is to defend what they call free-market ideology. They feel that any government intervention leads us to serfdom and brings about a socialist world, so that’s what they have to fight off: a socialist world. Increase the power of the private sector and decrease the public sphere is their ideology.

You can set up carbon markets, consumer markets, and just pretend, but if you want to get serious about climate change, really serious, in line with the science, and you want to meet targets like 80 percent emissions cuts by midcentury in the developed world, then you need to be intervening strongly in the economy, and you can’t do it all with carbon markets and offsetting. You have to really seriously regulate corporations and invest in the public sector. And we need to build public transport systems and light rail and affordable housing along transit lines to lower emissions. The market is not going to step up to this challenge. We must do more: rebuild levees and bridges and the public sphere, because we saw in Katrina what happens when weak infrastructure clashes with heavy weather—it’s catastrophe. These climate deniers aren’t crazy—their worldview is under threat. If you take climate change seriously, you do have to throw out the free-market playbook.

"If you take climate change seriously, you do have to throw out the free-market playbook."

What is the political philosophy that underscores those who accept climate change versus those who deny it?

The Yale cultural cognition project has looked at cultural worldview and climate change, and what’s clear is that ideology is the main factor in whether we believe in climate change. If you have an egalitarian and communitarian worldview, and you tend toward a belief system of pooling resources and helping the less advantaged, then you believe in climate change. And the stronger your belief system tends toward a hierarchical or individual worldview, the greater the chances are that you deny climate change and the stronger your denial will be. The reason is clear: it’s because people protect their worldviews. We all do this. We develop intellectual antibodies. Climate change confirms what people on the left already believe. But the Left must take this confirmation responsibly. It means that if you are on the left of the spectrum, you need to guard against exaggeration and your own tendency to unquestioningly accept the data because it confirms your worldview.

Members of the Left have been resistant to acknowledging that this worldview is behind their support of climate action, while the Right confronts it head on. Why this hesitancy among liberals?

There are a few factors at work. Climate change is not a big issue for the Left. The big left issues in the United States are inequality, the banks, corporate malfeasance, unemployment, foreclosures. I don’t think climate change has ever been a broad-based issue for the Left. Part of this is the legacy of siloing off issues, which is part of the NGO era of activism. Climate change has been claimed by the big green groups and they’re to the left. But they’re also foundation funded. A lot of them have gone down the road of partnerships with corporations, which has made them less critical. The discourse around climate change has also become extremely technical and specialized. A lot of people don’t feel qualified and feel like they don’t have to talk about it. They’re so locked into a logic of market-based solutions—that the big green groups got behind cap and trade, carbon markets, and consumer responses instead of structural ones—so they’re not going to talk about how free trade has sent emissions soaring or about crumbling public infrastructure or the ideology that would rationalize major new investments in infrastructure. Others can fight those battles, they say. During good economic times, that may have seemed viable; but as soon as you have an economic crisis, the environment gets thrown under the bus, and there is a failure to make the connection between the economy and the climate crisis—both have roots in putting profits before people.

You write in your article, “After years of recycling, carbon offsetting, and light-bulb changing, it is obvious that individual action will never be an adequate response to the climate crisis.” How do we get the collective action necessary? Is the Occupy movement a step in the right direction?

The Occupy movement has been a game changer, and it has opened up space for us to put more radical solutions on the table. I think the political discourse in the United States is centered around what we tell ourselves the American public can handle. The experience of seeing these groups of young people put radical ideas on the table, and seeing the country get excited by it, has been a wake up call for a lot of people who feel they support those solutions—and for those who have said, “That’s all we can do.” It has challenged the sense of what is possible. I know a lot of environmentalists have been really excited by that. I’m on the board of 350.org, and they’ll be doing more and more work on the structural barriers to climate action. The issue is why? Why do we keep losing? Who is in our way? We’re talking about challenging corporate personhood and financing of elections—and this is huge for environmental groups to be moving out of their boxes. I think all of the green organizations who take corporate money are terrified about this. For them, Occupy Wall Street has been a game changer.

"The Occupy movement has been a game changer, and it has opened up space for us to put more radical solutions on the table."

What comes after communism and capitalism? What’s your vision of the way forward?

It’s largely about changing the mix in a mixed economy. Maybe one day we’ll have a perfect “ism” that’s post-communism and -capitalism. But if we look at the countries that have done the most to seriously meet the climate challenge, they’re social democracies like Scandinavia and the Netherlands. They’re countries with a strong social sphere. They’re mixed economies. Markets are a big part, but not the only part, of their economies. Can we meet our climate targets in a system that requires exponential growth to continue? Furthermore, where is the imperative of growth coming from? What part of our economy is demanding growth year after year?

If you’re a locally based business, you don’t need continual growth year after year. What requires that growth is the particular brand of corporate capitalism—shareholders who aren’t involved in the business itself. That part of our economy has to shrink, and that’s terrifying people who are deeply invested in it. We have a mixed economy, but it’s one in which large corporations are controlled by outside investors, and we won’t change that mix until that influence is reduced.

Is that possible?

It is if we look at certain choke points like corporate personhood and financing, and it makes sense for us to zero in on aspects of our system that give corporations massive influence. Another is media concentration. If you had publicly financed elections, you’d have to require public networks to give airtime to candidates. So the fact that networks charge so much is why presidential elections cost more than a billion dollars, which means you have to go to the 1 percent to finance the elections. These issues are all linked with the idea that corporations have the same free-speech rights as people, so there would also be more restrictions on corporate speech.

Entrepreneur and writer Peter Barnes has argued that what’s missing is adequate incorporation of the “commons sector” in the economy—public goods like natural and social capital. “Capitalism 3.0” he calls it, which we’d achieve not by privatizing these goods but by creating new institutions such as public-asset trusts. What’s your opinion of this approach?

I definitely think it’s clear that the road we’ve been on—turning to the private sector to run our essential services—has proven disastrous. In many cases, the reason why it was so easy to make arguments in favor of privatization was because public institutions were so cut off and unresponsive and the public didn’t feel a sense of ownership. The idea that a private corporation has valued you as a customer was a persuasive argument. Now it turns out both models have failed. So this idea that there is a third way—neither private nor state-run public—is out there.

Cooperatives Over Corporations

Published on Wednesday, February 22, 2012 by Creators.com

by Jim Hightower

We're being told by today's High Priests of Conventional Wisdom that everyone and everything in our economic cosmos necessarily revolves around one dazzling star: the corporation.

This heavenly institution, the HPCW explain, has such financial and political mass that it is the optimal force for organizing and directing our society's economic affairs, including the terms of employment and production. While other forces are in play (workers, consumers, the environment, communities and so forth), they are subordinate to the superior gravitational pull of the corporate order. Profits, executive equanimity and a healthy Wall Street pulse rate are naturally the economy's foremost concerns.

How nice. For the wealthy few. Not nice for the rest of us, though. We're presently seeing the effect of this enthronement of self-serving corporate elites. Millions of Americans are out of work, underemployed and tumbling from the middle class down toward poverty. Yet excessively paid and pampered CEOs (recently rebranded as "job creators" by fawning GOP politicians) are idly sitting on some $2 trillion in cash, refusing to put that enormous pile of money to work on job creation.

The Powers That Be keep us tethered to this unjust system of plutocratic rule only by constantly ballyhooing it as a divine perpetual wealth machine that showers manna on America. Any tampering with the hierarchical control of the finely tuned machinery of trickle-down corporate capitalism, they warn, will cause a collapse and crush American prosperity.

Ha! Prosperity for whom? The corporate order itself has come crashing down on the prosperity of America's workaday majority — and the people are no longer fooled about the system's "divinity." From the Wisconsin rebellion to the outing of the Koch brothers' efforts to impose their plutocratic regime on us, from the Occupy movement to the spreading grassroots campaign to get corporate cash out of our elections, we commoners have finally peeked behind the curtain to see the fraud being perpetrated by the wizards of wealth inequality.

Yet, tightly clutching their wealth, the wizards retort that the only alternative is the hellish horror of government control, screeching "socialist" at all critics to scare off any real change.

But wait. The choices for our country's rising forces of economic and political democracy are not limited to corporate or government control. There's another, much better way of organizing America's economic strength: The Cooperative Way.

Cooperatives can (and do) provide a deeply democratic, locally controlled, highly productive, efficient percolate up capitalism.

Co-ops are wholly in step with the values, character, spirit and history of the American people.

While socialism has been cast by the corporatists as a destroyer of our sainted free-enterprise system, the cooperative approach is not an -ism at all, but a democratic structure that literally frees the enterprise of the great majority of Americans — which is why the co-op movement is fast spreading throughout our country.

While it's rarely mentioned by the conventional media, completely missing in the political discourse, not considered by economic planners and chambers of commerce and not known by most of the public, there are 30,000 cooperatives in America (with 73,000 places of business). A 2009 survey by the University of Wisconsin's Center for Cooperatives (www.uwcc.wisc.edu) found that these energetic enterprises have 130 million members, registering $653 billion in sales and employing more than 2 million people.

There are several types of co-ops, including those owned by workers (there are 11,000 of these, with 13 million worker-owners). Also, there are cooperatives owned by consumers, producers, local businesses, artists and communities, as well as hybrids of those categories. They function in every sector of our economy — manufacturing, health care, transportation, banking, farming and food, media, massage, child care, funeral services, interpreting and translating services, advertising, home building, high tech, engineering, energy ... and even a strip club in San Francisco.

Co-op businesses do everything that a corporation can do, but with a democratic structure, an equitable sharing of income and a commitment to the common good of the community and future generations.

You might be surprised to learn that such national brand names as ACE Hardware, Best Western Hotels, Organic Valley, REI and True Value Hardware are organized as co-ops, rather than as corporations. The strength of the movement, however, is in the limitless number of local cooperatives flowering all across the country. From Union Cab of Madison (http://www.unioncab.com/) to KOOP Radio in Austin (http://www.koop.org/), from Evergreen Cooperatives in Cleveland (www.evergreencoop.com) to Circle Pines Center in Michigan (www.circlepinescenter.org), citizen co-ops are highly prized for their unique personalities, human scale, democratic values and community focus.

Cooperatives are a big, structural reform that ordinary Americans can implement right where they live, giving small groups a pragmatic and effective way to push back against the arrogance and avarice of the centralized, hierarchical corporate model. Not only do co-ops work economically, they also make people important again, offering real democratic participation and putting some "unity" back in "community."

© 2012 Creators.com

National radio commentator, writer, public speaker, and author of the book, Swim Against The Current: Even A Dead Fish Can Go With The Flow, Jim Hightower has spent three decades battling the Powers That Be on behalf of the Powers That Ought To Be - consumers, working families, environmentalists, small businesses, and just-plain-folks.

The Key to Global Prosperity: Worker Ownership

from the Guardian, January 9, 2012

By Jeffrey Hollender

Inequality has become an embarrassing social reality for more and more global citizens – a reality that we seem very far away from solving.

One particular statistic underlines the sorry state of affairs in which we find ourselves: 1% of Americans own 40-50% of national wealth. And it is a trend perpetuated in other first world countries. The rest – the 99% – are making their voices heard with protests in the streets of New York, the Middle East and elsewhere.

But how does such gross inequity come to be? And what can be done to alleviate it? The causes are key to our development of solutions. One such cause of our current crisis is that we have seen businesses grab a greedy handful of wealth, while even the smallest piece of the pie (crumbs really) has slipped out of the hands of the middle and lower classes.

In the US, while our tax system and regulatory guidelines bear a large portion of the blame, business has played a powerful hand in almost everything that’s wrong with this picture. Big business writes most of the rules and also maintains its hold on wealth concentration by ensuring that workers are not owners.

The antidote? Co-operatively owned business, Employee share ownership plans (Esops) and other forms of worker ownership that are often classified under the idea of economic democracy.

Economic democracy describes a socio-economic arrangement in which business enterprises are democratically managed and worker-owned. While the form and structure of economic democracy varies, these businesses are organised to primarily benefit a group of stakeholders, rather than outside investors.

Such economic institutions exist in all sectors of our economy from banking, finance and insurance to education, manufacturing, retail and agriculture. Indeed, economic democracy exists within capitalist economies and does not reject the role of markets, but rather limits the primacy of the profit-maximisation motive that currently drives the way in which most businesses engage with the market.

Shared ownership helps diversify rather than concentrate wealth – which is what we desperately need to do to revitalise our economy. It roots the value it generates in communities, keeping assets and resources from being transferred from local communities and low-wage employees to multinational corporations and their owners.

Co-operatively owned businesses can range from small-scale local companies to multimillion dollar global businesses. Throughout the world, co-operatives today already employ more than 100 million people and have more than 800 million members. In the US, nearly 14 million employees participate in 9,650 employee stock ownership programs at public and private firms with combined assets of over $925bn (£592bn). In the US, co-operative businesses serve over 120 million members, or four in 10 Americans. The top 100 co-ops generate more than $150bn in revenues, and there are more than 72,000 co-operative establishments in the US providing more than 2m jobs.

In Europe, Italy’s Legacoop and Spain’s Mondragon multi-sector co-operatives have been able to both reach significant scale and demonstrate long-term sustainability. Legacoop, founded in 1886 in Milan, now has more than 15,000 member co-operatives and employs more than one million people. Mondragon, founded in 1956, now holds €33.3m (£27.4m) in assets and employs more than 85,000 people internationally.

A world of co-operation and shared ownership is not only possible but critical to address the chronic unemployment, the dangerous concentration of wealth and the environmental destruction our world currently faces.

[Source: The Guardian]

Breaking Ground for a World Beyond Capitalism

Published on Saturday, January 7, 2012 by CommonDreams.org

The Challenge of the Era of Technological Abundance

by Gar Alperovitz

The following is an excerpt from Gar Alperovitz's America Beyond Capitalism, recently released in paperback updated with a new forward by James Gustave Speth. It is reprinted here with kind permission of the author.

The United States is the wealthiest nation in the history of the world. By the end of the twenty-first century it will have the technological capacity to increase the income of all its citizens many times over or to radically reduce work-time and thereby allow a new flowering of democracy, liberty, and personal and community creativity. The new century could be—should be—one of innovation, hope, even excitement. 

Few Americans approach the century this way. The future is clouded by problems rather than opportunities; it appears as an era of great political difficulty and danger. At the most obvious level is the threat posed by terrorism and war—and the many challenges to liberty that overly zealous approaches to both have produced. At another level are the growing social, economic, racial, and other difficulties catalogued in the preceding pages. Critically, confidence that the great traditional values at the very heart of the American experience can be sustained has been declining rapidly. 

A society committed to enhancing equality, liberty, and democracy that is unable to achieve such values in practice—indeed, that is moving in precisely the opposite direction—is committed to a morally incoherent politics. If such a politics continues through time, ever greater cynicism must develop; and with it, an ever deepening sense that American society has lost its moral compass, that government policies are merely the result of power plays and brokering between interested parties that do not and cannot claim any deeper democratic or moral legitimacy. 

A political-economic system can continue to violate the values it affirms for a very long time without major consequences. It is unlikely, however, to be able to do so forever. The question is: can a meaningful, morally coherent, and ultimately positive politics be constructed in the emerging era of technological abundance? 

Can a new direction be set that acknowledges the systemic nature of our problems and openly posits a concrete alternative and a process that might move in a new direction? Can the system be changed? 

It is important to stand back from the current moment to consider underlying issues of principle that will frame the politics of the coming era—to and through times of war and terrorism...and beyond. Leaving aside the question of near- or long-term political-economic feasibility, four fundamental contentions are suggested by the evolving political-economic developments we have reviewed: 

First, that there is no way to achieve movement toward greater equality without developing new institutions that hold wealth on behalf of small and large publics. 

Second, that there is no way to rebuild Democracy with a big D in the system as a whole without nurturing the conditions of democracy with a small d in everyday life—including the economic institutions that allow and sustain greater stability of local community life. 

Third, that there is no way to achieve democracy in a continental-scale system with a population moving toward 400 million people—and possibly a billion or beyond—without radical decentralization, ultimately in all probability to some form of regional units. 

Fourth, that there is no way to achieve meaningful individual liberty in the modern era without individual economic security and greater amounts of free time—and that neither of these, in turn, is possible without a change in the ownership of wealth and the income flows it permits. 

These four contentions stand on their own. Indeed, at this point in American history, the ball is in the court of those who hold that equality, liberty, and meaningful democracy can be achieved without meeting the challenges suggested by the four basic points. Further related questions are whether there is any other way to achieve gender equality, ecological sustainability, and the sustained reality of meaningful community. 

The Pluralist Commonwealth model holds, beyond this, that democratic control of large economic enterprise—a central problem confronting all political-economic systems—can never be achieved without transforming and making public the ownership of large-scale wealth and without developing a new culture—and further, that this can only be done by building on the four key elements. 

Without local democracy, there can be no culture of democratic practice; without security and time, there can be only a weak citizenry; without decentralization, it is difficult to mobilize democratic practice and accountability; and without major and far-reaching new forms of wealth holding, there can never be adequate support for the conditions and policies needed to build a more egalitarian and free democratic culture. 

Finally, the model is based on the judgment that greater equality, greater individual economic security, greater amounts of free time, and—upon this basis—the reconstitution of a culture of common responsibility are ultimately required if we are ever to reorient our community and national priorities in general. 

The central argument of this book is that the first decades of the twenty-first century are likely to open the way to a serious debate about these and other systemic questions—and further, that real-world conditions during the coming period are likely to offer opportunities for establishing substantial foundations for a possible longer-term systemic transformation thereafter. 

The prospects for near-term change are obviously not great—especially when such change is conceived in traditional terms. Indeed, although there may be an occasional progressive electoral win, there is every reason to believe that the underlying trends will continue their decaying downward course. In many ways times are likely to get worse before they get better. 

On the other hand, fundamental to the analysis presented in the preceding pages is the observation that for precisely such reasons, there is likely to be an intensified process of much deeper probing, much more serious political analysis, and much more fundamental institutional exploration and development. We have also noted that there are important signs of change in the traditional “laboratories” of democratic process. States from Alaska to California, and from Alabama to Ohio, have moved forward to create—and systematically build political support for—many new political-economic experiments and strategies. Federal fiscal and other decisions are now producing pain and reassessment at every level. 

Traditionally, a distinction has been made between reform, on the one hand, and revolution, on the other. The former implies nonviolent improvement in the outcomes of a given system—with no fundamental change in its basic institutional structure. It cleans up around the edges of the existing system, as it were—sometimes slowly, sometimes in major political outbursts. The latter commonly implies abrupt and often violent change—above all, of the fundamental institutional structures of the system. 

The kind of change that appears in the various trajectories of emerging U.S. development involves an unusual combination of strategic approaches. Like reform, in the main it involves step-by-step nonviolent change. But like revolution, its process is oriented to the development of different institutional structures to replace traditional corporate forms over time. It might appropriately be called “evolutionary reconstruction.” 

A politics based on evolutionary reconstructive principles does not abandon reform when it can achieve important gains. On the other hand, such a politics explicitly seeks to understand—and to foster—the longer-term foundational requirements of the values it affirms. It is not satisfied with, or misled by, occasional electoral gains that do little to alter the direction of long-term trends. It is a politics of historical perspective and commitment to the long haul. 

Few predicted either the upheavals of the 1960s or the conservative revolution that followed. Major eruptions and political realignments are the rule, not the exception in U.S. history. Large numbers of working Americans; blacks and Hispanics who will become a majority as the century develops; senior citizens (and those who shortly will become seniors); women who seek practical ways to achieve thoroughgoing gender equality; liberals and conservatives alike who value family and community; environmentalists who cannot secure protections either for endangered goals or sustainable growth along current lines of development—all are finding it increasingly difficult to realize their objectives through traditional means. 

A fundamental question is what may happen as various groups, each beginning with more narrowly defined interests, come to the realization that what they value most cannot be achieved without a new approach. If, as appears increasingly likely, such awareness begins to intersect with the knowledge and experience gained through the development of new strategies and ideas, new possibilities are likely to become available to politics in the coming era. 

There are numerous indications of underlying political instability in the U.S. system. Millions have expressed their discontent by breaking with the major political parties to vote for Ross Perot, Pat Buchanan, and Ralph Nader; to elect Jesse Ventura in Minnesota; and to support Howard Dean’s insurgent campaign for the Democratic Party nomination in 2004. Such “unexpected” developments also suggest that beneath the surface level of politics-as-usual, it is by no means clear that the public is or will remain quiescent forever—especially if social and economic pain continues, if political elites continue to overreach, and if new directions begin to be clearly defined. 

The term “conjunktur”  designates a coming together at one moment in time of diverse trends to create new, unforeseen, and often dramatic opportunities for change. A major electoral shift or political realignment is easily conceivable—and with it the truly interesting question of the first decades of the century: whether foundations for something much more far-reaching might be established for the period beyond. 

The legitimacy of the present economic arrangements and entitlements is also likely to be called into question by largeorder developments that intersect with—and strengthen—ongoing efforts to achieve change. 

In the late 1990s economist William Baumol pointed out that per capita GDP in the United States had increased nine-fold since 1870—and that almost 90 percent of this growth was due to innovations developed over the previous 130-year period. Even pre-1870 innovations such as the steam engine and the railroad, he observed, “still add to today’s GDP.” 

Nobel laureate Robert Solow has similarly pointed out that current economic growth must overwhelmingly be attributed to “residual” factors that, broadly speaking, involve the huge contributions of inherited technological knowledge. Again, research by economist Edward Denison has shown that advances in knowledge are “the biggest and most basic reason for the persistent long-term growth of output per unit of input.” 

The moral—and hence, ultimately, political—implications of this growing understanding are beginning to be recognized. Above all, as historian Joel Mokyr observes, the vital knowledge we receive from the past comes to us through no effort of our own as a “free lunch.” The implicit question is inherently explosive: if so, who should rightly benefit, and in what proportions, from this extraordinary inheritance—this free gift that produces so much of our common abundance? 

Seth Shulman, the author of Owning the Future, has made the obvious connection. The elites who hold most of the rights to modern technologies “are legally sanctioned, but the legitimacy of their claims often remains dubious because of the debt they owe to innovations that have been made possible only by years or decades of collective advances.” 

The current technological contributions that produce such huge rewards for the fortunate few, in short, are a mere pebble placed atop a Gibraltar of received science and technology that makes the modern additions possible—and that was often paid for by the public, and that can be traced back through many generations, indeed, centuries. Current elites, William Gates Sr. urges, disproportionately reap the harvest of what is inherently a collective investment. Gates proposes their estates be taxed accordingly. 

The late Herbert Simon, another Nobel laureate, defined the central issue this way: “[A]ny causal analysis explaining why American GDP is about $25,000 per capita [1998] would show that at least two-thirds is due to the happy accident that the income recipient was born in the U.S.” Simon termed the vast gift of the past a sort of “patrimony” received simply by the chance of birth—and like Gates, urged that this should be subject to large-order taxation. 

We have noted growing anger at the extreme wealth of some amid the great poverty of others—and, too, at the corrupt practices of many leading corporate executives. We have seen that elite ownership has very little to do with the demands of efficiency and productivity, and that a variety of institutional forms can manage wealth effectively—indeed, often more effectively than traditional forms. 

Efforts to alter the excesses of America’s international stance and to persuade the United States to respond more humanely to global problems are both essential and laudable. If we Americans truly hope to help others around the world, however, we have much hard work to do, first and foremost, here at home.

The new understandings that the computer, satellite communication, and the World Wide Web increasingly underscore are the moral wild cards of the era of technological abundance. Nobel laureate Joseph Stiglitz urges in general that “just as the importance of land in production change dramatically as the economy moved from agriculture to industry, so too does the movement to a knowledge economy necessitate a rethinking of economic fundamentals.” As recognition that the sources of modern abundance are deeply rooted in the legacy we all commonly receive from the past continues to develop, it is likely to bring with it a powerful critique of all justifications of current wealth ownership patterns and a powerful rationale for new, broader allocations and institutional strategies. 

Little has been said in the preceding pages about global issues and international relations. The reason is not only that this book is devoted primarily to U.S. developments. It is that it is extremely difficult to imagine a fundamental shift in America’s stance toward the rest of the world absent a transformation of our own ways at home. The argument of Alexis de Tocqueville and John Stuart Mill—that ultimately democracy in a nation depends upon the development of democracy in its communities—is echoed in the judgment that America is unlikely to play a different role in the world until it is a different America—until it finds ways once again to realize values of equality, liberty, democracy, and, one day, perhaps even of community in our own land. Efforts to alter the excesses of America’s international stance and to persuade the United States to respond more humanely to global problems are both essential and laudable. If we Americans truly hope to help others around the world, however, we have much hard work to do, first and foremost, here at home. 

Large-order institutional restructuring, we tend to forget, is exceedingly common in the long sweep of world history. The difficulty lies in pulling ourselves out of the present moment to consider our own possibilities in broader historical perspective. 

The current years of terrorism and war are not the first time our nation has been challenged by grave danger, nor is this the only time it has experienced great violence at home. Indeed, we have survived even civil war and losses many times those of recent years. The fundamental questions posed throughout this book may or may not be answered. They will not, however, go away. 

We have begun a new century. The coming decades will establish the terms of reference for further, future change. It is not possible to know whether a new direction based on the developing ideas, models, practical experiments, and new alliance explorations can lay the foundations for the next political-economic system. Or whether, over time, a new basis can thereby be established for a politics capable of unleashing the moral energies that can flow from a renewed commitment to achieving equality, liberty, and democracy.  

It is possible, however, for one person—each person—to help refine our understanding and our strategies and to help establish the practical and political elements needed in the first stage of any realistic forward-moving developmental process. Each step is valuable on its own terms, no matter what. 

Long before the civil rights movement, there were many years of hard, quiet, dangerous work by those who came before. Long before the feminist explosion there were those who labored to establish new principles in earlier decades. It is within the possibilities of our own time in history that—working together and openly charting an explicit new course—this generation can establish the necessary foundations for an extraordinary future and for the release of new energies. 

It may even be that far-reaching change will come much earlier and much faster than many now imagine.

Gar Alperovitz is the Lionel R. Bauman Professor of Political Economy at the University of Maryland and co-founder of the Democracy Collaborative. Among his most recent books are America Beyond Capitalism and (with Lew Daly) Unjust Deserts: How the Rich Are Taking Our Common Inheritance and Why We Should Take It Back.

The Key to Global Prosperity: Worker Ownership

by Jeffrey Hollender

from the Guardian

Shared ownership helps to diversify rather than concentrate wealth and roots the value it generates in communities

Protesters around the world are questioning inequality issues around wealth and employment. Is shared ownership the answer? Photograph: Murdo MacLeod

Inequality has become an embarrassing social reality for more and more global citizens – a reality that we seem very far away from solving.

One particular statistic underlines the sorry state of affairs in which we find ourselves: 1% of Americans own 40-50% of national wealth. And it is a trend perpetuated in other first world countries. The rest – the 99% - are making their voices heard with protests in the streets of New York, the Middle East and elsewhere.

But how does such gross inequity come to be? And what can be done to alleviate it? The causes are key to our development of solutions. One such cause of our current crisis is that we have seen businesses grab a greedy handful of wealth, while even the smallest piece of the pie (crumbs really) has slipped out of the hands of the middle and lower classes.

In the US, while our tax system and regulatory guidelines bear a large portion of the blame, business has played a powerful hand in almost everything that's wrong with this picture. Big business writes most of the rules and also maintains its hold on wealth concentration by ensuring that workers are not owners.

The antidote? Co-operatively owned business, Employee share ownership plans (Esops) and other forms of worker ownership that are often classified under the idea of economic democracy.

Economic democracy describes a socio-economic arrangement in which business enterprises are democratically managed and worker-owned. While the form and structure of economic democracy varies, these businesses are organised to primarily benefit a group of stakeholders, rather than outside investors.

Such economic institutions exist in all sectors of our economy from banking, finance and insurance to education, manufacturing, retail and agriculture. Indeed, economic democracy exists within capitalist economies and does not reject the role of markets, but rather limits the primacy of the profit-maximisation motive that currently drives the way in which most businesses engage with the market.

Shared ownership helps diversify rather than concentrate wealth – which is what we desperately need to do to revitalise our economy. It roots the value it generates in communities, keeping assets and resources from being transferred from local communities and low-wage employees to multinational corporations and their owners.

Co-operatively owned businesses can range from small-scale local companies to multimillion dollar global businesses. Throughout the world, co-operatives today already employ more than 100 million people and have more than 800 million members. In the US, nearly 14 million employees participate in 9,650 employee stock ownership programs at public and private firms with combined assets of over $925bn (£592bn). In the US, co-operative businesses serve over 120 million members, or four in 10 Americans. The top 100 co-ops generate more than $150bn in revenues, and there are more than 72,000 co-operative establishments in the US providing more than 2m jobs.

In Europe, Italy's Legacoop and Spain's Mondragon multi-sector co-operatives have been able to both reach significant scale and demonstrate long-term sustainability. Legacoop, founded in 1886 in Milan, now has more than 15,000 member co-operatives and employs more than one million people. Mondragon, founded in 1956, now holds €33.3m (£27.4m) in assets and employs more than 85,000 people internationally.

A world of co-operation and shared ownership is not only possible but critical to address the chronic unemployment, the dangerous concentration of wealth and the environmental destruction our world currently faces.

Jeffrey Hollender is the founder of Jeffrey Hollender Partners, a business strategy consulting firm, and the co-founder and former CEO of Seventh Generation. Jeffrey blogs at www.jeffreyhollender.com and he can also be found tweeting at @jeffhollender

Protest to Occupation: From Capitalist Democracy to Self-Determination

by Jean Paul Holmes

December 13, 2011, from Political Affairs

Many political pundits of various media institutions were quick to demand the Occupy Movement declare a list of grievances at its founding. Though not immediately, and not uniformly, a set of demands has emerged from many of the 100 or so occupations found in cities across the United States. Demands include such proposals as the end to the war on terror, the formation of a single-payer health care system, a higher tax on the wealthy, the overturning of the Citizens United v. the FEC Supreme Court decision, restoration of the guidelines once found in the Glass-Steagall Act, and various other forms of economic regulation as well as limitations on money's influence in politics.

These demands give some idea of what the Occupy Movement is about, but focusing too narrowly on the demands misses the movement's very important core element. The most important feature of the Occupy Movement was the very process by which the demands were made.

The Occupy Movement is important in that it no longer looks to the government, as it currently is, to acheive its goals. The General Assembly, the legislative body present at each occupation, represents in miniature an alternative governing organization meant to both demonstrate everyday people's ability to manage their affairs as well as act as a body to be compared to the government itself. In fact, Goldsmiths, University of London anthropologist David Graeber, a founder of the Occupy Movement, made many statements indicating this as the reason for the movement's being organized as it was.

The Occupy Movement is about people's exercising self-determination, its very process of decision making to be juxtaposed to the current lack of power participants feel in our capitalist democracy.

The preamble to the Declaration of the Occupation of New York City clarifies:

"As one people, united, we acknowledge the reality: that the future of the human race requires the cooperation of its members; that our system must protect our rights, and upon corruption of that system, it is up to the individuals to protect their own rights, and those of their neighbors; that a democratic government derives its just power from the people, but corporations do not seek consent to extract wealth from the people and the Earth; and that no true democracy is attainable when the process is determined by economic power."

"We come to you at a time when corporations, which place profit over people, self-interest over justice, and oppression over equality, run our governments."

The Occupy Movement is young and yet at its beginning, as corporations and the class which operates them are so entrenched in U.S. politics.

The most popular reason given for why the wealthy and corporations exercise so much power politically involves the process of campaign finance. In the past decade the majority of money presidential and congressional candidates raised came from contributions of $200 or more. Less than one percent of the population made these donations, 81 percent of whom had incomes of more than $100,000 a year. These donations pale in comparison to the amount of money businesses donate directly to candidates' political parties, which comprise near 90 percent of total contributions in any given election.

Corporations not only have a powerful effect on elections, but are a virtually inseparable part of the political process itself.

The capitalist class is able to use the wealth generated by the corporations which they run to continuously lobby on their behalf.

Lobbying is a constant component of corporate strategy. In 2010, the oil and gas industry spent over 146 million dollars while employing 802 lobbyists, the pharmaceutical industry spent over 244 million dollars while employing 1,612 lobbyists, and finance (insurance and real estate) spent over 475 million dollars while employing 2,563 lobbyists. In comparison, public sector unions, representing the largest non-corporate, politically active institutions in the U.S., spent just over 14 million dollars and had a mere 150 lobbyists.

Further, as corporations are institutions which both own and manage a nation's resources, they naturally become politicians' biggest source for relevant information with which to form public policy. Corporate directors, executives, and those they employ as top level accountants or lawyers form the basis of the nation's largest think tanks and policy discussion groups.

Think tanks organize corporate money and industry experts to discuss issues surrounding public policy. They debate current policy, identify issues of their own and train experts. Of the ten largest think tanks in the U.S., seven are either explicitly conservative or promote ideas in line with the stated goals of the Republican Party. The other three define themselves as non-partisan. Some think tanks, like the Heritage Foundation, focus on promoting experts and their interpretation of policies via public relations efforts while other think tanks, like the American Enterprise Institute or Chamber of Commerce, focus more on providing information and expertise to involved corporations, policy discussion groups, or directly to politicians.

Policy discussion groups are leaner than think tanks and tend to be focused more directly on policy formation. These are corporations' political working groups, where experts from think tanks present ideas to the heads of corporations and position statements are formed. One of the most powerful policy discussion groups is the Business Council, which began as a quasi-governmental advisory group in the 1930s only to become an independent entity in 1962. The Business Roundtable is the Business Council's active branch. These groups either meet directly with members of Congress and the Executive branch or work through lobbyists.

Corporations are, therefor, not only economic entities. They represent institutions of organized power and are the foundations that allow the capitalist class the constant influence in politics which the Occupy Movement stands against.

The economy, having developed so that a small group of capitalists wield such a vast amount of power, forces progressives to reconsider capitalist democracy. The directors of these corporations are not only member's of the nation's wealthiest one percent, but have been observed by sociologist G. William Domhoff to also be 90 percent male and 95 percent white. Capitalism has developed such that it undermines democracy itself.

The Occupy Movement introduced many to the process of self-determination through the management of their occupations, from the preparation and distribution of food, to the organization of hygiene and the production of media. The challenge is to expand on the practice of self-determination and employ it on a vast scale.

Another Occupy Movement founder, Naomi Klein, presented how this might be done in The Take, a 2004 film on Argentinian worker's self-management of factories. The film demonstrating how communities united to operate factories abandoned by that nation's companies in a recession. Curiously, they used the slogan "occupy, resist, produce." Many of the reclaimed factories continue to operate effectively under management elected from the workers' own ranks in democratic self-management systems established during their occupation.

It is time for progressive forces in the U.S. to seriously pose capitalism as a question. At the end of November, the Republican governor's association met in Florida in part to talk about messaging. Frank Luntz, a Republican political messaging strategist, insisted that conservatives replace the word "capitalism" with the words "economic freedom" or "free market". A recent change to Texas textbooks also replaced "capitalism" with "free enterprise system".

The capitalist question, when posed as a matter of economic freedom, prompts those without economic power to respond "freedom for whom?". The question begs an answer that calls for the need for a "democratic economy". This idea can be conceptualized as parallel to the goal of "democracy in the workplace", a phrase the labor movement currently uses in its struggle.

There can be no real political democracy until there is economic democracy.

Worker-Owners of America, Unite!

By GAR ALPEROVITZ

Published: December 14, 2011 by the New York Times

College Park, Md.

THE Occupy Wall Street protests have come and mostly gone, and whether they continue to have an impact or not, they have brought an astounding fact to the public’s attention: a mere 1 percent of Americans own just under half of the country’s financial assets and other investments. America, it would seem, is less equitable than ever, thanks to our no-holds-barred capitalist system.

But at another level, something different has been quietly brewing in recent decades: more and more Americans are involved in co-ops, worker-owned companies and other alternatives to the traditional capitalist model. We may, in fact, be moving toward a hybrid system, something different from both traditional capitalism and socialism, without anyone even noticing.

Some 130 million Americans, for example, now participate in the ownership of co-op businesses and credit unions. More than 13 million Americans have become worker-owners of more than 11,000 employee-owned companies, six million more than belong to private-sector unions.

And worker-owned companies make a difference. In Cleveland, for instance, an integrated group of worker-owned companies, supported in part by the purchasing power of large hospitals and universities, has taken the lead in local solar-panel installation, “green” institutional laundry services and a commercial hydroponic greenhouse capable of producing more than three million heads of lettuce a year.

Local and state governments are likewise changing the nature of American capitalism. Almost half the states manage venture capital efforts, taking partial ownership in new businesses. Calpers, California’s public pension authority, helps finance local development projects; in Alaska, state oil revenues provide each resident with dividends from public investment strategies as a matter of right; in Alabama, public pension investing has long focused on state economic development.

Moreover, this year some 14 states began to consider legislation to create public banks similar to the longstanding Bank of North Dakota; 15 more began to consider some form of single-payer or public-option health care plan.

Some of these developments, like rural co-ops and credit unions, have their origins in the New Deal era; some go back even further, to the Grange movement of the 1880s. The most widespread form of worker ownership stems from 1970s legislation that provided tax benefits to owners of small businesses who sold to their employees when they retired. Reagan-era domestic-spending cuts spurred nonprofits to form social enterprises that used profits to help finance their missions.

Recently, growing economic pain has provided a further catalyst. The Cleveland cooperatives are an answer to urban decay that traditional job training, small-business and other development strategies simply do not touch. They also build on a 30-year history of Ohio employee-ownership experiments traceable to the collapse of the steel industry in the 1970s and ’80s.

Further policy changes are likely. In Indiana, the Republican state treasurer, Richard Mourdock, is using state deposits to lower interest costs to employee-owned companies, a precedent others states could easily follow. Senator Sherrod Brown, Democrat of Ohio, is developing legislation to support worker-owned strategies like that of Cleveland in other cities. And several policy analysts have proposed expanding existing government “set aside” procurement programs for small businesses to include co-ops and other democratized enterprises.

If such cooperative efforts continue to increase in number, scale and sophistication, they may suggest the outlines, however tentative, of something very different from both traditional, corporate-dominated capitalism and traditional socialism.

It’s easy to overestimate the possibilities of a new system. These efforts are minor compared with the power of Wall Street banks and the other giants of the American economy. On the other hand, it is precisely these institutions that have created enormous economic problems and fueled public anger.

During the populist and progressive eras, a decades-long buildup of public anger led to major policy shifts, many of which simply took existing ideas from local and state efforts to the national stage. Furthermore, we have already seen how, in moments of crisis, the nationalization of auto giants like General Motors and Chrysler can suddenly become a reality. When the next financial breakdown occurs, huge injections of public money may well lead to de facto takeovers of major banks.

And while the American public has long supported the capitalist model, that, too, may be changing. In 2009 a Rasmussen poll reported that Americans under 30 years old were “essentially evenly divided” as to whether they preferred “capitalism” or “socialism.”

A long era of economic stagnation could well lead to a profound national debate about an America that is dominated neither by giant corporations nor by socialist bureaucrats. It would be a fitting next direction for a troubled nation that has long styled itself as of, by and for the people.

Gar Alperovitz, a professor of political economy at the University of Maryland and a founder of the Democracy Collaborative, is the author of “America Beyond Capitalism.”

Britain is an Economic Dictatorship - Time for Economic Democracy

by Peter G Tatchell, from Huffington Post, November 29, 2011

Up to two million trade union members are expected to strike this Wednesday, in protest against the government's attack on pensions and cuts in public services. Their grievances are real. But their solutions don't go far enough.

Pressing the government for fairness isn't the answer. Staging a protest is second best. These are reactive, defensive responses to fundamental flaws and failings in the way our economy is organised and run.

The perennial failing of most trade unions is that their horizons are so limited. They seek a better deal for their members within the economic status quo, when the real solution is to reform the system of economy that, by its very nature, leaves the vast majority of working people powerless, disenfranchised and marginalised. When it comes to the economy, the average person has no meaningful say in the decisions that affect their jobs, wages, pensions and working conditions.

We expect political democracy. Why not economic democracy too?

Behind the cosy democratic facade, Britain is a cut-throat economic dictatorship. A rich and powerful economic elite makes all the key economic decisions, excluding millions of employees and consumers.

Our country's democratic political transformation - pushed forward by the Levellers, Chartists and Suffragettes - has never been matched by a corresponding economic democratisation.

'One person, one vote' has been won in the political sphere (albeit imperfectly) but not in the realm of economics. Britain's democratic revolution, which begun four centuries ago, remains unfinished.

It is time to put economic democracy on the political agenda; to bring the economy into democratic alignment with the political system.

Extending the economic franchise is about democracy and justice. It can help create a greater plurality and diversity of economic power, and also lay the foundations for a more equitable and productive economic partnership between all those who contribute to wealth creation and to the provision of public services, from local councils to the NHS.

Whatever people think of the current economic system, one thing is indisputable: it is characterised by an absence of democracy, participation, transparency and accountability.

Employees and their representative bodies - the trade unions - are frozen out of economic influence and decision-making.

Big business rules. The captains of industry, commerce and finance have almost total power.

They run their enterprises on totalitarian lines. All decision-making is concentrated in the hands of a tiny, privileged cabal of major shareholders, directors and managers. They alone determine how the company operates. Employees - without whom no wealth would be created and no institution could function - are powerless and disenfranchised. They are little more than glorified serfs of the moneyed classes and their government.

Not much has changed in two centuries of capitalism. There have been no major democratic reforms of the economy. Although millions of people bought shares in privatised public enterprises like BT, their individual holdings are minuscule and marginal. They have no real influence. Big corporate interests retain the decisive economic power. This power is as centralised and autocratic as ever. A few determine the fate of the many.

The advent of nationalised public industries, utilities and services changed nothing. They have been run in much the same centralised, dictatorial manner as their privately-owned counterparts. There was never any economic democracy in the state-run railways or coal mines. The system of ownership changed but not the system of management. The bosses of public utilities and nationalised industries were almost as powerful as the captains of private enterprise. Their employees remained locked out of the decision-making process. It was state capitalism, not socialism. The Labour Party and the trade unions have made a huge mistake in over-emphasising public ownership, to the neglect of public control.

The same applies today in the NHS and other public services. They are administered according to the classic capitalist model of top-down command and control. NHS big-wigs have almost as much power as private medical bosses. Doctors, nurses and ancillary staff are excluded from policy-making in both public and private medicine. Their years of accumulated hands-on, frontline service knowledge is disregarded when it comes to policy-making. This is a huge waste of human resources.

Wherever we look, in all sectors of the economy, the democratic deficit is universal. Power is concentrated and wielded in ways that is contrary to the democratic, egalitarian spirit of modern, twenty-first century Britain. The time for economic democracy is now.

‘Economic Democracy’ Key to Solving Global Financial Crisis, Says City Tech Professor in New Book

Released: 10/27/2011 2:00 PM EDT
Source: New York City College of Technology

Newswise — Brooklyn, NY -- October 27, 2011 -- Discussing citizen movements that arose in response to the global financial crisis, Costas Panayotakis, author of the new book Remaking Scarcity: From Capitalist Inefficiency to Economic Democracy (Pluto Press, UK, September 2011), notes that although it seemed the whole world except the U.S. was in revolt, “uprisings and the eruption of social movement activity are unpredictable because they usually represent the convergence of many different factors interacting with each other in complicated ways.”

Even earlier, preceding the Occupy Wall Street protest movement by almost a year-and-a-half, Panayotakis, associate professor of sociology at New York City College of Technology (City Tech), wrote in a published article: “As a Greek teaching at The City University of New York, I can’t help but notice the parallels between brutal budget cuts in Greece and the impact of the economic crisis in the United States.”

The timeliness of Panayotakis’ work was captured in the forward to his book by Joel Kovel, author of ten books in the field and editor-in-chief of the international journal Capitalism Nature Socialism. “In Remaking Scarcity, Costas Panayotakis expertly dissects a capitalist system in the agonies of intractable crisis and gives a radical yet practicable guide to its transformation.” The book has been favorably received by experts on economics, politics and “green” economics from universities in the U.S. and England.

Panayotakis will read from his book on Thursday, November 10, at 5 p.m., in the City Tech campus bookstore, 259 Adams Street, in Downtown Brooklyn. Also reading that same evening will be City Tech Professor Ben Shepard, from his book The Beach Beneath the Streets: Contesting New York City’s Public Spaces.

In Remaking Scarcity, Panayotakis proposes “economic democracy,” a restructuring of economic control ensuring that a wealthy minority does not determine economic and political priorities and make decisions affecting the majority of citizens. As an example, he cites the 2003 Argentinian workers’ transformation of nearly 200 bankrupt factories, where they became the stockholders and managers, sharing administrative responsibilities and profits.

While teaching courses on sociology and globalization, Panayotakis has long been an observer of the global economy, political systems and their effect on democracy, social problems and the environment. “We now are seeing a popular loss of faith in the economic and political decision-makers who affect all our lives and the future of the planet,” he says, “especially the banks, whose profit-seeking severely damaged the global economy.”

Panayotakis has given presentations at international conferences including at Oxford University and York University, at meetings of the American Sociological Association and Eastern Sociological Society, at the Kennedy Space Center and at the Brecht Forum in New York. He was also recently invited to present his ideas on economic democracy at Tufts University. He has appeared on radio and television talk shows in Canada, Jamaica, New Zealand, Iran, and the U.S., and contributes regularly to scholarly journals and other publications. He is book editor for Capitalism Nature Socialism.

Formerly a Robert Gillece Fellow at The CUNY Graduate Center, he has taught at several colleges within the CUNY system before becoming fulltime at City Tech in 2002.
During the past few months, Panayotakis also has taken his message to the streets of New York City in a theatrical way. In the subways, he and other participants perform his satirical script, “Confessions of an Austerity Nut,” preaching the virtues of belt-tightening to assist “our neediest billionaires,” and blaming the current economic crisis on working people who are “too rich and too greedy.” Afterward, he and his cohorts distribute the script to observers, encouraging them to perform it publicly.

The idea for this project came to Panayotakis after a union meeting and discussion with a colleague on creative ways to resist what he calls “the austerity policies imposed on ordinary New Yorkers.” “I got up at 6 a.m. one day and furiously scribbled the script,” he explains. “It’s more appealing and inspiring to people if this kind of critique takes the form of comedy.”

More “Austerity Nuts” have joined in, and recently the professor himself became a homework assignment for a college journalism student, who posted online a radio journalism report on that experiment. Support for the “Austerity Nut” experiment has continued to grow ever since the recent launch of an Austerity Nut video and website (see austeritynut.com). Says Panayotakis, “My dream is that one day I will walk into a train, and I won’t be able to perform the script because somebody is already doing it!”

New York City College of Technology (City Tech) of The City University of New York (CUNY) is the largest public college of technology in New York State. Located at 300 Jay Street in Downtown Brooklyn, the College enrolls more than 16,000 students in 62 baccalaureate, associate and specialized certificate programs.

The Middle Class: Demonized by the New Left in the Sixties, Defended by Occupy Wall Street Radicals Today

by John Lawrence

What a difference 40 years makes! The New Left radicals of the sixties treated the middle class with about as much respect as Rush Limbaugh treats liberals. The middle class was put down, demeaned and vilified. Today the protest movement is all about defending the beleaguered middle class. The middle class and the treatment thereof is the axis on which turns the raison d'etre of the two movements. It's why the movement of the sixties failed and why the Occupy Wall Street Movement may very well succeed in radically restructuring the US government and economy.

First of all in the sixties the protest movement was basically a cultural rather than a political movement despite the attempts of the New Left to make it political. The protest was mainly an anti-war movement combined with cultural overtones. It was the Age of Aquariius. There was a big change coming because Bob Dylan and the Beatles told us there was. It was Blowin' in the Wind. If you didn't wear bell bottoms and grow your hair long you were not part of the movement. Magic was in the air. But when it came right down to it, the Beatles didn't want a revolution because after all they were making too much money. So was relatively speaking the middle class, Nixon's silent majority. They were pretty well off in the sixties and early seventies. They just wanted the US out of Vietnam so their sons wouldn't have to be drafted. Hardly anyone had a student loan. College was relatively free compared to today.

Where I went to school at the University of California San Diego in the late sixties, tuition was free. There was a $73. a quarter incidental fee, and I rented a room for $40. a month. Middle class wages came with benefits - a pension and health care. Wives didn't have to work outside the home to make mortgage payments. I bought my first home for less than what you pay for a mid range car today. There were no adjustable rate mortgages. Everybody had it pretty good. Is it any wonder that the vast middle class did not join the radicals in their attempt to foment a revolution? People were too well off. And the cultural aspects were easily co-opted by commercial interests. You want tie dye. Hey, we'll sell it to you. You want bell bottoms. You can find them at Macy's.

The put down of the middle class was mainly a put down of middle class mores. Things like staying a virgin until you were married, buying ticky tacky houses in tract developments, having to go to church on Sunday, participation in the Rotary club. People didn't want to buy their Grandfather's Oldsmobile. So capitalist society geared up to sell them something else. You want long hair. Hey there's the Broadway musical, Hair. Down to here. Down to there. The same old imperatives to sell, sell, sell - only updated for a new generation. The Students for a Democratic Society were isolated because what people really wanted was new mores to replace their parents' mores. They didn't want to do away with capitalism. Capitalism had been very, very good to them.

Today the situation is different. The middle class is under siege. Far from putting down the middle class, today's Left is trying to defend it. The right wing is reduced to trying to defend the very wealthy, the upper 1%, using their vast wealth for TV advertising and smoke and mirrors. The 99% have lost the prosperity of the sixties. The Occupy Wall Street Movement is aimed right at the heart of capitalism - Wall Street. College tuition at UCSD is over $13,000 today. Along with room and board, books and other expenses, the cost for a year of college education at UCSD is almost $30,000. A far cry from when I was paid to go there as a graduate student with a research assistantship and expenses were minimal. One of my classmates even took flying lessons with the money that was left over from his assistantship. No one went into debt to go to college. Student loans were unheard of. People could work their way through college as I did as an undergraduate on the co-op plan where I worked for a quarter and went to school for a quarter. People could work their way through college with a waitressing job at Howard Johnson's.

Foreclosures are running rampant. People are being forced out of their homes even though the banks don't have the proper documentation to prove ownership. People whose homes are underwater, meaning they owe more than their homes are worth, are stuck there not being able either to refinance or to sell. Their choice is to go on paying exhorbitant mortgage payments every month or to walk away to an uncertain fate and ruined credit. 50 million people have no health care. Jobs are hard to come by. Recent college graduates are lucky to get a job as a barrista at Starbucks. Teachers, firemen, librarians and policemen are being laid off in droves. Manufacturing has moved to China. The middle class is under attack. That is the difference between the demonization of the middle class in the sixties and the attempt to save the middle class that is happening today.

Ed Schultz who has a talk show on msnbc was the first person I know that made a point of defending the middle class, long before it became fashionable, on his previous radio talk show. Now everyone is jumping on the bandwagon. Why? The upper 1% owns most of the wealth and makes most of the income, and they are accelerating their financial predominance. The bankers on Wall Street, having been bailed out by middle class taxpayers and the Fed to the tune of trillions of dollars, are giving themselves even larger bonuses today than they were before the financial crisis which they precipitated. Unions are under attack in Wisconsin, Michigan, Florida and elsewhere where Republican governors and legislatures are in control of state governments. The American Dream has turned into the American Nightmare for masses of people. People are waking up to the fact that government has been taken over by the large corporations who pay politicians, all the Republicans and a number of Democrats, to do their bidding. 30,000 lobbyists swarm Capitol Hill. They are not there to protect the interests of the middle class. They are there to curry financial favors for the upper 1%. Their money floods TV with ads favoring their politicians and their interests. Money runs politics and the American government.

The American government is gridlocked and dysfunctional. Republican filibusters kill any legislation President Obama would like to get enacted to create jobs, forestall the student debt crisis, or help underwater home owners. So now he is trying to get something done by executive orders, but so far it's just frittering around the edges. He needs to make much bolder moves by executive order such as starting an infrastructure bank and reincarnating FDR's CCC and WPA. If the American divided government continues on its present path it will inevitably be replaced by a more functional political system such as a parliamentary system or some system that can't be gridlocked and obstructed to death. Republican intransigence is just making the need for a different system of government more obvious. And it's not about replacing the American government with socialism or communism. It's about replacing a democratic system that doesn't work or only works in the interests of the rich with another democratic system that works in the interests of the middle class. As far as an economic system, there is not a country in the world that has a purely socialistic or communistic system. Even China's economic system is a synthesis of communism and capitalism. So no one in his right mind is advocating replacing capitalism with pure socialism or pure communism. There are societies which have adopted the best features of a number of disparate systems to create societies that are democratic both politically and economically. Economic democracy, in which the middle class is predominant and not beholden to the big banks which sit at the beating heart of American capitalism, is indeed a real possibility. The Occupy Wall Street Movement will eventually have to demand radical changes in the American system in order even to accomplish its minimal goals. Bankruptcy protection for student loans, which was taken away by the Bankruptcy Act of 2005 will have to be reestablished, and that will be an arrow aimed at the heart of capitalism and in particular Wall Street. But what was changed six years ago can be changed back. It's not so set in stone. It's a fight worth fighting.

So the New Left radicals of the sixties were way ahead of their time in wanting a political and economic revolution. The vast middle class was too comfortable and well off to support such a major change. Cultural revolution was co-opted and amounted to nothing. Today, however, with more and more income and wealth flowing upward to the 1% leaving the 99% further and further in the dust, with a political system which is wholly owned by the wealthy, with poverty at record levels and more and more people falling out of the middle class, there is the possibility of a true political and economic revolution in the US which would take back democratic control in favor of the vast majority and create a fairer and ultimately more prosperous society.

Memo to Occupy! How to Keep the Movement Alive, Spread the Message and Change the World

by Derek Shearer, Professor of Diplomacy at Occidental College and former US Ambassador

from Huffington Post, October 12, 2011

Two cheers for Occupy!

Abrazos from California to all those willing to take action and make a statement against the economic status quo and politics as usual. Your spirit and activism are cheering to those of us from the 60s generation who have not given up on reform in America.

You already have your critics from the right-wing Republican leadership to middle-of-the road commentators like David Brooks. Ignore them. You are more important than you know. A few progressive critics have made an important point: activism without a vision or a program ultimately will die out or be disappointed. Economic inequality in the US is outrageous, and Wall Street interests do heavily influence both political parties -- but being right about the situation does not mean that it will change. Your movement needs content -- and it needs dialogue. Here are a few modest suggestions:

• Organize a national day of Popular Economics teach-ins, focused on economic inequality. Model it after Earth Day or the Vietnam Moratorium. Start on campuses, then take it to communities in civic centers, union halls, churches and schools. There are a number of progressive economists who would participate such as Joe Stiglitz and Paul Krugman (both Nobel Prize winning economists), James Galbraith, Barry Bluestone, Robert Reich, Martin Carnoy, Richard Parker, Richard Rothstein, Jeff Madrick -- and smart political scientists and journalists like Jacob Hacker, Michael Hirsh, John Judis, Caroline Heldman and Tom Edsall. They and many others would be happy to offer their analysis and expertise -- and they all speak economics in English.
• Show the documentary Inside Job by Charles Ferguson. Put up screens in public parks and in front of city halls and have free showings of the film as part of your demonstrations. Make use of the film for Teach-In events in the spring as part of a public outreach strategy.
• Circulate and discuss the New America Foundation's report, The Way Forward, reported on in the New York Times, Oct. 11. This is a serious, progressive plan to move the economy out of the doldrums. It is one example of an intellectual rallying cry for your movement, and an answer to the question: what are you for?
• Give activists copies of what I call The Little White Book -- the paperback Mis-Measuring Our Lives -- Why GDP Doesn't Add Up by Joseph Stiglitz, Amartya Sen, and Jean-Paul Fitoussi, all world class economists, who explain why traditional economic statistics don't do justice to reality and what is important in our lives. Wave copies of the book in front of Congress and the Treasury in Washington, DC, to make the point that economics should put people's lives at its foundation -- and that there are practical ways to for the government to do that.
• Actively support candidates like Elizabeth Warren in Massachusetts and Tammy Baldwin in Wisconsin who are running on economic reform platforms -- and support Barack Obama, but with qualifications (as I outlined in my Huffington Post piece, Thinking About Obama, 9/12/11). And run your own candidates in state and local elections just as the Tea Party did. Many of the more liberal members of Congress got their start by running as anti-war candidates or pro-environment candidates in the 60s and 70s.
• Make allies of artists, musicians, comedians, and the clergy
• Already many of your Occupy sites have included improvised music and art. Reach out to more musicians and artists for songs and posters about economic inequality and justice and the power of Wall Street. Engage performers to put on local concerts. Ask local clergy to reflect on religion's stance on economic inequality. Consider a nationally televised concert for Economic Equality on the Mall in Washington, DC. I'll bet that you could persuade Lady Gaga (she has endorsed Obama) to appear with Bob Dylan and Bruce Springsteen. No doubt Jon Stewart would be happy to be MC.

If you extend the life of your movement by adding content and reaching out to more people through Teach-ins and other forms of public dialogue, you will have a dramatic effect on the issues debated in the 2012 Presidential election. You already have had an impact, adding spine to Democrats in Congress and pushing the White House in a more progressive direction. You could also energize Obama to become a truly progressive President in his second term -- and you could build a movement which would live beyond and outside any one elected leader. At the very least, call on him now to appoint a Presidential commission on Inequality--its causes and solutions.

Feel free to check out copies of Economic Democracy, or A New Social Contract, books which I co-authored with Stanford economist Martin Carnoy, or even peruse the Clinton/Gore campaign platform, Putting People First, which I co-authored with Robert Reich and Ira Magaziner. You might find a few reform proposals which are still relevant.

It's a Fall Offensive to make my heart sing.

Book Review: After Capitalism

by Linda Greene, from The Bloomington Alternative

October 1, 2011

It’s easy to talk about socialism in the abstract, but hardly anyone tries to imagine and codify exactly what socialism in the United States could be like.

David Schweikart has a vision of what our society could be like after socialism replaces capitalism:

"[T]he Marxian vision of a new world is one in which the work I do — the work we all do — is both challenging and satisfying. Through work I develop my skills and talents, and have the pleasure of contributing to the well-being of others. The work I do involves my body as well as my mind, physical dexterity as well as intelligence — capacities that have been nurtured through education."

Schweikart’s book After Capitalism is an imaginative handbook for creating a socialist American society that succeeds capitalism. It describes in down-to-earth detail a replacement for capitalism that he calls "economic democracy” and how we can bring it about. The book is an entertaining and informative tour de force, with a lot of careful thought behind it. Only reading it can do justice to its complexity.

Schweikart lists four "fundamental problems” with capitalism: "staggering inequality, widespread unemployment, the intensification of work for those who remain employed, and intractable poverty, both domestic and global.”

Besides "its savage inequality,” capitalism is an irrational system: "How can it be,” Schweikart asks, "that the amazing technologies we keep developing tend to intensify, not lessen, the pace of work and make our jobs and lives less, not more, secure?”

***

Schweikart doesn’t envision the total overthrow of capitalism; he thinks it’s wise to incorporate the best qualities of capitalism into economic democracy. "A mass movement dedicated to establishing real as opposed to pseudo democracy is not going to trample on the genuine advances the previous order has achieved,” he says.

---

David Schweikart, After Capitalism, 2nd ed. Lanham, Md: Rowman & Littlefield Publishers Inc., 2011

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"Economic democracy abolishes private ownership of the means of production and wage labor, but retains the market,” Schweikark says. In other words, economic democracy is a socialist system with a competitive market economy.

Economic democracy, according to Schweikart, has "three basic features, the second of which it shares with capitalism:”

Worker self-management: Each productive enterprise is controlled democratically by its workers.

The market: These enterprises interact with one another and with consumers in an environment largely free of government price controls. Raw materials, instruments of production, and consumer goods all are bought and sold at prices largely determined by the forces of supply and demand.

Social control of investment: Funds for new investment are generated by a capital assets tax and are returned to the economy through a network of public investment banks.”

In economic democracy the means of production belong to the whole society collectively, and workers lease them from the society. "A flat rate tax is the source of revenue and is distributed to regions on a per capita basis,” Schweikart says. The workers receive a "nationally specified minimum per capita income” and the profits of the firms they work in. That income is economic democracy’s "equivalent to the minimum wage.” The government is the "employer of last resort.”

Whereas capitalist companies strive to maximize total profits, in economic democracy the idea is to maximize profits per worker, according to Schweikart. "Economic democracy abolishes private ownership of the means of production and wage labor, but retains the market." Schweikart defines a capitalist as someone "who owns enough productive assets that he can live comfortably on the income from those assets.” Economic democracy makes capitalists obsolete.

Economic democracy is a "genuinely democratic, fully employed, stable, ecologically sustainable society without overwork or poverty,” Schweikart says. As he points out, a healthy capitalism requires unemployment to keep wages down. Further, the threat of job loss is the "basic disciplinary mechanism of the system.”

In economic democracy, as in capitalism, Schweikart says, "stimulating consumer demand is in the immediate interest of every enterprise.” Unlike capitalism, however, economic democacy is not "under competitive pressure to produce, make a profit, reinvest and grow.”

"The transformation from capitalism to economic democracy is nonviolent and comes about as a result of a social movement inspired by deep humanistic ideals (which is the only way it will ever come about),” Schweikart asserts. "One of the ‘conditions,’ if there is to be a relatively peaceful transition from capitalism to socialism, is the coming to power of a Left political party with a radical agenda,” he says.

The labor movement, of course, plays a critical role in changing the economic system, but that’s not to say that other struggles aren’t important and interrelated. As to issues of race, sex, ecology, peace, gay and lesbian liberation, prisons and so forth, "[N]one of these issues in fact can be treated in isolation from the others, although various movements will doubtless have distinctive emphases.”

***

Schweikart doesn’t merely elaborate on the characteristics of economic democracy but offers a blueprint for getting there. "Economic democracy abolishes private ownership of the means of production and wage labor, but retains the market." "Unlike capitalism, however, economic democacy is not 'under competitive pressure to produce, make a profit, reinvest and grow.'"

He suggests ways to move toward economic democracy by creating a more "benign form” of capitalism. Schweikart offers three scenarios for moving peacefully from capitalism to economic democracy, depending in part on the status of the economic system at the time.

After Capitalism leaves questions about specifics: What would happen to the military-industrial system under economic democracy? What would happen to Big Pharma? The health insurance industry? It’s a mark of a good book, however, that it leaves the reader eager to delve further into issues the book focuses on.

Democracy, Schweikart says, "is a system in which a universal electorate is reasonably well informed, active, and unobstructed by a privileged minority class.”

After Capitalism is a stimulating guidebook for those who want to work toward a genuine democracy in the United States.

Linda Greene can be reached at lgreene@bloomington.in.us

 

The Declaration of Economic Democracy

by Keith Harrington, from Huffington Post, October 3, 2011

A video from day 14 of the Occupy Wall Street protests shows an impressively huge crowd flowing through the arches of the NYPD headquarters in New York City. The crowd is chanting: "The whole world is watching, the whole world is watching!" While that may not be the case yet, we're getting there. And that brings up a pretty big problem for the protesters and the future of the movement: If the whole world does end up watching, what exactly will they be watching?

Like lots of leftists, I'm inspired by this movement, and elated that it's happening. But I'm deeply worried it could end up falling upon the sword of its own self-imposed ambiguity. Nothing sums up that ambiguity better than a quote from a recent article on the protests:

When [a protester was] asked how long he was planning to be there [he replied]... "Until change is made to the financial structure."

What that change might look like, no one can say for sure.

Here's what the occupiers are getting absolutely right: protesting and gaining attention for it. The world needs to know that there are those among us who are ready to take action, and not stand by while a ruthless, soulless elite hijacks our civilization and flies it into the ground.

But besides declaring "we're not going to take it" -- which is certainly an important thing -- the only other declaration the protesters have made is "we're angry, we're fed up, and we believe in a better world." And that's what they're doing wrong. Public outrage with the status quo is not news to anyone.

What the world needs to hear is an answer to the questions: "Where do we go from here? Is there a truly workable alternative to capitalism? How do we solve the myriad crises of capitalism?"

I understand there is a natural allergy among the protesters to taking this awesome amorphous mass of people power they've assembled and solidifying it around a core set of leaders or defined principles. And indeed, there are plenty of good reasons to avoid entrusting the voice and vision of the movement to a spokesperson. This is a people's movement; it's not a search for a messiah of hope to pull us out of dark times. It's about learning to pull ourselves out.

But while you don't need a spokesperson, that doesn't mean you shouldn't have "spokes-principles" -- a core set of ideas or answers to the crises of the Wall-Street Empire that speak for you, that communicate who you are to a public that's tuning in more and more every day.

Without that set of spokes-principles, the public may have sympathy for the protesters' motives, but it will ultimately fear their objectives. And the organizers will have done the world a great disservice by earning a big public spotlight and failing to shine it on answers that the world urgently needs to know and start talking about if we're going to have a fighting chance of saving our civilization.

The right spokes-principles can encompass all of the fluid, diverse, populist beauty and verve of the protests and channel it into a vision that the broader public can see itself and its aspirations reflected in.

If it's about anything, Occupy Wall Street is about challenging the economic imperialism of Wall Street. Naturally then, the movement's spokes-principles should be the principles of economic democracy as roughly defined here:

1. People over profit: An economic democracy is an economy that subordinates profit to people, not the other way around.
2. Stakeholders over shareholders: An economic democracy is an economic system in which the voices, rights, and interests of all economic stakeholders -- including employees, stockholders, communities, ecosystems, other species and future generations -- are represented. Unlike our current economy where shareholders are given primacy, in an economic democracy no one stakeholder is granted a disproportionate degree of power and privilege.
3. Better not bigger: In order to reorient the economy towards people and all stakeholders, we have to release it from the captivity of profit. In an economy geared towards GDP growth, the bottom line is the bottom line, and protecting it means suppressing wages, slashing payrolls, passing on costs to other people, other places, and other times. Most importantly, our economy has outgrown the physical limits of the planet, and saving civilization means stopping growth. A democratic economy should be a steady-state economy where existing wealth is distributed fairly, and where economic health is measured by true indicators of social welfare rather than the blunt and archaic tool of GDP. The Center for the Advancement of the Steady State Economy is a useful resource for steady-state solutions.
4. Main Street not Wall Street : The design of our financial system undermines true markets and productive community-based enterprises in favor of reckless speculation. It is designed to suck wealth away from communities and towards the corporate elite. A good blueprint here is the New Economy Working Group's report How to Liberate America from Wall Street Rule.
5. One employee, one vote: An economic democracy is an economy where companies are built around the concept of one worker, one vote. In an economic democracy a company is a community of employees, where the employees, as full citizens of that community and the true source of company profit, decide how to invest that profit in the community. In this way, an economic democracy is distinct from both capitalism and socialism -- both variations of economic oligarchy -- where private boards on the one hand and public bureaucrats on the other decide how the profits workers generate are disposed of.
6. Economic Constitutionalism: In the United States Constitution the framers properly defined the powers and limits to the powers of the powerful institutions that govern our society. In an age where corporations have become as powerful as any institution of government, and have amassed undue influence over the policies of those institutions, their powers need to be defined and constitutionally limited just like any institution of government.

This Declaration of Economic Democracy is by no means an exhaustive list. But it is an endlessly expansive one. One that is broad enough in its framework to incorporate and synthesize the wide diversity of dreams, grievances, demands and aspirations of the many people involved in the protests. It's one that can help the broader public understand and identify with the movement, and help the movement build an identity that's powerful enough to bring down the Wall and build a better world.

Food Bank Asks People to 'Step Up'

A model that looks a lot like Costco except the food and clothing are virtually free! Just $50 a month and some labor participation in the warehouse, and they offer free classes too!. These folks in Portland deserve a lot of credit. Here's their website. Following is a news clip that NBC ran on them.

Visit msnbc.com for breaking news, world news, and news about the economy

 

CAPITALISM’S CREATIVE DESTRUCTION OF A CIVIL SOCIETY … The Rights of Money vs. Living Persons

MARGINALIZING WORKERS, WAGES, COMMUNITIES,   ENVIRONMENTAL CONCERNS WHILE CONCENTRATING  INCOME  AND WEALTH IN THE HANDS OF THE FEW

By: Frank Thomas

At a time when the global economy is separating ever larger international firms from public accountability and the public’s interests; at a time when economic globalization is systematically creating a sea of poverty and race to the bottom for middle-class Americans; at a time when corporations are bidding down wages and taxes under the threat of moving elsewhere, outsourcing and automating away jobs at will, closing down plants and trashing any responsibilities to productive, loyal employees and communities; at a time when the Paul Ryans are orchestrating the coup de grãce of unions, the sell-off of government assets, the elimination of jobs for teachers, firemen, policemen, and social workers – the main unresolved questions facing all Americans are less about political ideologies than about life’s values vs. financial values, about  the concentration of economic power in mega global corporations, now society’s most powerful citizens … whose sole mission is maximizing  shareholder wealth and  often, as Robert Hinkley has noted, “at the expense of the environment, human rights, the communities in which they operate, or the dignity of their employees.”

As far back as 1996, David Korten of the Harvard Business School with unusual foresight gave his verdict on the then existing (and now populist Tea Party) libertarian doctrinaire harangue that an unregulated free-market economy equates with democracy. His verdict on what the free market and the unfettered self-interests of multinational corporations are doing was smack on the point, “We are suffering from a threefold human crisis: the deepening of poverty, social disintegration, and environmental destruction.”

 

Following  excerpts are from his writings and 1996 essay entitled,  “The Rights of Money versus The Rights of Living Persons”   His observations have an unnerving relevance to the Fiscal-Economic QUAGMIRE we are in today after 30 years of laissez-faire capitalism (Parts I, II and III of my writing on this subject) … which in its worst form is taking our nation toward plutocracy and away from egalitarianism and democracy.  In the spirit of John Lawrence’ s blog to  explore deeply – with eyes and mind open – our  nation’s structural problems and solutions to same, here is David Korten’s  provocative, prescient plea for a reawakened civil society and for reclaiming the economic spaces in our society in favor of the small and the locally accountable. Written 15 years ago, Korten’s out-of-the-box thinking reminds me of some words once said by LeRoy Greason, former President of my Alma Mater, Bowdoin College in Maine, who just passed away:

“We are seldom absolutely right. Even when most alive and living beyond ourselves, we had best walk humbly with our gods.” 

 “THE RIGHTS OF MONEY VERSUS THE RIGHTS OF LIVING PERSONS,”  by David Korten, November 1996

Proponents of market liberalism claim the free market is the essential foundation of political democracy – a guarantor of the rights of people against the abuse of state power. They neglect, however, the important ways in which the unfettered market tends to function as a profoundly undemocratic institution.Political democracy vests rights in the living person, one person, one vote. By contrast, the market recognizes only money – one dollar, one vote. It gives no voice to the penniless (or those hit by bad times), and when not balanced by constraining political forces can become an instrument of oppression by which the wealthy monopolize society’s resources, leaving the less fortunate without land, jobs, technology, (training) or other means of livelihood. Only when wealth is equally (I prefer word, equitably) distributed can the market be considered democratic in any meaningful sense.                                        

World markets are now dominated by global-mega corporations – among the most undemocratic and unaccountable of human institutions. By its nature, the corporation creates a legal concentration of power (and highly paid lobbyist network) while shielding those who wield that power from accountability for the consequences of its use. Many mega-corporations command more economic power (including advertising budgets that rival education budgets) than do the majority of states, and they dominate the political processes of nearly all states. Their growing unaccountable power poses a serious threat to the basic economic and political rights of people everywhere.

The time has come to re-examine some of our most basic assumptions about the nature of democracy, human rights, and the institution of the corporation. The survival of our political freedoms depends on recognizing that economic rights are an essential foundation of political democracy. Consider, for example, two of the most fundamental of all human rights – the right to a means of living (literally the right to live) and the right to participate in making the decisions that affect our lives.

The Right of Access to a Means of living:  The earth’s (rapidly declining) life-sustaining resources are a common heritage of all life. All people are born with an inalienable right to a sufficient share of these resources to create a secure and fulfilling life for themselves and their families. They have a corresponding responsibility to share and steward these resources to the benefit of all persons and other living things.

Since the most basic requirements of living depend on the products of the earth, there is a fundamental – though often neglected – connection between livelihood rights and property rights. English philosopher John Locke set forth a moral justification for property rights in The Second Treatise of Government published in 1689. Locke argued that where unused land is abundant, a man has a right to appropriate for his private and exclusive use the land which he tills to produce for his basic subsistence needs. It is through the application of his labor to make the land produce that he acquires this private right. Locke stressed that given the condition of abundance, such appropriation in no way deprived others of similar opportunity. Locke was clear that the rightful claim to a property right followed only from the application of one’s personal labor. Furthermore, this claim legitimately extended only to such property as required to meet one’s material needs – suggesting that a property is virtually synonymous with a livelihood right.

Locke, however, went beyond this relatively unassailable moral argument to seek justification for actions of those who accumulate property far beyond their personal needs. Presuming that property rights are most likely to be accumulated by clever and industrious persons who seek to realize their full productive potential, Locke argued that the result of this accumulation would be to maximize the wealth of society and thereby the well-being of all. It is essentially the same argument that economists make to this day in defense of inequality based on the assumption that the surpluses created through investments of the wealthy in a growing economy will be widely distributed through society in the form of high-paying jobs and well-funded public services (the  lying “trickle-down” economic con-game played on ordinary Americans the last 30 years).

It is noteworthy that the moral defense of inequality in Locke’s thesis and the work of (many) modern economists rests on two inadequately examined assumptions :  (1) natural wealth is abundant relative to need; and (2)  the benefits of an overall increase in economic activity are widely shared even when wealth is distributed unequally.

Unfortunately, on a global basis, for several billion people who find their livelihoods increasingly at risk, neither premise is valid in our present world. To the contrary, the poor are being excluded from access to land, technology is eliminating jobs quicker than it is creating new ones, and public services are being systematically dismantled – all to increase the riches of those whose wealth already exceeds any conceivable need. In short, property rights are being used routinely to justify the exclusion of those without property from access to a decent means of living.

As suggested by Locke’s argument, the rightful purpose of a property right is to protect a person’s right of access to a means of livelihood or to secure for the individual a just reward for entrepreneurial initiatives that create a better life for all. A property right loses its legitimacy when its exercise by those who have more than they need denies others of their rightful means of a livelihood or otherwise diminishes their opportunities for a full and meaningful life. The livelihood rights of the many come before the property rights of the few. Recognition in our laws and public culture of this limitation of property rights is fundamental to the market’s socially efficient function.

The Right to Participate in Decisions That Affect One’s Life and Community :  Born with reason, conscience, and the capacity for intelligent choice, all people have the inalienable right – indeed the obligation – to use these gifts to participate actively in the decisions that affect their lives and communities.

In the economic realm, the exercise of the right of participation extends far beyond choosing among those products the market finds it profitable to offer us. It includes the right to participate in setting standards and priorities for the economic affairs of our communities, the uses to which our local resources will be put, and the conditions under which we will engage in external trade and invite the participation of others in our domestic economies.

This right is under attack by the world’s mega-corporations that seek to establish their own right to move across the planet without restriction to extract resources; exploit unorganized and unprotected labor; evade taxes and environmental regulations, and health safety; monopolize indigenous knowledge and genetic materials without regard to the human and environmental consequences. Their weapons of choice are international (and national) agreements on trade and investment that take precedence over the rules and regulations established by people and their  governments to govern local commerce.

Negotiated in secret and implemented without full public discussion and democratic assent, these agreements are systematically eroding the democratic rights of people to regulate their own local and national economies, and to set rules for commerce consistent with their own values and judgments regarding their personal and community needs. The interests of money and the fictitious legal persona of the corporation are thus placed ahead of the interests of living persons and their communities – all in the name of market freedom.

An unregulated market invariably encourages the externalization of costs because the resulting public costs (resource giveaways, low wage labor, tax breaks, lax environmental regulations) become private gains. This happens, for example, when a chemical corporation dumps wastes (or a natural gas driller pumps huge quantities of chemicals into the ground destroying water supplies) without adequate treatment, thus passing the resulting costs of air, water, and soil pollution to the community in the form of health care costs, genetic deformities, lost working days, a need to buy bottled water, and the cost of cleaning up the contamination.

It is useful to recall that Adam Smith, the intellectual patron saint of free-marketeers, favored a market comprised exclusively of small buyers and sellers. Smith considered the corporation to be an instrument for monopolizing markets and saw no place for such institutions in a properly functioning competitive market economy. By his reckoning, the corporation is an anti-market institution. Smith opposed any form of economic concentration and would be outraged by claims that he advocates that the market turns unrestrained greed into socially optimal outcomes. Smith’s focus was on self-interest of small business entrepreneurs, small farmers, and artisans trying to get the best price for their products to provide for themselves and their families. For him, greed is a high-paid corporate executive firing 10,000 employees and then rewarding himself with a multi-million dollar bonus for having saved the company so much money. In short, Smith believed the efficient market is composed of small, owner-managed enterprises located in the communities where the owners reside (my note: This is precisely the democratic modus operandi of the exciting trend to community, regional, state-wide, worker-manager owned cooperatives).

A corporation comes into being only through the public act of the government that issues the corporate charter. The creation of a corporation is thus a public, not a private, act. And its only justification is to serve a public purpose. Whatever privileges or authority the corporation may enjoy are derived from the authority of government, which is itself derived from the will of the people. It therefore follows that the corporation is rightfully subject to the will of the people and to whatever laws people freely choose to establish governing its function.

It is the proper function of the corporation to implement the laws that people establish through their governments, not to participate in their creation. Indeed, it is essential to the integrity of democratic governance that corporations be barred from political participation of any kind on the theory that political rights reside in real people. (my note: This position by Korten in 1996 is a far cry from present-day reality reflected in Supreme Court’s recent one vote majority decision in Citizens United case ruling that spending money to influence elections by corporations is a form of constitutionally protected free speech under the 1^st Amendment).

The idea that corporations should enjoy the rights of flesh and blood persons – including the right of free speech – grew out of the U.S. Supreme Court decision in 1886 that designated corporations as legal persons entitled to all the rights and protections afforded by the Bill of Rights of the U.S. Constitution. Significantly, the U.S. Constitution makes no reference to corporations. It was a decision without legal or moral foundation made by a corrupted court system. (my note: By the beginning of the 20^th century, corporations had become sovereign as persons under the law and had turned people into consumers, or workers, or whatever the corporation of the moment chose to define humans as).

Markets are important institutions and they have an essential place in any democratic society – functioning within a framework of democratically determined rules and public safeguards. There is nothing democratic, however, about an unregulated market that responds exclusively to the needs of the wealthy and subordinates human rights and interests. In the end, only an active and politically engaged citizenry can assure the protection of our human rights from the arbitrary use of power by either states or corporations (my note: For example, the recent moves by some states to privatize publically-owned government assets and eliminate collective bargaining rights of unions).

Institutional power and legitimacy flow from the will of the people, and when any institution usurps our natural rights, it is the right of the people to restructure, replace, or eliminate, that institution.

SUMMARY

At a time when abundant resources critical to all life are being rapidly depleted and falling commodity prices have become a thing of the past, we are being warned that our traditional, desperate free-for-all  focus on 4% or higher GDP growth rates is no longer sustainable. This requires a paradigm shift to policies aimed at achieving the conditions where market-driven capitalism can function in a more equitable democratic fashion in the public interest. This also means we cannot sustainably consume at 70% of GDP with zero Savings, explosively high Trade Deficits and related consumer and federal Debt … a formula we’ve perfected that will inevitably bring  the next crisis of all crises.

We need to fundamentally rethink our social-economic model … as someone said “do a little fate-of-the world scale thinking.” But I’m afraid we will continue to tinker with things broken in our unstable social-economic system. We seem Hell Bent on remaining captive to divisive ideology where the best and brightest ideas are sacrificed to inflexible dogma and the greedy pursuit of political power.                                            

I support David Korten’s thesis that corporations owe as much to the public as they do to shareholders. They owe something to workers,  communities and the natural environment in which they operate.  This calls for a far more civil society founded upon the values of equity, cooperation, openness, active citizen participation, consensus-oriented decision making and responsibility to the whole society.

In a 2000 essay, David Korten further wisely contrasted the values/benefits inherent in an uncivil purely capitalistic society where the sole defining purpose is making money and people are treated as expendible commodities -- vs. a more humanistic civil society where inclusivity, equity, shared sacrifice and shared gain are the dominate cultural values: 

“We might thus expect the economy to be comprised primarily of local enterprises and to vest in each individual a share in the ownership of the productive assets on which their livelihood depends (i.e., cooperatives, small enterprises). The civil society is radically self-organizing and predominately cooperative in the manner of all healthy living systems, and seeks to maximize the opportunity for each individual to fully and freely develop and express their creative potential in service to the whole life. (my note: Actually this was the American Dream that has become a middle-class Nightmare). Thus, a civil society differs on every dimension from the capitalist economy in which we currently live.

In the pure capitalist economy, money is the defining value and the primary mediator of relationships among persons and institutions. The whole of public life is dominated by national and global financial markets (and shareholder interests) that value life only for its liquidation price. The wages of working people are suppressed to increase the returns to those elite few who already command vast financial holdings.

Dominant corporations buy politicians and control public discourse to create a grossly distorted one dollar, one vote democracy. Spiritually impoverished and pressed into a struggle for survival, those deprived of both political voice and a (decent) adequate means of livelihood become increasingly indebted to the system that demands they devote ever more of their life energies to its imperatives. Ideals of equity are out the window and individual freedom becomes largely illusory.”

Equal Energy For All: Can We Democratize the Grid?

Published on Tuesday, August 30, 2011 by Shareable

by Beth Buczynski

The Institute for Local Self-Reliance (ILSR) recently published an e-book (PDF) advocating complete democratization of the electric grid by abandoning a system that is dominated by large, centralized utilities for a 21st century grid made of independently-owned and widely-dispersed renewable energy generators.

A democratized system for creating and distributing electric power ensures that the economic benefits of electricity generation are as widely dispersed as the ownership.

Why Now?

As long as communities still rely on centralized, fossil-fuel powered energy plants to generate power, democratization of the electrical grid will remain a dream. But the past 10 years have seen an exponential growth in the adoption of renewable energy alternatives, namely home solar and wind power, which presents an unprecedented opportunity for transformation.

As the technology and installation of these systems continues to drop in price, more private property owners are able to take advantage of their pollution and money-saving benefits. This increased accessibility makes it possible to turn any rooftop or open field into a mini-power plant. It is this level playing field that makes the dream of a locally-owned and managed electrical grid into a reality.

Examples of Democratic Energy

The key to democratizing the electrical grid is convincing municipal governments that distributed power generation is every bit as robust as centralized distribution. One way to visualize differences between a distributed and centralized grid is to think about the way that the internet is made up of files that live on millions of servers and computers around the world instead of one central server.

Power companies claim that home power plants creating more than 5-10 percent of local grid electricity would cause major technical problems, but in communities around the world, this has not proven to be true.

Germany has installed over 10,000 MW of distributed solar photovoltaics (PV) – mostly on rooftops – in the past two years and renewable energy now constitutes 17 percent of overall electricity generation. Half of Germany's wind power and three-quarters of its solar is locally owned.

The city of Kona, Hawaii, uses a 700 kilowatt (kW) solar array provides 35 percent of the capacity of the local distribution feeder.  In Las Vegas, 10 MW of commercial solar PV on a distribution line provides 50 percent of capacity (and up to 100 percent during periods of low load).

California plans to add 12,000 MW of distributed electricity power by 2020, and 16 additional states have added a distributed generation mandate on top of their renewable electricity requirements.

“The battle for the future control and ownership of our energy system is on,” ILSR senior researcher Farrell maintains. “Utilities are fighting back by encouraging policy makers to put up roadblocks to a democratic energy future and by belittling renewable energy’s potential. The major barriers are not technical, but political.”

Creating a Shareable Grid

Farrell and other renewable energy advocates say that policy changes are necessary to overcome barriers to a democratic grid.

Those barriers include federal regulatory agencies that provide significant financial incentives for centralized energy projects and new high-voltage transmission; incentives that are unavailable to distributed electricity generation. In fact, many federal and state energy incentives discriminate against locally owned distributed energy generation in favor of centralized, absentee owned power plants.

But bureaucracy, industry lobbyists, and economic woes make it unlikely that we’ll see these barriers removed in a timely fashion. So encouraging a distributed grid may fall to entrepreneurs and community organizers instead.

In Canada, residents of Ontario can invest in local solar power projects by buying SolarShare bonds. The $1,000 bond provides a 5 percent annual return over five years and the money is invested in solar power projects across the province.

Investors also become voting members of the SolarShare cooperative, a project of the TREC Renewable Energy Cooperative that both develops community-owned renewable energy projects and educates Ontarians about renewable energy, energy conservation and the community power model.  

In a similar effort, U.S.-based Solar Mosaic brings the popular crowdfunding technique to the clean tech industry by developing a way for communities to create their own renewable energy without going into debt.

Solar Mosaic members increase solar financing options in their neighborhood by purchasing "tiles" a $100 share of a community solar project. Participating property owners get to enjoy the low cost of clean energy without huge up-front costs or high interest rates from banks. Individual investors are paid back over time from the revenue the Tile generates while earning some fun goodies along the way.

Take Action

We may not be able to convince Congress that it’s time to throw the full weight of the U.S. economy behind the renewable energy industry and the formation of a democratic, distributed electrical grid, but it is possible to advocate important change in your own community.

Consider contacting your state representatives about the need for CLEAN Contracts (i.e. feed-in tariffs) and regulations that would require local utilities to share data about the current distribution network, allowing distributed generators to locate the best opportunities for developing new projects.

Also, look for opportunities to educate local officials about passing solar access laws that grant everyone the right to capture sunshine on their property for solar electricity and by changing building codes to encourage or require more on-site power generation.

Images used under CC license from ILSR's New Rules Project

Beth Buczynski is a freelance writer and editor living in the Rocky Mountain West. Stay in touch with Beth on Twitter as @ecosphericblog and @GoneCoworking

more Beth Buczynski

A Cooperative Economy: The Time Is Now

Published on Friday, August 26, 2011 by Green for All Blog

by Carmen Llanes

I am impressed by the amount of knowledge in our communities. There are countless skills among those who are currently unemployed and underemployed and those who have been laid off during this recession.

In more and more businesses, the tasks and responsibilities are being piled up on smaller staffs and overworked employees, many of whom find themselves increasingly fed up with top-down management that doesn't appreciate them.

In fact, much of our recession can be attributed to the lack of input from workers and small businesses. Our economy has been at the mercy of too few hands over the last several decades. Now many folks are using whatever skill they have to get by in a world with fewer local jobs and many, many underemployed people.

Why should so much talent go to waste?

This is a perfect time for a cooperative economy. Considering the disproportionate struggles faced by women and people of color during a recession, the cooperative economy presents an opportunity for all people, to leverage more power by making themselves the bosses, sharing ownership, and taking a collective approach to good management. Many people have already been let down by a top-down corporate or non-profit model in a recession-ridden society. Now is the time to rebuild the system, and build a society founded on justice, dignity, and respect for people and the planet.

Finding Opportunity in Crisis: Inspiration From the Road Ahead

I was really inspired by the power of community in supporting local economies through a recession when I first visited Detroit in 2008 and again in 2010 for the US Social Forum. There is much more than a depressed economy in Detroit. There are pockets of vibrant community. There is food growing. There are queer-owned, women-owned, cooperatively run businesses getting together. And while there may be great stretches of empty blocks, between them, there are farmers markets, and neighbors who talk to each other. There are older communities and advocates working alongside young and aspiring activists and entrepreneurs. This is what I think of when I hear Detroiters refer to "opportunity in crisis."

Austin is doing far better, financially at least, than Detroit. But when it comes to competition in a cutthroat time of depressed profit and wages, women, immigrants, and people of color are getting the raw end of the deal left and right. Many in the city feel underemployment, under appreciation or both.

In this sense we are primed for an alternative. And the good news is, while any big, social or economic grassroots movement is a "marathon", so to speak, we are witnessing big change over the last couple of years. Austin has already birthed more than one worker-owned cooperative business in recent years. Black Star Co-Op Pub & Brewery opened doors in the summer of 2010, with a large banner outside that reads "Community-Owned Beer." A consumer cooperative (owned by the community it serves) and also a worker-coop (run by its employees), Black Star is attracting a full house of business seven days a week. And the byproducts their brewery produces? They make great dog biscuits! Sold at the pub and at farmers markets and stores around town—green and delicious products for people and their pets.

Red Rabbit Cooperative BakeryRed Rabbit Cooperative Bakery has launched this year and is making donuts with local and organic ingredients. Their donuts also happen to be vegan, but the target audience includes meat and dairy eaters, since anyone can enjoy a good donut. The founding women of Red Rabbit used to work at a major grocery store chain bakery. They decided to take their skill set elsewhere, and make decisions collectively, so as to be truly appreciated as workers and owners. They started using all-natural, vegan, locally and organically derived ingredients, and using sustainable, environmentally friendly practices to create delicious donuts now being distributed all around town. Their demand is growing, and they are in the process of opening their own storefront, a green, worker-owned bakeshop.

One of the most beautiful things about building the movement for worker-owned businesses is that cooperatives, on principle, work to support each other. While Red Rabbit started small, with donuts, they are expanding to breads and other goods, and now sell sandwich loaves to Black Star Co-op Pub & Brewery as the Pub's menu expands. Black Star also collaborates with Third Coast Workers for Cooperation, an organization helping to develop green, worker-owned business and educating the community about the cooperative movement. Black Star helps the organization out in fundraising initiatives, so that TCWC can continue to offer free and low-cost assistance to emerging worker coops. All three organizations strive to make every element of the work green, local, and sustainable. And economically, a local support system offers more sustainability than the disconnected, global, corporate alternative. Much like the cradle-to-cradle ideology protects our natural resources, keeping our money in a cyclical change of hands that stays in our community and promotes justice and sustainability, is the way we will change the world, one town at a time.

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The most exciting thing about discussing this work right now, is that more folks are realizing that this model can apply to their situations. Again, skilled people, underemployed, who know these businesses, are the perfect candidates to get together and organize their collective skills into local, economic power. It could be a valet company, a restaurant, a bike rental business, a car body shop, a construction team, insulation team, house-cleaning cooperative. The possibilities are endless, and in a town like Austin where the service industry employs a huge sector of our population, the possibilities stand to be lucrative.

Without getting too carried away, we must dare to dream up a new reality. Reviewing the disappointments of national news can only get us so far, but if we can immerse ourselves into transforming local business, then we can address movement building from a much more inclusive and meaningful place. When our communities are empowered by belonging to a movement that they see is growing with success, then we will be even more ready to plunge into the national dialogue. But this time, we will be empowered by our own local successes.

Carmen Llanes is a Green For All Fellow Candidate.

What Financial Crises Teach Us About Economic Democracy

by Ellen Russell, from rabble.ca, August 15, 2011

The left can learn an important lesson from the financial upheavals that are becoming routine these days. As elites scramble to confront each successive crisis, they prove by example that which they consistently deny: there is an alternative to the dictates of the free market.

One of the most politically disempowering aspects of neoliberal capitalism is the mantra that we were powerless to resist economic forces. We are constantly told that there is no help for our economic complaints. The free market created the situation, and market forces reign supreme.

In particular, governments are portrayed as powerless to override the dictates of the market. Politicians supposedly have no power to resist the punishing discipline of the invisible hand. Sorry for your troubles, have a nice day.

The lesson we are meant to learn from this is that the left should just sit on their hands when it comes to challenging economic arrangements. It isn't a question of political organizing, or having a cracker-jack argument, or proposing a better way to organize an economy. Whatever critiques or alternatives the left presents are not taken seriously, since resisting the market is futile.

We have paid a heavy price for the prevalence of this "nothing-can-be-doneism". Why go out in the streets, why attend a political gathering, why vote the so-and-sos out of power if nothing can change? Why even articulate aspirations for a different kind of economy if no alternatives are possible?

This current financial instability teaches us a valuable lesson. When capitalism is in crisis mode, this position of "hands off market forces" is immediately thrown out the window. If a crisis looms that threatens elites, any number of new arrangements are negotiated in very short order.

I need hardly point out that this is hypocritical: when regular folks are losing their jobs and government services, and much of the third world is circling the drain (economically speaking), then we are supposed to remain silent in deference to market forces. When elites are threatened by market forces, suddenly they believe that political will should govern market forces. As German Chancellor Angela Merkel said during the first Greek debt crisis last year, "We must re-establish the primacy of politics over the markets."

Consider the Tea Partiers' efforts to play chicken with American public finances. Most corporate leaders -- and many reasonable politicians -- grasped that this silly debt ceiling business was threatening to unleash incalculable punishment as market forces reacted to the possiblity of a default by the U.S. on its debt obligations. Corporate bigwigs (who are tight with the Republicans and usually are reluctant to take on Tea Party zealots publically) had had enough of rattled financial markets as the deadline was approaching. Phone calls were made. A letter went out from Wall Street banks demanding some sort of solution. After a little more grandstanding, the politicians cobbled together something.

Of course there is a mind-blowing double standard at play when elites take action to forestall market punishment. Supremacy of the market is good enough for the rest of us, but they never take this pabulum seriously if it means that they should sacrifice their wellbeing for this principle. They are quite clear that arrangements can be changed to safeguard their interests -- regardless of what outcome might be produced by market forces.

But beyond this obvious hypocrisy, there is a more profound political lesson. Elites know that something actually CAN be done.

Take the most recent financial crisis concerning Greek debt, for example. If Greece's debt was considered to be in freefall, that would trigger a whole series of market reactions that might have done incalculable damage to the banks and other financial market players that had lent money (wisely or not) to the more heavily indebted European countries. Markets would have severely punished debt holders and other financial market participants, and ultimately the carnage would have extended to other European countries and the global economy more generally.

Did the European Union issue a press release saying that unfortunately the market was going to have to take its course, and (by the way) you financial market hotshots may wish to huddle in the nearest bomb shelters for the duration? Not on your life. The major players got together and started negotiating. People compromised. New arrangements were discussed. Suddenly all kinds of innovative thinking was possible. In other words, they showed us that a group of people can get together and do things differently, regardless of what market discipline might require.

This is not to say that the Greek debt problem is solved or that money lenders will not feel pain. There are still tough times ahead. But they showed us that people can get together to manage the tough times.

We have to recognize free market ideology for what it is: a tool to persuade us that we cannot stand up for what we want. The mantra that the market must govern all of economic life has encouraged us to believe that democratically determined priorities have no relevance in economic matters. But if collective decision making can trump market forces during a crisis, then the cat is out of the bag: economic democracy is possible.

Capitalist systems have consistently maintained that democracy can only exist in the political sphere. Because markets rule the economic sphere. Economic democracy is so radical that we are usually not permitted to see the extent to which economic affairs are orchestrated by some very human influences.

We've seen elites gather to problem solve in a crisis, in flagrant disregard of their purported obedience to market forces. When the doo-doo hits the fan, we catch glimpses that it is possible for society to rule markets.

Economist Ellen Russell is a research associate with the Canadian Centre of Policy Alternatives. Her column comes out monthly in rabble.ca.

The US Does Not Need Workers; It Needs Consumers

by John Lawrence

Why is unemployment so high? Simply put it's because corporations and businesses can produce a surfeit of consumer goods without the need for additional human labor. Since 125,000 new faces enter the work force every month, there should be new jobs created for these people if they are to make a living since most people, but not all, make their living through work. Some, however, the rentier class, make their living from stocks, rent, dividends and interest, but not very many. But the American and even the world - since we're in a global economy - production machine doesn't need additional workers; it needs more consumers. Everything can be produced with a diminishing number of workers. Why? Consider automation, robotization, computerization. In short today machines do most of the work. You only have to watch one of those shows on the Science Channel to appreciate this: "How Stuff is Made." You see that most industrial processes have been completely automated.

Back in the old days production was very labor intensive. Stuff was made by hand. Machines were very primitive or non-existent depending how far you go back. The land was tilled and crops planted by hand whereas today huge tractors and automated farm machinery mean that one man can do the work that was done by hundreds a hundred years ago. What little labor is needed in today's world can easily be outsourced to wherever labor is cheapest. We have gone from an economy which was very labor intensive, one that required a lot of hands for the production of goods, to one that requires very little labor to keep the machines and robots humming. And the process of mechanizing and automating production processes continues. Robots are getting ever smarter.

So where does that leave the average person who is trying to make a living? Not in a very good position with the current economic model. It essentially leaves him or her in the position of a serf begging for a job and competing with thousands of others for work. The serfs were even better off because at least their labor was needed. Today's industrial reserve army is not really needed by the capitalists and corporatists who control the economy. That means two things: 1) the value of labor is depreciated because so much of it is available and unneeded and 2) there is a growing percentage of the population that must either be sustained by some form of welfare or unemployment compensation or cast to the wolves to beg, borrow and steal.

What is needed is a new economic paradigm which recognizes that very little labor is needed and machines can do most of the work. What would that new economic model look like? There would need to be a much larger leisure class than now exists. The wealthy are very few in number as a percentage of the population as a whole. They don't have to work because they have a steady stream of income which represents a return on their assets. Ownership of real estate produces a return in the form of rent. Ownership of stock produces a return in the form of dividends. Interest income is at an all time low because interest rates are so low, but when they go up again, people will be able to make a living if they have enough money in money market, CD and savings accounts. Unfortunately the distribution of wealth is way out of whack. Those in a position of being able to make a living off of so-called unearned income are very few. Those in the position that their only recourse is to make a living from their labor are the vast majority. What is needed is to turn this situation around so that the vast majority can make a living off of return on assets and only a small minority, whose labor is actually necessary for the functioning of society, will be necessary to make money from work. Or the work could be spread around so that everyone might work a few hours a week and make their living mainly on the return on assets or acquired wealth and a small portion of their living off their labor.

This is effectively what advanced societies (not including the US) have done. A large portion of the wealth of the society is held publicly. This does not preclude the private acquisition of wealth, but insures that the distribution of wealth is not as skewed as it is in the US. This makes it possible for the less fortunate, the less able and the unemployed to make a living as a return on public wealth. The fortunate do not need public assistance, but the unfortunate do. Public wealth can provide for free health care, free education and free unemployment compensation among other things. By taxing the rich, money is redistributed to the poor so that the processes of production and consumption can continue. Or public wealth in the form of natural resources can be sold and the profits divided evenly among the people. Many countries use their oil assets as a form of public wealth. Otherwise, all the money ends up in the hands of the wealthy and production stops because the vast majority of people have no money to consume. When money is redistributed or recycled from rich to poor, the production and consumption processes can hum merrily along. So taking money from the rich in the form of taxation and redistributing it to the poor is very important for the healthy functioning of society especially in advanced societies where most of the work is done by robots and human labor is increasingly unnecessary.

So all this banter about the rich being job creators is a bunch of hooey. The rich are not job creators; they are robot acquirerers and job destroyers. They make capital investments of a nonhuman variety because they are more efficient in the production process than are humans. For one thing machines can whiz and hum 24 hours a day. Humans need their rest. Safety standards for machines are more lax than they are for humans. Maintenance is simpler. Machines don't get sick or disgruntled. All in all if a capitalist can replace a human with a machine, he will do it. Capital investment in machines is more desirable than an investment in human capital.

So what does that say about the value of education? Essentially a college education is of diminishing value. Sure some will chase the fantasy of more and more education in order to better compete for fewer and fewer jobs. In the long run the student loan debt required to obtain a credentialization in some field will not be worth it. Since more and more people will be left to their own devices instead of hired, the sensible thing is to prepare for a life of self-employment. Instead of preparing to participate in the global economy with its attendant risks of outsourcing and downsizing, prepare to participate in the local economy in a job from which you cannot be fired and which cannot be outsourced. A college education prepares one mainly to be a servant of a corporation. It shows that one was docile and compliant enough to follow years and years of instruction, sit in classrooms and take tests successfully. It shows the employer that a potential hiree has the requisite qualities of docility and compliability to make a good employee, one who won't make waves or criticize the corporation, one who will adopt the ethos and become enculturated in corporate values, one who, in other words, will sell his soul to the corporation.

Another way to fight back against the job destroyers (not creators) is to form cooperative work enterprises such as the Mondragon corporation which is wholly employee owned. The employee, in addition to acquiring a paycheck, acquires a share of the profits as well. So the worker becomes an owner and makes part of his living from a return on assets just like the wealthy do. Wealth, therefore, is more widely distributed and can be further distributed by reducing the work week, hiring more employees and distributing wealth even more widely.

In an age in which there is a diminishing need for human labor and most work in the production process is done increasingly by machines, the rational thing to do is to distribute the necessary work more widely (i.e. reduce unemployment), reduce the work week and create a situation where each individual makes a portion of their living off of acquired public wealth. In Norway, for instance, the old age pension system is entirely funded by profits from a publicly owned asset: oil. These profits then are invested conservatively so they will be available to future generations.

 

Acampada Sol: Spain’s Call for Economic Democracy

27 May 2011 :: J.E. Robertson from cafe Sentido

In Spain’s capital, Madrid, in the heart of the city, at the Puerta del Sol, from which major roads radiate out toward all corners of the country, thousands of protesters, of all ages and social classes, young and old, have set up camp, literally, in what is now a Europe-wide demand for economic democracy. The protesters and “participantes” include not only young and old, students, post-grads and laborers, but also those who work and those who cannot find work.

Spain, at present, is suffering an astonishing 45% rate of unemployment among young people, principally those between the ages of 18 and 25. Many of them blame the ruling class and the generation that holds power for setting up an economic and political system they say is rigged against their interests. But the movement has spread far beyond the young and the unemployed.

Many of the those who attend the protests, and some who camp in Puerta del Sol, are fully employed, and spend their days working and their evenings and mornings protesting. The movement is best described as a peaceful grassroots uprising, demanding full “economic democracy”, a term that is often heard circulating among those gathered in the square and at the “assemblies” (asambleas) that form around specific issues.

There are meetings, or asambleas, to debate the specifics of a given political or economic issue, and out of those asambleas, a ground-up democratic process forms “commissions” (comisiones), which then help to organize the process of debate and the exchange of ideas, regarding that specific issue. Some of the comisiones in the square have a practical on-the-ground function relating to keeping the encampment functioning.

There are comisiones for food, energy, legal issues, communications and outreach, and there are tables that are set up to take down people’s ideas and suggestions. Donations of food and clothes have been brought in to make it possible for the (mostly young) people who are camping overnight in the square to stay there and keep the footprint of the movement visible.

A public address system announces when one of the asambleas is about to form, in a certain part of the square, so that people can attend or join the debate, and have their say. The movement has spread to villages and cities across Spain, and a coordinated effort to formulate parallel local and “global” strategies and platform positions, is ongoing.

An online campaign, involving multiple different websites, Facebook groups, Twitter accounts, and hashtag discussions, is helping to give material shape to the spontaneously formed, “people power” revolution. Protests are now being staged in Athens, in Paris, in London, and across Europe, with the demand for prosecution of financial felons, and political reforms oriented toward fairness and toward honoring the voice of the people.

In Puerta del Sol, one of the initiatives being considered would require a referendum to approve any new binding economic agreements that would affect people living in Spain, one of its autonomous regions, provinces or cities, to ensure that narrow economic interests don’t impose the structures that benefit them on a populace, to the detriment of democracy. Specifics of the initiative are under consideration, including the frequency and manner in which such referenda would be staged.

The movement in Spain is clearly rooted in the energy, methodology and ideas of similar actions taken in Tunisia, in Cairo, and in Madison, Wisconsin, to protest against misuse of government power, the purchasing of political influence and the suppression of fundamental rights for citizens.

A World of Cooperation and Shared Ownership

by Jeffrey Hollender

Huffington Post, June 7, 2011

We hold in our own hands the key to building a sustainable economic future. Literally. By placing responsibility and ownership into the hands of employees globally, we have the ability to mold an economy that benefits us all.

It's possible by embracing the idea of economic democracy.

Traditionally, economic democracy represents a socio-economic arrangement in which business enterprises are democratically managed and worker-owned. Think Organic Valley, the $500 million leader in the organic dairy industry, which is also a cooperative of family farms.

Cooperatively-owned businesses can range from small-scale local companies to multimillion dollar global businesses. While form and structure varies (worker cooperatives, consumer cooperatives, producer cooperatives, purchasing cooperatives and credit unions), these businesses share a common goal: to primarily benefit a group of stakeholders rather than primarily outside investors.

Shared ownership helps diversify rather than concentrate wealth. It roots the value it generates in communities, keeping assets and resources from being transferred from local communities to multinational corporations and their owners. Organic Valley's farmers have a tangible financial stake in the co-op, amounting to 5.5 percent of each member's annual sales. Each member farmer also is entitled to a single vote in decision-making.

These economic institutions exist in all sectors of our economy, from banking, finance and insurance to education, manufacturing, retail and agriculture. Economic democracy exists within capitalist economies and does not reject the role of markets, but rather limits the primacy of the profit-maximization motive that currently drives the way in which most businesses engage with the market.

Today, throughout the world, cooperatives already employ more than 100 million people and have more than 800 million members. In the United States, cooperatives have more than 120 million members and employ more than 850,000 people, and indirectly generate more than 2 million jobs. Additionally, according to the National Center on Employee Ownership, approximately 13.6 million employees in the United States are employee-owners through their participation in 11,300 employee stock ownership programs (ESOPs). Combined employee assets held in these ESOPs exceed $900 billion.

The breadth and depth of co-ops in the United States can also be seen in the following figures. Today, the more than 29,000 co-ops in the United States:

• Have total assets of 3.1 trillion;
• Operate at more than 72,000 establishments nationwide;
• Deliver telephone services through 255 co-ops to 964,000 households;
• House more than 1.5 million households through 6,400 co-ops; and
• Provide financial services through 7,486 credit unions to 91.76 million member-owners, with total assets now exceeding 925 billion.*

Well-known cooperative businesses range from the aforementioned Organic Valley to Nationwide Mutual Insurance, an 80-year-old Fortune 500 company, with more than $135 billion in statutory assets; Land O'Lakes, Inc., a farmer-owned food and agricultural cooperative with $12 billion in sales; Unified Grocers, the largest wholesale grocery distributor in the western United States with over $4 billion in sales; and Amalgamated Life Insurance Company, founded in 1943 with more than $800 million in annual premium, premium equivalencies and fee-for-service.

In Europe, Italy's Legacoop and Spain's Mondragon multi-sector cooperatives have been able to both reach significant scale and demonstrate long-term sustainability. Legacoop, founded in 1886 in Milan, now has more than 15,000 member cooperatives and employs more than one million people. Mondragon, founded in 1956, now holds 33.3 million euros in assets and employs more than 85,000 people internationally.

A world of cooperation and shared ownership is not only possible, but critical to address the chronic unemployment, the dangerous concentration of wealth and the environmental destruction our world currently faces.

Let's make the possible tangible so we can put our hands to use building our economic future.

Resources for additional information about economic democracy:

The Democracy Collaborative
ESOP Association
National Center for Employee Ownership (NCEO)
National Cooperative Business Association
National Federation of Community Development Credit Unions
Ohio Employee Ownership Center
U.S. Federation of Worker Cooperatives
Vermont Employee Ownership Center

*Sources include industry reports (e.g., 2010 CUNA data on credit unions), a 2009 USDA-financed study, authored by Steven Deller, Ann Hoyt, Brent Hueth and Reka Sundaram-Stukel of the University of Wisconsin, and "Worker Cooperatives for the 21st Century" by Nicholas Luviene, Amy Stitely and Lorlene Hoyt.

 

This Blogger's Books from

The Responsibility Revolution: How the Next Generation of Businesses Will Win
by Jeffrey Hollender, Bill Breen

What Matters Most: How a Small Group of Pioneers Is Teaching Social Responsibility to Big Business, and Why Big Business Is Listening
by Jeffrey Hollender

 

 

Follow Jeffrey Hollender on Twitter: www.twitter.com/JeffHollender

The New-Economy Movement

Published on Friday, May 27, 2011 by The Nation

by Gar Alperovitz

The idea that we need a “new economy”—that the entire economic system must be radically restructured if critical social and environmental goals are to be met—runs directly counter to the American creed that capitalism as we know it is the best, and only possible, option. Over the past few decades, however, a deepening sense of the profound ecological challenges facing the planet and growing despair at the inability of traditional politics to address economic failings have fueled an extraordinary amount of experimentation by activists, economists and socially minded business leaders. Most of the projects, ideas and research efforts have gained traction slowly and with little notice. But in the wake of the financial crisis, they have proliferated and earned a surprising amount of support—and not only among the usual suspects on the left. As the threat of a global climate crisis grows increasingly dire and the nation sinks deeper into an economic slump for which conventional wisdom offers no adequate remedies, more and more Americans are coming to realize that it is time to begin defining, demanding and organizing to build a new-economy movement.

That the term “new economy” has begun to explode into public use in diverse areas may be an indication that the movement has reached a critical stage of development—and a sign that the domination of traditional thinking may be starting to weaken. Although precisely what “changing the system” means is a matter of considerable debate, certain key points are clear: the movement seeks an economy that is increasingly green and socially responsible, and one that is based on rethinking the nature of ownership and the growth paradigm that guides conventional policies.

This, in turn, leads to an emphasis on institutions whose priorities are broader than those that typically flow from the corporate emphasis on the bottom line. At the cutting edge of experimentation are the growing number of egalitarian, and often green, worker-owned cooperatives. Hundreds of “social enterprises” that use profits for environmental, social or community-serving goals are also expanding rapidly. In many communities urban agricultural efforts have made common cause with groups concerned about healthy nonprocessed food. And all this is to say nothing of 1.6 million nonprofit corporations that often cross over into economic activity.

For-profits have developed alternatives as well. There are, for example, more than 11,000 companies owned entirely or in significant part by some 13.6 million employees. Most have adopted Employee Stock Ownership Plans; these so-called ESOPs democratize ownership, though only some of them involve participatory management. W.L. Gore, maker of Gore-Tex and many other products, is a leading example: the company has some 9,000 employee-owners at forty-five locations worldwide and generates annual sales of $2.5 billion. Litecontrol, which manufactures high-efficiency, high-performance architectural lighting fixtures, operates as a less typical ESOP; the Massachusetts-based company is entirely owned by roughly 200 employees and fully unionized with the International Brotherhood of Electrical Workers.

A different large-scale corporation, Seventh Generation—the nation’s leader in “green” detergents, dishwashing soap, baby wipes, tissues, paper towels and other household products—has internal policies requiring that no one be paid more than fourteen times the lowest base pay or five times higher than the average employee.

In certain states, companies that want to brandish their new-economy values can now also register as B Corporations. B Corp registration (the “B” stands for “benefit”) allows a company to subordinate profits to social and environmental goals. Without this legal authorization, a CEO could in theory be sued by stockholders if profit-making is not his sole objective. Such status ensures that specific goals are met by different companies (manufacturers have different requirements from retail stores). It also helps with social marketing and branding. Thus, King Arthur Flour, a highly successful Vermont-based, 100 percent employee-owned ESOP, can be explicit, stating that “making money in itself is not our highest priority.” Four states—Maryland, Vermont, New Jersey and Virginia—have passed legislation that permits B Corp chartering, with many others likely to follow.

Cooperatives may not be a new idea—with at least 130 million members (more than one in three Americans), co-ops have broad political and cultural support—but they are becoming increasingly important in new-economy efforts. A widely discussed strategy in Cleveland suggests a possible next stage of development: the Evergreen Cooperatives are linked through a nonprofit corporation, a revolving loan fund and the common goal of rebuilding the economically devastated Greater University Circle neighborhoods. A thoroughly green industrial-scale laundry, a solar installation company and a soon-to-be-opened large-scale commercial greenhouse (capable of producing about 5 million heads of lettuce a year) make up the first of a group of linked co-ops projected to expand in years to come. The effort is unique in that Evergreen is building on the purchasing power of the area’s large hospital, university and other anchor institutions, which buy some
$3 billion of goods and services a year—virtually none of which, until recently, had come from local business. Senator Sherrod Brown is expected to introduce national legislation aimed at developing Evergreen-style models in other cities. (Full disclosure: the Democracy Collaborative of the University of Maryland, which I co-founded, has played an important role in Evergreen’s development.)

* * *

Along with the rapid expansion of small and medium-size businesses committed to building the new economy has come a sense of community and shared mission. Staff, managers and owners at many of these companies are finding more opportunities to share ideas and pool resources with like-minded professionals. The American Sustainable Business Council, a growing alliance of 150,000 business professionals and thirty business organizations, has emerged as a leading venue for such activity. Most members are “triple bottom line” companies and social enterprises committed to the environment and social outcomes as well as profits.

In many ways the council operates like any advocacy group attempting to lobby, educate and promote legislation and strategies. Thirty-five leaders recently met with Labor Secretary Hilda Solis, for instance, to make clear that the US Chamber of Commerce does not speak for all American business, to seek her help with specific projects and issues, and to fill her in on a range of environmentally and socially concerned economic efforts that definitely do not do business as usual. The names of some of the council’s constituent organizations offer a sense of what this means: Green America, Business for Shared Prosperity, Social Enterprise Alliance, Count Me In for Women’s Economic Independence, California Association for Microenterprise Opportunity. Although ecological concerns are at the top, the council’s agenda is highly supportive of other progressive social and economic goals. A recent blog by Jeffrey Hollender, chair of the council’s advisory board (and former CEO of Seventh Generation), attacked the US Chamber of Commerce for “fighting democracy and destroying America’s economic future.”

The Business Alliance for Local Living Economies (BALLE), made up of more than 22,000 small businesses, is another rapidly growing organization that works to strengthen new-economy networks. BALLE brings together locally owned efforts dedicated to building ecologically sustainable “living economies,” with the ambitious long-term goal of developing a global system of interconnected local communities that function in harmony with their ecosystems. The group’s Mid-Atlantic Regional Hub, the Sustainable Business Network of Greater Philadelphia, recognizes area businesses that “demonstrate a strong social and environmental impact while also making a profit.” A recent example is GreenLine Paper, a company that produces green products and works to preserve forests and prevent climate change. By participating in the network, GreenLine Paper gains brand recognition and promotion, as well as marketing, policy support, technical assistance and access to a like-minded coalition of businesses.

Sarah Stranahan, a longtime board member at the Needmor Fund, recalls having a sense in late 2009 that large numbers of Americans were beginning to understand that something is profoundly wrong with the economy. Bearing this in mind, with a small group of other activists she brought leaders of diverse organizations together in early September of that year to explore ways to build a larger movement. The New Economy Network (NEN), a loosely organized umbrella effort comprising roughly 200 to 250 new-economy leaders and organizations, was the low-budget product of their meeting. NEN acts primarily as a clearinghouse for information and research produced by member organizations. “However, our most important role,” says Stranahan, who serves as the network coordinator, “has been to help create a larger sense of shared common direction in a time of crisis—a sense that the new-economy movement is much greater than the sum of its diverse parts.”

* * *

Several initiatives have begun to deal systematically with fundamental problems of vision, theory and longer-term strategy. The New Economics Institute (NEI), which is in formation, is a joint venture that brings together the former E.F. Schumacher Society and the New Economics Foundation, in Britain. Among the environmentalists and economists involved are Gus Speth, David Orr, Richard Norgaard, Bill McKibben, Neva Goodwin, John Fullerton and Peter Victor.

“For the most part, advocates for change have worked within the current system of political economy,” says Speth, a former adviser to Presidents Carter and Clinton, onetime administrator of the United Nations Development Programme and the recently retired dean of the Yale School of Forestry and Environmental Studies, who has emerged as one of the new-economy movement’s leading figures. “But in the end,” Speth declares, “this approach will not succeed when what is needed is transformative change in the system itself.”

NEI is teaming up with other organizations, like the progressive think tank Demos, on several projects. One shared effort is attempting to develop detailed indicators of sustainable economic activity. As many scholars have demonstrated, the gross national product indicator is profoundly misleading: for instance, both work that generates pollution and work that cleans it up are registered as positive in the GNP, although the net real-world economic gain is zero, and there is a huge waste of labor on both sides of the effort. Precisely how to develop a “dashboard” of indicators that measure genuine economic gain, environmental destruction, even human happiness is one of NEI’s high priorities. Another is a detailed econometric model of how a very large economic system can move away from growth as its central objective. Related to both are earlier and ongoing Great Transition studies by the Tellus Institute, a think tank concerned with sustainability.

* * *

A less academic effort concerned with vision and long-term institutional and policy reform is the New Economy Working Group, a joint venture of the Institute for Policy Studies (IPS) and YES! Magazine. Among other things, the working group (which includes people, like Speth, who are concurrently involved in other initiatives) is attempting to create detailed designs for state and local banks in support of new-economy institutional development. (The longstanding Bank of North Dakota is one important precedent.) The larger goal of the Working Group is to advance a coherent vision of an economy organized around sustainable local community economies. John Cavanagh, on leave as director of IPS, and his wife, Robin Broad, a professor of international development at American University, emphasize the importance to developing nations of communities that provide economic, social and environmental “rootedness” in an “age of vulnerability.” David Korten, board chair of YES! Magazine and author of Agenda for a New Economy, stresses a radically decentralized domestic free-market vision of “self-organizing” communities that rely almost entirely on local resources. He envisions a trajectory of cultural change that could not only reduce conventionally defined economic growth but even reverse it—in part to make up for past ecological and resource destruction, and also to deal with global warming.

It is possible, even likely, that the explosion and ongoing development of institutional forms, along with new and more aggressive advocacy, will continue to gather substantial momentum as economic and ecological conditions worsen. It is by no means obvious, however, how even a very expansive vision of such trends would lead to “systemic” or “transformative” change. Moreover, different new-economy advocates are clearly divided on matters of vision and strategy. Speth, for instance, sees far-reaching change as essential if the massive threat posed by climate change is ever to be dealt with; he views the various experiments as one vector of development that may help lay groundwork for more profound systemic change that challenges fundamental corporate priorities. Others, like David Levine, executive director of the American Sustainable Business Council, emphasize more immediate reforms and stress the need for a progressive business voice in near-term policy battles. What to do about the power of large private or public corporations in the long term is an unresolved question facing all parties.

* * *

Obviously, any movement that urges changing the system faces major challenges. Apart from the central issue of how political power might be built over time, three in particular are clearly daunting: first, many new-economy advocates concerned about global warming and resource limits hold that conventionally defined economic growth must be slowed or even reversed. In theory an economic model that redistributes employment, consumption and investment in a zero- or reduced-growth system is feasible, but it is a very hard sell in times of unemployment, and it is a direct challenge to the central operating principle of the economic system. It is also a challenge to the priorities of most elements of the progressive coalition that has long based its economic hopes on Keynesian strategies aimed at increasing growth.

A related problem concerns the labor movement. Many new-economy advocates hold progressive views on most issues of concern to labor. In a recent letter supporting progressives in Wisconsin, for instance, the American Sustainable Business Council wrote that “eliminating collective bargaining is misguided, unsustainable and the wrong approach to solving deeper, more systemic economic issues”—hardly the standard Chamber of Commerce point of view! Still, the ultimate goal of reducing growth is incompatible with the interests of most labor leaders.

Although there have been tentative off-the-record explorations of how to narrow differences among groups, no direction for agreement has emerged. That some cooperation is possible is clear, however, from common efforts in support of “green jobs,” such as the Apollo Alliance (which aims to create 5 million “high-quality, green-collar jobs” over the coming ten years) and the BlueGreen Alliance, a partnership of major labor and environmental groups dedicated to expanding the quality and availability of green jobs. IPS director Cavanagh is working with a small group of theorists and activists on a plan for green jobs that attempts to integrate new-economy concerns with those of labor and other progressive groups, and to link the expanding local efforts with traditional national strategies.

A further line of possible long-term convergence is new interest by the United Steelworkers in alternative forms of economic enterprise—and, importantly, larger-scale efforts. The Steelworkers signed an agreement with the Mondragon Corporation in 2009 to collaborate in establishing unionized cooperatives based on the Mondragon model in manufacturing here and in Canada. (Mondragon, based in the Basque region of Spain, has nearly 100,000 workers and is one of the largest and most successful cooperative enterprises in the world.)

A third and very different challenge is presented by traditional environmental organizations. Speth, a board member of the Natural Resources Defense Council, has found very little willingness among his fellow board members to discuss system-changing strategies, even if understood as long-term developmental efforts. The traditional organizations spend most of their time trying to put out fires in Washington, he notes, and have little capacity to stand back and consider deeper strategic issues—particularly if they involve movement building and challenges to the current orthodoxy.

* * *

For all the difficulties and despite the challenges facing progressive politics, there are reasons to think that new-economy efforts have the capacity to gather momentum as time goes on. The first is obvious: as citizen uprisings from Tunisia to Madison, Wisconsin, remind us, judgments that serious change cannot take place often miss the quiet buildup of potentially explosive underlying forces of change. Nor were the eruptions of many other powerful movements—from late-nineteenth-century populism to civil rights to feminism and gay rights—predicted by those who viewed politics only through the narrow prism of the current moment.

Many years ago, I was legislative director to Senator Gaylord Nelson, known today as the founder of Earth Day. No one in the months and years leading up to Earth Day predicted the extraordinary wave of environmental activism that would follow—especially since environmental demands are largely focused on morally informed, society-wide concerns, unlike those of the labor, civil rights and feminist movements, all of which involve specific gains important to specific people.

In my judgment, new-economy efforts will ultimately pose much more radical systemic challenges than many have contemplated. Nonetheless, new-economy advocates are beginning to tap into sources of moral concern similar to those of the early environmental movement. As the economy continues to falter, the possibility that these advocates—along with many other Americans who share their broader concerns—will help define a viable path toward long-term systemic change is not to be easily dismissed. In fact, it would be in keeping with many earlier chapters of this nation’s history.

© 2011 Gar Alperovitz

Gar Alperovitz is the Lionel R. Bauman Professor of Political Economy at the University of Maryland and co-founder of the Democracy Collaborative. Among his most recent books are America Beyond Capitalism and (with Lew Daly) Unjust Deserts: How the Rich Are Taking Our Common Inheritance and Why We Should Take It Back

Acampada Sol: Spain’s Call for Economic Democracy

27 May 2011 :: J.E. Robertson from cafe sentido

In Spain’s capital, Madrid, in the heart of the city, at the Puerta del Sol, from which major roads radiate out toward all corners of the country, thousands of protesters, of all ages and social classes, young and old, have set up camp, literally, in what is now a Europe-wide demand for economic democracy. The protesters and “participantes” include not only young and old, students, post-grads and laborers, but also those who work and those who cannot find work.

Spain, at present, is suffering an astonishing 45% rate of unemployment among young people, principally those between the ages of 18 and 25. Many of them blame the ruling class and the generation that holds power for setting up an economic and political system they say is rigged against their interests. But the movement has spread far beyond the young and the unemployed.

Many of the those who attend the protests, and some who camp in Puerta del Sol, are fully employed, and spend their days working and their evenings and mornings protesting. The movement is best described as a peaceful grassroots uprising, demanding full “economic democracy”, a term that is often heard circulating among those gathered in the square and at the “assemblies” (asambleas) that form around specific issues.

There are meetings, or asambleas, to debate the specifics of a given political or economic issue, and out of those asambleas, a ground-up democratic process forms “commissions” (comisiones), which then help to organize the process of debate and the exchange of ideas, regarding that specific issue. Some of the comisiones in the square have a practical on-the-ground function relating to keeping the encampment functioning.

There are comisiones for food, energy, legal issues, communications and outreach, and there are tables that are set up to take down people’s ideas and suggestions. Donations of food and clothes have been brought in to make it possible for the (mostly young) people who are camping overnight in the square to stay there and keep the footprint of the movement visible.

A public address system announces when one of the asambleas is about to form, in a certain part of the square, so that people can attend or join the debate, and have their say. The movement has spread to villages and cities across Spain, and a coordinated effort to formulate parallel local and “global” strategies and platform positions, is ongoing.

An online campaign, involving multiple different websites, Facebook groups, Twitter accounts, and hashtag discussions, is helping to give material shape to the spontaneously formed, “people power” revolution. Protests are now being staged in Athens, in Paris, in London, and across Europe, with the demand for prosecution of financial felons, and political reforms oriented toward fairness and toward honoring the voice of the people.

In Puerta del Sol, one of the initiatives being considered would require a referendum to approve any new binding economic agreements that would affect people living in Spain, one of its autonomous regions, provinces or cities, to ensure that narrow economic interests don’t impose the structures that benefit them on a populace, to the detriment of democracy. Specifics of the initiative are under consideration, including the frequency and manner in which such referenda would be staged.

The movement in Spain is clearly rooted in the energy, methodology and ideas of similar actions taken in Tunisia, in Cairo, and in Madison, Wisconsin, to protest against misuse of government power, the purchasing of political influence and the suppression of fundamental rights for citizens.

Collective Bargaining Essential to Democracy

By Bruce T. Boccardy

Posted Mar 05, 2011 @ 06:33 PM

Last update Mar 05, 2011 @ 08:51 PM, from The Herald News

Political events in Wisconsin have questioned the necessity of collective bargaining. The governor of Wisconsin notwithstanding, collective bargaining is recognized as a human right in international conventions, constitutions, and courts.

Our Constitution addresses the right of collective bargaining in the thirteenth amendment. The amendment appears to refer to only the issue of slavery. However, according to the Supreme Court in 1911, the purpose of the thirteenth amendment was not simply to eliminate slavery, but release one person’s labor from the exploitation of another.

The Norris-LaGuardia Anti-Injunction Act of 1932 was the primary statute that declared the right of collective bargaining. This was followed by the National Labor Relations Act of 1935 and the Universal Declaration of Human Rights in 1948. Both confirmed that right.

Today, corporate power is strangling the natural American impulse of political democracy. Collective bargaining is an extant instrument that ensures at least a modicum of fairness for employees.

Corporate billionaires pay swarms of lobbyists to influence legislators to enact anti-union legislation. This cohort also transfers gobs of cash to legislators as the Koch brothers did for the governor of Wisconsin. Additionally, they finance reactionary think tanks that churn our staggering amounts of false data. Individual employees are obviously no match for such corporate power. Unions are essential to balance that asymmetrical relationship as a “countervailing power,” as coined by economist John Kenneth Galbreath.

The other power facing employees is government power. Like corporations, they wield an enormous amount of economic power over a vast workforce. Moreover, public sector union employees are subjected to the same work issues as private sector employees. It is hypocritical to deny them the same protections that private union employees have won.

Our history is replete with patterns of employer abuse absent a union with the collective bargaining instrument. Employees were routinely underpaid, overworked and dismissed unjustly at the caprices of employers. Their lives were arbitrarily disrupted and sent into financial and personal chaos. The issue of collective bargaining crystallizes our justification to provide a serious voice for those who perform the work in our cities and towns.

Decent work standards that facilitated the growth of the middle and working class emanated from collective bargaining. These included the 40-hour workweek, the weekend, vacation time, employer-supported health insurance, pensions, family and medical leave, and basic safety and health protections in the work environment. A union contract can prevent splenetic supervisors from unfairly unleashing their wrath on employees.

When unions improve the work conditions of their members, there is a concentric effect that can benefit all working people. The non-partisan Economic Policy Institute released a report in August 2003 concluding that unions have contributed to employment standards and practices adopted throughout the nation. The record shows that when unions are strong, wages and salaries increase for all. Health care coverage and pensions are strengthened. When private and public unions are weak, the quality of life for our families and communities is jeopardized.

Moreover, unions have contributed to legislation and standards that benefit all working people such as the Occupational and Safety and Health Act of 1970 and the Family Medical Leave Act of 1993.

Finally, there is no correlation between states that have collective bargaining rights and states burdened with large deficits. Data from the Bureau of Labor Statistics in January this year and the Center on Budget Policy and Priorities this February confirmed this. States that deny employees bargaining rights such as Nevada, North Carolina, and Arizona have huge deficits of over 30 percent. Others states that possess bargaining rights such as Massachusetts, New Mexico, and Montana have smaller deficits of less than 10 percent.

State budget deficits are not the product of collective bargaining, but largely reflect the disastrous impact of our latest recession. The test for states now is to provide essential services to cities and towns with fair budget and tax policies that do not break the backs and spirits of middle and low income folks.

Unions are demonstrably imperfect entities. However, without collective bargaining rights, employment conditions are flagrantly rigged for corporations and governmental bureaucrats. Collective bargaining is the sine qua non for union members. It is an instrument to ensure some measure of economic democracy. Our cherished institutions of political democracy require an authentic economic democracy to achieve the just aspirations of all working people.

Bruce Boccardy is the president of Local 888, of the Service Employees International Union, representing public employees throughout Massachusetts.

Congratulations, Egypt! A People's Revolution Done Right: Next Step - Prevent it From Being Hijacked

by John Lawrence

 
The people's revolution in Egypt may be a turning point in world zeitgeist. For 30 years neocon values have prevailed. On November 23, 2006 I blogged in a post entitled "Neocon Rats Leaving the Sinking Ship":

"The whole neocon idea of spreading democracy in the middle east by attacking and invading a country in order to change it from a dictatorship to a democracy is a ridiculous proposition on the face of it, but that's what the neocons were selling. And the preposterous notion that this was a moral undertaking - it was morally a good thing to do - to bring death and destruction to a nation in order to spread democracy is as repugnant as the notion that Hitler was morally correct to invade weaker countries because the Germans were the most advanced civilization composed of the stongest and best people. The American supermensch, according to the neocons, would advance the Iraqi undermensch to democracy and freedom. Depite the cost in death and destruction, they would thank us some day. They would throw flowers at the advancing troops much as the Austrians threw flowers at the German army during the Anscluss."

This pretty well sums up American policy under George W Bush and the neocons. Their notion of forcing democracy on a country by invading it played out in Iraq and Afghanistan. The IMF and the World Bank were US surrogates which forced policies of privatization, deregulation and shredding of the social safety net down the throats of any country not stong enough to resist. The neocon US saw as its duty the forcing of what they considered to be American values down the throats of the rest of the world. The result in many cases was the creation of an elite class of wealthy oligarchs and increased poverty among the majority of the people with a corrupt and repressive dictator favorable to American intersts at the top. The intersection of political and economic power was complete. Such was the case in Egypt.

For those that say that this protest came out of nowhere, let me set the matter straight. There have been protests as recently as last June. They just never got the mass publicity. In an article, Privatization and Corruption in Egypt, we find the following:

Last June there were protests against privatization in Egypt. The protests were so severe that the government actually decided to effectively end the program. Since the 1990's a key economic priority in Egypt was the privatization of state owned industries and a transition from a centrally controlled economy to a more free market oriented economy that would be part of the global capitalist system. The justification for such a move was the inefficiency of the state controlled command economy. However, the more pressing concern was to open up the country to foreign investment and also enrich crony supporters of the government through privatization of state owned assets at fire sale prices. Many in the public long believed that privatization of state companies involved corruption involving insider dealings and opposed it for this reason but also there was oppoosition from some old guard officials who thought that privatization would be destabilizing. When the state owned companies, this ownership could be used to help control dissent. Wages could be raised and people could be employed even when in purely capitalist market terms they were not needed. In fact they provided a social safety net of sorts. The privatization has already gone about as far as it could go. Remaining state companies often are technologically outdated and overstaffed with poorly trained workers. No capitalist investors are interested in buying them except perhaps at very low prices. In June of 2010 thousands of workers protested outside parliament complaining about lost jobs, wages, and social protections. Fearing even more political unrest the government decided to drop further privatization for now. The government has even bought back several companies from investors. The demand from the international business community has been for further "reform"to cut Egyptians expectations. Egyptians expect their government to do things for them not just for business! Experts claim that the fundamental mistake of the government was in failing to reduce public expectations. Under the command economy and state ownership people expected the state to be the primary provider. People supported the government because the government gave everyone jobs. The experts complain that there are still about six million state civil service employees. Of course the reform would be to privatize most of these services, make them centers for private profit and investment and hire only if this made money for investors. The new view of this is expressed by an official. Anonymous of course and to the New York Times! ‘You educate me, give me a degree, you give me a job, when I die you bury me - and I do nothing.' " Of course they did do something; they kept the system going inefficient or not. The problem is that it is not part of the system of global capitalism and it does not provide much for private profit or investors. Political scientist Amr El-Shobaki said that privatization was a way that friends of the rich and powerful could grow more rich and powerful. The privatization process had begun under Anwar Sadat but it begin in earnest in 1991. The goal was to privatize 314 companies. All the bargains are gone to investors, dissolved or merged with other state companies. 150 are still left. Shobaki said:"There is always a cost for reform, but the problem here is that people now have the impression that those who always pay the cost of every reform are the simple people, while businessmen are never held accountable for corruption and while privatization of companies takes place in secret, without the knowledge or participation of the people," Perhaps people's impressions are correct. Faced with opposition to privatization the government took another tack. Open the door to foreign investment and let state industries wither. In the Egyptian context, economists say it is a victory that this work force has shrunk, to about 300,000 from about 1.3 million in 1978. Right, it is a victory that jobs are lost. THe government that scored that victory is now in danger of falling. One of the reasons is the high unemployment. The government has adopted other "reforms" to reduce expectations of the Egyptian working class and whip them into shape. The government adopted a law that allowed state-owned companies to deal with employees in the same way as private-sector companies. In 2009 it began to carry out a new law allowing the private firms to build infrastructure, including sewage plants and hospitals, another unpopular move intended to whittle away the state-dominated system. A study of Egyptian attitudes show a quite different view of privatization and the role of government than in the U.S. Consider this: ""The majority of citizens believe that the best system would strengthen the role of the state and the public sector; only 20% of citizens considered privatization to be beneficial to Egypt’s economy. ""

There you have it, friends, in a nutshell! Privatization, a core neocon value, led to large scale unemployment and it was this that was the primary factor behind Egypt's revolution. You had large numbers of young college educated people with no job prospects. You had fantastic wealth among a tiny elite while the rest lived in poverty. This revolution was about corruption in this sense, but it was all perfectly legal. Mubarak himself had siphoned off $70 billion dollars from the system which required foreign investors to enter into partnerships with Egyptians owning 51%. The best state owned companies had been privatized and snapped up by foreign investors. The remaining state owned companies were virtually worthless. No investor wanted to buy them. In the name of efficiency workers had been laid off.

The New York Times confirmed that what was happening was the sell-off of state owned enterprises to private investors with the consequence of laid off employees and high unemployment:

Privatization began in earnest in 1991, when Egypt agreed to work with international lenders on an economic restructuring plan to help it repair a failing economy. This represented an effort to accelerate changes started in the 1970s by President Anwar el-Sadat, who began the process of dismantling the state-controlled economy fashioned by President Gamal Abdel Nasser in the 1950s and early ’60s. The 1991 effort started off easily enough when the state readily found buyers for assets like its beer and cement industries. But over time, the state said it was left with difficult-to-sell assets, outdated factories producing cars, instruments for textile manufacturing and other things that are either obsolete or unwanted. At the same time public pressure became intense as workers complained that their rights were being auctioned off. The goal was originally to sell off 314 companies. There are still 150 left: the rest have been sold to investors, gone public on the stock market, dissolved or merged with other state industries. “There is always a cost for reform, but the problem here is that people now have the impression that those who always pay the cost of every reform are the simple people, while businessmen are never held accountable for corruption and while privatization of companies takes place in secret, without the knowledge or participation of the people,” Mr. Shobaki said. Faced with so many obstacles, the government took another approach, trying to open the door to foreign investment while quietly allowing state industries to wither. In the Egyptian context, economists say it is a victory that this work force has shrunk, to about 300,000 from about 1.3 million in 1978. The government also adopted a law that allowed state-owned companies to deal with employees in the same way as private-sector companies. This year it began to carry out a new law allowing the private firms to build infrastructure, including sewage plants and hospitals, another unpopular move intended to whittle away the state-dominated system.

So fundamentally the revolution was about jobs. It was about economic democracy as opposed to economic aristocracy. It was a rejection of crony capitalism in which state owned assets are sold off to a group of politically powerful and connected insiders. It was about a repudiation of neocon values. The reason that the American right wing is so upset is that they are afraid that the Muslim Brotherhood will take over. They are upset over the word "Brotherhood." Any new economic system put in place by the Egyptian people that has anything to do with "Brotherhood" is antithetical to American economic values, the values of capitalism. Why it might mean redistribution of wealth not from the poor to the wealthy which they favor but in the other direction from wealthy to poor which they don't. When George W Bush and the neocons talked about "democracy," democracy was just a euphemism for American style capitalism - a top down elite of wealthy investors and a majority underclass living in poverty with a repressive dictator at the top who maintained stability so American interests in the region would not be transgressed. The American right wing has gotten so comfortable with sham democracy that it has a problem with anything approaching authentic democracy.

But the Egyptian people are interested in real democracy not sham democracy, and that real democracy very definitely has an economic component as did the 1948 UN Declaration of Human Rights which states: "Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control." The Egyptian revolution is a repudiation of neocon values, a repudiation of privatization, deregulation, austerity and shredding of the social safety net. It is more than a call for free elections and a new parliament. It is a call for economic as well as political justice. Let's hope that the Egyptian people's revolution is not hijacked.

It's impossible to know what went on behind closed doors, but the final results show that the military sided with the people and against the oligarchy. If Bush were President, the results might have turned out differently. The military might have been persuaded to turn on the people thus preserving American interests in the region. The victory of the Egyptian people does not mean a repudiation of American interests, just a rejection of neocon values. Neocon values are only American values when Republicans are in control. The fact that we have a President Obama and Democrats are in power in the White House means that American values have shifted. Now American values can support and work hand in hand with a true democracy in Egypt. This might be the paradigm shift which truly delivers power and economic justice to the people and away from the interests of globalized transnational corporations and the international wealthy class of elite investors. Let's hope so.

The Mondragon Cooperative: A Blueprint for America?

In the Shadow of the Dragon

Monday 24 January 2011, from truthout

by: Thom Hartmann, Berrett-Koehler Publishers | Serialized Book

(Image: Berrett-Koehler Publishers; Edited: to)

The motivating force of the theory of a democratic way of life is still a belief that as individuals we live cooperatively, and, to the best of our ability, serve the community in which we live, and that our own success, to be real, must contribute.

- Eleanor Roosevelt 

There was a dragon here hundreds of years ago, here in the Basque country in northern Spain, a place steeped in tradition, a hilly expanse between the mountains and the sea. Local lore has it that the Basque language, the only European one with no known root language, is a remnant from the time of Atlantis, which may have vanished into the Atlantic Ocean not far from here eons ago.

Standing on a hillside overlooking an early autumn valley, Louise and I were amazed by the simple beauty of the mountain of the dragon, its gray and balding peak towering above the town like an ancient ziggurat. This is Mondragon, a small town named after the dragon of the mountain, the dragon probably being, a local resident told us, a particularly brutal lord or local king who exercised the Rite of the First Night, a dreaded ritual when fair maidens were whisked away on their wedding night.

The Rite of the First Night was said to have been common across Europe throughout the Dark and Middle Ages, although it was probably far less common than modern folklore suggests. When a young woman was married, she was required to spend the night of her wedding with—and lose her virginity to—the local lord or king.

Oddly enough, all across Europe one still finds remote communities where most of the people have similar large noses or red hair or big ears and so on—all descendants of some ancient lord who fathered the first children of innumerable families. European society was patriarchal and hierarchal, and because the king lived in distant Toledo, his defilement role was filled by the local lord. The sheer horror of his men coming to take away the new bride became the legend of the dragon.

Now here is the ultimate irony: right here in this valley, in the shadow of the dragon, has grown a business enterprise that—in virtually every way imaginable—is the antithesis of a dragon.

And for all of us in the United States, this business enterprise represents a model that can be transformative and sow the seeds of a new kind of business entity that is, at its heart, more equitable, more fair, and more just—and therefore more truly American— than the predatory multinational corporations that are now typical of twenty-first-century America.

Cooperation and Corporation

The Mondragon Cooperative is neither hierarchical nor patriarchal. There’s no king or lord. The corporation is owned by its employees. The most highly paid person earns less than six times the most poorly paid person. Decisions are made by workers on the front lines and then communicated up to the “managers” for implementation.

And this is no flaky, hippy-dippy communelike experiment. It is the world’s largest federation of cooperatives, employing more than 90,000 people in more than 250 companies that focus on four areas: retail, finance, industry, and knowledge. In 2008, Mondragon’s revenue was €16.8 billion ($24.2 billion). All—every last euro cent—of the profits are distributed in one of three ways: reinvested in the business, given to worthy local charities, or paid as dividends to Mondragon’s worker-owners.

What Mondragon has shown, by its sheer size, scope, and success, is a new economic model that avoids the pitfalls of both modern capitalism and old-fashioned communism.

“Capitalism” has its deficiencies, whether institutions are for- profit (think Goldman Sachs, where stocks are sold to investors or the public) or not-for-profit (think Red Cross, where the CEO earns $500,000 per year and the “stock” is controlled by a board of directors).

Similarly, “communism” has its problems because the state owns the business, employees are simply agents of the state, and nothing works because nobody is accountable to anybody and there’s no incentive to do better.

Most importantly, both capitalism and communism are top- down hierarchies that stifle human ingenuity.

But Mondragon is the world’s largest example of a third way: worker-owned cooperatives that foster enterprise as well as equity. Unlike the top-down nature of capitalism and communism, Mondragon has flipped that pyramid upside down.

That flipping is apparent when one visits any of the Mondragon businesses. Louise and I were on the factory floor of an absolutely spotless washing-machine manufacturing facility of the Mondragon Cooperative in 2009 when we witnessed the true cooperative nature of the enterprise. Like all Mondragon businesses, this state-of-the-art industrial facility, converting sheets of raw metal into finished washing machines for sale all around the world, is run by its employees.

As we stood watching, a group of about a dozen workers assembled electronics on a U-shaped assembly line. A “manager” walked up and asked for everyone’s attention. Our translator shared with us the essence of the conversation: next Thursday there was going to be a schedule change, the result of some local event.

At first it sounded like a typical manager telling his employees what was what. “Thursday our systems will change, and we’ll have to produce a different number of units,” he said. The workers nodded.

Then came the bombshell: “How do you all think we should do this?” he asked.
A conversation ensued, and it dawned on me that the workers were not arguing or fighting or complaining; they were offering concrete suggestions. With each suggestion others would point out its strengths or weakness or offer their own.
The “manager” was facilitating the conversation and taking notes. Within 10 minutes some sort of a consensus was achieved, and the workers told the “manager” how they’d handle Thursday’s change. He thanked them and left, his job now to communicate up to the cooperative’s administrators how the assembly line would adjust itself to Thursday’s changes.

This was about as far from the Rite of the First Night as it’s possible to imagine. In Mondragon, in the shadow of the ancient—and now dead—dragon, the descendents of the serfs have taken charge. The result is one of the most successful—and equitable—business models in the world.

And it’s not just the business pyramid that has been upended; there’s a sociocultural element at Mondragon that is just as transformational to its local cultures as is the idea of workers owning and running their own businesses.

Mondragon University was the first institution started here by Don José Maria Arizmendiarrieta, the priest who began in the 1940s what has now grown to become the worldwide Mondragon organization. Investing in education—building knowledge—is like building a factory. Through Mondragon University they’re investing in humans just as much as the factories are investing in the business infrastructure of the towns where Mondragon works. That investment in educating and training students at a university with strong links to the cooperatives is evident in the fact that almost all students find work within weeks of graduation. Mondragon’s practice of placing people over profits clearly produces results that benefit all.

The Commons Moment is Now

Published on Monday, January 24, 2011 by CommonDreams.org

How a small, dedicated group of people can transform the world—really

by Jay Walljasper

Social change is not something easily diagrammed on a chart. Sweeping transformations that rearrange the workings of an entire culture begin imperceptibly, quietly but steadily entering people’s minds until one day it seems the ideas were there all along. Even in our age of instantaneous information—when a scrap of information can zoom around the globe in mere seconds, people’s world views still evolve quite gradually.

Learning from the Right

This is exactly how the paradigm of corporate power came to rule the world. First articulated in large part by an obscure circle of Austrian economists, it surfaced in the United States during the 1950s as a curious political sideshow promoted by figures such as novelist Ayn Rand and her protégé Alan Greenspan.

The notion of the market as the bedrock of all social policy entered mainstream debate during the Goldwater campaign in 1964, which appeared to mark both its debut and its demise. Despite Republicans’ spectacular defeat in elections that fall—which extended from the White House all the way to local races—small bands of pro-market partisans refused to accept the unpopularity of their theories. Instead, they boldly launched a new movement that would eventually turn American life upside down.

Bankrolled by wealthy backers who understood that modern politics is a battle of ideas, market champions shed their image as fusty reactionaries swimming against the tide of progress and gradually refashioned themselves as visionaries charting a bold course for the future.

Their ranks swelled throughout the late 1970s as an unlikely combination of libertarian dreamers, big-business opportunists, and anxious defenders of traditional values signed up for the cause. The successive elections of Margaret Thatcher in Britain, Ronald Reagan in the United States, and François Mitterrand in France confirmed market fundamentalists’ global ascendancy. Thatcher and Reagan, each in her and his own distinct way, became effective advocates for the idea that the market should be the chief organizing principle of human endeavor. Mitterrand, on the other hand, was a dedicated socialist but soon discovered that the growing influence of international capital rendered him powerless to carry out promises of his 1981 election campaign. This was final confirmation that we had entered a new age of corporate domination.

Ever since then, our world has been shaped by these forces. Alan Greenspan became the most influential economic policy maker in recent history during eighteen years as chairman of the U.S. Federal Reserve. And the market paradigm is now seen by many — a lot of whom did not begin as right-wingers — as an indisputable truth on the same level as the Ten Commandments or the laws of physics.

Today, it feels as though everything is for sale to the highest bidder—from the names of sports stadiums to DNA sequences that make human life possible. Since the 1980s, reform movements of the left and center successfully resisted certain extreme elements of the radical right agenda, but many Americans still believe a free-market blueprint for the future is inevitable. Progress, once viewed as the gradual expansion of social equity and opportunity, is now widely viewed as the continual expansion of economic privatization and unchecked corporate power.

Introducing the Commons Paradigm

There are emerging signs that market fundamentalism has passed its peak as the defining idea of our era. In the United States, the first glimmer of hope was when the Bush administration’s plan to partially privatize Social Security funds in the stock market gained little traction in Congress and public opinion. Painful financial upheavals around the globe revealed the glaring weaknesses of the current economic model for all to see, leaving some market true believers scrambling to embrace new policies. Yet old ideologies don’t quietly fade, especially when they enjoy sizable support in the corporate world. We’ve seen a fierce backlash against Barack Obama’s admittedly modest departures from rigid market thinking.

At the same time, a group of activists, thinkers, and concerned citizens around the world who are rallying support for the idea of a commons-based society. At this point, they’re a scrappy bunch—many with backgrounds in various social movements, community causes, and Internet initiatives—not so different from the dedicated market advocates of the 1950s, except in where they place their hopes. These commoners, as they call themselves, see possibilities for large numbers of people of diverse ideological stripes coming together to chart a new, more cooperative direction for modern society.

The volatile political mood of our era bears some resemblance to the late 1970s when liberalism was losing its footing and conservative policy makers refashioned their old political rhetoric, based on social exclusion and apologies for capitalism, into a shiny new philosophy: “the market.” Pre- viously the thrust of right-wing thought had been focused on what they were against (civil rights, labor unions, social programs, et cetera), but by claiming the market as their mission, they were able to emphasize instead what they were for. The success of that rebranding has led to many of the problems we now grapple with today.

A New Political Dawn?

In the same way, commons-based thinking could eventually shift the balance of politics in the United States and the world. Yet unlike market fundamentalism, the commons is not just old wine in new bottles; it marks a substantive new dimension in political and social thinking.

A commons-based society holds considerable appeal for progressives after a long period in which the bulk of their political work has been in reaction to initiatives from the right. Activists across many social movements, now aware that an expansive political agenda will succeed better than narrow identity politics and single-issue crusades, are starting to experiment with the language and ideas of the commons. This line of thinking also makes sense to some traditional conservatives who regret the wanton destruction of our social and environmental assets carried out in the name of a free-market revolution. In the truest sense of the word, the commons is a conservative as well as progressive virtue because it aims to conserve and nurture all those things necessary for sustaining a healthy society.

Growing numbers of citizens—including many who never before questioned the status quo—now seem willing to explore new ideas that once would have seemed radical. Millions of Americans are now making shifts in their personal lives such as buying organic foods, using alternative medicine, collaborating online, and searching for something beyond consumerism that offers a sense of meaning in their lives. They may not yet be sprinkling their conversations with the word commons, but they are looking for changes in their lives.

Now is the time to introduce a decisive shift in worldview. People everywhere are yearning for a world that is safer, saner, more sustainable and satisfying. There’s a rising sense of possibility that even with our daunting economic and environmental problems, there are opportunities to make some fundamental improvements. Everyone deserves decent health care. The health of the planet should take precedence over the profits of a few. Clean water, adequate food, education, access to information, and economic opportunity ought to be available to all people. In other words, a commons-based society. Let’s transform that hope into constructive action. 

This excerpt originally appeared in All That We Share: A Field Guide to the Commons by Jay Walljasper, © 2010 Jay Walljasper, published by The New Press, reprinted here with permission.

Jay Walljasper is the editor and chief author of All That We Share: A Field Guide to the Commons. He is editor of OnTheCommons.org and author of The Great Neighborhood Book, writes widely about cities, community, sustainability and travel. On The Commons is a commons movement strategy center.

© 2010 Jay Walljasper, published by The New Press, reprinted here with permission.

School Crossing Guards or Tax Cuts for the Rich?

By Jack Burgess

From the Chillicothe Gazette, November 24, 2010

Most of us have a lot to be thankful for at Thanksgiving. Most of us have a roof over our heads and enough to eat, but there's also a lot to be concerned about this year.

As our nation continues to struggle with the effects of unregulated stock speculation and failures, unemployment and continued war in the Middle East, we wonder where we're headed.

We're told our pensions are too large, we retire too soon, we want too much health care, and taxes that are too high are somehow the cause of our problems. The powers that be are setting us up for some tough, but they say unavoidable, choices.

In Chillicothe, it's school crossing guards and police protection versus tax cuts for the well-to-do, which decimate the state's ability to fund essential services. That's what it comes down to.

Preserve the benefits of the new health care law -- keeping your college age kids on your health care plan, no maximum on your own plan and being assured you can get coverage even if you're suffering from some dreaded disease -- or going back to the world's most expensive health care that still leaves us struggling to keep up with ever higher deductibles, wondering how long we'll even have coverage.

Why do Americans face such choices? Maybe it's the fault of history and government teachers -- of which I am one -- that we taught the kids to memorize historical documents, like the Gettysburg Address, but didn't help them internalize the truth of the Civil War as a bloodbath over slavery. How we said, "All men are created equal," but didn't include women, African Americans or First Americans until they won those rights.

Maybe we spent too much time on famous battles and not enough on the day-to-day battles of working people to get a living wage, a day off or compensation if they were injured on the job. Maybe we focused too much on the genius of men like Henry Ford but ignored their use of armed thugs to shoot workers demanding fair treatment.

Somehow, Americans have not learned that when tax rates on upper incomes were much higher, in the 1940s and 1950s, our nation was most prosperous. Or that when we in Ohio began cutting corporate taxes, back in the 1960s, we were prosperous and were promised we would become more so, but the opposite happened. We were promised that corporations would invest the extra money from the tax cuts here in Ohio, but instead they invested in low-wage countries in Latin America and Asia.

So we've become a society where a Donald Trump has a regular TV show about firing people, while millions look for work, and there are essentially no shows about working people. A society in which people who manipulate stock numbers get rich, while those who work hard making things with their hands -- when jobs are available -- are told they demand too much. Where failed business managers get tens of millions in extra compensation when they retire, but we are told we're overpaid and should work until we're 70.

And in our anger about all this, we've taken the bait of the folks who gave us this bad deal, and we've strengthened their hand in the government.

It's time for us to relearn, or learn for the first time, the lessons from history, that only through making ourselves heard through unions, pressure groups and progressive political parties did we achieve what equality and prosperity we have. It wasn't a gift of the Donald Trump's. It was what we earned with our work and our organizing.

If we expect the Republicans of today -- the party of tax cuts for the rich and more war in the Middle East -- to help us out, we're counting on the foxes to guard the hen house.

As to the Democrats in Washington, they have become the sheep guarding the hen house. It remains to be seen if they can move beyond their desire to be nice to the folks who are exploiting us and them and reinvigorate the party of Franklin Roosevelt, which stood for economic democracy, opportunity and hope for working people and the middle class.

Burgess is a retired teacher and a member of the Chillicothe Gazette's Board of Contributors.

Tax the Rich: Increase Employment and Sustain Demand

By Al Engler | November 12, 2010, from rabble.ca

Transnational finance, the corporate media, and rightwing political parties are using high government deficits as pretexts for cuts to public employment and social programs.

It is not a surprise that capitalists campaign to give returns on investments priority over employment, workers' income, and the wellbeing of the needy. Having aggressively supported cuts to business and income taxes, wealthholders have reason to worry about the real returns on bonds. It is also not a surprise that unions and students in Europe have mobilized millions against these cuts. Unions, public sector workers, pensioners, immigrants and the needy are not to blame. Government deficits are a direct result of capitalist speculation, the 2008 financial crash, government bailouts, and the resulting loss of employment, income and government revenues.

If government deficits were the real problem -- not just a pretext -- military spending, particularly in the U.S., would be drastically cut. Taxes would be raised. Of course, tax increases have consequences. In a time of fragile global markets, increasing sales tax or value-added taxes could reduce consumer purchasing power, further weakening markets. Taxes on enterprise revenues could reduce expenditures for plant and equipment and could cause the failure of more businesses.

Steeply graduated income taxes would upset the super rich but would otherwise be benign. Taxing the portion of income over $200,000 a year at rates of 75 per cent, and over $500,000 at 90 per cent would increase government revenues by five or 10 per cent of gross domestic income without reducing markets for most goods and services. Additional revenues could be raised by taxing speculative profits on the buying and selling of stocks, bonds, real estate, and currencies. International agreement to raise tariffs to 15 to 25 per cent from the current average of five to 10 per cent would raise more. The profits of transnational corporations would be squeezed, but the resulting growth in local production for local consumption would increase employment, income, and public revenues everywhere.

Supply-side economics, which has dominated government policy for 30 years, insists that increasing taxes on the wealthy will decrease the money available for private investment, causing job loss, reduced real incomes, and economic decline. Supply-side economics was a wealthholders' reaction to Keynesian demand-side policies. The Keynesian period -- from World War II through the 1970s -- had grown out of destructive 20th-century wars, financial crashes, and social upheaval. Keynesians increased public spending on pensions, unemployment insurance, education, healthcare and income support. Laws were changed to make it easier for unions to organize and to bargain collectively.

Much of the cost of stimulating demand was covered by steeply graduated income taxes. In Canada, the U.S., and the U.K., the highest incomes were taxed at marginal rates up to 90 per cent during the war and in the years immediately after. Although the top rates were lowered in the 1960s, these remained high. Throughout the period, the share of total income going to capital as profits, dividends, interest payments, and rent declined. Nonetheless, investments in machinery, equipment, infrastructure (bridges, roads, schools, hospitals, public transit), and housing stock rose steadily.

By the 1970s, the super rich and the corporate elite had concluded that Keynesian policies were not in their interests. These, they claimed, had led to stagnation and inflation, not growth. Expanding public employment and social entitlements may have increased consumer demand, but this, they claimed, had come at the expense of capitalist income, reducing the supply of funds available for investment.

In fact, the Keynesian period was a time of steady, impressive growth in investment and consumer income. Inflation rates did reach double digit levels in the 1970s. Neoconservatives blamed this on rising social spending and government deficits. A more obvious explanation was the combination of rising oil prices, a massive inflow of capital from abroad into the U.S., U.K, Europe and Canada, and increasing government deficits. Oil prices had risen from under $3 to over $30 a barrel, increasing the price of nearly all goods and services. The rulers of oil exporting despotisms were suddenly awash in revenues they could invest abroad. Meanwhile, rising government deficits were a predictable consequence of cuts in tax rates paid by corporations and top income earners. U.S. government decisions to finance war in Vietnam with borrowed money, not tax increases, compounded the problem.

After supply-side policies were adopted, taxes on upper incomes and businesses were cut further. Industries were deregulated. Laws were changed to make it more difficult for unions to organize and to engage in effective collective bargaining. Public utilities and services were privatized.

The rich did get richer -- the super-rich substantially richer -- but economies did not flourish as supply-siders had predicted. The quality of public services declined. Social infrastructure was allowed to decay. Employment in manufacturing and service industries fell. The real income of wage and salary workers stopped growing. Markets for consumer goods stagnated.

Supply-side theorists ignored the evidence. Instead, they turned phrases from Adam Smith into a mantra. More income for capitalists, they intoned, would mean more savings, more investment, more economic growth. But Smith was not talking of 20th-century corporate oligarchs when he equated capitalist income with savings and investment. He was referring to a middle class of farmers, shopkeepers, and merchants, whose frugality he contrasted with the aristocracy's fondness for luxury. The middle class, he said, turned their income into savings for investment in the future; aristocrats spent and borrowed for their current pleasure.

Today's super-rich are more like eighteenth-century aristocrats than the middle classes of Smith's day. They are mega and giga-consumers who transform revenues made from productive assets and social labour into personal wealth -- into mansions, yachts, beachfront condos, and winter retreats. As a class, they are obsessed with maximizing returns on their wealth, but they have little interest in productive investment. For them, innovation means a search for new more profitable investment instruments: derivatives, futures, dubious mortgages packaged as collatoralized debt obligations, and credit default swaps (bankruptcy insurance).

Even when pyramid scams and outright fraud are not involved, nothing is added to means of livelihood when one capitalist buys and another sells stocks. Financial entitlements are merely shuffled from one to another. When the rich do invest in actual plant and equipment this is likely to be abroad where labour is cheaper and profits are higher.

The economic argument

Steeply graduated income taxes could quickly make public debt manageable. Unlike taxes on consumption, taxes on the highest incomes would not dampen markets for consumer goods. Additional public revenues could be used to improve education, healthcare, social housing, income support, public transit. As employment and markets expand, enterprises would be encouraged to invest more.

Most investment in real means of livelihood actually comes from undistributed corporate profits. Confiscatory tax rates on the highest incomes would discourage the distribution of profits as dividends, executive salaries, and bonuses. Higher levels of retained earnings would provide corporations with more funds to invest in research and development as well as on plant and equipment.

With far higher taxes on capitalist income, the super rich will have to make do with less sumptuous homes, fewer and less luxurious automobiles, yachts, and vacation spots. For everyone else, the cost of keeping up with the Joneses will be less. In all income groups, people are likely to save more, making more funds available for investment in housing and local enterprises.

The democratic argument

Capitalism claims to be a system of individual opportunities. Providing governments with the revenues needed to improve education, healthcare, pensions, and income support would expand opportunities for everyone. Steeply graduated income taxes would transfer control of social surpluses from a corporate oligarchy to elected national, regional, and local governments.

Can governments and elected representatives be trusted to act in the common interest? With steeply graduated income tax, a small self-serving minority would have less money to influence legislation and corrupt politicians. Billionaires, like the Koch brothers -- two of the wealthiest men in the U.S. who have bankrolled the U.S. Tea Party -- would have less spare cash to dominate and manipulate political agendas in their narrow class interests.

Steeply graduated income taxes alone would not end capitalist entitlement, but as governments gain more revenues to expand social entitlements and public employment, people will demand to be heard and to have a voice in economic decisions. The right of wealthholding minorities to impose their immediate interests will be replaced with the transparent, democratic right of people to direct economic life in the common interest, in the interests of human and environmental wellbeing.

The environmental argument

The wealthiest one per cent presently claim close to 20 per cent of total income. If their share was reduced to five per cent, extravagant consumption and the accompanying waste of resources would be greatly reduced.

Governments would have the funds needed to replace dependence on private automobiles with fast, efficient public transportation. Central heating systems and geothermal heating and cooling systems that require far less fossil fuels could be constructed. Local agriculture for local markets could be effectively encouraged. Environmental protection agencies would have the funds and inspectors needed to investigate complaints and to act against corporate damage to ecosystems.

As control of social surpluses passes from the hands of wealthholding minorities to elected governments, national, regional, and local communities will provide more employment and goods and services as human rights. Fewer people will depend on the profitability of capital in general and of transnational corporations in particular. More people will be free to oppose environmentally destructive industrial activity.

As economic democracy replaces the dictatorship of capital, industrial and service workers, professionals, the retired, homemakers, students, farmers, mushroom pickers, loggers, and ecologists will all have the right to a voice and equal vote in their communities' economic decisions. Private profits will not be allowed to take precedence over the income and employment of common people, or over the carrying capacity of environments.

Allan Engler is a Vancouver trade unionist, social activist, and author. His Economic Democracy, the working-class alternative to capitalism was published this year by Fernwood Books.

Time for Economic Democracy

Peter Tatchell says democratising economic decision-making is the key to a fairer, more stable economy

by Peter Tatchell

Saturday, October 16th, 2010, from TRIBUNEMAGAZINE.co.uk

Three years after a banking crisis that pushed Britain – and much of the world – into the worst recession for decades, the major political parties still have no policies to prevent a repeat economic meltdown. They have still failed to put in place adequate checks and balances to overcome the structural flaws in the private-ownership, free market system which allowed the credit crunch to occur.

The Labour, Conservative and Liberal Democrat leaderships support the highly centralised, largely unaccountable neo-liberal economic system – a system that allowed irresponsible financial decisions by banks and big businesses. This failure to remedy the causes of the crisis leaves this country vulnerable to more chaos in the future.

A major cause of the near-catastrophe of the past three years is the way economic power and decision-making is organised: highly centralised, exclusive, autocratic, secretive and unaccountable. These factors predispose the economy to risk-taking and recession, as well as being inherently anti-democratic and unfair.

One element of a sounder and more just economy is greater economic democracy, participation, transparency, decentralisation, and accountability. Here are a few suggestions to achieve this transformation.

Make corporate negligence and recklessness an explicit criminal offence, to reign in big business cowboys and ensure more responsible economic management. Bankers and company bosses should not be able to wreck whole economies and squander people’s jobs, pensions and savings with impunity. They ought to be personally liable for damaging corporate decisions, in the same way that doctors and others can be held liable for professional negligence. The threat of legal penalties is likely to result in more prudent corporate governance.

Require medium and large-sized companies with boards of directors to be accountable to their employees and to the wider public by including on their boards employee-elected directors and independent directors to represent the interests of consumers. Similar proposals were included in the
1973 Bullock Report and Labour’s 1976 programme.

Under this system, employee and consumer directors would promote non-corporate interests and act as watchdogs and whistleblowers against corporate irresponsibility. If these directors had been on the board of Northern Rock, I doubt the management would have got away with so many reckless decisions. Having directors who are not driven by the profit-motive also increases the likelihood of company policies that are more socially inclusive and environmentally responsible.

Give trade unions a majority stake in the management of their members’ pension funds, to decentralise and democratise investment decision-making and give it a social and ethical dimension. The nearly £1,000 billion invested in pension funds is a massive counterweight to the economic clout of big business. It could be invested in ways that help make the economy more people-centred and public welfare-oriented. Trade union-controlled pension funds are, for example, less likely to invest in the arms trade and clothing sweatshops. They are more open to investment to meet social needs, including renewable energy, affordable housing and quality public transport.

Retain the current full or part public ownership of the banks that were rescued by the last Government, to ensure they operate in the public interest and use their future profits for the public good. Why should the banks be returned to the private sector when it made such a mess of running them? Publicly-controlled – or remutualised – banks could be the means to fund new social housing and low-interest loans to poorer families and to employee-owned enterprises.

Give employees the legal right to buy-out their companies and turn them into workers co-operatives, with funding coming from the publicly-owned banks. This would weaken the power of big corporations, localise and socialise economic decision-making and give employees incentives for greater productivity. Evidence shows that people employed in workers’ co-operatives tend to have higher output, better job satisfaction and greater social solidarity.

Limit corporate bonuses to a percentage of profits and defer their payment for a decade. This would deter short-term, high-risk investments. It would make bonuses conditional on the long-term success of a business. Only people who made successful, sustainable investment decisions would therefore be rewarded.

Legislate for the progressive transfer of share ownership into trade union-administered employee share funds. This is a variation on the “wage-earner funds” proposed by Rudolf Meidner of the Swedish trade union federation, the LO, in the 1970s. It would obligate all private share capital companies to assign to a union-controlled fund a proportion of their annual profits in the form of a new share issue.

Gradually, probably over many decades, it would give employees, through their unions, a controlling interest in their firms – transforming them into self-governing workers’ co-operatives. The great strength of this scheme is not only its democratic and social justice elements. It also provides incentives and rewards employees for economic success. The more productive and profitable a company, the more shares it has to issue to the employees’ funds and the sooner employees gain a controlling stake.

As well as redistributing wealth and power in favour of employees and the wider public, these reforms would reduce the chances of a re-run of the economic crisis. They would achieve these twin goals by a combination of decentralising economic power, democratising economic decision-making, improving corporate social responsibility and strengthening the accountability of businesses to their staff and consumers.

Most of these policies could be implemented unilaterally by a British government. However, given the globalised economy, they would work most effectively if they were adopted by the European Union. Although still predominantly a big business cartel, there is nothing to stop the EU pioneering this new economic model, if the peoples of Europe elect parties that demand it.

The EU’s massive share of international finance, production and trade would enable it to withstand pressure to conform to the dominant neo-liberal economics of the United States-China axis. In other words, Britain and the EU could lead the way in the structural transformation of autocratic, dog-eat-dog capitalism into a more democratic, co-operative and accountable green socialised economy. Why not?

For more information about Peter Tatchell’s human rights and social justice campaigns: www.petertatchell.net

Missing: A Vision of Economic Possibility

Published on Wednesday, November 3, 2010 by YES! Magazine

This election showed us that neither of our two major parties has a credible vision for our economic future. And that's why this is a moment of opportunity.

by David Korten

It is now the morning after. Republicans, as expected, are celebrating a sweeping victory. Democrats are licking their wounds. Meanwhile, record numbers of people are still contending with the hardships of unemployment and foreclosure with no relief in sight. And the nation braces for deepening political gridlock.

It is a moment of opportunity for America to set a new course and for a young President Barack Obama to establish his place in history as a path-breaking leader.

So how does electoral failure and political gridlock create a moment of opportunity?

Neither of our two major parties has a credible vision for the economic future of our nation.

We are a nation consumed by short-term thinking and fragmented political contests centered on narrowly defined issues. Neither of our two major parties has a credible vision for the economic future of our nation.

The Republicans offer only their standard prescription of tax cuts for the rich, a rollback of regulations on predatory corporations, and elimination of the social safety net-a proven prescription for further job loss and devastation of the middle class.

The Democrats have no identifiable program for economic recovery, let alone for adapting our economy to the dramatic demographic, environmental, economic, and political changes that rule out any chance of a return to pre-2008 business as usual.

In an insightful interview, Populist historian Lawrence Goodwyn suggests that this creates a historic opportunity. He observes that bankers have been a dominant ruling power throughout much of our national history and a barrier to realizing the democratic ideal on which our nation was founded. It has not been within the power of any American president to break their hold due to lack of an adequate public understanding of the nature of the problem.

We now have 15 million unemployed people who feel deeply betrayed and upwards of two million homeowners whose homes have been foreclosed-all as a direct consequence of the actions of Wall Street bankers. These same interests used conceptual deception backed by massive political spending to swing the election in favor of right wing extremists devoted to policies that will further decimate the middle class without resolving the pain of the unemployed and the foreclosed.

The deception, which can be maintained only so long, sows the seeds of its own self-destruction. In taking control of the House and leaving the Democrats with only a slim majority in the Senate, Republicans now share responsibility for what is certain to be continued economic failure.

The administration, however, remains in the hands of a now seasoned Democratic president who Goodwyn believes has the potential to rise to the occasion, lead his party to a second term victory, break the power of Wall Street, and actualize the democratic ideal that has for so long eluded us.

It requires, however, a vision of a New Economy that is truly democratic, based on sound market principles, rooted in community values, and accountable to community interests. Economists steeped in the economic models that got us into this mess are not going to provide President Obama with such a vision. He will need to look to the people who are working from the bottom up outside the halls of established power to frame and implement a new economic vision aligned with the values of caring and sharing at the core of authentic spiritual teaching and for which scientists tell us our brains are wired.

This vision is being articulated and popularized by alliances such as the New Economy Working Group and the New Economy Network and implemented by groups such as the Business Alliance for Local Living Economies, the American Independent Business Alliance, Transition Towns, local food movements, and many others. The vision is grounded not in some utopian ideology or theory, but rather on the work and experience of millions of people are already engaged in living the New Economy into being through grassroots actions that flow from their deepest values and aspirations.

The emerging vision calls for a fundamental economic restructuring to put life values ahead of financial values, give the creation of sustainable livelihoods for working people priority over bonuses for Wall Street traders, and root the power to create and allocate money in people and community rather than in Wall Street financial institutions. David Brancaccio has documented impressive examples in a PBS television special titled "Fixing the Future" scheduled to be aired on November 18, 2010.

As awareness grows that no adjustments at the margin of the existing Wall Street-dominated economy will resolve the plights of joblessness and the homelessness, so too does potential political support for fundamental economic restructuring in support of the emerging vision. The political party that responds to this rapidly growing economic and political force will gain a decided advantage in 2012 and beyond.

It is President Obama's opportunity to win a second term and establish his place in history not only as the first African-American president, but as well the president who liberated the nation, our democracy, and the market from the grip of Wall Street. I have drafted a framing presidential economic address ready for delivery by the future president who dares to take on the challenge. Imagine a president delivering this speech. Let us make it happen.

This work is licensed under a Creative Commons License

David Korten is co-founder and board chair of  YES! Magazine, co-chair of the New Economy Working Group, president of the People-Centered Development Forum, and a founding board member of the Business Alliance for Local Living Economies (BALLE). His books include Agenda for a New Economy: From Phantom Wealth to Real Wealth, The Great Turning: From Empire to Earth Community, and the international best seller When Corporations Rule the World.

Time for Economic Democracy

Peter Tatchell says democratising economic decision-making is the key to a fairer, more stable economy

by Peter Tatchell

From TribuneMagazine.co.uk, Saturday, October 16th, 2010

Three years after a banking crisis that pushed Britain – and much of the world – into the worst recession for decades, the major political parties still have no policies to prevent a repeat economic meltdown. They have still failed to put in place adequate checks and balances to overcome the structural flaws in the private-ownership, free market system which allowed the credit crunch to occur.

The Labour, Conservative and Liberal Democrat leaderships support the highly centralised, largely unaccountable neo-liberal economic system – a system that allowed irresponsible financial decisions by banks and big businesses. This failure to remedy the causes of the crisis leaves this country vulnerable to more chaos in the future.

A major cause of the near-catastrophe of the past three years is the way economic power and decision-making is organised: highly centralised, exclusive, autocratic, secretive and unaccountable. These factors predispose the economy to risk-taking and recession, as well as being inherently anti-democratic and unfair.

One element of a sounder and more just economy is greater economic democracy, participation, transparency, decentralisation, and accountability. Here are a few suggestions to achieve this transformation.

Make corporate negligence and recklessness an explicit criminal offence, to reign in big business cowboys and ensure more responsible economic management. Bankers and company bosses should not be able to wreck whole economies and squander people’s jobs, pensions and savings with impunity. They ought to be personally liable for damaging corporate decisions, in the same way that doctors and others can be held liable for professional negligence. The threat of legal penalties is likely to result in more prudent corporate governance.

Require medium and large-sized companies with boards of directors to be accountable to their employees and to the wider public by including on their boards employee-elected directors and independent directors to represent the interests of consumers. Similar proposals were included in the
1973 Bullock Report and Labour’s 1976 programme.

Under this system, employee and consumer directors would promote non-corporate interests and act as watchdogs and whistleblowers against corporate irresponsibility. If these directors had been on the board of Northern Rock, I doubt the management would have got away with so many reckless decisions. Having directors who are not driven by the profit-motive also increases the likelihood of company policies that are more socially inclusive and environmentally responsible.

Give trade unions a majority stake in the management of their members’ pension funds, to decentralise and democratise investment decision-making and give it a social and ethical dimension. The nearly £1,000 billion invested in pension funds is a massive counterweight to the economic clout of big business. It could be invested in ways that help make the economy more people-centred and public welfare-oriented. Trade union-controlled pension funds are, for example, less likely to invest in the arms trade and clothing sweatshops. They are more open to investment to meet social needs, including renewable energy, affordable housing and quality public transport.

Retain the current full or part public ownership of the banks that were rescued by the last Government, to ensure they operate in the public interest and use their future profits for the public good. Why should the banks be returned to the private sector when it made such a mess of running them? Publicly-controlled – or remutualised – banks could be the means to fund new social housing and low-interest loans to poorer families and to employee-owned enterprises.

Give employees the legal right to buy-out their companies and turn them into workers co-operatives, with funding coming from the publicly-owned banks. This would weaken the power of big corporations, localise and socialise economic decision-making and give employees incentives for greater productivity. Evidence shows that people employed in workers’ co-operatives tend to have higher output, better job satisfaction and greater social solidarity.

Limit corporate bonuses to a percentage of profits and defer their payment for a decade. This would deter short-term, high-risk investments. It would make bonuses conditional on the long-term success of a business. Only people who made successful, sustainable investment decisions would therefore be rewarded.

Legislate for the progressive transfer of share ownership into trade union-administered employee share funds. This is a variation on the “wage-earner funds” proposed by Rudolf Meidner of the Swedish trade union federation, the LO, in the 1970s. It would obligate all private share capital companies to assign to a union-controlled fund a proportion of their annual profits in the form of a new share issue.

Gradually, probably over many decades, it would give employees, through their unions, a controlling interest in their firms – transforming them into self-governing workers’ co-operatives. The great strength of this scheme is not only its democratic and social justice elements. It also provides incentives and rewards employees for economic success. The more productive and profitable a company, the more shares it has to issue to the employees’ funds and the sooner employees gain a controlling stake.

As well as redistributing wealth and power in favour of employees and the wider public, these reforms would reduce the chances of a re-run of the economic crisis. They would achieve these twin goals by a combination of decentralising economic power, democratising economic decision-making, improving corporate social responsibility and strengthening the accountability of businesses to their staff and consumers.

Most of these policies could be implemented unilaterally by a British government. However, given the globalised economy, they would work most effectively if they were adopted by the European Union. Although still predominantly a big business cartel, there is nothing to stop the EU pioneering this new economic model, if the peoples of Europe elect parties that demand it.

The EU’s massive share of international finance, production and trade would enable it to withstand pressure to conform to the dominant neo-liberal economics of the United States-China axis. In other words, Britain and the EU could lead the way in the structural transformation of autocratic, dog-eat-dog capitalism into a more democratic, co-operative and accountable green socialised economy. Why not?

For more information about Peter Tatchell’s human rights and social justice campaigns: www.petertatchell.net

The Rise of the New Power Co-Op Movement

by Brendan Smith

Oysterman and Labor Network for Sustainability Co-Founder

Posted: September 28, 2010 10:43 AM on Huffington Post

[Drafted with Jeremy Brecher]

Breakdown at Copenhagen. Climate legislation stalled. EPA regulation of greenhouse gasses threatened. Is climate protection dead?

Maybe not. Climate protection has gone local. Political leaders may fiddle while the world burns, but grassroots groups around the country are organizing to cut greenhouse gas emissions and build a greener future for their communities. Block by block and using every tool at their disposal, groups are fighting to green schools and workplaces; setting up networks of green job training centers; installing solar water heaters in low income communities; and halting new coal-fired power plants with both political and direct action.

One of the least known but most promising examples of this "localization" of climate politics is the greening of utility co-ops to create affordable and renewable energy, green jobs, and regional green development. These efforts may well represent the beginning of a "New Power Co-Op Movement" that can help jump start the shift to a new green economy.

Electric co-ops are owned by their customers, who are called "members" due to their dual role as customer/owner. Their primary mission is to provide access to electricity at affordable prices for every potential member in their service area.

Electric co-ops were created as one of President Franklin Roosevelt's New Deal programs in order to promote rural development. The first electric co-op was born in 1934 in the back of a furniture store in Corinth, Mississippi. Within a few years, it had thousands of counterparts across the nation.

Today, America's 930 electric cooperatives are the sole source of electricity for 42 million people in 47 states -- nearly 12 percent of the nation's population. They control $100 billion in assets and $31 billion in member equity.

What Matters in Kansas

In western Kansas, rural communities, farms, and businesses get their electricity from Midwest Energy, the electric co-op based in Hays, Kansas. The co-op has pioneered an energy conservation strategy known as "on-bill financing." It has developed a program called How$mart that provides money for energy efficiency improvements such as insulation, air sealing, and new heating and cooling systems for residential and small business consumers. Co-op members -- whether owners or tenants -- don't have to put up any money "up-front." Instead, they repay the funds through energy savings on their monthly power bills.

Members start with an energy audit to determine potential savings. The co-op develops an individualized conservation plan. Members choose a contractor. If the member moves or sells the property, the deal passes to the next customer at that location.

The program started with a pilot in four rural counties in the summer of 2008; it then spread through rural Western Kansas. A year later it had invested $1 million in more than two hundred rural homes and businesses. It is estimated that customers will save over 400,000 kilowatt-hours per year, enough to power forty homes. That will put 13,000 fewer tons of carbon dioxide into the environment over the next twenty years. The Environmental Defense Fund recently recognized How$mart as one of America's best energy innovations.

"New Power" in Kentucky

For decades residents of eastern Kentucky have been fighting Big Coal's destruction of their majestic environment and cherished way of life by coal extraction. Much of that fight is led by the statewide citizens organization Kentuckians For The Commonwealth. KFTC has deep roots in the state's impoverished mountain communities where coal is mined; many of its leaders are former coal miners. While it has engaged in direct action against mountaintop removal, it recognizes that such action is not enough. Kentuckians desperately need a new strategy for economic development, energy, and jobs. KFTC is now promoting a plan for "New Power" that would make eastern Kentucky's electric cooperatives the pivot for such a strategy.

East Kentucky Power Cooperative (EKPC) is a cooperative that is owned by 16 local electric distribution coops. EKPC generates and sells power to these co-ops, which serve half a million members in 87 counties. EKPC is proposing to build a new 278-megawatt coal-burning power plant in central Kentucky along the Kentucky River at an estimated cost of nearly one billion dollars.

The Smith plant would only increase the dependence of Kentucky on coal for its energy supply and thereby increase the pressures for mountaintop removal. The struggle against the Smith plant has led KFTC to accompany its fight to save the mountains with a search for a "New Power" alternative.

With the help of KFTC, co-op members are now proposing that the co-ops not waste their funds on the Smith coal plant, but instead invest in an alternative plan to meet the power needs of their members through energy-saving and renewable energy programs. These local energy needs will be met by a combination of energy efficiency and weatherization initiatives paid through on-bill financing, along with local renewable energy, such as small-scale hydroelectric plants and rooftop solar hot water heaters. The New Power plan would cost less than the Smith Plant while meeting the same energy demand.

Such a plan would not only provide for eastern Kentucky's energy needs in a way that would protect the local environment and the global climate, it would also provide far more and better jobs. According to EKPC itself, the Smith plant will create only 700 temporary jobs at the peak of construction and 60 permanent jobs. Yet, according to the Ochs Center for Metropolitan Studies,an energy plan based on efficiency and renewables will create nearly 4,600 direct jobs over the same period it would take to build the Smith Plant. Members of local communities could be trained and hired for these green energy jobs.

The New Power plan would also significantly lower the utility bills of co-op members (some co-op members in eastern Kentucky spend more than 50% of income on energy). The estimated cost of electricity from the alternative plan is 17% less than the Smith coal-burning plant. Money saved could be invested in affordable housing, environmental restoration, healthcare, and other job-creating activities. (For more on KFTC's alternative program read: "A Cooperative Approach to Renewing East Kentucky".)

Co-op members in Kentucky are weighing the trade-off. According to Rachel Harrod, whose stepmother ran for a local co-op board this summer:

I believe there's an alternative that will be better for the environment, less costly to co-op members, and far more beneficial economically. The jobs generated by a clean energy portfolio would be a welcome boost to our local economy. I can't tell you how significant this would be to an area that has lost much of its agricultural base in recent years.

 

In addition to saving co-op members from paying for dirty power, a New Power program in eastern Kentucky could kick-start a broader agenda for transitioning Appalachia to the new green economy. Co-ops already have the key infrastructure in place. And instead of being controlled by for-profit investor utilities, the new facilities will literally be owned by eastern Kentucky -- the co-op owners, not distant stakeholders. These economic benefits will stay in Kentucky and reverberate through the region.

Greening Economic Democracy

Rural electric co-ops were once a model for economic democracy. David Lilienthal, a founding director of the Tennessee Valley Authority, described an electric coop annual meeting in the 1940s:

Throughout a whole day as many as 2,000 farmers and their wives and children discussed the financial and operating reports made to them by their [co-op] superintendent and board of trustees, and later while we ate a barbecue lunch watched new uses of electricity demonstrated.

 

He added,

These membership "town meetings" are not simply business sessions. They have an emotional overtone, a spiritual meaning to people who were so long denied the benefits of modern energy.

 

But many electric coops have become distant from such town meeting democracy. In eastern Kentucky, for example, elections to coop boards are rarely contested, with many of the officers serving for decades. Policies are often controlled by coal and other energy companies; as a result, Kentucky's rural electrical cooperatives are more than 90 percent dependent on coal. That makes rural Kentuckians vulnerable to rising fuel prices and coal depletion.

Building the new green economy will require the revival of democracy -- at every level. That's why co-op members, with the help of KFTC, have begun challenging the entrenched leadership of local co-op boards. This year, KFTC members Dallas Ratliff and Tona Barkley ran for the board of the Owen Electrical Cooperative. In her campaign materials Barkley says:

As a board member, I will strive to make the co-op more open and democratic. I'll also promote a stronger approach to helping members improve the energy efficiency of their homes and businesses and a more aggressive approach to transitioning into more renewable sources of energy -- to protect members from rising energy costs, to protect our health, and to create local jobs.

Like Tona, hundreds of KFTC members throughout the state see a clear link between new democratic power and new clean energy power.

Such a program could be a model for the 400 rural electrical co-ops with 40 million members nationwide. And that could be a significant contribution to a new strategy for protecting the global climate -- from below.

Jesse Jackson Channels Progressive Robert LaFollette; Calls for Economic Justice, More Jobs

Published on Sunday, September 12, 2010 by The Nation

Bring the Troops Home, Bust the Banksters, Democratize the Economy

by John Nichols

 BARABOO, WISCONSIN -- Decrying the excesses of big banks and Wall Street speculators, the Rev. Jesse Jackson told thousands of cheering progressives at a county fairgrounds in rural Wisconsin Saturday that: “There is a contest for the soul of America.

Cheered on by the crowd that had gathered for Fighting Bob Fest, the annual progressive chautauqua on the Sauk County Fairgrounds in this central Wisconsin community, the civil rights leader and two-time presidential candidate declared that America would have to choose between being of a country where a tiny elite controls the vast majority of wealth or one where the great mass of Americans have a chance to survive and thrive.

“We cannot subsidize bankers and leave people homeless on the streets of America,” Jackson said. “It’s time for a change!”

“We will fight back!” chanted the crowd, which packed the grandstand and field for one of the largest Bob Fest gatherings in the nine-year history of the event.

For Democratic strategists who worry about an "enthusiasm gap" in this year's mid-term election season, Jackson offered the antedote. His adamant address had thousands of people -- many of them from rural and smalltown Wisconsin -- on their feet and cheering. And this year's Fighting Bob Fest drew more than twice as many people as a highly publicized and expensively promoted "Tea Party" event -- which featured television personalies, "Joe the Plumber" and Congressman Paul Ryan, R-Janesville -- held the same day in Racine, Wisconsin.

The enthusiastic response for Jackson’s populist speech offered a reminder that there is no enthusiasm gap. There's a message gap.

When the message is muscular, the enthusiasm is there.

Jackson wasn't the only one drawing cheers on a day that heard rousing speeches from  former Texas Secretary of Agriculture Jim Hightower, Congressman David Obey, Congresswomen Tammy Baldwin and Gwen Moore, Democratic gubernatorial candidate Tom Barrett and other prominent speakers from Wisconsin and across the nation.

A Saturday that began with overcast skies and scattered rain showers ended with bright sunshine and a rollicking, old-school rallying of the progressive faithful in the tradition of Robert M. La Follette, the Wisconsin governor, senator and 1924 presidential candidate for whom the festival is named.

Jackson, who was honored with a lifetime achievement award by festival organizers, hailed the progressive movement led by La Follette, which campaigned for economic and social justice at home while opposing empire building abroad.

Sounding anti-war themes that were very much in the La Follette tradition, Jackson called for bringing U.S. troops home and reallocating resources from fighting wars abroad to fighting unemployment at home.

“We want for America what we provide for Iraq and Afghanistan,” said Jackson. “We want jobs for Chicago… jobs for Milwaukee… jobs for Sauk County.”

Sounding economic justice themes that repeatedly brought the crowd to its feet, Jackson warned that: “We’ve globalized capital without globalizing human rights, without globalizing workers’ rights, women’s rights, children’s rights. Let’s democratize our economy!

© 2010 The Nation

John Nichols is Washington correspondent for The Nation and associate editor of The Capital Times in Madison, Wisconsin. A co-founder of the media reform organization Free Press, Nichols is is co-author with Robert W. McChesney of The Death and Life of American Journalism: The Media Revolution that Will Begin the World Again and Tragedy & Farce: How the American Media Sell Wars, Spin Elections, and Destroy Democracy. Nichols is also author of Dick: The Man Who is President and The Genius of Impeachment: The Founders' Cure for Royalism.

Globalism Sheds American Jobs: Go Local Instead

John,

This is a quick follow-up commentary to you excellent thoughts about the structural job destruction spiral we are caught in by indifferent, giant  quasi-monopolistic enterprises. On the positive side, there are some emerging signs of a promising sea change of more local communities choosing for nurturing independent businesses and locally produced goods as an Escape from Big Corporate uniformity and concentrated power ... as a better way to self-control and stimulate worker happiness and job growth. People's priorities and attitudes, for example, appear to be slowly shifting to food co-operatives, to neighborhood green grocers and local hardware stores, to opening their own drug stores rather working for a chain for minimum wages and neglible benefits.

The 1950s uprising of the extraordinarily successful Spanish Mondragon Cooperative Movement is now arriving to America's shores. This new grass roots economy movement -- tied to community and small-scale businesses under a disciplined policy of mutual employer-employee loyalty and shared ownership -- offers a truly exciting countervailing power against the privileges of global conglomerates. Decades of softening anti-monopoly enforcement has exploded corporate bigness and a business culture of concentrating power, evaporating local businesses and jobs for the sole benefit of management bonuses and shareholder returns ... ultimately undermining our democracy with big corporate money influence on community elected representatives.

The conservative right consistently forgets that Americans have always had a gut suspicion and deep dislike of corporate economic concentration. Even Thomas Jefferson proposed making "freedom from monopolies in commerce" an article in the Bill of Rights. He did not succeed. But over the past 200 years courts have given the corporate form enormous powers such as the rights of citizens, unlimited liability, and unlimited life. (Ed. note: See recent Supreme Court decision on Citizens United which gives corporations even more power.) The result? A handful of global corporations, mega-retailers, giant insurance and financial institutions dominate all sectors of society. They suck out all the breathing air of local businesses, eradicating smaller competition, local suppliers, and jobs. They systematically destroy the relationships that tie small businesses and a community together. We end up erecting a singly-driven monoculture and economy with the goal to Export wealth and jobs, thereby relegating more and more of the working community to an insecure minimum wage/benefit status. This curse of bigness is also fostering an increasingly unhappy and alienated populace throughout America ... people generally feeling more and more at the job, product/service choice and quality mercy of unresponsive, destructive corporate behavior.

As a nation, we should be encouraging aggressively a new economic mission of reconnecting capital with community and region.  A new economic mission that recognizes that mega-banks, for example, that are TOO BIG TO FAIL are also TOO BIG TO EXIST, so well put by one writer. Huge financial instutions, exerting corrosively concentrated power, must be broken up into much smaller, more competitive units that (like the Mondragon co-operative banks and firms which are based on solidarity) respond better to unique regional conditions and needs. The new economic mission should be to encourage many more small locally owned businesses which are a catalyst for social-civic activities and engaging community/regional interactions ...  in sharp contrast to communities saturated with boringly standard chain mega-stores/shopping malls/big box stores all designed to generate quick consumption, little conversation, and community cohesiveness. In this regard, I've read that my home state of Maine (somewhat like San Francisco, I believe) has a policy that prohibits large stores being built that do not meet rigid criteria of environmental and economic benefits including enlivening a citizenry sense of civic and community togetherness, of diverse architectural harmony,  where local store owners know their customers who chat with acquaintances in stores and along sidewalks.

Much more money needs to be productively redirected to rebuilding local communities, to stimulate existing and startup businesses, to nurture local/regional enterprises like the neighborhood stores, locally owned food markets, independent restaurants, small-scale farms, a green industrial bank, etc. As one fellow Mainer remarked: " Money is a human invention and the rules that control its dynamic are also a human invention. The capital rules in place today favor mobility over community, speculation over productive investment in people and small enterprises, volatility over permanence, where the  monopoly corporate aim is extraction of wealth rather than creation of wealth."  

And where the concomitant goal of corporate bigness is to achieve this extraction of wealth with rock bottom wages and a minimum of workers who are trapped in a race to the bottom .... whereby lower-middle class wealth or what remains of it is diverted to ruling class elites.

Regards,

Frank Thomas
The Netherlands

P.S. : Constanze Woelfle, an American accountant based in the Netherlands, recently noted in a study the following ratios of U.S. CEO pay to that of average manufacturing and middle-class working employees:

471 to 1 in the U.S.
24:1 in the UK
15:1 in France
13:1 in Sweden
12:1 in the Netherlands

This warped U.S. income disparity and cynically greedy diversion of income from workers to upper management echelons and investors are symptomatic of and a contributing factor to our egregious culture of job destruction. 

Best,
Frank

 

European Capitalism Superior to American Capitalism?

How Europe Avoided an Economic Crisis that is Anywhere Near as Bad as Ours

By Richard Clark (about the author)  

Published by OpEdNews.com, May 1, 2010 at 08:16:21

What follows is a synopsis of an article by Steven Hill that recently appeared in The Nation -- http://www.thenation.com/doc/20100510/hill. That article was adapted from Hill's eyeopening recently published book, Europe's Promise: Why the European Way Is the Best Hope in an Insecure Age. (http://www.europespromise.org/).

Contrary to what rightwing American critics would have us believe, Europe has the largest economy in the world, producing nearly a third of the world's GDP. Indeed, its economy is almost as large as those of the United States and China combined. Europe has more Fortune 500 companies than the United States and China put together, and Europe had a higher per capita growth rate from 1998 to 2008 than the United States. Long denigrated by US pundits as the land of high unemployment, the EU currently even has a slightly lower unemployment rate than the United States. Indeed, the World Economic Forum in 2008-09 ranked Denmark, Sweden, Finland, Germany and the Netherlands among the top ten most competitive economies in the world. They are also ranked at or near the top of most lists for quality of life, health care and social benefits. That's not a coincidence, since the participation of workers on all corporate boards of directors allows for both economic vibrancy and more egalitarian social policy. And while the United States also ranks high in competitiveness, it is near the bottom among most-developed countries in health care, social benefits and quality of life.

Sweden, Germany and other European countries are proof that you can have it all -- but only if you have the right institutions to facilitate both a powerful economic engine and the supportive institutions and benefits to harness that engine and keep employees and families healthy and productive. These distinctly European advances may be the most important innovations in the world economy since the invention of the modern corporation, since they encourage free enterprise combined with economic democracy and worker consultation that does not unduly burden entrepreneurship and commerce. The advances allow businesses to be both competitive and socially responsible.

In effect, Europe has reinvented the corporation. Yet the latest critiques of capitalism by leading authors like Naomi Klein, Noam Chomsky and the producers of the popular film The Corporation tend to view all corporations and all capitalisms as the same. American progressives, while searching for effective responses to globalization, appear to be mostly unaware of these intriguing European inventions. Movements to revoke the charters of offensive corporations, while having gut-level appeal, have failed to recognize that European corporations are fundamentally different animals from their "disaster capitalism" US counterparts.

Now, a year and a half after an economic earthquake shook the world, new economic models are beginning to find traction in America. Alternatives to Wall Street capitalism, the epicenter of the temblor, are suddenly getting a new hearing in the United States, whether it's Paul Volcker calling for reinstatement of Glass-Steagall regulation of the banking sector, the United Steelworkers announcing an alliance with the Mondragon cooperatives in Spain to develop manufacturing cooperatives in the United States, or Cleveland-based efforts to establish worker-owned co-ops in distressed communities [see Alperovitz, Howard and Williamson, "The Cleveland Model," March 1, in The Nation].

If Americans want to learn about cooperatives, Europe is a great place to start.Those co-ops produce an estimated 12% of the GDP of the European Union and involve, directly or indirectly, at least 60% of the population. Besides the Mondragon co-ops in Spain, in which 256 companies employ 100,000 people in industry, retail, finance and education, there's also Coop Italia, which operates the largest supermarket chain in Italy, employing 56,000 with more than 6 million members; housing co-ops like Poland's TUW; and the Co-operative Group in Britain, which is the world's largest consumer-owned business, with 4.5 million members.

In Europe, practices unfamiliar to Americans, such as co-determination, supervisory boards and works councils, have been crucial in helping to harness capitalism's tremendous wealth-creating capacity so that its prosperity is broadly shared.

Co-determination has several features, one of which allows workers to elect representatives to corporate boards of directors known as supervisory boards. Supervisory boards then oversee company managers, who handle day-to-day operations. In Germany, the world's second-largest exporter and fourth-largest national economy, fully half of the boards of directors of the largest corporations -- Siemens, BMW, Daimler, Deutsche Telekom and others -- are elected by workers. In Sweden, one-third of a company's directors are worker-elected. To understand the significance of this, imagine if Wal-Mart were legally required to allow its workers to elect a third to half of its board, who would then oversee the CEO. Imagine how much that would change Wal-Mart's behavior toward its workers and supply chain. It's hard for Americans even to conceive of such a notion; indeed, when I ask Americans at my lectures how many of them have heard of worker-elected supervisory boards, usually no hands go up. Yet most European nations employ some version of this as a regular feature of their economy.

Co-determination means that elected worker directors should sit side by side as equal decision-makers with stockholder representatives, supervising management, is a little-known yet unprecedented extension of democratic principle into the corporate sphere.

Research shows that employee representation on corporate supervisory boards, contrary to fears that it would cause tension or render decision-making too cumbersome, has actually fostered cooperation between management and workers. This, in turn, has benefited the businesses as well as the workers. Workers have input, even into important decisions, so companies are less plagued by labor strife and internal schisms. And workers are well compensated, with high salaries and the most generous social support systems in the world.

One study of Swedish businesses found that two-thirds of executives viewed co-determination as "very" or "rather" positive, because it contributed to a positive climate, made board decisions "deeply rooted among the employees" and facilitated implementation of "tough decisions." Eight of ten chairmen were satisfied with the arrangement and felt it was not important to reduce worker representation. An EU directive establishing a continent-wide framework for board-level employee representation went into effect in October 2004, firmly rooting supervisory boards in Europe's economic culture.

The other pillar of co-determination is known as works councils, which are just what the name implies -- elected councils at businesses, through which employees gain significant input into working conditions. Works councils, which are separate from labor unions but often populated by trade unionists, have real clout. They enjoy veto power over certain management decisions pertaining to treatment of employees, such as redeployment and dismissal. They also have "co-decision rights" to meet with management to discuss the firm's finances, work and holiday schedules, work organization and other procedures. In addition, they benefit from "consultation rights" in planning the introduction of new technologies and in mergers and layoffs, as well as in obtaining information useful in contract negotiations, such as profit and wage data. In some nations, including Germany, Sweden and France, works councils have acquired even more rights and greater influence.

German law stipulates that factory-wide workers' assemblies must be held at least four times a year, at which a management representative must report on the plant and the business. The head of the works council also reports, and workers use these assemblies to promote their views and, if necessary, criticize company decisions in front of management.

In 1994 the EU issued a pioneering directive on works councils, stipulating that every multinational with at least 1,000 workers, and at least 150 workers in two or more EU nations, must negotiate agreements with works councils. Other nations have supplemented that directive by requiring councils in every workplace. Studies by Princeton's Jonas Pontusson and others have concluded that works councils contribute to efficiency by improving communication, which in turn improves the quality of decisions and legitimizes decisions in the eyes of workers. The studies also found that works councils are associated with lower absenteeism, more worker training, better handling of grievances and smoother implementation of health and safety standards. It turns out that when workers are given a degree of consultation, it makes them more satisfied and more productive.

In Germany works councils and supervisory boards can take substantial credit for the fact that, while the US unemployment rate has more than doubled during this economic crisis, Germany's has barely increased. That's because Chancellor Angela Merkel was heavily influenced by works councils and labor unions, and by the culture of consultation in general, to adopt a policy called Kurzarbeit, or "short-time work," in which, instead of laying off millions, employees agreed to spread the pain by working shorter weeks. Most of the lost wages have been made up from a special fund squirreled away during more prosperous times. As a result, more Germans have money in their pockets, and communities and households haven't been decimated by layoffs like they have been in the United States. (Despite the advantages, when Larry Summers, one of Barack Obama's closest economic advisers, was asked why the president didn't pursue short-time work to stem the economic bleeding, he dismissed the idea, saying the White House wanted to create new jobs, not preserve old ones.) But of course there's absolutely no reason why we couldn't do both!

Co-determination has proved crucial to Europe's economic success and its broadly distributed wealth. The practical effect of co-determination is that corporate managers and executives must confer extensively with employees and unions about a range of issues, even about the future direction of the company. Co-determination reflects European "socialized capitalism," with its communitarian values, long-term strategic vision and emphasis on manufacturing, much the way huge executive bonuses, quarterly earnings and a bloated financial sector reflect America's Wall Street capitalism. Socialized capitalism has both produced and benefited from the culture of consultation, which has also contributed to the creation of cooperatives and resulted in a vibrant small-business sector that produces two-thirds of European jobs, compared with only half of US jobs.

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Let's follow the European example

Europe's Answer to Wall Street

By Steven Hill

This article appeared in the May 10, 2010 edition of The Nation.

April 21, 2010

This article is adapted from Steven Hill's recently published Europe's Promise: Why the European Way Is the Best Hope in an Insecure Age (EuropesPromise.org).

KAREN CALDICOTT

A year and a half after an economic earthquake shook the world, the so-called experts are still trying to figure out what happened and how to move forward. In the shadows of that confusion, new economic models are beginning to find traction. Alternatives to Wall Street capitalism, the epicenter of the temblor, are suddenly getting a new hearing in the United States, whether it's Paul Volcker calling for reinstatement of Glass-Steagall regulation of the banking sector, the United Steelworkers announcing an alliance with the Mondragon cooperatives in Spain to develop manufacturing cooperatives in the United States, or Cleveland-based efforts to establish worker-owned co-ops in distressed communities [see Alperovitz, Howard and Williamson, "The Cleveland Model," March 1].

But the brightest spots in the postcollapse landscape are in Europe, which long ago advanced a degree of economic democracy that has proved its mettle in this crisis and therefore deserves closer inspection. If Americans want to learn about cooperatives, Europe is a great place to start. They produce an estimated 12 percent of the GDP of the European Union and involve, directly or indirectly, at least 60 percent of the population. Besides the Mondragon co-ops in Spain, in which 256 companies employ 100,000 people in industry, retail, finance and education, there's also Coop Italia, which operates the largest supermarket chain in Italy, employing 56,000 with more than 6 million members; housing co-ops like Poland's TUW; and the Co-operative Group in Britain, which is the world's largest consumer-owned business, with 4.5 million members.

However, most cooperatives are generally small-scale and thus unlikely anytime soon to replace the most important economic institution in modern mass economies, which is the corporation. The corporation, even with all its considerable warts, is the greatest wealth generator that humans have ever created, but its success raises the questions: Who gets to control that wealth? Whose pockets should the wealth flow into?

To answer those questions, Europe, led by Germany, has evolved over several decades one of its greatest contributions to the global economy. Practices unfamiliar to Americans, such as co-determination, supervisory boards and works councils, have been crucial in helping to harness capitalism's tremendous wealth-creating capacity so that its prosperity is broadly shared.

Co-determination has several features, one of which allows workers to elect representatives to corporate boards of directors known as supervisory boards. Supervisory boards then oversee company managers, who handle day-to-day operations. In Germany, the world's second-largest exporter and fourth-largest national economy, fully half of the boards of directors of the largest corporations--Siemens, BMW, Daimler, Deutsche Telekom and others--are elected by workers. In Sweden, one-third of a company's directors are worker-elected. To understand the significance of this, imagine if Wal-Mart were legally required to allow its workers to elect a third to half of its board, who would then oversee the CEO. Imagine how much that would change Wal-Mart's behavior toward its workers and supply chain. It's hard for Americans even to conceive of such a notion; indeed, when I ask Americans at my lectures how many of them have heard of worker-elected supervisory boards, usually no hands go up. Yet most European nations employ some version of this as a regular feature of their economy.

The impact has been impressive. Klas Levinson, a researcher for the former National Institute for Working Life in Sweden, is one of the world's experts on co-determination. I met with Levinson at the institute's Stockholm headquarters, a sleek glass structure with the air of a university campus. "Co-determination is Europe's little secret advantage," he told me. "The idea that elected worker directors should sit side by side as equal decision-makers with stockholder representatives, supervising management, is a little-known yet unprecedented extension of democratic principle into the corporate sphere."

Levinson's research shows that employee representation on corporate supervisory boards, contrary to fears that it would cause tension or render decision-making too cumbersome, has actually fostered cooperation between management and workers. This, in turn, has benefited the businesses as well as the workers. Workers have input, even into important decisions, so companies are less plagued by labor strife and internal schisms. And workers are well compensated, with high salaries and the most generous social support systems in the world.

One of Levinson's studies of Swedish businesses found that two-thirds of executives viewed co-determination as "very" or "rather" positive, because it contributed to a positive climate, made board decisions "deeply rooted among the employees" and facilitated implementation of "tough decisions." Eight of ten chairmen were satisfied with the arrangement and felt it was not important to reduce worker representation. An EU directive establishing a continentwide framework for board-level employee representation went into effect in October 2004, firmly rooting supervisory boards in Europe's economic culture.

The other pillar of co-determination is known as works councils, which are just what the name implies--elected councils at businesses, through which employees gain significant input into working conditions. Works councils, which are separate from labor unions but often populated by trade unionists, have real clout. They enjoy veto power over certain management decisions pertaining to treatment of employees, such as redeployment and dismissal. They also have "co-decision rights" to meet with management to discuss the firm's finances, work and holiday schedules, work organization and other procedures. In addition, they benefit from "consultation rights" in planning the introduction of new technologies and in mergers and layoffs, as well as in obtaining information useful in contract negotiations, such as profit and wage data. In some nations, including Germany, Sweden and France, works councils have acquired even more rights and greater influence.

In France the food manufacturer Danone agreed with its works councils to specific rules on job cuts, including consideration of union proposals to avoid layoffs and worker transfers. The Polish union Solidarity has said that the inclusion of Central and Eastern European worker representatives in works councils is "the most effective and sometimes nearly the only way" for them to obtain information on multinational companies' operations. German law stipulates that factorywide workers' assemblies must be held at least four times a year, at which a management representative must report on the plant and the business. The head of the works council also reports, and workers use these assemblies to promote their views and, if necessary, criticize company decisions in front of management.

In 1994 the EU issued a pioneering directive on works councils, stipulating that every multinational with at least 1,000 workers, and at least 150 workers in two or more EU nations, must negotiate agreements with works councils. Other nations have supplemented that directive by requiring councils in every workplace. Studies by Princeton's Jonas Pontusson and others have concluded that works councils contribute to efficiency by improving communication, which in turn improves the quality of decisions and legitimizes decisions in the eyes of workers. The studies also found that works councils are associated with lower absenteeism, more worker training, better handling of grievances and smoother implementation of health and safety standards. It turns out that when workers are given a degree of consultation, it makes them more satisfied and more productive.

In Germany works councils and supervisory boards can take substantial credit for the fact that, while the US unemployment rate has more than doubled during this economic crisis, Germany's has barely increased. That's because Chancellor Angela Merkel was heavily influenced by works councils and labor unions, and by the culture of consultation in general, to adopt a policy called Kurzarbeit, or "short-time work," in which, instead of laying off millions, employees agreed to spread the pain by working shorter weeks. Most of the lost wages have been made up from a special fund squirreled away during more prosperous times. As a result, more Germans have money in their pockets, and communities and households haven't been decimated by layoffs like they have been in the United States. (Despite the advantages, when Larry Summers, one of Barack Obama's closest economic advisers, was asked why the president didn't pursue short-time work to stem the economic bleeding, he dismissed the idea, saying the White House wanted to create new jobs, not preserve old ones.)

Co-determination has proved crucial to Europe's economic success and its broadly distributed wealth. "The practical effect of co-determination," says Levinson, "is that corporate managers and executives must confer extensively with employees and unions about a range of issues, even about the future direction of the company." Co-determination reflects European "social capitalism," with its communitarian values, long-term strategic vision and emphasis on manufacturing, much the way huge executive bonuses, quarterly earnings and a bloated financial sector reflect America's Wall Street capitalism. Social capitalism has both produced and benefited from the culture of consultation, which has also contributed to the creation of cooperatives and resulted in a vibrant small-business sector that produces two-thirds of European jobs, compared with only half of US jobs.

Interestingly, the conquering US powers in World War II can take some credit for co-determination. After the war a group of prominent German economists, led by future chancellor Ludwig Erhard, Walter Eucken and others, proposed what they called the "social market economy" in the belief that the market should serve broader social goals. And it was conservative Christian Democrats, not the leftish Social Democrats, who introduced this idea. The Allied powers encouraged this line of thinking, since it decentralized economic power, shifting it away from the German industrialists who had supported the Nazi war effort. In effect, US planners "punished" postwar Germany with economic democracy as a way of handicapping concentrated wealth and power, helping to birth the most democratic corporate governance structure the world had ever seen.

In the decades after Germany's launch of social capitalism, co-determination spread throughout Europe; it has been adopted in most of the new EU member states from Central and Eastern Europe. Sixty years after its genesis, co-determination is a core element of the European economy, and it distinguishes Europe's social capitalism from America's Wall Street capitalism.

Critics allege that co-determination hurts competitiveness, but the success of the European economy and of its many global businesses belies this criticism. Contrary to the US media stereotype that "old man" Europe is chronically plagued by a weak, sclerotic economy, Europe has the largest economy in the world, producing nearly a third of the world's GDP. Indeed, its economy is almost as large as those of the United States and China combined. Europe has more Fortune 500 companies than the United States and China together, and Europe had a higher per capita growth rate from 1998 to 2008 than the United States. Long denigrated by US pundits as the land of high unemployment, the EU currently even has a slightly lower unemployment rate than the United States. Indeed, the World Economic Forum in 2008-09 ranked Denmark, Sweden, Finland, Germany and the Netherlands--all of which employ some degree of co-determination--among the top ten most competitive economies in the world. They are also ranked at or near the top of most lists for quality of life, healthcare and social benefits. That's not a coincidence, since co-determination allows for both economic vibrancy and more egalitarian social policy. And while the United States also ranks high in competitiveness, it is near the bottom among most-developed countries in healthcare, social benefits and quality of life.

Sweden, Germany and other European countries are proof that you can have it all--but only if you have the right institutions to facilitate both a powerful economic engine and the supportive institutions and benefits to harness that engine and keep employees and families healthy and productive. These distinctly European advances may be the most important innovations in the world economy since the invention of the modern corporation, since they encourage free enterprise combined with economic democracy and worker consultation that does not unduly burden entrepreneurship and commerce. The advances allow businesses to be both competitive and socially responsible.

In effect, Europe has reinvented the corporation. Yet the latest critiques of capitalism by leading authors like Naomi Klein, Noam Chomsky and the producers of the popular film The Corporation tend to view all corporations and all capitalisms as the same. American progressives, while searching for effective responses to globalization, appear to be mostly unaware of these intriguing European inventions. Movements to revoke the charters of offensive corporations, while having gut-level appeal, have failed to recognize that European corporations are fundamentally different animals from their "disaster capitalism" US counterparts. When I asked a leading globalization critic from the Economic Policy Institute his opinion of co-determination and works councils, he replied dismissively, "Bah, those just lead to company unions," a demonstrably false claim.

Of course, the American right rejects co-determination as socialism incarnate, ignoring its potential to renew capitalism and support real family values. While the United States does not have a strong history of economic democracy, we do have a recurring pattern of responding to economic crisis by extending stakeholder rights as well as New Deal-type supports. This has resulted in employee stock-option plans, a small but vigorous co-op movement and stakeholder laws passed by an unusual labor-business coalition in Pennsylvania as a shield against corporate raiders, and other reforms. The Steelworkers alliance with the Mondragon cooperatives is another encouraging sign. These are some of the American threads of consultation and economic democracy that can be used to fashion a progressive response to the stunning failure of Wall Street capitalism. There is nothing magical or culturally determined about Europe's use of co-determination. All it takes to start the ball rolling here is a legislator, a governor or a president willing to introduce such a law. What would be the argument against it--that the CEOs who nearly destroyed the American economy and then came back for a government bailout know best? That's a debate any progressive leader should relish.

About Steven Hill:

 

Steven Hill is director of the Political Reform Program of the New America Foundation and author, most recently, of Europe's Promise: Why the European Way is the Best Hope in an Insecure Age. more...

Phony "Economic Recovery," Real Alternatives

by Rick Wolff

Published by Monthly Review, April 18, 2010

The crisis persists.  Tens of millions remain unemployed or underemployed.  Millions are losing their homes this year adding to millions last year.  States and municipalities are cutting back on schools, hospitals, programs for disabled and the elderly, etc.  Business and political leaders stretch to keep the public away from blaming the system, capitalism.

So we are told to celebrate a "jobless recovery" because banks, the stock market, and some corporations did better over the last year.  A "jobless recovery" is like a "war-filled peace."  Such phrases abuse language.  Leaders use them to tell it like it isn't.   The facts are these.  Bush and Obama poured vast sums of public money into the banks, urging them to renew lending to individuals and businesses that would then buy and hire again.  The banks used the government money to improve their own bankrupt balance sheets, but they never lent it out across our economy.  That was far too risky, they said; bankers often miss irony.  The broad economy kept sinking, but the stock market rose because speculators borrowed the cheap government-provided money from the banks to buy shares at crisis-depressed prices.

In simple English, the plan to overcome crisis by using public money to refinance failed banks did not work.  Rather than admit failure and consider alternative plans, our leaders proclaim that government-refinanced banks and a partly restored stock market constitute "recovery."

Alternative strategies could yield a real recovery in jobs, production, and healthy budgets for states, cities, and towns.  During the 1930s economic crisis, then president Roosevelt used one such alternative to treat high unemployment.  His administration hired the unemployed directly because private capitalist enterprises had proven unable or unwilling to do so.  Federal programs like the Civilian Conservations Corps and the Works Progress Administration provided over 11 million jobs between 1933 and 1943.  Those unemployed re-hired by Washington built many of our nation's parks and highways, replanted forests, and delivered re-employed artists into every corner of the US, among other socially useful projects.  Those programs ended only when another government activity provided even more jobs and finally ended unemployment: World War 2.

No direct government hiring program exists now or is being sought by Obama's administration.  Business fears the consequences of production by and competition from the government.  Millions of government employees would fight hard politically to protect their jobs.  So business uses its revenues to block such government actions by contributing to candidates, lobbying elected officials, and bribing bureaucrats.  Business also spends billions on think tanks, foundations, publications, and academics to criticize the government in principle as the people's enemy, the cause of its miseries.  And we are surprised by teabaggers?

Another alternative to today's failed government bailout of banks would extend what FDR did in the 1930s.  The federal government would finance local, state, and national rehiring of the unemployed but with two new special qualifications.  First, at least half of goods and services they produce would have to be green: reduce pollution, restore the natural environment, reduce depletion of energy and materials resources, and so on.  Second, the enterprises created to re-employ people would differ from traditional capitalist corporations by establishing genuine economic democracy at the workplace.

Others have proposed green government employment programs such as building mass transit systems, so I need not discuss them again here.  However, few have so far proposed new organizations of work.  For example, one such proposal would assign the newly re-employed a new kind of job description.  Each of their jobs would include (1) a specific production task and also (2) full and equal  participation in running the enterprise.  These workers would democratically make the decisions that, in traditional capitalist enterprises, are reserved for boards of directors (12-20 individuals selected by and responsible to the major shareholders who are usually a tiny minority of all shareholders).  In such new enterprises, then, there would be no shareholders controlling boards of directors exploiting workers.  The workers collectively would instead be their own board of directors.  They would be accountable to the state that established them, to the communities immediately affected by and dependent upon them, to their consumers, and to other enterprises with whom they exchange goods and services.

This alternative plan offers many benefits.  It employs millions, pays them, and thereby allows them to pay their mortgages (thereby keeping their homes), to pay taxes (thereby adding revenues to states and localities), and to buy commodities (thereby creating jobs).  It restores self-esteem, vitality, and thus productivity to depressed workers, their families, and their communities.  It tackles long-neglected environmental needs.

This alternative plan also represents a commitment to achieving economic democracy.  All US workers could see for themselves how such differently organized enterprises function, whether their employees are more productive and happier than them.  Those enterprises' activities and results would be made public and transparent.  Over time, people would acquire two new freedoms of choice between democratic and undemocratic enterprises: (1) which they prefer to work in, and (2) whose products they prefer to purchase.  Imagine each commodity labeled to identify the work organization of its production.

This alternative plan could transform a bad thing -- today's crisis and failure of our traditional capitalist economy -- into an historic good thing.  It would inaugurate a national effort to diversify our economic system.  This is a win-win plan.  We gain in our relations with the natural environment and we gain in bringing democracy into our production system.

The losers would be those who prefer traditional capitalist organizations of work.  For them, the social costs of environmental and ecological deterioration, of non-democratic work organization, and of the repeated recessions and depressions capitalism imposes on societies don't seem so bad.  We should not be surprised.  After all, businesses and shareholders are the ones who got government help first as their system broke down over the last 3 years, and they are the ones who made the most before the breakdown.  Will those potential losers be strong enough again to block such a win-win plan?  Or might an alliance of environmentalists and anti-capitalist democrats carry some version of it to victory?

---

Rick Wolff is a Professor Emeritus at the University of Massachusetts in Amherst and also a Visiting Professor at the Graduate Program in International Affairs of the New School University in New York.   He is the author of New Departures in Marxian Theory (Routledge, 2006) among many other publications.  Check out Rick Wolff’s documentary film on the current economic crisis, Capitalism Hits the Fan, at www.capitalismhitsthefan.com.  Visit Wolff's Web site at www.rdwolff.com, and order a copy of his new book Capitalism Hits the Fan: The Global Economic Meltdown and What to Do about It.

Europe's Promise by Steven Hill

by John Lawrence

Frank Thomas and I have been reading a book by Steven Hill: Europe's Promise. Hill dispenses with the myths about Europe - that it is a nanny state coddling its citizens from cradle to grave - early on. Rather then being a welfare state, Hill describes European society as a workfare state. Seen in this light everything that is done that benefits the average citizen does so in order to enable him or her to be a better and more productive worker. Universal health care enables small business to concentrate on business without having to be responsible for health care in exchange for a tax that is far lower than what the average American small business spends on their employees' private health care plans. In this sense government takes the weight off small business' back. In the US there is an obsession with getting government off our back. In Europe government takes the weight off small business' back. Government is an enabler rather than a disabler of business, and as such, Europe has become an economic powerhouse far outstripping the US in many indices.

Europe has not only become an economic powerhouse, but it has done so in a way that widely distributes the rewards and produces far less inequality than does the US. Economic democracy is a way of life. Workers participate in management decisions at all levels. In the 1940s a group of economists based in Freiburg and Cologne proposed a new type of capitalist blueprint which was neither the US laissez faire capitalist model nor the communist state command model. They called it the "social market economy." It was founded on the principles of both pursuing the free market and of serving humanity. Far from being a boom and bust economy like the US, Europe pursues a slow growth steady state model. Slow and steady wins the race. If the US is the hare, Europe is the tortoise and we all know who won that race.

While the US main jobs program is its military - the US spends over 4% of its GDP on the military - Europe spends less than 2% on its military. The savings is spent on benefits for its people like universal health care, universal child care, free or near free education up through university level and massive infrastructure projects like high speed rail. On the other hand Europe pursues a carrot philosophy as opposed to the US' stick when it comes to foreign policy providing more than twice the aid to poor countries than does the US.

The EU also benefits from a close government-industry partnership that represents an industrial policy totally lacking in the US which leaves everything to private enterprise. This is also true of other countries that have a different model from the EU - China, for example. Hill states:

Today in the post-economic crash era, in which state regulation and state direction of economies have a new found legitimacy, this American free market fundamentalism seems nostalgically quaint, especially since the government owned sovereign wealth funds of China, Saudi Arabia, the Gulf states, and elsewhere manage about $3 trillion in assets and investments all over the world, and huge state-owned enterprises such as Russia's Gazprom, Saudi Arabia's Aramco, and China's SINOPEC rely on much greater government involvement than [Europe's government-industrial partnership,] Airbus. The economic rules have shifted dramatically. but the United States, even under the Obama administration, still remains in an antiquated free market ideology.

While other countries have vibrant and active interconnections between government and industry, the US has a government controlled by corporate paid lobbyists who work to use government as a paid adjunct to their particular business interests resulting in short-sighted payoffs to special interests which do nothing for the overall economy not to mention the average worker/citizen. Sovereign wealth funds introduce a state capitalist component to many countries including EU countries such as Norway which reaps 50% of off shore oil drilling profits which are then plowed back into Norway's social security program. While the US contemplates its social security program going broke, Norway is acting as a state capitalist in cooperation with private capitalists to extract oll from the North Sea, sell it on the world market and plow part of the profits (widely distributed)  back into its own people. The US considers state capitalism to be socialistic and so remains, as a government, in huge debt with no idea how to get out of it except to reduce social programs that benefit its people. In the EU these programs are well and rationally funded.

To be continued ...

The Future Commonwealth Part II

by John Lawrence

We have previously blogged about Albert Chavannes' writing on utopia called The Future Commonwealth, and how his ideas about the funding of government have been implemented by many societies today particularly in their establishment of Sovereign Wealth Funds. On the other hand, the US only funds itself by taxes and the issuance of debt. On this topic Chavannes, writing in the nineteenth century, was prescient.

Chavannes' other main idea was the widespread use of apprenticeships erstablished not by private enterprise but by the government. However, Chavannes was not a complete socialist maintaining that there is a proper balance between public and private enterprise:

"By making our Commonwealth a cooperative business concern, we have made it rich and placed its citizens above want. Yet we have retained sufficient fields of activity for private enterprises. By our system of public apprenticeship we are training our youths to useful occupations. It brings all classes together, and is the measure that will have the most far-reaching effects."

Now this idea of publicly sponsored apprenticeships is worth considering especially in light of the present day high unemployment rate and job downsizing and offshoring. The government reponse to high unemployment is extended unemployment insurance benefits. In other words, rather than requiring any actual work from the unemployed, the government basically pays them to search for non-existent jobs. It wasn't always so. In the Great Depression FDR established the Civilian Conservation Corps and the Works Progress Administration. These programs provided immediate work for numerous people and resulted in considerable improvements to US infrastructure including the environment.

Contrast this with today's response to high unemployment which results in no on the job training or useful public works being constructed. On the one hand you pay people to search for nonexistent jobs in the private sector. On the other you provide jobs with what amounts to apprenticeships (another name for on the job training), put the same amount of money into the economy which will have a multiplier effect, and get useful constructive results manifested in return. It is all well and good to encourage people to go to college, but there is a large segment of the population such as ex-felons and homeless people who are virtually unemployable, and government programs to employ these people are needed. The unemployment rate today among male African-Americans is about 20%. Unless a societal effort is made to employ these people directly and immediately with on the job training and without raising the bar by requiring a college education, many will either wind up homeless or in jail.

Chavannes is acutely aware of the criticism that public enterprise is less efficient than private enterprise. He compares the US to his version of utopia:

"Well, my dear Sir," Mr. Wilton replied, "probably there is a foundation for the opinion you express, although it may be fostered by those who have a direct interest in preventing the government from extending its operations.

"But there is a fundamental difference between your government and ours. Yours is a Republic, established to maintain civil and political rights. Ours is a Commonwealth, organized to secure those rights, and besides, to manage public business for public benefit. Our welfare is intimately connected with the pecuniary success of the Commonwealth, and we are all interested in its proper management. On that account the people never surrender the law-making power to their delegates, but exercise a constant supervision over all their actions. and if they fail to properly conduct the business committed to their case, they are quickly called to account for their mismanagement."

This contrast between a Republic and a Commonwealth is worth noting for its resemblance to the state of world affairs today. Conservatives in the US argue that the US is a Republic not a Commonwealth or a Democracy and as such should not be concerned with the welfare of its people except to maintain civil order and to fight wars. Progressives, on the other hand, maintain that social programs such as education and health care should be rights not privileges as they are in much of the rest of the developed world. Most other advanced societies such as Europe, Brazil, China and India are in fact Commonwealths not Republics because they not only provide for the economic welfare of their people but they act as state capitalists raising money by various means and depositing it in their Sovereign Wealth Funds. Monies are then used for various social welfare programs. The crucial points here are that in these modern day Commonwealths money is raised by means other than taxation and money is expended for the purposes of public welfare. This has been called state capitalism.

The problem with the US is that it lowers taxes, has no other means to raise money since it gives away its natural resources to private corporations, and, therefore, goes increasingly into debt. A recent piece on NBC described how billions of dollars of gold are mined from public lands by private corporations while not one penny goes into the public treasury.

This land is owned by the taxpayers of America, but the profit is totally in the hands of private interests. Contrast this with Norway where 50% of the monies realized from their natural resource of oil goes into the public Treasury while the other 50% goes to private interests. There is a 50-50 split between public and private.

Chavannes talks about government having a Business department similar to Japan's Ministry of International Trade and Industry (MITI). I have blogged about the need for the US to establish such a cabinet level Department, but the US seems committed to running huge trade deficits with the rest of the world only adding to its immense national debt, and it takes a hands off policy to the establishment of any enterprise which might in any way compete with private enterprise. As a result and particularly because the US will not enforce the Sherman Antitrust Act, corporations in the US, as is the case with the health insurance corporations, are virtual monopolies which can raise prices with impunity.

Chavanees goes on:

"We have added to out government a Business department, independent of the Political and the Judiciary, which has entire charge of the business of the commonwealth, and is responsible to the people alone for the result of their labor. Through this department we co-ordinate the productive power of the whole people, and constitute ourselves into a cooperative association.

"We, the people, thus become a business firm, and hire a certain number of men to manage the work for us. We recognize that there must be stability, and on that account the Managers and Advisers are elected for indefinite terms, and are retained in place so long as the people are satisfied with their services. [much like in China!] But should dissatisfaction arise, specific charges must be laid before the Advisers, and if they are sustained, a new election is ordered which is the final verdict pronounced by the people. [unlike in China!]"

Chavannes goes on to say that there are oversight and supervisory Boards whose duties are to provide checks and balances over the whole public business enterprise. He also states that these business functions can occur at the local government level as well as the national level.

Finally, Chavannes deals with some of the inevitable criticism that his utopia will evoke:

"'I am surprised,' I said to him, 'that some of your energetic men do not crowd to the wall their less ambitious neighbors.'

"'I believe,' he answered, 'that if you were to remain here some time, you would understand it better. It is naturaL that in your country [the US] you should strive for wealth, for wealth is not only comfort, it is power. Under your system everything is for sale. Suppose I should bestir myself to accumulate a fortune, what should I do with it? All our most valuable property is in the hands of the Commonwealth. We have little inducement to increase our wealth beyond what will secure us a comfortable existence.'"

This is as opposed to the US where immense wealth translates into control of the political process through lobbying, TV advertising and campaign contributions.

Chavannes continues:

"I expressed my fear that this stifling of private ambition might result unfavorably to the general prosperity.

"'We have found out here that there are other things worth living for besides the acquisition of money. Our men have as much brain, and are just as enterprising as yours, but, unable to concoct schemes by which they can exploit their weaker neighbors for their own benefit, they have to place their intelligence and their activity at the disposal of the Commonwealth to be used for the people's benefit. Yours is the freebooter system, ours is the organized army of labor.'

"Still it seemed to me that all this government control could not be maintained without a serious loss of personal freedom. I asked him whether he was not compelled to order his goods from certain stores, and give them a price arbitrarily fixed by the Government.

"'Not at all,' he answered. 'Our wholesale trade is perfectly free, and the prices are regulated by the law of supply and demand as in all countries. It is true that we have some regulations here that do not exist in other countries, but they are for the protection of the whole people. ...'"

Chavannes goes on to say that while profits have not been abolished, speculation has. But he says, "All that we ask is that [public laws] should tend to accomplish the desired end with the least infringement of individual freedom."

Chavannes is clearly proposing a mixed society, not purely socialistic or capitalistic. He is proposing that the Government or Commonwealth be concerned about regulating private enterprise as it does in many parts of the world today. Arguably deregulation and non-enforcement of existing laws has led to the Great Recession of 2008 in the US and the egregious excesses of some US corporations especially banks. While other countries regulate  and seek to optimize trade and industry in their own self interest, the US continues to pursue its free trade policies which benefit transnational corporations to the detriment of the public Treasury and the accumulation of national debt. While other countries enrich their Sovereign Wealth Funds, the US continues to lower taxes, give away its natural resources to private corporations and not pursue other means to accumulate public wealth. This leads to increased national debt. Before Ronald Reagan entered office in 1980, the US was the world's largest creditor nation, imported raw materials and exported manufactured goods. Now after 30 years of Reagan initiated policies of lowered taxes and free trade, the US is the world's largest debtor nation with the bulk of its debt owed to foreign countries, exports raw materials and imports manufactured goods. Increasingly, it is becoming a Third World nation with its top 1% owning 95% of the wealth and the middle class fast becoming the redundant poor.

Right's Lies About Euro Capitalism Exposed in Revealing New Book

by Bill Mann

Huffington Post, March 16, 2010

The right, which has lied for years about Canada's supposedly "broken" national health care system, has been doing the same thing about Europe's supposedly "dysfunctional," "socialistic" and "sclerotic" version of capitalism. Not exactly surprising, all things considered.

Author Steven Hill's new book, Europe's Promise: Why The European Way Is The Best Hope for An Insecure Age rebuffs many of the blatant lies we've heard for years about Europe's supposedly sclerotic economic system. Hill says he's been getting hate mail from the right since his eye-opening new book appeared.

This week Hill told CBS Radio Network commentator Dave Ross (on Ross' Seattle talk show) that the U.S. is rigidly locked into a "fundamentalist " version of capitalism.

Hill, who researched his impressive book in Europe for a decade, is director of the Political Reform program of the New America Foundation. He told Ross:

"We have the Wall Street form of capitalism. Europe has a broader, society-based form of capitalism that spreads profits around to society at large".

Europe, which has become the world's largest trading bloc, is often branded by Fox News-type know-nothings as the "sick old man" of western economies. Just the opposite is true, says Hill. "They've had far lower unemployment than the U.S. in the current recession. Europe has avoided millions of layoffs partly by getting people to work shorter work weeks instead of firing them, keeping money in people's pockets."

Europe's economies also spend far less than the U.S. on health care, Hill said on Ross' KIRO Radio show. He added that Germany's enlightened version of capitalism requires by law that 50% of corporate board members be elected by a company's workers. European corporations make up a big part of the Fortune 500," Hill noted, adding, "Europe has a vibrant capitalistic economy."

But it's different than ours. "It's far more broader-based. The U.S. distributes corporate profits to a tiny percentage of people, whereas European governments decided long ago that the wider community should also receive them."

"America is fixated on lower taxes," explains Hill, "and while Europeans do pay higher taxes, their child-care and health-care costs are far less than ours. It raises the standard of living for everyone."

Hill, whom New Yorker economics writer Hendrick Hertzberg calls " a reverse Alexis de Tocqueville," says former Treasury Secretary/Goldman Sachs alum Robert Rubin has been quoted as saying European-type enlightened capitalism wouldn't work here because "we're not focused on preserving jobs, but in creating new ones."

Hill noted that "Europe, ironically, learned about economic democracy from the U.S." through the Marshall Plan that helped Europe recover after World War II.

Jacob Hacker, author of "The Great Risk Shift: The New Economic Security and the Decline of the American Dream," reviewed Hill's cut-through-the -B.S. book by saying this:

"What can the United States learn from Europe? If you believe what's said in Washington, the answer is 'not much'. Hill's intelligent, broad-ranging, and deeply researched book says the correct answer is 'a great deal'-- and now is the time to learn it."

So, no matter what you hear from Fox News and the GOP's clown corps, Europe is definitely NOT "an old man" or "sclerotic." Hill:

"Europe's been far more pragmatic than we have about adjusting their economic systems to benefit a much broader section of their societies. The idea that Europe's economy is socialistic or failing is absurd. Europe is as capitalistic as we are. It has a vibrant, capitalistic economy."

But... one with a heart to go along with a brain.

The Future Commonwealth

by John Lawrence

I stumbled on a book a long time ago at a used book store with the title, "The Quest for Utopia," by Glen Negley and J. Max Patrick, copyright 1952. The subtitle was "An Anthology of Imaginary Societies." It is basically a collection of wrtings by nineteenth century utopists describing societies which they believe might exist some time in the future. A lot of these descriptions are fanciful and based on notions which, in my opinion, are pretty far-fetched like the notion that all human beings are basically good people and that they will all behave properly given the right conditions. I don't believe that any society predicated on the fact that good behavior will somehow be universally achieved is realistic.

Other utopias, however, are not only realistic but contain germs of ideas which could be manifested in reality. Some of these ideas have in fact already been implemented. Such a one is "The Future Commonwealth" by Albert Chavannes (1836-1903), a Swiss immigrant to the US. Chavannes became a successful businessman and devoted his last years to writing. In 1894 he established a lumber company in Knoxville, Tennessee of which his grandson became owner. The grandson, Edward Chavannes, also became Mayor of Knoxville. Albert wrote "The Future Commonwealth" in 1892. What is interesting about this tract is not that it is an all encompassing description of a society which could be implemented in toto, but that it contains many good ideas which could be implemented in any society and some that have already been implemented in certain societies.

Chavannes was in the tradition of the English utilitarians and believed that whatever promoted the general welfare would also promote personal happiness. Contrast this with the current prevailing notion in the US today that whatever promotes individual freedom promotes the general welfare - just the opposite. Chavannes writes, "We consider the distribution of products the most important question, and that its correct solution offers the best prospect of increasing human happiness. The rich have more than they can enjoy, while the poor have less. We made our new Commonwealth the great Capitalist, and thus prevented the undue accumulation of wealth in private hands.

"There is the whole secret of it. Cooperation on a large scale, not practised by a few, for the advantage of a few, as it exists among you, but carried by the Commonwealth, for the advantage of the whole population, for the rich as well as for the poor, for the women as well as for the men."

Chavannes goes on to say that his utopia is not "simply a Socialistic settlement, where the state controls everything" and is not antithetical to the "free and independent citizens " of the US. He reassures the reader that his utopia has not abridged personal freedom.

"We ... have entrusted the Commonwealth with the accumulation and use of a portion of our capital for the benefit of the people, while you only entrust your government with the spending of such capital as you raise by unequal taxation, or by borrowing from the wealthy class, thus increasing the burdens of the producers by compelling them to pay interest on the money your government spends."

Here Chavannes has put his finger on the difference between the US model and the models of many other countries of the world. The US government is run on debt or taxation instead of on the principle of capital generation and accumulation. Other countries such as Norway, for example, have Sovereign Wealth Funds which generate capital which is then distributed to the people in the form of old age pensions. Norway's government takes 50% of the monies derived from its natural resources, oil, for example, and uses it on behalf of its citizens to offset taxes and to supply social benefits such as social security. The US gives away its natural resources to private corporations which then accrue all the profits for themselves. The US then has to borrow money from other nations' Sovereign Wealth Funds and has become the world's largest debtor nation. The only way the US can pay its own way is to raise taxes which it has an aversion to doing. So while other countries accumulate wealth which not only provides for social programs but is also used to offset taxes, the US neither accumulates wealth as a nation nor raises taxes thereby going increasingly into debt.

Tom Friedman on Meet the Press, Sunday March 14 contrasted the efficiency of the Chinese government with the American:

Tom Friedman thinks Democracy is becoming a hindrance.

The media is wringing it’s hands over the political climate. It’s always sunny when Democrats get their way. The forecast is for stormy weather. All this opposition and people in the street, it’s not a good thing.

Tom Friedman was on Meet the Press today with Tom Brokaw and David Brooks. He thinks we’d be better off if we were more like the Chinese government.

Brokaw: Tom, are we at a kind of turning point in America in terms of being able to make this a functioning country again or are we dysfunctional?

Friedman: This is what worries me that I’ve been saying for a while there is only one thing worse than one party autocracy, the Chinese form of government, and that’s one party democracy. In china if the leadership can get around to an enlightened decision, it can order it from the top down. Here, when you have one party democracy, one party ruling, basically and the other party basically saying “no”, every solution is suboptimal. When your chief competitor can produce optimal and you can only produce suboptimal! Because what happens whether it’s health care or the energy bill, votes 1 through 50 cost a lot; votes 50 to 59 cost you a fortune and 60, his name is Ben Nelson. By the time you made those compromises you wind up with the description out of the health care bill, which is this Rube Goldberg contraption, I hope it passes but I can’t tell you I think it’s optimal.

It’s so much easier to get things done when there’s no opposition, no one to say “no”. Of course to achieve that you have to round up and imprison or kill dissidents and impose censorship. As long as something optimal comes out of it once in awhile, say universal health care, it’s well worth it or so the thinking goes in some circles. History is well acquainted with optimal solutions from unopposed governments.

So even Tom Friedman, the arch proponent of globalism, thinks the Chinese model is winning out over the American model, and he didn't even mention the fact that China has a Sovereign Wealth Fund that is accumulating monies as the American government pays interest on its debt owed largely to China.

Chavannes had the difference between the "socialist" economies of western Europe and the laissez-faire capitalism of the US pegged. On the one hand the socialist governments are in the business of accumulating monies which can then offset both taxes and social programs. On the other the US government is in the business of beggaring itself because it gives away profitable revenue sources to private interests.

Chavannes goes on:

"Whatever costs money to maintain, as the streets and the parks, the police and the fire departmen, etc., is placed in the hands of the government, and the people are taxed for its support, while those enterprises which offer oppoprtunities to make money, as the supply of light and water, the life and fire insurance companies, are allowed to fall into the hands of corporations and individuals. We are so far Socialists as to keep in the possession of the people many valuable privileges which you give away to men who use them for private benefit."

Chavannes goes on to outline the various profitable enterprises that the government controls , but makes clear that there is still plenty of room for private enterprise to flourish. The point here is that not only is the government well funded in order to provide the things that private enterprise won't like maintaining and improving infrastructure, but does so without taxing the people so low taxes,  improved infrastructure and social benefits go hand in hand.

Chavannes also makes a major point about apprenticeship programs in his utopia which is a subject we will go into on a future post.